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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE
ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended December 31, 1996
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
Commission file number 0-25428
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MEADOW VALLEY CORPORATION
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(Exact name of registrant as specified in its charter)
Nevada 88-0328443
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(State or other (I.R.S. Employer Identification Number)
jurisdiction of incorporation
or organization)
4411 South 40th Street, Suite D-11, Phoenix, AZ 85040
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(Address of principal executive offices) (Zip Code)
(602) 437-5400
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(Registrant's telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Title of each class: Name of exchange on which registered:
Common stock, $.001 par value Nasdaq National Market
Common stock purchase warrants Nasdaq National Market
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes x No
------ -----
Indicated by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K x
---
On February 28, 1997, the aggregate market value of the registrant's voting
stock held by non-affiliates was $10,335,594.
On February 28, 1997, there were 3,601,250 shares of Common Stock
outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
The registrant incorporates by reference into Part III of this Report,
information contained in its definitive proxy statement disseminated in
connection with its Annual Meeting of Shareholders for the year ended
December 31, 1996.
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PART I
Item 1. Business
General
Meadow Valley Corporation (the "Company") was incorporated in Nevada
on September 15, 1994. On October 1, 1994, the Company purchased all of the
outstanding Common Stock of Meadow Valley Contractors, Inc. ("MVC"), for $11.5
million comprised of a $10 million promissory note and $1.5 million paid by the
issuance of 500,000 restricted shares of the Company's Common Stock valued at
$3.00 per share. MVC was founded in 1980 as a heavy construction contractor and
has been engaged in that activity since inception. References to the Company's
history include the history of MVC.
Operating through MVC, the Company is a heavy construction contractor
specializing in structural concrete construction of highway bridges and
overpasses and the paving of highways and airport runways. The Company
generally serves as the prime contractor for public sector customers (such as
federal, state and local governmental authorities) in the states of Nevada,
Arizona, Utah and New Mexico. The Company believes that specializing in
structural concrete construction has contributed significantly to its revenue
growth and provides it with an advantage in the competitive bidding process.
However, such specialization limits the types and sizes of projects upon which
the Company bids and may be a competitive disadvantage for projects in which the
amount of work proposed to be completed by the prime contractor (as compared to
the amount of work which will be subcontracted by the prime contractor) is a
consideration in the bidding process. The Company primarily seeks public sector
customers because public sector projects are less cyclical than private sector
projects, payment is more reliable, work required by the project is generally
standardized and little marketing expense is incurred in obtaining projects.
The Company generated average project revenue of approximately $6 to
$7 million in each of the three years ended December 31, 1994, 1995 and 1996.
The Company had a project backlog of approximately $130 million at December 31,
1996, which included portions of a $19 million reconstruction of sections of
Interstate 10 in Phoenix, AZ, portions of a $14 million airport runway extension
at McCarran International Airport in Las Vegas, NV, portions of a $41 million
sitework for a new terminal at McCarran International Airport in Las Vegas, NV,
portions of the $28 million beltway continuation in Las Vegas, NV, the $36
million Squaw Peak Pkwy Shea-Thunderbird Freeway Continuation in Phoenix, AZ,
and the $16 million reconstruction of sections of Interstate 15 in North Salt
Lake, Utah. 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, Salt Lake City (Utah) Airport Authority and
the New Mexico Department of Transportation.
On October 16, 1995, the Company sold 1,675,000 Units of its
securities to the public at $6.00 per Unit (the "Public Offering"). Each Unit
consisted of one share of $.001 par value common stock and one common stock
purchase warrant. In November 1995, the Company sold an additional 251,250 Units
pursuant to its underwriters' overallotment option.
On January 2, 1996, the Company acquired certain assets of AKR
Contracting ("AKR"), an unaffiliated company in Phoenix, Arizona, specializing
in earthwork, grading and paving of residential subdivisions, commercial centers
and small publicly funded projects. Through AKR, the Company expects to increase
revenue from the private construction market in which the Company was not
previously engaged.
Business Strategy
The Company seeks to generate revenue growth and profitability by
pursuing the following business strategy:
(i) Expand Construction-related Niche Markets. The Company continues
to assess the viability of entering the concrete or "white" paving market. By
performing white paving work itself, the Company may be able to increase its
project
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revenue and earnings, reduce reliance on white paving subcontractors and improve
the likelihood of being awarded projects in which the amount of work proposed to
be completed on a project by the prime contractor is a consideration in the
competitive bidding process. The Company will continue to explore other niche
markets which may increase the Company's competitiveness, diversify its revenue
base, increase project revenue and improve profitability. Consistent with this
strategy, the Company has taken action in five areas:
(1) The Company has entered into an operating lease for a portable
hot mix asphalt plant and related paving equipment. The asphalt
paving capabilities provide the Company the opportunity to expand
its existing geographic market. The Company believes increased
competitiveness and revenue will be generated on projects that
call for large quantities of asphaltic concrete.
(2) On January 2, 1996, the Company acquired certain assets of AKR,
an unaffiliated company in Phoenix, Arizona. AKR specializes in
earthwork, grading and paving of residential subdivisions,
commercial centers and in small publicly funded projects. Through
AKR, the Company expects to increase revenue from the private
construction market in which the Company was not previously
engaged.
(3) During 1996, the Company formed Ready Mix, Inc. ("RMI"), a
wholly-manufactures and distributes ready mix concrete and
expects to target markets such as concrete subcontractors, prime
contractors, home builders, commercial and industrial property
developers, pool builders and homeowners. RMI is expected to
begin operations from its first in March 1997. Financed with
internal funds, a $2 million line of credit and operating leases,
the Company intends RMI to operate from two sites using
approximately 40 mixer trucks.
(4) During 1996, the Company formed Prestressed Products,
Incorporated ("PPI"), a wholly-owned precast concrete company
based in Moapa, NV, which is northeast of Las Vegas, NV. PPI will
design, manufacture and erect precast prestressed concrete
building components for use on commercial, institutional and
public construction projects throughout the Southwest. Product
lines include architectural and structural building components
and prestressed bridge girders for highway construction. PPI will
begin operations during 1997 with a precast yard and concrete
batch plant located on leased property adjacent to the Company's
office in Moapa, Nevada.
(5) The Company has established a sand and gravel crushing and
screening operation in Moapa, Nevada. The Company's primary
product is a crushed and washed sand that is intended to be sold
to the RMI, PPI and the Company.
(ii) Solidify Market Position. The Company intends to continue to
expand its operations in Nevada, Arizona, Utah and New Mexico and consider
expansion into other western states.
(iii) Seek to Acquire Other Businesses. The Company will seek to
acquire other businesses that provide subcontracting services used by the
Company in its projects, complement the Company's existing construction
expertise or offer construction services similar to the Company in other
geographic markets. In certain circumstances, the Company may join with one or
more companies combining expertise, financial strength, and/or bonding capacity.
Through a joint venture, the Company may be able to pursue projects which might
otherwise exceed its staffing or bonding resources.
(iv) Increase Bonding Capacity. The Company retained a portion of the
proceeds of its Public Offering to increase its bonding capacity in order to bid
upon more and larger projects. The Company intends to retain a portion of future
earnings to further increase its bonding capacity. See "--Insurance and
Bonding."
Market Overview
The Company believes that infrastructure construction (primarily
highways, bridges, overpasses, tunnels and other transportation projects) in the
western United States is substantial and will generate continued federal, state
and local government expenditures. In 1991, Congress passed the Intermodal
Surface Transportation Efficiency Act of 1991 ("ISTEA") which included an
appropriation of over $150 billion through September 1997. In 1995, as a result
of the ISTEA
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legislation, Congress designated a National Highway System ("NHS") consisting of
158,674 miles of key transportation corridors and continued funding as
originally intended through ISTEA. In addition to federal funding, which has
increased year-to-year in the states in which the Company has historically
operated, other funding mechanisms are used at various governmental levels to
improve and maintain transportation facilities. Maricopa County (Phoenix,
Arizona metropolitan area) and Clark County (Las Vegas, Nevada metropolitan
area) have passed sales tax measures to fund major transportation improvements.
Maricopa County's program has approximately $800 million of work remaining to be
bid that is scheduled for completion by 2006. Clark County's program, including
airport improvements funded by PFC's (Passenger Facility Charges),budgets
expenditures of approximately $300 million through 1997. The transportation
departments of the states of Arizona, Nevada and Utah expect to let contracts
during 1997 in amounts approximating $410 million, $278 million and $256
million, respectively. Utah's State Legislature is currently debating funding
alternatives for the planned reconstruction of I-15 through Salt Lake City.
This work will be accomplished under a design/build contract expected to be in
excess of $1 billion. Both Las Vegas, Nevada and Phoenix, Arizona have
experienced considerable growth in residential construction. Site work, grading,
drainage and paving of residential subdivisions, commercial shopping centers,
and industrial office complexes will be pursued by the Company through AKR.
Private infrastructure spending is highly cyclical, and is very sensitive to
general economic conditions and interest rates and, therefore, is subject to
volatility. There can be no assurance that the recent trends in residential and
commercial development will be sustained.
Operations
In addition to the construction of highways, bridges, overpasses and
airport runways, the Company constructs other projects which require the use of
structural concrete. From its Phoenix, Arizona corporate office and area offices
in Moapa, Nevada, Salt Lake City, Utah and New Mexico, the Company markets
(primarily by responding to solicitations for competitive bids) and manages all
of its projects. Staff is also located at job sites to meet on-site project
management requirements. See "--Marketing."
In addition to profitability, the Company considers a number of
factors when determining whether to bid on a project, including the location of
the project, likely competitors and the Company's current and projected
workloads. The Company uses a computer-based project estimating system which
reflects its bidding and construction experience and which the Company believes
best identifies the 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. Until 1996, the
Company had seldom experienced material deviations in actual project costs from
its estimated project budgets. Several material deviations occurred in 1996;
however, management has determined they were primarily the result of operational
difficulties and not of a nature that would require modifications to the
estimating or bidding procedures.
The Company owns some of the construction equipment used in its
projects, including cranes, backhoes, scrapers, graders, loaders, trucks,
trailers, pavers and rollers. The net book value of the Company's equipment at
December 31, 1996 was approximately $4.7 million. Although the Company leases a
significant portion of its equipment, it believes that ownership of equipment is
generally preferable to leasing because ownership ensures equipment availability
and normally results in lower equipment costs. The Company attempts to keep its
equipment as fully utilized as possible and may rent equipment on a short-term
basis to other contractors.
The Company's corporate management coordinates engineering and
administrative support services with operating management at the project site.
The latter are responsible for planning, scheduling and budgeting operations,
equipment maintenance and customer satisfaction. Project and area 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 areas to
assure the Company of adequate competitive bids for supplying such raw
materials. Generally, the Company will obtain four bids from competing concrete,
asphalt or aggregate suppliers whose reserves of such materials will normally
extend beyond the expected
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completion date of the project. Costs for raw materials vary depending upon
project duration, construction season, or other factors; but, generally, prices
quoted to the Company for raw materials are fixed for the project's duration.
The Company continues to revise its field reporting systems and to
reassign senior management personnel in order to control costs and improve its
reporting systems. Arvin L. Black resigned as Area Manager for Arizona
operations and was replaced by Robert H. Bottcher. Gary W. Burnell will begin
his duties as Chief Financial Officer effective April 1, 1997. Kenneth D.
Nelson has been named Vice President - Corporate Administration with direct
responsibilities for field cost accounting systems, training and enforcement of
compliance with Company policies and procedures relative to tracking and
managing field cost. To assist Mr. Nelson in this effort, the Company has added
James M. Vandegrift, who has extensive construction cost accounting experience,
as Cost Accounting Supervisor. Management at the area and corporate levels has
increased both the depth and frequency of direct scrutiny of project costs.
Additional training is being scheduled and the Company's upgraded Windows-based
field cost system (F-Cost) is undergoing its beta testing on selected projects.
Additionally, the Company recently employed the services of Fails Management
Institute (FMI), one of the nation's leading construction management
consultants, to perform a complete performance evaluation of the Company's
systems, personnel and practices. Management intends to utilize the findings of
the FMI study to further enhance its Field reporting systems, management
practices and operational matters.
Projects and Customers
The Company specializes in public sector construction projects and its
principal customers are the state departments of transportation in Nevada,
Arizona, Utah and New Mexico and bureaus and departments of municipal and county
governments in those states. The Company generated average project revenue of
approximately $6 to $7 million in each of the three years ended December 31,
1994, 1995 and 1996. For the year ended December 31, 1996, revenue generated
from six projects in Nevada, Arizona and Utah represented 63% of the Company's
revenue. The discontinuance of any projects, a general economic downturn or a
reduction in the number of projects let out for bid in any of the states in
which the Company operates, could have an adverse effect on the Company's
results of operations. In each of the two years ended December 31, 1995 and
1996, Clark County General Services and the Arizona Department of
Transportation each accounted for over 10% of the Company's consolidated
revenue.
The following table describes all projects substantially completed by
the Company in each of the three years ended December 31, 1994, 1995 and 1996.
Contract amounts include agreed upon change orders, if any, and represent the
total dollar value of the contract to the Company.
<TABLE>
<CAPTION>
Contract
Customer Project Designation Location Amount Completion Date
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<S> <C> <C> <C> <C>
City of Phoenix, Arizona Northern Avenue Phoenix, AZ $ 311,132 April 1994
Clark County, Nevada
General Services Airport Beltway Channel Las Vegas, NV 2,895,903 April 1994
Clark County, Nevada
General Services Airport Connector Las Vegas, NV 13,870,339 November 1994
Cheyenne Joint Venture Cheyenne Channel
Reconstruction Las Vegas, NV 1,446,002 November 1994
City of Phoenix, Arizona Grand Canal Phoenix, AZ 43,845 January 1995
Arizona Department of
Transportation Squaw Peak Parkway Phoenix, AZ 25,733,328 May 1995
Arizona Department of
Transportation Casa Grande Highway Phoenix, AZ 27,052,138 May 1995
Clark County, Nevada
General Services Flamingo Winnick Las Vegas, NV 2,687,309 May 1995
Clark County, Nevada
General Services Airport North Portal Las Vegas, NV 15,068,853 May 1995
</TABLE>
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<TABLE>
<CAPTION>
Contract
Customer Project Designation Location Amount Completion Date
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<S> <C> <C> <C> <C>
Arizona Department of
Transportation Red Mountain Freeway Phoenix, AZ $12,684,836 May 1995
Salt Lake City, Utah Airport
Authority 40th Street Relocation Salt Lake City, UT 2,293,088 May 1995
Clark County, Nevada
General Services Van Buskirk Las Vegas, NV 3,175,206 May 1995
Continental Insurance Gila River Phoenix, AZ 3,594,017 May 1995
City of Mesquite, Nevada Mesquite Mesquite, NV 316,244 October 1995
Lincoln County, Nevada Panaca, NV Panaca, NV 243,903 October 1995
Colorado River Commission River Mountain Las Vegas, NV 1,300,901 November 1995
City of Mesquite, Nevada Summer Ridge Mesquite, NV 129,237 December 1995
City of Mesquite, Nevada Hillside Storm Drain Mesquite, NV 162,103 December 1995
City of Henderson, Nevada C-1 Channel Henderson, NV 1,086,497 October 1995
Arizona Department of Payson-Show Low
Transportation Highway at Heber Heber, AZ 5,535,662 April 1996
Arizona Department of
Transportation I-17 Widening Phoenix, AZ 8,633,650 October 1996
DG Fenn Baptist Retirement Phoenix, AZ 78,468 October 1996
Salt Lake City Airport
Authority South Cargo Salt Lake City, UT 1,517,428 October 1996
Intermountain
Roadbuilders Davis Monthan - Streets Tucson, AZ 344,418 April 1996
Town of Youngtown Youngtown Streets Youngtown, AZ 77,423 February 1996
Arizona Department of
Transportation Pima Freeway Phoenix, AZ 7,546,838 May 1996
Salt Lake City, Utah Airport
Authority Salt Lake City Airport Salt Lake City, UT 27,364,636 January 1996
Clark County, Nevada
General Services South Beltway Las Vegas, NV 16,175,964 January 1996
Arizona Department of
Transportation Dunlap Phoenix, AZ 8,198,181 January 1996
VFL Technology Chevron Cell
Corporation Construction Salt Lake City, UT 1,315,072 June 1996
Arizona Department of Chandler
Transportation Boulevard Phoenix, AZ 2,209,435 May 1996
Utah Department of
Transportation Snow Canyon Southern, Utah 4,138,290 January 1996
Arizona Department of
Transportation Navajo Papermill Rd Phoenix, AZ 641,061 January 1996
Intermountain Roadbuilders Intermtn.Roadbuilders Phoenix, AZ 265,345 January 1996
Arizona Department of
Transportation Goodyear Urban Goodyear, AZ 463,665 August 1996
Crescent Run LLP Crescent Run Mesa, AZ 262,261 April 1996
</TABLE>
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<TABLE>
<CAPTION>
Contract
Customer Project Designation Location Amount Completion Date
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<S> <C> <C> <C> <C>
Wespac Lost Canyon II Scottsdale, AZ $ 152,778 October 1996
City of Winslow City of Winslow Winslow, AZ 1,402,868 September 1996
Clark County Department of
Aviation Searchlight Searchlight, NV 707,977 January 1996
Arizona Department of
Transportation Nogales Connection Nogales, AZ 11,308,000 October 1996
</TABLE>
The following table describes all projects of the Company in progress
as of December 31, 1996. Current contract amounts include agreed upon change
orders, if any, and represent the dollar value of the contract to the Company.
<TABLE>
<CAPTION>
Current Award
Contract Date/Estimated
Customer Project Designation Location Amount Completion Date
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<S> <C> <C> <C> <C>
February 1996
City of Henderson Equestrian Detention Henderson, NV $ 5,317,707 March 1997
Clark County Department of June 1995
Aviation Jean Airport Jean, NV 3,576,993 March 1997
Clark County, Nevada McCarran Airport January 1995/
General Services Parking Garage Las Vegas, NV 60,494,179 March 1997
Clark County Department of August 1995/
Public Works LV Beltway Las Vegas, NV 28,684,010 March 1997
Clark County Department of McCarran Garage August 1995/
Aviation Infrastructure Las Vegas, NV 5,950,409 March 1997
Arizona Department of Phoenix - Casa November 1995/
Transportation Grande (Joint Venture) Phoenix, AZ 19,600,390 June 1997
Intermountain December 1995/
Roadbuilders Davis Monthan - Taxiway Tucson, AZ 164,608 March 1997
January 1996/
Homes by Dave Brown Country Estates Gilbert, AZ 260,643 July 1997
Clark County Department of March 1996/
Aviation Runway Extension Las Vegas, NV 14,165,629 August 1997
Clark County Department of June 1996/
Aviation Ticketing Facility Las Vegas, NV 7,223,006 July 1997
December 1995/
Kay Roger/ADA Const. Legacy II Phoenix, AZ 195,483 February 1997
Clark County Department of Union Pacific R.R. June 1996/
Aviation Relocation Las Vegas, NV 1,989,519 January 1997
April 1996/
Chanen Midwestern University II Glendale, AZ 230,579 January 1997
June 1996/
Moapa Water District Moapa Water District Moapa, NV 858,485 January 1997
</TABLE>
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<TABLE>
<CAPTION>
Current Award
Contract Date/Estimated
Customer Project Designation Location Amount Completion Date
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<S> <C> <C> <C> <C>
June 1996/
Frehner Construction Precast Las Vegas, NV $ 97,885 January 1997
May 1996/
Robert Ewing Lone Butte Industrial Maricopa County 225,000 February 1997
July 1996/
City of Phoenix Collector Street Overlay Phoenix, AZ 2,082,183 January 1997
Clark County Department of August 1996/
Aviation Terminal D Sitework Las Vegas, NV 41,026,706 April 1998
May 1996/
City of Phoenix Skunk Creek Landfill Phoenix, AZ 2,708,736 January 1997
June 1996/
Dept. of United States Army White Sands Missile Range New Mexico 12,207,945 June 1997
June 1996
Triton Builders AT&T Expansion Mesa, AZ 246,080 January 1997
November 1996/
City of Las Vegas Detention Facility Las Vegas, NV 386,046 May 1997
Dept. of Transportation July 1996/
Hwy. Admin. Wiggins Crossing Arizona 812,890 August 1997
Nevada Department of September 1996/
Transportation Eastern State Highway Sys Las Vegas, NV 2,196,806 February 1997
August 1996/
Robert Ewing Lone Butte 3&4 Maricopa County 201,979 February 1997
Clark County Department of McCarran Air Cargo October 1996/
Aviation Expansion Las Vegas, NV 2,387,106 April 1997
New Mexico Department of August 1996/
Transportation I-25/Socorro New Mexico 2,495,015 June 1997
Arizona Department of Squaw Peak Shea-TBird October 1996/
Transportation Continuation Phoenix, AZ 36,240,016 February 1999
Municipal Parking September 1996/
City of Gilbert Expansion Gilbert, AZ 154,492 January 1997
School House Roosevelt Lake, October 1996/
United States Forest Service Campground AZ 4,578,350 August 1997
October 1996/
Jackson Properties Country Meadows Maricopa County 748,289 April 1997
Utah Department of October 1996/
Transportation I-15/Woods Crossing Salt Lake, UT 15,985,425 November 1997
November 1996/
City of Bisbee Bisbee Municipal Airport Bisbee, AZ 295,712 January 1997
United States Dept. Of October 1996/
Agriculture Tonto Forest Arizona 290,000 March 1997
</TABLE>
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<TABLE>
<CAPTION>
Current Award
Contract Date/Estimated
Customer Project Designation Location Award Completion Date
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<S> <C> <C> <C> <C>
October 1996/
United States Marine Corp. Yuma Taxiway Repair Yuma, AZ $ 668,000 March 1997
Arizona Department of November 1996/
Transportation Douglas Rodeo Hwy Douglas, AZ 1,455,635 May 1997
December 1996/
City of Mesa City of Mesa Sealcoat Mesa, AZ 103,898 May 1997
December 1996/
Mayo Clinic/Ryan Cos. Mayo Arrowhead Glendale, AZ 133,320 May 1997
</TABLE>
Backlog
The Company's backlog (anticipated revenue from the uncompleted
portions of awarded projects) was approximately $130 million at December 31,
1996, compared to approximately $90 million at December 31, 1995. 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. 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 in the
structural concrete segment of the construction industry are price, reputation
for quality work, financial strength, knowledge of local market conditions and
estimating abilities. The Company believes that it competes favorably with
respect to each of the foregoing factors. However, most of the Company's
projects involve public sector work for which contractors are first pre-
qualified to bid and then are chosen by a competitive bidding process, primarily
on the basis of price. Because the Company's bids are often determined by the
cost to it of subcontractor services and materials, the Company believes it is
often able to lower its overall construction bids due to its prompt payments to,
consistent workloads for, and good relationships with, its subcontractors and
suppliers. The Company competes with a large number of small owner/operator
contractors that tend to dominate smaller (under $4 million) highway 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. and SundtCorp., Inc.), many
of whom have larger net worths, bonding capacities and construction personnel
than the Company. Due to currently favorable market conditions in Nevada,
Arizona and Utah, which have resulted in an increase in heavy construction
projects in these states, additional competition for projects may be expected.
Such additional competition could reduce the Company's profit margins on certain
projects.
Although smaller contractors have smaller overhead expenses, generally
overhead expenses are proportionate when computed as a percentage of total
revenue generated and are therefore not a competitive factor. Except for the
Company's approximately $65 million limit on individual project bonds and
approximately $160 million limit on aggregate project bonds, the Company does
not believe it is at a competitive disadvantage in relation to its larger
competitors. The Company does not believe it has other competitive advantages
or disadvantages with respect to its smaller competitors other than advantages
which may result from its higher bonding capacity, longer relationships with
subcontractors and suppliers and the perceived stability of having been in
business since 1980.
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The Company does not believe that the competitive environment is
materially different in other western states in which the Company may expand;
however, growth rates have been stagnant in some western states in recent years,
thereby intensifying competition among construction companies in those states.
Initially, the Company will be at a competitive disadvantage in new markets
until it obtains information on those markets and develops relationships with
local subcontractors.
The Contract Process
The Company's projects are obtained primarily through competitive
bidding and negotiations in response to advertisements by federal, state and
local government agencies and solicitations by private parties. The Company
submits bids after a detailed review of the project specifications, an internal
review of the Company's capabilities and equipment availability and an
assessment of whether the project is likely to attain targeted profit margins.
The Company owns, leases, or is readily able to rent, any equipment necessary to
complete the projects upon which it bids. After computing estimated costs of the
project to be bid, the Company adds its desired profit margin before submitting
its bid. The Company believes that success in the competitive bidding process
involves (i) being selective on projects bid upon in order to conserve
resources, (ii) identifying projects which require the Company's specific
expertise, (iii) becoming familiar with all aspects of the project to avoid
costly bidding errors and (iv) analyzing the local market to determine the
availability and cost of labor and the degree of competition. Since 1987, the
Company has been awarded contracts for approximately 18% 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 government contracts provide for termination of the contract at
the election of the customer. In such event the Company is generally entitled
to receive a small cancellation fee in addition to reimbursement for all costs
it incurred on the project. Many of the Company's contracts are subject to
completion requirements with liquidated damages assessed against the Company if
schedules are not met. The Company has not been materially adversely affected
by these provisions in the past.
Contracts often involve work periods in excess of one year. Revenue on
uncompleted fixed price contracts is recorded under the percentage of completion
method of accounting. The Company begins to recognize revenue on its contracts
when it first accrues direct costs. Pursuant to construction industry practice,
a portion of billings, generally not exceeding 10%, may be retained by the
customer until the project is completed and all obligations of the contractor
are paid. The Company has not been subject to a material loss in connection
with any such retention.
The Company acts as prime contractor on most of its construction
projects and subcontracts certain jobs such as electrical, mechanical and white
paving work to others. As prime contractor, the Company bills the customer for
work performed and pays the subcontractors from funds received from the
customer. Occasionally the Company provides its services as a subcontractor to
another prime contractor. As a subcontractor, the Company will generally
receive the same or similar profit margin as it would as a prime contractor,
although revenue to the Company will be smaller because the Company only
contracts a part of the project. As prime contractor, the Company is
responsible for the performance of the entire contract, including work assigned
to subcontractors. Accordingly, the Company is subject to liability associated
with the failure of subcontractors to perform as required under the contract.
The Company occasionally requires its subcontractors to furnish bonds
guaranteeing their performance, although affirmative action regulations require
the Company to use its best efforts to hire minority subcontractors for a
portion of the project and some of these subcontractors may not be able to
obtain surety bonds. On average, the Company has required performance bonds for
less than 10% of the dollar amount of its subcontracted work. However, the
Company is generally aware of the skill levels and financial condition of its
subcontractors through its direct inquiry of the subcontractors and contract
partners of the subcontractors, as well as its review of financial information
provided by the subcontractors and third party reporting services including
credit reporting
10
<PAGE>
agencies and bonding companies. The Company has experienced losses of less than
.5 of 1% of total revenue over the last five fiscal years including a loss of .8
of 1% of total revenue for the year ended December 31, 1993. As the Company
expands into new geographic areas, it expects to obtain references and examine
the financial condition of prospective subcontractors before entering into
contracts with them, requiring bonding as deemed appropriate.
In connection with public sector contracts, the Company is required to
provide various types of surety bonds guaranteeing its own performance. The
Company's ability to obtain surety bonds depends upon its net worth, working
capital, past performance, management expertise and other factors. Surety
companies consider such factors in light of the amount of the Company's surety
bonds then outstanding and the surety companies' current underwriting standards,
which may change from time to time. See ''--Insurance and Bonding.''
Insurance and Bonding
The Company maintains general liability and excess liability
insurance, insurance covering its owned and leased construction equipment and
workers' compensation insurance in amounts it believes are consistent with its
risks of loss and in compliance with specific insurance coverages required by
its customers as a part of the bidding process. The Company carries liability
insurance of $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 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 net worth, liquid working
capital (consisting of cash and accounts receivable in excess of accounts
payable and accrued liabilities) and the number and size of projects under
construction. The larger the project and/or the more projects in which the
Company is engaged, the greater the Company's bonding, net worth and liquid
working capital requirements. Bonding requirements vary depending upon the
nature of the project to be performed. The Company generally pays a fee to
bonding companies of 1/2% to 1% of the amount of the contract to be performed.
Because these fees are generally payable at the beginning of a project, the
Company must maintain sufficient working capital to satisfy the fee prior to
receiving revenue from the project. The Company has approximately a $65
million limit on individual project bonds and approximately a $160 million limit
on aggregate project bonds.
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. In the
private infrastructure market which the Company pursues through AKR, a more
focused effort is required. AKR is listed on preferred " bid lists" of certain
real estate developers. The timely completion of quality work at competitive
prices and constant maintenance of personal relationships is necessary to
preserve the Company's place on these bid lists. Occasionally, private work
can be negotiated depending upon the business practices of the owner/developer.
Membership and participation in selected industry associations helps to increase
the Company's exposure to potential clients and is one means by which the
Company stays informed as to industry developments and future prospects within
the marketplace.
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
11
<PAGE>
discharge. Under the Federal Clean Air Act and Clean Water Act, the Company
must apply water or chemicals to reduce dust on road construction projects and
to contain water contaminants in run off water at construction sites. The
Company may also be required to hire subcontractors to dispose of hazardous
wastes encountered on a project. The Company believes that it is in substantial
compliance with all applicable laws and regulations. However, amendments to
current laws or regulations imposing more stringent requirements could have a
material adverse effect on the Company.
Employees
On December 31, 1996, the Company employed approximately 50 salaried
employees (including its management personnel and executive officers) and
approximately 178 hourly employees. The number of hourly employees varies
depending upon the amount of construction in progress. For the year ended
December 31, 1996, the number of hourly employees ranged from approximately 178
to approximately 397 and averaged approximately 309. At December 31, 1996,
the Company's employees did not belong to a labor union and the Company
believes its relations with its employees are satisfactory.
Item 2. Properties
The Company leases approximately 6,200 square feet of executive
office space at 4411 South 40th Street, Suites D-10 and D-11, Phoenix, Arizona,
85040, under one lease which expires in July 1997, at a rental rate of $4,022
per month. The Company leases approximately 1,800 square feet of office space at
1598 North 400 West, Suite C, Layton, Utah 84041, which expires in February
1998, at a monthly rental rate of $1,000 per month. The Company also leases
from an affiliate approximately 2,000 square feet of office space at 1501
Highway 168, Moapa, Nevada 89025, on a month-to-month basis, at a rental rate
of $800 per month. The Company believes that its rental rates are fair,
reasonable and consistent with rates charged by unaffiliated third parties in
the same market area.
Item 3. Legal Proceedings
The Company is a party to legal proceedings in the ordinary course of
its business. The Company believes that the nature of these proceedings (which
generally relate to disputes between the Company and its subcontractors,
material suppliers or customers regarding payment for work performed or
materials supplied) are typical for a construction firm of its size and scope,
and that none of these proceedings are material to its financial condition.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders, through
the solicitation of proxies or otherwise, during the fourth quarter of the
fiscal year ended December 31, 1996.
12
<PAGE>
PART II
Item 5. Market for Registrant's Common Equity and Related Stockholder Matters
The Company's Common Stock has been listed on the Nasdaq National
Market since October 1995 and is traded under the symbol "MVCO". The following
table represents the high and low closing prices for the Company's common stock
on the Nasdaq National Market.
<TABLE>
<CAPTION>
1995 1996
------------------------------
High Low High Low
------------------------------
<S> <C> <C> <C> <C>
First quarter....................... 6 3/8 5
Second quarter...................... 6 1/8 5
Third quarter....................... 7 3/8 4 7/8
Fourth quarter...................... 6 1/8 5 1/8 4 3/4 3 5/8
</TABLE>
Holders of Record
As of February 28, 1997 there were more than 350 record and beneficial
owners of the Company's Common Stock.
Item 6. Selected Financial Data
<TABLE>
<CAPTION>
Proforma
Years Ended December 31, Combined (1)
- ------------------------------- 1992 1993 1994 1995 1996
------------- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Revenue......................................... $34,756,329 $60,474,750 $80,220,521 $90,048,523 $133,723,645
Gross Profit.................................... 2,994,885 3,461,503 5,472,878 4,354,455 2,810,585
Income (loss) from Operations................... (376,554) (230,934) 4,704,425 2,364,676 (331,525)
Interest Expense................................ 4,542 3,727 500,000 1,116,464 611,828
Income (loss) before income taxes(2)............ 25,331 60,501 4,565,398 1,608,997 (106,863)
Net income (loss)............................... 15,706 37,511 2,824,776 1,059,347 (85,228)
Average shares outstanding(3)................... 1,675,000 1,675,000 3,350,000 1,641,663 3,601,250
Net income (loss) per share(3).................. $0.01 $0.02 $0.84 $.65 $(.02)
<CAPTION>
Financial Position Data: 1992 1993 1994 1995 1996
------------- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C> <C>
Working capital (deficiency).................... $ 4,169,935 $ 5,617,286 $(3,348,451) $11,319,107 $ 8,738,820
Total assets.................................... 11,391,879 19,664,666 22,375,168 28,909,786 42,121,334
Long-term debt.................................. - - - 3,689,055 4,631,377
Stockholders' equity (deficit).................. 5,631,661 6,809,481 (232,770) 11,761,997 11,676,769
</TABLE>
(1) Effective October 1, 1994, the Company acquired all the outstanding shares
of Meadow Valley Contractors, Inc. ("MVC") in a transaction accounted for by
the purchase method of accounting whereby the basis of certain assets was
revalued for accounting purposes. To arrive at this proforma presentation, the
MVC financial statements for the 1994 period prior to October 1, 1994 have
been combined with the Company's financial statements for the period ending
December 31, 1994. See Note 2 to the Company's Consolidated Financial
Statements.
13
<PAGE>
(2) Includes the effect of proforma income tax adjustments reflecting
additional income taxes that would have been reported had MVC been subject
to federal and state income taxes for the periods presented through
September 30, 1994. Prior to October 1, 1994, MVC was a S Corporation
and, therefore, did not pay income taxes.
(3) The average shares outstanding and net income (loss) per share are computed
upon the number of shares of the Company's Common Stock outstanding as of
December 31, 1994 including the assumed issuance of 500,000 shares of
restricted Common Stock in the MVC acquisition, which were issued during
October 1995.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
General
The Company was incorporated in Nevada on September 15, 1994. On
October 1, 1994, the Company purchased all of the outstanding Common Stock of
Meadow Valley Contractors, Inc. ("MVC"), for $11.5 million comprised of a $10
million promissory note and $1.5 million paid by the issuance of 500,000
restricted shares of the Company's Common Stock valued at $3.00 per share. MVC
was founded in 1980 as a heavy construction contractor and has been engaged in
that activity since inception. References to the Company's history include the
history of MVC.
The Company is a heavy construction contractor specializing since 1980
in structural concrete construction of highway bridges and overpasses and the
paving of highways and airport runways. The Company generally serves as the
prime contractor for public sector customers (such as federal, state and local
governmental authorities) in the states of Nevada, Arizona, Utah and New Mexico.
The Company believes that specializing in structural concrete construction has
contributed significantly to its revenue growth and provides it with an
advantage in the competitive bidding process. However, such specialization
limits the types and sizes of projects upon which the Company bids and may be a
competitive disadvantage for projects in which the amount of work proposed to be
completed by the prime contractor (as compared to the amount of work which will
be subcontracted by the prime contractor) is a consideration in the bidding
process. The Company primarily seeks public sector customers because public
sector projects are less cyclical than private sector projects, payment is more
reliable, work required by the project is generally standardized and little
marketing expense is incurred in obtaining projects.
On January 2, 1996, the Company acquired certain assets of AKR
Contracting ("AKR"), an unaffiliated company in Phoenix, Arizona. AKR
specializes in earthwork, grading and paving of residential subdivisions,
commercial centers and in small publicly funded projects. Through AKR, the
Company expects to increase revenue from the private construction market in
which the Company was not previously engaged.
During 1996, the Company formed Ready Mix, Inc. ("RMI"), a wholly-
owned ready mix concrete company based in Las Vegas, NV. RMI manufactures and
distributes ready mix concrete and expects to target markets such as concrete
subcontractors, prime contractors, home builders, commercial and industrial
property developers, pool builders and homeowners. RMI is expected to begin
operations from its first site near the end of the first quarter 1997. Financed
with internal funds, a $2 million line of credit and operating leases, the
Company intends to operate from two sites using approximately 40 mixer trucks.
During 1996, the Company formed Prestressed Products Incorporated
("PPI"), a wholly-owned precast concrete company based in Moapa, NV, which is
northeast of Las Vegas, NV. PPI will design, manufacture and erect precast
prestressed concrete building components for use on commercial, institutional
and public construction projects throughout the Southwest. Product lines
include architectural and structural building components and prestressed bridge
girders for highway construction. PPI will begin operations during 1997 with a
precast yard and concrete batch plant located on leased property adjacent to the
Company's office in Moapa, Nevada.
The Company has historically relied upon a small number of projects to
generate a significant portion of its revenue. For instance, revenue generated
from six projects represented 63% of the Company's revenue for the year ended
December 31, 1996. Results for any one calender quarter may fluctuate widely
depending upon the stage of completion of the Company's active projects.
14
<PAGE>
Results of Operations
The results of operations for the year ended December 31, 1994,
represents the combined activities of MVC and the Company on a continuous basis
for the 12 month period. The Company had no other operations since inception
other than MVC's operations. Accordingly, a discussion of the combined
operations for the 12 months ended December 31, 1994, is considered more
meaningful than a discussion of separate operations.
The following table sets forth statement of operations data expressed
as a percentage of revenues for the periods indicated:
<TABLE>
<CAPTION>
Years Ended December 31,
--------------------------
1994 1995 1996
------- -------- -------
<S> <C> <C> <C>
Revenue............................... 100.00% 100.00% 100.00%
Cost of contract revenue.............. 93.18 95.16 97.90
Gross profit.......................... 6.82 4.84 2.10
General and administrative expenses... .89 2.21 2.35
Income (loss) from operations......... 5.93 2.63 (.25)
Interest income....................... .43 .52 .56
Interest expense...................... (.28) (1.24) (.46)
Other income.......................... .03 .07 .07
Prior Offering costs.................. - (.19) -
Income (loss) before income taxes..... 6.11 1.79 (.08)
Net income (loss) after income taxes.. 3.72 1.18 (.06)
</TABLE>
Year Ended December 31, 1996 compared to Year Ended December 31, 1995
Revenue and Backlog. Revenue increased 48.5% to $133.7 million for
the year ended December 31, 1996, from $90.0 million for the year December 31,
1995. The increase results primarily from a $30.0 million increase in backlog
at December 31, 1995 over the prior year and the award of approximately $100
million of projects during the first nine months of 1996, compared to
approximately $58 million during the same period in 1995. In addition, the
Company's expansion into earthwork, grading and paving of residential
subdivisions, commercial centers and in small public works, through the
acquisition of certain assets of AKR, contributed approximated $11.2 million to
the Company's overall revenue growth. Revenue is impacted in any one period by
the backlog at that beginning of that period.
Gross Profit. As a percentage of revenue, gross profit decreased from
4.84% in 1995 to 2.10% in 1996. The decrease results primarily from cost
overruns attributable to (i) omission of costs from bid estimates (ii)
difficulty in assembling an adequate skilled labor force due to physical
location of a construction site (iii) erroneous assumptions at bid time
regarding the Company's construction productivity (iv) cost related plan or
specification errors and (v) inadequate field and corporate supervision, offset
by a 2.2% increase in gross profit margins due to the settlement of a claim
which is related to a project completed during 1995. Gross profit margins can
be affected by construction delays and difficulties due to weather conditions,
availability of materials, the timing of work performed by other subcontractors
and the physical and geological condition of the construction site.
General and Administrative Expenses. General and administrative
expenses increased from $1,989,779 for 1995 to $3,142,110 for 1996. The
increase results, in part, from the start-up costs associated with the Company's
development stage subsidiaries, the Company's expansion in the Utah market and,
through AKR, expansion into earthwork, grading and paving of residential
subdivisions, commercial centers and in small publicly funded projects. The
additional costs associated with the development stage companies, expansion in
the Utah market and AKR amounted to $719,572, consisting primarily of salaries
and office set up costs. In addition to the start-up costs, the Company
sustained increased general and administrative expenses due to the 48.5% growth
in revenue.
15
<PAGE>
Interest Income and Expense. Interest income increased in 1996 to
$741,270 from $470,150 due to invested proceeds from the Public Offering and
increased funds held in retention. Interest expense decreased in 1996 to
$611,828 due to the November 1995 repayment of $6.5 million of loans issued in
connection with the acquisition of Meadow Valley Contractors, Inc.
Net Income (Loss) After Income Taxes. Net loss after income taxes for
1996 was $(85,228) compared to net income of $1,059,347 for 1995. The
decrease primarily resulted from the lower gross profit and higher general and
administrative expense as discussed above.
Year Ended December 31, 1995 compared to Year Ended December 31, 1994
Revenue and Backlog. Revenue increased 12.3% to $90.0 million for the
year ended December 31, 1995, from $80.2 million for the twelve months ended
December 31, 1994. The increase resulted from the awarding of several
significant projects in the first quarter of 1995, totaling approximately $76.0
million. Revenue is impacted in any one period by the backlog at the beginning
of the period. Backlog was approximately $96.0 million at December 31, 1995,
an increase of approximately $66.0 million from December 31, 1994.
Gross Profit. As a percentage of revenue, gross profit decreased from
6.8% in 1994 to 4.8% in 1995. The decrease was a result of (i) the
substantial completion during 1994 of several projects with higher gross profit
margins; (ii) decreased gross profits during the first six months of 1995
related to additional costs incurred in the final stages of three ''large
volume'' projects. (A ''large volume'' project is defined by the Company as a
project in excess of $20 million). The Company is requesting additional
compensation for each of the large volume projects based upon the Company's
contractual right to request additional compensation if plan or specification
errors result in additional work or extend the duration of the project. Large
volume projects offer lower gross profit margins but greater total dollar
profits than smaller volume projects. Gross profit margins are affected by
construction delays and difficulties due to weather conditions, availability of
materials, the timing of work performed by other subcontractors and the physical
and geological condition of the construction site.
General and Administrative Expenses. General and administrative
expenses increased from $712,331 for 1994 to $1,989,779 for 1995. The increase
results primarily from additional administrative and estimating personnel hired
during 1995 who contributed to the significant increase in backlog at December
31, 1995. The additional estimating personnel are expected to enable the Company
to submit bids on a greater number of projects in the future. The additional
administrative personnel are expected to be instrumental in the exploration and
development of new business markets and acquisition targets. Other factors
contributing to the increase in general and administrative expenses were as
follows (i) amortization of goodwill of $81,390 relating to the acquisition of
MVC (ii) the 1994 recovery of a bad debt of $257,575 and (iii) costs associated
with the relocation of the executive office from Nevada to Arizona.
Interest Income and Expense. Interest income increased in 1995 to
$470,150 from $346,450 due to increased retentions held in interest bearing
accounts, invested proceeds from the initial public offering and higher average
interest rates earned in 1995. Interest expense increased in 1995 to $1,116,464
from 222,889 in 1994 due to interest expense on the promissory notes issued to
acquire MVC.
Provision for Income Taxes. MVC was an S Corporation under the
Internal Revenue Code through September 30, 1994. As such, the MVC was not
subject to federal and state income taxes. MVC's sole stockholder was required
to report the MVC's taxable income on his personal income tax return. The
financial statements of the Company include a pro forma income tax adjustment
that represents the estimated federal and state income taxes that would have
been paid if MVC had been subject to taxation. Effective with the acquisition
of MVC by the Company as of October 1, 1994, the S Corporation election was
revoked and all future income will be subject to federal and state income taxes.
Net Income. Net income after income taxes for 1995 was $1,059,347
compared to $2,824,776 for 1994. The decrease resulted primarily from the
lower gross profit and higher general and administrative expense as discussed
above, together with interest expense, and goodwill amortization relating to the
acquisition of MVC.
16
<PAGE>
Liquidity and Capital Resources
The Company's primary need for capital has been to finance growth in
its core business as a heavy construction contractor and its expansion into the
other construction and construction related businesses heretofore discussed.
Annual revenue has grown from approximately $60.5 million in 1993 to $133.7
million in 1996. Growth has resulted in the need for additional capital to
finance increased receivables, retentions and capital expenditures, and to
address fluctuations in the work-in-process billing cycle, wherein costs and
estimated earnings on contracts in progress have exceeded billings.
The following table sets forth, for the periods presented, certain
items from the Statements of Cash Flows of the Company and MVC.
<TABLE>
<CAPTION>
Years Ended December 31,
-----------------------------------------
(Combined)
1994 1995 1996
------------ ------------- ------------
<S> <C> <C> <C>
Cash Flows Provided By (Used in) Operating Activities: $ 2,114,540 $(1,789,928) $(3,085,632)
Cash Flows Provided By (Used in) Investing Activities: 2,072,896 (527,120) (584,470)
Cash Flows Provided By (Used in) Financing Activities: (2,043,046) 2,935,528 (247,283)
</TABLE>
Although the Company may experience increased profitability as
operations increase, cash may be reduced to finance receivables and for customer
cash retention required under contracts subject to completion. Management
continually monitors the Company's cash requirements to maintain adequate cash
reserves, and the Company believes that its cash balances were and, together
with the operating lines of credit described below, are sufficient.
Cash used in operating activities increased $5.2 million during the
years 1994 to 1996. The increased is primarily the result of an increase in
accounts receivable and net costs in excess of billings ("billings") of $14.4
million, offset by increases in accounts payable and accrued liabilities of $9.4
million along with interest payments related to the MVC acquisition of $.6
million and income tax payments in the amount of $1.1 million. The outstanding
accounts receivable and billings have increased primarily due to growth in
revenue and increased retentions related to large volume projects. The Company
contracts primarily with public sector customers, which it believes
significantly reduces exposure to conventional bad debts. Accordingly, based on
the Company's history of no material delays in the collection of accounts
receivable, no allowance was established for potentially uncollectible accounts
at December 31, 1996.
For the year ended December 31, 1994, cash provided by investing
activities amounted to $2.1 million, primarily as a result of cash acquired
through purchase of a subsidiary of $2.3 million, offset by loans to related
parties of $.3 million. Cash used in investing activities during 1995 included
the purchase of property and equipment of $1.4 million. Cash used during 1995
was offset by a decrease in restricted cash of $.3 million and repayment of $.6
million of loans to related parties.
For the year ended December 31, 1996, cash used in investing
activities amounted to $.6 million, primarily the result of the purchase of
property and equipment of $1.9 million offset by a decrease in restricted cash
of $1.2 million. The decrease in restricted cash during 1995 and 1996 is a
result of the partial release of funds held in escrow accounts pending the
completion of three large volume projects.
Cash flows used in financing activities increased by $1.7 million to
$2.0 million during the year ended December 31, 1994. The increase was caused
by a $1.7 million distribution to a stockholder. Cash provided by financing
activities during 1995 include proceeds from the initial public offering of the
Company's securities in the amount of $9.5 million, net of offering costs. Cash
provided by financing activities during 1995 was offset by repayment of $6.5
million of loans from a related party issued in connection with the MVC
acquisition. Cash used in financing activities during 1996 include lease
payments of $.1 million and equipment loan payments of $.1 million.
The Company currently has available from a commercial bank a
$2,000,000 operating line of credit ("line of credit") at an interest rate of
the commercial bank's prime plus .50%, and a $2,000,000 operating line of credit
at an interest rate of the commercial bank's prime plus .25%. At December 31,
1996, nothing had been drawn on either of the lines of credit.
17
<PAGE>
Under the lines of credit, the Company is required to maintain certain levels of
working capital, to promptly pay all its obligations and is precluded from
conveying, selling or leasing all or substantially all of its assets. At
December 31, 1996, the Company was in full compliance with all such covenants
and there are no material covenants or restrictions in the lines of credit which
the Company believes would impair its operations. The lines of credit expire
August 15, 1997.
The Company anticipates incurring total costs related to the ready mix
operations of approximately $7.2 million which include the acquisition of land,
equipment and batch plant. The batch plant and its related equipment in the
amount of approximately $6.0 million will be financed primarily through
operating leases. The land totaling approximately $1.2 million will be financed
through bank notes and/or other financial instruments, which include
approximately $100,000 of capital expenditures and a $420,000 million land note
financed during 1996. In addition, the Company is currently leasing
approximately 40 ready-mix trucks with estimated annual lease payments of
$800,000.
The Company anticipates incurring total costs of approximately $.6
million, which includes $.2 million of capital expenditures incurred during
1996, for the acquisition of equipment and construction of a precast
manufacturing facility. The facility and its related equipment will be financed
with the proceeds of the IPO.
Management believes that the Company's cash reserves, together with
its lines of credit, are sufficient to fund its cash requirements for the next
12 months and that the Company's working capital will be adequate to fund its
short term and long term requirements.
New Accounting Pronouncements
Statements of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" (SFAS No. 123) establishes a fair value method of
accounting for stock-based compensation plans and for transactions in which an
entity acquires goods or services from nonemployees in exchange for equity
instruments. The Company adopted this accounting standard January 1, 1996. SFAS
123 also encourages, but does not require companies to record compensation cost
for stock-based employee compensation. The Company has chosen to continue to
account for stock-based compensation utilizing the intrinsic value method
prescribed in Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees." Accordingly, compensation cost for stock options is
measured as the excess, if any, of the fair market price of the Company's stock
at the date of grant over the amount an employee must pay to acquire the stock.
Statements of Financial Accounting Standards No. 125, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishment of Liabilities"
(SFAS No. 125) issued by the Financial Accounting Standards Board (FASB) is
effective for transfers and servicing of financial assets and extinguishment of
liabilities occurring after December 31, 1996, and is to be applied
prospectively. Earlier or retroactive applications is not permitted. The new
standard provides accounting and reporting standards for transfers and servicing
of financial assets and extinguishment of liabilities. The Company does not
expect adoption to have a material effect on its financial position or results
of operations.
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.
Known and Anticipated Future Trends and Contingencies
With the completion of the Public Offering in October 1995 and the
corresponding influx of capital, the Company's bonding limits were raised to
approximately $65 million per single project and $160 million aggregate.
Subject to the Company's profitability and increases in retained earnings, it
is anticipated that the bonding limits will increase proportionately, thereby
allowing the Company to bid on and perform more and larger projects.
18
<PAGE>
The Company believes that the trend toward government funding of the
transportation system will continue. The passage of the ISTEA bill in 1991 was
intended to establish a strategic direction for future transportation
development in the United States. The creation of the National Highway System
in 1995 with corresponding funding is an indication of this trend. The current
ISTEA bill is due for reauthorization in 1997, and it is believed that the
current legislation, with necessary modifications, will likely be passed by
Congress. A number of state legislatures are addressing transportation funding
by allowing the construction of toll roads, and design-build contracts. These
contracts tend to be larger ($300 million - $1 billion) and therefore attract
larger contractors, joint ventures, or consortiums of firms.
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 all 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, quasi-public toll
roads, and others are all examples of how transportation funding is evolving.
Transportation norms are being challenged by federally mandated air quality
standards. Improving traffic movement, eliminating congestion, increasing
public transit, adding or designating high occupancy vehicle (HOV) lanes to
encourage car pooling and other solutions are being considered in order to help
meet EPA - imposed air quality standards.
Seasonality
The construction industry is seasonal, generally due to inclement
weather occurring in the winter months. Accordingly, the Company may experience
a seasonal pattern in its operating results with lower revenue in the first
quarter of each calendar year than other quarters. Quarterly results may also be
affected by the timing of bid solicitations by governmental authorities, the
stage of completion of major projects and revenue recognition policies. Results
for any one quarter, therefore, may not be indicative of results for other
quarters or for the year.
Item 8. Financial Statements and Supplementary Data
The Company's Consolidated Financial Statements are indexed on page F-1.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure
Not Applicable
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, 1996, 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, 1996, which is hereby incorporated by reference.
19
<PAGE>
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, 1996,
which is hereby incorporated by reference.
Item 13. Certain Relationships and Related Transactions
Information on certain relationships and related transactions
including information with respect to management indebtedness will be included
under the caption "Information Regarding Indebtedness of Management to the
Company" of the Company's definitive Proxy Statement relating to the Annual
Meeting of Shareholders for the year ended December 31, 1996, which is hereby
incorporated by reference.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a)(1) Financial Statements
See Item 8 of Part II hereof.
(a)(2) Financial Statement Schedules
The schedules specified under Regulation S-X are either not
applicable or immaterial to the Company's consolidated financial
statements for the period from the date of inception, September 15,
1994 through December 31, 1994 and the years ended December 31,
1995 and 1996.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the fourth quarter
ended December 31, 1996.
(c) Exhibits
<TABLE>
<CAPTION>
Exhibit
No. Title
------- ------------------------------------------------------------
<S> <C>
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)
</TABLE>
20
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Title
- -------- ---------------------------------------------------------------
<S> <C>
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
5.01 Opinion of Gary A. Agron, regarding legality of the Common
Stock (includes Consent)(1)
5.02 Opinion of Gary A. Agron, regarding legality of the Units,
Common Stock and Warrants (1)
10.01 Incentive Stock Option Plan (1)
10.02 Office lease of the Registrant (1)
10.03 Office lease of the Registrant (1)
10.04 Contract between the State of Arizona and the Registrant dated
October 22, 1993 (1)
10.05 Surety Bond between the Registrant and St. Paul Fire & Marine
Insurance Company (1)
10.06 Surety Bond between the Registrant and United States Fidelity
and Guaranty Company (1)
10.07 Contract between Clark County, Nevada and the Registrant dated
October 6, 1992 (1)
10.08 Surety Bond between the Registrant and St. Paul Fire and
Marine Insurance Company (1)
10.09 Agreement between Salt Lake City Corporation and the
Registrant dated May 5, 1993 (1)
10.10 Contract between Clark County, Nevada and the Registrant dated
July 21, 1993 (1)
10.11 Contract between Clark County, Nevada and the Registrant dated
August 17, 1993 (1)
10.12 Promissory Note executed by Robert C. Lewis and Richard C.
Lewis (1)
10.13 Promissory Note executed by Moapa Developers, Inc. (1)
10.14 Promissory Note executed by Paul R. Lewis (1)
10.15 Contract between Clark County, Nevada and the Registrant dated
September 7, 1993 (1)
10.16 Agreement between Salt Lake City Corporation and the
Registrant dated February 11, 1994 (1)
10.17 Contract between Northwest/Cheyenne Joint Venture and the
Registrant dated March 16, 1994 (1)
10.18 Contract between Clark County, Nevada and the Registrant dated
April 5, 1994 (1)
10.19 Statutory Payment Bond dated September 8, 1994 (1)
</TABLE>
21
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Title
- -------- ---------------------------------------------------------------
<S> <C>
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. Danely (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
10.37 Contract Award Notification - Clark County
10.38 Joint Venture Agreement
10.39 Employment Agreement with Mr. Grasmick
10.40 Contract between Registrant and Clark County, Nevada
10.41 Contract between Registrant and Clark County, Nevada
10.42 Contract between Registrant and Utah Department of
Transportation
10.43 Contract between Registrant and Arizona Department of
Transportation
10.44 Promissory Note executed by Nevada State Bank
10.45 Escrow Settlement Documents and related Promissory Note
10.46 Conveyor Sales Contract and Security Agreement
10.47 CAT Financial Installment Sale Contract
10.48 Second and Third Amendments to Office Lease of the Registrant
10.49 Lease Agreement with US Bancorp
10.50 Lease Agreement with CIT Group
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)
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
Exhibit
No. Title
- -------- ---------------------------------------------------------------
<S> <C>
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)
</TABLE>
- --------
(1) Incorporated by reference to the Company's Registration Statement on Form
S-1, File Number 33-87750 declared effective October 16, 1995.
23
<PAGE>
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
By: /s/ Bradley E. Larson Date: March 19, 1997
------------------------------------------------
Bradley E. Larson
President and Chief Executive Officer
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/ Kenneth D. Nelson
- --------------------------------- ----------------------------------------
Bradley E. Larson, Kenneth D. Nelson,
Director, President and Director, Chief Financial Officer,
Chief Executive Officer Treasurer and Vice President - Finance
Date: March 19, 1997 Date: March 19, 1997
---------------------------- -----------------------------------
/s/ Paul R. Lewis /s/ Donald W. Townsend
- --------------------------------- ----------------------------------------
Paul R. Lewis, Donald W. Townsend,
Director and Chief Director
Operating Officer Date: March 19, 1997
Date: March 19, 1997 -----------------------------------
----------------------------
/s/ Alan A. Terril /s/ Gary A. Agron
- --------------------------------- ----------------------------------------
Alan A. Terril, Gary A. Agron,
Director and Vice Director
President - Nevada Date: March 19, 1997
Operations -----------------------------------
Date: March 19, 1997
----------------------------
/s/ Charles E. Cowan /s/ Julie L. Bergo
- --------------------------------- ----------------------------------------
Charles E. Cowan, Julie L. Bergo,
Director Secretary and Principal Accounting
Date: March 19, 1997 Officer
---------------------------- Date: March 19, 1997
-----------------------------------
/s/ Scott E. Miller
- ---------------------------------
Scott E. Miller
Director
Date: March 19, 1997
----------------------------
24
<PAGE>
INDEX TO FINANCIAL STATEMENTS
Meadow Valley Corporation and Subsidiaries
<TABLE>
<S> <C>
Independent Certified Public Accountants' Report.................. F-2
Consolidated Balance Sheets at December 31, 1995 and 1996......... F-3
Consolidated Statements of Operations for the period from
the date of inception, September 15, 1994 through
December 31, 1994 and for the years ended December 31,
1995 and 1996................................................... F-4
Consolidated Statements of Changes in Stockholders'
Equity for the period from the date of inception,
September 15, 1994 through December 31, 1994 and for the
years ended December 31, 1995 and 1996.......................... F-5
Consolidated Statements of Cash Flows for the period from
the date of inception, September 15, 1994 through December
31, 1994 and for the years ended December 31, 1995 and
1996............................................................ F-6
Notes to Consolidated Financial Statements........................ F-8
</TABLE>
F-1
<PAGE>
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS' REPORT
To The Stockholders and Board of Directors of
Meadow Valley Corporation
We have audited the accompanying consolidated balance sheets of Meadow Valley
Corporation and Subsidiaries as of December 31, 1995 and 1996, and the related
consolidated statements of operations, changes in stockholders' equity and cash
flows for the period from the date of inception, September 15, 1994, through
December 31, 1994 and the years ended December 31, 1995 and 1996. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted audit standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial statements.
An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall consolidated
financial statement presentation. We believe our audits of the consolidated
financial statements provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Meadow
Valley Corporation and Subsidiaries as of December 31, 1995 and 1996, and the
consolidated results of their operations, and cash flows for the period from the
date of inception, September 15, 1994, through December 31, 1994 and for the
years ended December 31, 1995 and 1996, in conformity with generally accepted
accounting principles.
BDO Seidman, LLP
Los Angeles, California
February 28, 1997
F-2
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, December 31,
Assets: 1995 1996
------------- -------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents (Notes 1 and 3).............................................. $ 5,357,904 $ 1,440,519
Restricted cash (Notes 1 and 3)........................................................ 2,629,549 1,415,577
Accounts receivable (Notes 1 and 4).................................................... 13,710,390 26,861,458
Prepaid expenses and other............................................................. 67,000 836,086
Note receivable - related parties (Note 12)............................................ 257,575 257,575
Note receivable - other (Note 11)...................................................... - 1,855
Costs and estimated earnings in excess of billings on
uncompleted contracts (Note 5)....................................................... 2,721,178 3,726,328
------------- -------------
Total Current Assets............................................................. 24,743,596 34,539,398
Property and equipment, net (Notes 1, 6, 9 and 12)....................................... 1,997,438 5,278,390
Refundable deposits...................................................................... 48,989 247,740
Note receivable - other (Note 11)........................................................ - 210,602
Goodwill, net (Note 1)................................................................... 1,900,880 1,820,850
Tradename, net (Note 1).................................................................. - 24,354
Real Estate.............................................................................. 218,883 -
------------- -------------
Total Assets..................................................................... $28,909,786 $42,121,334
============= =============
Liabilities and Stockholders' Equity:
Current Liabilities:
Notes payable - related party (Note 12)................................................ $ - $ 500,000
Notes payable - other (Note 9)......................................................... - 266,220
Obligation under capital lease (Note 14)............................................... 70,504 254,364
Accounts payable (Notes 7 and 12)...................................................... 10,985,454 19,629,807
Accrued liabilities (Notes 8, 12 and 16)............................................... 1,040,422 1,777,334
Billings in excess of costs and estimated earnings on
uncompleted contracts (Note 5)....................................................... 718,794 3,372,853
Income tax payable (Note 13)........................................................... 609,315 -
------------- -------------
Total Current Liabilities........................................................ 13,424,489 25,800,578
Deferred income taxes (Note 13).......................................................... 34,245 12,610
Obligation under capital lease (Note 14)................................................. 189,055 643,910
Note payable - related party (Note 12)................................................... 3,500,000 3,000,000
Notes payable - other (Note 9)........................................................... - 987,467
------------- -------------
Total Liabilities................................................................ 17,147,789 30,444,565
------------- -------------
Commitments and contingencies (Notes 12, 14 and 16)
Stockholders' Equity:
Preferred stock - $.001 par value; 1,000,000 shares authorized,
none issued and outstanding (Note 15)................................................ - -
Common stock - $.001 par value; 15,000,000 shares authorized,
3,601,250 issued and outstanding (Notes 15 and 19)................................... 3,601 3,601
Additional paid-in capital............................................................. 10,943,569 10,943,569
Capital adjustment (Note 2)............................................................ (799,147) (799,147)
Retained earnings...................................................................... 1,613,974 1,528,746
------------- -------------
Total Stockholders' Equity ...................................................... 11,761,997 11,676,769
------------- -------------
Total Liabilities and Stockholders' Equity....................................... $28,909,786 $42,121,334
============= =============
</TABLE>
The Accompanying Notes are an Integral Part of the Consolidated Financial
Statements
F-3
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For The Period
From The Date
of Inception,
September 15,
1994 Through For the Years Ended
December 31, December 31,
-------------- -------------------------------
1994 1995 1996
-------------- -------------- --------------
<S> <C> <C> <C>
Contract Revenues (Note 18)............. $ 18,340,303 $ 90,048,523 $ 133,723,645
Cost of Contract Revenues (Note 12)..... 17,064,719 85,694,068 130,913,060
-------------- -------------- --------------
Gross Profit............................ 1,275,584 4,354,455 2,810,585
General and Administrative Expenses..... 188,619 1,989,779 3,142,110
-------------- -------------- --------------
Income(loss) from Operations............ 1,086,965 2,364,676 (331,525)
-------------- -------------- --------------
Other Income (Expense):
Interest income......................... 114,292 470,150 741,270
Interest expense - related party
(Note 12).......................... (222,889) (1,116,464) (611,828)
Other income............................ 10,468 63,635 95,220
Offering costs written off.............. - (173,000) -
-------------- -------------- --------------
(98,129) (755,679) 224,662
-------------- -------------- --------------
Income (loss) before income taxes....... 988,836 1,608,997 (106,863)
Income tax (expense) benefit (Note 13).. (434,209) (549,650) 21,635
-------------- -------------- --------------
Net Income (loss)....................... $ 554,627 $ 1,059,347 $ (85,228)
============== ============== ==============
Net Income (loss )per share............. $ .47 $ .65 $ (.02)
============== ============== ==============
Weighted Average Common Shares
Outstanding............................ 1,175,000 1,641,663 3,601,250
============== ============== ==============
</TABLE>
The Accompanying Notes are an Integral Part of the Consolidated Financial
Statements
F-4
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
For The Period From The Date of Inception,
September 15, 1994 Through December 31, 1994
and For The Years Ended December 31, 1995 and 1996
<TABLE>
<CAPTION>
Common Stock
---------------------
Number of
Shares Paid-in Capital Retained
Outstanding Value Capital Adjustment Earnings
------------ -------- ----------- ---------- -----------
<S> <C> <C> <C> <C> <C>
Sale of common stock........................ 1,175,000 $ 1,175 $ 10,575 $ $
Net income for the period................... 554,627
Excess of purchase price over investors
predecessor cost of net assets acquired
(Note 2)................................. (799,147)
------------ -------- ----------- ---------- -----------
Balance at December 31, 1994................ 1,175,000 1,175 10,575 (799,147) 554,627
Sale of Units to the public (Note 15)....... 1,926,250 1,926 9,433,494
Issuance of common stock (Note 12).......... 500,000 500 1,499,500
Net income for the year..................... 1,059,347
------------ -------- ----------- ---------- -----------
Balance at December 31, 1995................ 3,601,250 3,601 10,943,569 (799,147) 1,613,974
Net loss for the year....................... (85,228)
------------ -------- ----------- ---------- -----------
Balance at December 31, 1996................ 3,601,250 $ 3,601 $10,943,569 $ (799,147) $ 1,528,746
============ ======== =========== ========== ===========
</TABLE>
The Accompanying Notes are an Integral Part of the Consolidated Financial
Statements
F-5
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
For The Period
From The Date of
Inception,
September 15,
1994 Through For the Years Ended
December 31, December 31,
---------------- ----------------------------
1994 1995 1996
---------------- ------------- -------------
<S> <C> <C> <C>
Increase (Decrease) in Cash and Cash Equivalents:
Cash flows from operating activities:
Cash received from customers................................ $ 20,334,596 $ 84,602,809 $ 122,322,752
Cash paid to suppliers and employees........................ (17,497,113) (85,317,317) (124,394,729)
Interest received........................................... 149,543 459,997 685,738
Interest paid............................................... - (1,195,119) (642,344)
Income taxes paid........................................... - (340,298) (1,057,049)
------------ ------------ -------------
Net cash provided by (used in) operating activities.... 2,987,026 (1,789,928) (3,085,632)
------------ ------------ -------------
Cash flows from investing activities:
Cash acquired through purchase of subsidiary................ 2,330,037 - -
Purchase of AKR Contracting tradename....................... - - (36,531)
Decreases in restricted cash................................ 585,553 316,996 1,213,972
Collection of notes receivable - related party.............. 804,000 600,000 -
Collection of note receivable - other....................... - - 876
Additional cost of acquisition.............................. - (136,058) -
Proceeds from sale of property and equipment................ 144,970 86,202 126,431
Proceeds from sale of rental real estate.................... - - 16,866
Purchase of property and equipment.......................... (217,774) (1,175,377) (1,906,084)
Purchase of real estate..................................... - (218,883) -
------------ ------------ -------------
Net cash provided by (used in)investing activities..... 3,646,786 (527,120) (584,470)
------------ ------------ -------------
Cash flows from financing activities:
Deferred offering costs..................................... (206,138) (1,166,498) -
Common stock issuance....................................... 11,750 - -
Proceeds from sale of unit to public........................ - 10,633,000 -
Distribution to stockholder................................. (1,700,000) - -
Repayment of capital lease obligation....................... - (30,974) (124,333)
Repayment of notes payable - other.......................... - - (122,950)
Repayment of note payable - related party................... - (6,500,000) -
------------ ------------ -------------
Net cash provided by (used in) financing activities.... (1,894,388) 2,935,528 (247,283)
------------ ------------ -------------
Net increase (decrease) in cash and cash equivalents............. 4,739,424 618,480 (3,917,385)
Cash and cash equivalents at beginning of period................. - 4,739,424 5,357,904
------------ ------------ -------------
Cash and cash equivalents at end of period....................... $ 4,739,424 $ 5,357,904 $ 1,440,519
============ ============ =============
</TABLE>
The Accompanying Notes are an Integral Part of the Consolidated Financial
Statements
F-6
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
<TABLE>
<CAPTION>
For The Period
From The Date of
Inception,
September 15,
1994 Through For the Years Ended
December 31, December 31,
---------------- --------------------------------
1994 1995 1996
---------------- -------------- -------------
<S> <C> <C> <C>
Increase (Decrease) in Cash and Cash Equivalents:
Reconciliation of Net Income (Loss ) to Net Cash
Provided by (used in) Operating Activities:
Net income(loss).......................................... $ 554,627 $ 1,059,347 $ (85,228)
Adjustments to reconcile net income to net cash provided
by (used in) operating activities:
Depreciation and amortization........................... 83,864 367,015 769,173
(Gain)/Loss on sale of property and equipment........... 40,321 (17,913) (38,170)
Gain on sale of rental real estate...................... - - (11,316)
Offering costs written off.............................. - 173,000 -
Changes in Assets and Liabilities, net of acquisition of
subsidiary:
Accounts receivable.................................... 1,845,193 (4,026,929) (13,095,536)
Prepaid expenses and other............................. (10,448) 17,037 (968,247)
Costs and estimated earnings in excess of billings
on uncompleted contracts.............................. 287,147 (1,647,081) (1,005,150)
Interest payable....................................... 222,889 (78,655) (30,516)
Accounts payable....................................... (230,259) 2,155,191 8,644,352
Accrued liabilities.................................... (86,931) (188,168) 767,429
Billings in excess of costs and estimated earnings
on uncompleted contracts.............................. (188,836) 182,574 2,654,059
Interest receivable.................................... 35,250 5,302 (55,532)
Income tax payable..................................... 340,298 269,017 (609,315)
Deferred income tax payable............................ 93,911 (59,665) (21,635)
---------------- --------------------------------
Net cash provided by (used in) operating activities....... $ 2,987,026 $ (1,789,928) $ (3,085,632)
---------------- --------------------------------
</TABLE>
The Accompanying Notes are an Integral Part of the Consolidated Financial
Statements
F-7
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies:
Nature of the Corporation:
Meadow Valley Corporation (the "Company") was organized under the laws
of the State of Nevada on September 15, 1994. The principal business purpose of
the Company is to operate as the holding company of Meadow Valley Contractors,
Inc. (MVC), Ready Mix, Inc. (RMI) and Prestressed Products, Inc. (PPI). MVC is a
general contractor, primarily engaged in the construction of structural concrete
highway bridges in the states of Nevada, Arizona, Utah and New Mexico. MVC was
acquired by the Company as of October 1, 1994. See Note 2. RMI is a producer and
retailer of ready-mix concrete operating in the Las Vegas metropolitan area. PPI
manufactures and/or erects prestressed products primarily in the Southern Nevada
area.
Principles of Consolidation:
The accompanying consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiaries MVC, RMI and PPI.
Intercompany transactions and balances have been eliminated in consolidation.
Accounting Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
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.
Restricted Cash:
At December 31, 1995 and December 31, 1996 funds in the amount of
$2,629,549 and $1,415,577 were held in trust, lieu of retention, on some of the
Company's construction contracts and will be released to the Company when the
contracts are completed.
Accounts Receivable:
Included in accounts receivable are trade receivables that represent
amounts billed but uncollected on completed construction contracts and
construction contracts in progress.
The Company follows the allowance method of recognizing uncollectible
accounts receivable. The allowance method recognizes bad debt expense based on
a review of the individual accounts outstanding, and the Company's prior history
of uncollectible accounts receivable. As of December 31, 1995 and December 31,
1996, no allowance has been established for potentially uncollectible accounts
receivable because, in the opinion of management, all accounts were considered
fully collectible.
F-8
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1. Summary of Significant Accounting Policies (Continued):
Property and Equipment:
Property and equipment are recorded at cost. Depreciation is provided
for on the straight-line method, over the following estimated useful lives.
<TABLE>
<S> <C>
Computer equipment 5-7 years
Construction equipment 3-8 years
Construction vehicles 5 years
Office furniture and equipment 7 years
Leasehold Improvements 5 years
</TABLE>
Goodwill:
Goodwill represents the excess of the costs of acquiring Meadow Valley
Contractors, Inc. over the fair value of its net assets and is being amortized
on the straight-line method over twenty-five (25) years. Amortization expense
charged to operations for the period from the date of acquisition to December
31, 1994 and for the years ended December 31, 1995, and 1996 amounted to
$18,465, $81,390 and $80,029. The carrying value of goodwill will be
periodically reviewed by the Company and impairments, if any, will be recognized
when expected future operating cash flows derived from goodwill is less than its
carrying value.
Tradename:
On January 2, 1996, the Company acquired the tradename of AKR
Contracting in the amount of $36,531. The tradename amortization is provided
for on a straight line basis over three years. Amortization expense charged to
operations in 1996 was $12,177.
Income Taxes:
The Company accounts for income taxes in accordance with the Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 109). SFAS
109 requires the company to recognize deferred tax assets and liabilities for
the expected future tax consequences of events that have been recognized in a
company's financial statements or tax returns. Under this method, deferred tax
assets and liabilities are determined based on the difference between the
financial statement carrying amounts and tax basis of assets and liabilities
using enacted tax rates in effect in the years in which the differences are
expected to reverse. The Company files consolidated tax returns with MVC, RMI
and PPI for federal and state tax reporting purposes.
Cash Flow Recognition:
For purposes of the statement of cash flows, the Company considers all
highly liquid instruments purchased with an initial maturity of three (3) months
or less to be cash equivalents.
Earnings Per Share:
Earnings per common share is computed by dividing the net income for
each period by the weighted average number of common shares outstanding during
the period. Common equivalent shares representing the common shares that would
be issued on exercise of outstanding stock options and warrants reduced by the
number of shares which could be purchased from the related exercise proceeds are
not included because their effect would be anti-dilutive.
Fair Value of Financial Instruments:
The Financial Accounting Standards Board issued SFAS No. 107,
Disclosures about Fair Value of Financial Statements, which is effective
December 31, 1995. This statement requires the disclosure of estimated fair
values for all financial instruments for which it is practicable to estimate
fair value.
The carrying amounts of financial instruments including cash,
restricted cash, accounts receivable, costs and estimated earnings in excess of
billings on uncompleted contracts, prepaid expenses and other, current portion
of notes receivable, current maturities of long-term debt, accounts payable and
accrued liabilities approximate fair value because of their short maturity.
F-9
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1. Summary of Significant Accounting Policies (Continued):
Fair Value of Financial Instruments (Continued):
The carrying amount of long-term debt approximates fair value because
the interest rates on these instruments approximate the rate the Company could
borrow at December 31, 1996.
New Accounting Pronouncements:
Statements of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" (SFAS No. 123) establishes a fair value method of
accounting for stock-based compensation plans and for transactions in which an
entity acquires goods or services from nonemployees in exchange for equity
instruments. The Company adopted this accounting standard on January 1, 1996.
SFAS 123 also encourages, but does not require companies to record compensation
cost for stock-based employee compensation. The Company has chosen to continue
to account for stock-based compensation utilizing the intrinsic value method
prescribed in Accounting Principles Board Opinion No. 25, "Accounting for Stock
Issued to Employees." Accordingly, compensation cost for stock options is
measured as the excess, if any, of the fair market price of the Company's stock
at the date of grant over the amount an employee must pay to acquire the stock.
Statements of Financial Accounting Standards No. 125, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities"
(SFAS No. 125) issued by the Financial Accounting Standards Board (FASB) is
effective for transfers and servicing of financial assets and extinguishments of
liabilities occurring after December 31, 1996, and is to be applied
prospectively. Earlier or retroactive applications is not permitted. The new
standard provides accounting and reporting standards for transfers and servicing
of financial assets and extinguishments of liabilities. The Company does not
expect adoption to have a material effect on its financial position or results
of operations.
2. Acquisition:
On October 24, 1994, the Company signed a Stock Purchase Agreement to
purchase all of the outstanding common stock of MVC, the acquisition was
effective as of October 1, 1994. The purchase price included a $10,000,000
promissory note, bearing interest at ten percent (10%) per annum, and due ten
days after the closing of the Initial Public Offering. Also included in the
aforementioned Stock Purchase Agreement is a $1,500,000 stock note payable,
bearing interest at six percent (6%) per annum, and due ten days after the
closing of the Initial Public Offering. Payment of the stock note payable was
made by the issuance of 500,000 shares of restricted common stock. The
promissory notes were secured by all of the outstanding common stock of MVC.
See Note 12.
The acquisition of MVC was accounted for using the purchase method of
accounting under APB Opinion 16 "Business Combinations." Accordingly, the
assets and liabilities were valued at their fair values for the portion of the
acquisition relating to new stockholders of the Company's interest which
resulted in increasing the basis of the historical book value of the net assets
acquired (all goodwill) in the amount of $1,864,676. In addition, as of October
1, 1994, $799,147 was charged to stockholders' equity and represents the
proportionate amount of the net purchase price in excess of the cost of the
interest of certain stockholders of the Company who were also stockholders of
MVC prior to the acquisition. During the year ended December 31, 1995 the
Company incurred additional costs relating to the acquisition in the amount of
$136,058.
The unaudited proforma results of operations presented below reflect
the Company's operations as though the acquisition had taken place at the
beginning of the period presented. The proforma results have been prepared for
comparative purposes only, and are not necessarily indicative of what the actual
results of operations would have been had such acquisition occurred at the
beginning of the periods presented, or what the results of operations will be in
the future.
F-10
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
2. Acquisition (Continued):
<TABLE>
<CAPTION>
For the
Year Ended
December 31,
1994
------------
<S> <C>
Revenues.............................. $80,220,521
Gross profit.......................... 5,472,878
Operating income...................... 4,704,425
Net income............................ 2,408,947
Net income per share.................. 1.44
Weighted average shares outstanding... 1,675,000
</TABLE>
Pro forma adjustments included in the table above include additional
interest on indebtedness and provision for income taxes. The weighted average
shares outstanding include the 500,000 shares of restricted common stock issued
as part of the acquisition.
3. 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, 1995 and December 31, 1996, the
Company had uninsured cash, cash equivalents, and restricted cash in the amount
of $10,132,967 and $5,434,509.
4. Accounts Receivable:
Based on the anticipated completion dates of current projects and the
Company's and MVC's history of collections, accounts receivable are expected to
be collected within one year.
Accounts receivable consist of the following:
<TABLE>
<CAPTION>
December 31, December 31,
1995 1996
------------ ------------
<S> <C> <C>
Contracts in progress.............. $ 7,347,835 $17,079,502
Contracts in progress - retention.. 5,501,653 7,590,488
Completed contracts................ 144,161 927,230
Completed contracts - retention.... 342,744 436,832
Other receivables.................. 373,997 827,406
----------- -----------
$13,710,390 $26,861,458
=========== ===========
</TABLE>
5. 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:
<TABLE>
<CAPTION>
December 31, December 31,
1995 1996
------------ ------------
<S> <C> <C>
Costs incurred on uncompleted contracts.. $ 169,957,398 164,191,228
Estimated earnings to date............... 8,000,973 7,179,053
------------- -------------
177,958,371 171,370,281
Less: billings to date................... (175,955,987) (171,016,806)
------------- -------------
$ 2,002,384 $ 353,475
============= =============
</TABLE>
F-11
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5. Contracts in Progress (Continued):
Included in the accompanying balance sheet under the following captions:
<TABLE>
<S> <C> <C>
Costs and estimated earnings in excess
of billings on uncompleted contracts.. $ 2,721,178 $ 3,726,328
Billings in excess of costs and
estimated earnings on uncompleted
contracts............................. (718,794) (3,372,853)
----------- -----------
$ 2,002,384 $ 353,475
=========== ===========
</TABLE>
6. Property and Equipment:
Property and equipment consists of the following:
<TABLE>
<CAPTION>
December 31, December 31,
1995 1996
------------ -------------
<S> <C> <C>
Land................................... $ - $ 562,901
Computer equipment..................... 81,056 173,905
Construction equipment................. 1,528,496 3,542,594
Construction vehicles (Note 14)........ 703,282 1,824,078
Office furniture and equipment......... 18,836 42,897
Leasehold Improvements................. - 42,028
----------- -----------
2,331,670 6,188,403
Accumulated depreciation............... (334,232) (972,413)
----------- -----------
1,997,438 5,215,990
Construction in progress - 62,400
----------- -----------
$ 1,997,438 $ 5,278,390
=========== ===========
</TABLE>
7. Accounts Payable:
Accounts payable consist of the following:
<TABLE>
<CAPTION>
December 31, December 31,
1995 1996
------------ ------------
<S> <C> <C>
Trade.................................. $ 6,111,551 $13,456,213
Retentions............................. 4,873,903 6,173,594
----------- -----------
$10,985,454 $19,629,807
=========== ===========
</TABLE>
8. Accrued Liabilities:
Accrued liabilities consist of the following:
<TABLE>
<CAPTION>
December 31, December 31,
1995 1996
------------ ------------
<S> <C> <C>
Salaries and wages..................... $ 563,620 $ 772,265
Interest............................... 144,234 113,717
Taxes.................................. 248,026 225,149
Insurance.............................. 16,042 276,525
Legal fees............................. 13,500 180,000
Other.................................. 55,000 209,678
----------- -----------
$ 1,040,422 $ 1,777,334
=========== ===========
</TABLE>
F-12
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
9. Notes payable - other
Notes payable - other consist of the following:
<TABLE>
<CAPTION>
December 31, December 31,
1995 1996
------------ ------------
<S> <C> <C>
10% note payable with monthly
payments of $13,777, plus
interest, due May 3, 2000,
collateralized by equipment....... $ - $ 564,846
9% note payable with monthly
payments of $5,669, due February
15, 2001, collateralized by
equipment......................... - 235,661
10% note payable with monthly
payments of $922, due December
18, 1999, collateralized by
equipment......................... - 33,180
9.33% note payable, first six
consecutive payments interest
only commencing September 15,
1996, remaining 78 months
principal and interest payments
of $7,227, due in full August 15,
2003, collateralized by the land.. - 420,000
---------- ----------
- 1,253,687
Less: current portion.............. - (266,220)
---------- ----------
$ - $ 987,467
========== ==========
</TABLE>
Following are maturities of long-term debt for each of the next 5 years:
<TABLE>
<S> <C>
1997............................... $ 266,220
1998............................... 283,390
1999............................... 293,621
2000............................... 197,332
2001............................... 82,083
Subsequent to 2001................. 131,041
----------
$1,253,687
==========
</TABLE>
10. Lines of Credit:
At December 31, 1996, the Company had available from a commercial bank
a $2,000,000 operating line of credit ("line of credit") at an interest rate of
the commercial bank's prime plus .50%, and a $2,000,000 operating line of at an
interest rate of the commercial bank's prime plus .25%. At December 31, 1996,
nothing had been drawn on either of the lines of credit. Under the lines of
credit, the Company is required to maintain certain levels of working capital,
to promptly pay all its obligations and is precluded from conveying, selling or
leasing all or substantially all of its assets. At December 31, 1996, the
Company was in full compliance with all such covenants. The lines of credit
expires August 15, 1997.
11. Note receivable - other
Note receivable - other consist of the following:
<TABLE>
<CAPTION>
December 31, December 31,
1995 1996
------------ ------------
<S> <C> <C>
8% note receivable, 84 monthly
payments in the amount of $1,565
commencing July 19, 1996, balloon
payment in the amount of $197,282
due June 19, 2003, collateralized
by deed of trust.................. $ - $212,457
Less: current portion.............. - (1,855)
-------- --------
$ - $210,602
======== ========
</TABLE>
F-13
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
12. Related Party Transactions:
Notes Receivable - Related Parties:
Notes receivable - related parties consist of the following:
<TABLE>
<CAPTION>
December 31, December 31,
1995 1996
------------ ------------
<S> <C> <C>
6% note receivable from a corporate
officer, dated December 15, 1994,
due June 15, 1997, including a six
month extension, collateralized by
100,000 shares of the Company's
common stock................... $ 257,575 $ 257,575
============ ============
</TABLE>
Equipment:
During the year ended December 31, 1996 the company purchased
equipment used in the construction business from a related party in the amount
of $299,800.
Professional Services:
During the year ended December 31, 1996, a related party rendered
professional services to the Company in the amount of $26,654.
Subcontractor/Supplier:
Various related parties performed construction work for the Company as
a subcontractor or provided materials and equipment used in the construction
business during the period September 15, 1994 through December 31, 1994 and the
years ended December 31, 1995 and 1996, in the amounts of $237,883, $119,614 and
$81,581. Included in accounts payable at December 31, 1996 are amounts due to
related parties, in the amount of $5,808.
Accrued Interest:
During the period from the date of inception September 15, 1994
through December 31, 1994 and the years ended December 31, 1995 and 1996, the
Company incurred interest expense in the amount of $222,889, $1,063,716 and
$438,699 related to notes payable to a principal stockholder. Included in
accrued liabilities at December 31, 1995 and December 31, 1996 are amounts due
to related parties, in the amount of $103,253 and $86,301. Included in accounts
receivable at December 31, 1995 and 1996 are amounts due from a related party,
in the amount of $15,455 and $15,455.
Note payable - related party:
At December 31, 1994, notes payable to a related party consisting of a
10% note payable in the amount of $10,000,000 plus a stock note payable, valued
at fair market value of $1,500,000 for accounting purposes because the note was
to be repaid through the issuance of 500,000 shares of restricted stock of the
Company. See Note 2. Interest on the stock note, in the amount of 6% per annum,
was payable in cash. The two notes were due ten days after the completion of an
initial public offering by the Company which was completed on October 16, 1995.
The notes were collateralized by the stock of MVC. On August 15, 1995 the notes
were revised requiring $5,000,000 to be repaid ten days after completion of an
initial public offering. The remaining $5,000,000 is due in five equal
installments of $1,000,000 plus interest at 12.5% per annum commencing October
31, 1995. On November 22, 1995 the Company prepaid $1,500,000 on the $5,000,000
note.
F-14
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
12. Related Party Transactions (Continued):
Note payable - related party(Continued):
At December 31, 1995 and 1996, note payable - related party was as
follows:
<TABLE>
<CAPTION>
December 31, December 31,
1995 1996
----------------- ------------------
<S> <C> <C>
12.5% note payable to a related
party, due October 16, 2000,
due in equal installments of
$1,000,000 plus accrued interest.... $ $3,500,000 $ 3,500,000
Less: current portion............ - (500,000)
----------------- ------------------
$3,500,000 $3,000,000
================= ==================
</TABLE>
Commitment:
The Company leased office space in Moapa, Nevada from a company
controlled by a principal stockholder under a non-cancelable operating lease
agreement which expired December 31, 1995. Rent expense paid under the
aforementioned operating lease agreement was $1,800 for the period from the date
of inception, September 15, 1994 through December 31, 1994. Effective January 1,
1995 the Company entered into a new lease with the same party, expiring December
31, 1995 with monthly payments of $1,200. The lease was renewed January 1, 1996
on a month to month basis with monthly payments of $800. The lease terms also
require the Company to pay common area maintenance, taxes, insurance and other
costs. Rent expense under the lease for the year ended December 31, 1995 and
1996 amounted to $14,400 and $9,600, respectively.
13. Income Taxes:
The provisions for income taxes consist of the following:
<TABLE>
<CAPTION>
September 15,
1994 (Inception)
Through For the Years Ended
December 31, December 31,
--------------- ---------------------------------
1994 1995 1996
--------------- -------------- ---------------
<S> <C> <C> <C>
Current:
Federal........... $ 322,680 $ 541,272 $ -
State............. 17,618 68,043 -
340,298 609,315 -
Deferred............. 93,911 (59,665) (21,635)
--------------- ------------- --------------
$ 434,209 $ 549,650 $ (21,635)
=============== ============= ==============
</TABLE>
Prior to October 1, 1994, MVC was a S Corporation for federal income
tax purposes. With the acquisition by the Company, MVC's S Corporation election
was revoked. Accordingly, as of October 1, 1994, income taxes amounting to
$96,700 were charged to operations due to temporary differences between the
carrying amounts of assets for financial reporting purposes and the
corresponding amounts used for income tax purposes.
F-15
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
13. Income Taxes (Continued):
The Company's deferred tax liability consists of the following, all
of which is long-term in nature:
<TABLE>
<CAPTION>
December 31,
----------------------------------------------------------
1995 1996
-------------------------- ----------------------------
<S> <C> <C>
Deferred tax asset:
Net operating loss carryforward............................... $ - $ 153,167
Deferred tax liability:
Depreciation.................................................. (34,245) (165,777)
--------------------------- ---------------------------
Net deferred tax liability..................................... $ (34,245) $ (12,610)
=========================== ===========================
</TABLE>
For the period ended December 31, 1994, the effective tax rate differs from
the federal statutory rate primarily due to state income taxes (1.8%) and the
one time charge relating to the termination of the S Corporation election
described above (9.8%). For the years ended December 31, 1995 and 1996, the
difference relates primarily to state income tax.
14. Commitments:
The Company is currently leasing office space in Phoenix, Arizona under
a separate non-cancelable operating lease agreement expiring in July 1997. On
May 1, 1996 the Company expanded its office facilities and amended the original
lease. The amended lease agreement provides for monthly payments of $4,022. The
lease terms also require the Company to pay common area maintenance, taxes,
insurance and other costs. Rent expense paid under the aforementioned operating
lease was $3,291 for the period from the date of inception, September 15, 1994
through December 31, 1994 and $14,622 and $44,481 for the years ended December
31, 1995 and 1996.
During December, 1994, the Company executed a five year employment
agreement with its chief executive officer, and executed three year employment
agreements with six of its executive officers that provide for an annual salary,
issuance of the Company's common stock and various other benefits and
incentives. At December 31, 1995 and 1996 the total commitments, excluding
benefits and incentives amount to $1,419,625 and $735,416.
The Company is the lessee of construction vehicles under capital leases
expiring in various years through 2001. The assets and liabilities under capital
leases are recorded at the lower of the present value of the minimum lease
payments or the fair value of the asset. The assets are depreciated over their
related lease terms. Depreciation on assets under capital leases charged to
expense in 1995 and 1996 was $31,481 and $114,175. At December 31, 1995 and
1996, property and equipment included $259,052 and $897,749, net of accumulated
depreciation, of construction vehicles under capital leases.
Minimum future lease payments under capital leases as of December 31,
1996 for each of the next five years and in aggregate are:
<TABLE>
<CAPTION>
Year Ended December 31, Amount
------------------------------------------------------------------------------------------- -------------------
<S> <C>
1997....................................................................................... $ 338,994
1998....................................................................................... 307,877
1999....................................................................................... 263,250
2000....................................................................................... 178,426
2001....................................................................................... 4,575
-------------------
Total minimum lease payments............................................................... 1,093,122
Less: Executory costs...................................................................... (34,415)
-------------------
Net minimum lease payments................................................................. 1,058,707
Less: Amount representing interest......................................................... (160,433)
-------------------
Present value of net minimum lease payment................................................. $ 898,274
===================
</TABLE>
F-16
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
15. Stockholders' Equity:
Preferred Stock:
The Company 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 4 years from the date
of the Offering.
16. Litigation Matters:
The Company is defending a claimed preference in connection with a
payment made to it by an insurance company in the approximate amount of
$100,000. The Company believes that the payment is not a preference, and is
vigorously defending the action. In addition, the Company's prior legal counsel
filed an arbitration action for disputed professional fees arising from its
representation of the Company. The Company had accrued a liability in the amount
of $125,000 as of December 31, 1994, representing the Company's estimated
portion of the liability. During 1995, the aforementioned dispute was resolved
resulting in additional legal fees of $36,000.
17. 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 three month period ended December 31, 1994, the Company
financed the sale of equipment in the amount of $19,559.
During the year ended December 31, 1995, the Company issued 500,000
share of restricted common stock in satisfaction of a $1,500,000 discounted
stock note payable. The Company acquired the stock of MVC for a $10 million
note payable and a 500,000 share stock note payable valued at $1,500,000
effective October 1, 1994. See Note 2.
During the year ended December 31, 1995, the Company exchanged certain
machinery and equipment with a book value of $20,000, plus cash of $74,160, for
similar equipment with a cost of $94,160, which represents the book value of
equipment given up plus the cash price.
During the years ended December 31, 1995 and 1996, the Company
financed the purchase of construction vehicles and equipment in the amount of
$290,533 and $1,719,685.
During the year ended December 31, 1996, the Company financed the
purchase of land in the amount of $420,000.
During the year ended December 31, 1996, the Company financed the sale
of real estate in the amount of $213,333.
F-17
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
18. Significant Customers:
For the period from the date of inception, September 15, 1994 through
December 31, 1994 and for the years ended December 31, 1995 and 1996, the
Company recognized a significant portion of its revenue from two Customers
(shown as an approximate percentage of total revenue):
<TABLE>
<CAPTION>
For The Period From The Date of For the Years Ended
Inception September 15, 1994 --------------------------------------
Through December 31, 1994 December 31, 1995 December 31, 1996
-------------------------------- ------------------- -----------------
<S> <C> <C> <C>
A................... 37.0% 33.2% 23.7%
B................... 43.0% 39.1% 41.3%
</TABLE>
At December 31, 1995 and December 31, 1996, amounts due from the
aforementioned Customers included in restricted cash and accounts receivable,
are as follows:
<TABLE>
<CAPTION>
December 31, December 31,
1995 1996
-------------- ----------------
<S> <C> <C>
A .................................................. $ 4,348,831 $ 3,835,166
B .................................................. 5,405,339 14,280,369
</TABLE>
19. 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 700,000 shares of its common stock for
issuance under the Plan. Granting of the options is at the discretion of the
Board of Directors and may be awarded to employees and consultants. Consultants
may receive only non-qualified stock options. The maximum term of the stock
options are 10 years and may be exercised as follows: 33.3% after one year of
continuous service, 66.6% after two years of continuous service and 100.0% after
three years of continuous service. The exercise price of each option is equal to
the market price of the Company's common stock on the date of grant. The
following summarizes the stock option transactions:
<TABLE>
<CAPTION>
Weighted Average
Shares Price Per Share
----------------- -----------------------
<S> <C> <C>
Outstanding at December 31, 1994 - -
Granted 311,000 $6.25
Forfeited (71,300) 6.25
-----------------
Outstanding at December 31, 1995 239,700 6.25
Granted 241,025 5.36
Forfeited (1,800) 5.36
-----------------
Outstanding at December 31, 1996 478,925 5.87
=================
</TABLE>
Information relating to stock options at December 31, 1996 summarized
by exercise price are as follows:
<TABLE>
<CAPTION>
Outstanding Exercisable
--------------------------------------- ----------------------------
Weighted Average Weighted Average
------------------------ -----------------
Exercise
Exercise Price Per Share Shares Life (Year) Price Shares Exercise Price
- ------------------------------------------------------ ------------- ------------- ---------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
$6.25 239,700 10 $6.25 76,950 $6.25
$4.375 to $5.41 239,225 10 5.36 - -
------------- ----------
478,925 10 5.87 76,950 6.25
============= ==========
</TABLE>
F-18
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
19. Stock Option Plan (Continued):
All stock options issued to employees have an exercise price not less
than the fair market value of the Company's Common Stock on the date of grant.
In accordance with accounting for such options utilizing the intrinsic value
method, there is no related compensation expense recorded in the Company's
financial statements for the year ended December 31, 1995 and 1996. Had
compensation cost for stock-based compensation been determined based on the fair
value of the options at the grant dates consistent with the method of SFAS 123,
the Company's net income and earnings per share for the years ended December 31,
1996, would have been reduced to the proforma amounts presented below:
<TABLE>
<CAPTION>
1995 1996
---------- -----------
<S> <C> <C>
Net income(loss)
As reported $1,059,347 $( 85,228)
Proforma - $(186,033)
Net income (loss) per share
As reported $ .65 $ (.02)
Proforma - $ (.05)
</TABLE>
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 1995 and 1996: expected life of options of 5
years, expected volatility of 30.19%, 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 1995 and 1996 approximated $1.31 and $1.23, respectively.
20. Subsequent Events:
During January 1997, the Company financed the purchase of machinery in
the amount of $157,048. The note payable has a 7.55% interest rate with monthly
payments of $4,889, due January 1, 1999.
During January 1997, the Company executed a five year employment
agreement with a third party to commence employment on April 1, 1997 as its
Chief Financial Officer. The agreement provides for an annual salary, issuance
of Company stock options and various other benefits and incentives.
F-19
<PAGE>
CONTRACT
--------
THIS CONTRACT, made and entered into this 6th day of February, 1996, between
Clark County, a political subdivision of the State of Nevada, hereinafter
referred to as the "OWNER" and Meadow Valley Contractors, Inc., (a Corporation
organized and existing under the laws of the State of Nevada), (a Partnership
consisting of N/A ), (an individual trading as N/A of the City of
-------------- -------
N/A in the State of N/A ), hereinafter referred to as the
- ---------- -----------
"CONTRACTOR".
WITNESSETH: That the said CONTRACTOR having been awarded
The Contract for the construction of the 7R/25L RUNWAY EXTENSION,
Las Vegas, Nevada.
in accordance with the Bid therefore and for and in consideration of the
promises and of the covenants and agreements, and of the payments herein
specified, to be made and performed by the CONTRACTOR and the OWNER, the
CONTRACTOR hereby covenants and agrees to and with the OWNER to undertake and
execute all of the said named Work, in a good, substantial and workmanlike
manner, and to furnish all the materials and all the tools and labor necessary
to properly perform and complete the Work ready for use, in strict accordance
with all the provisions of the Contract including the following Exhibits
attached hereto and made a part hereof:
Invitation to Bid
Bid
Contract
Exhibit "B" - Special Conditions
Exhibit "A" - General Conditions
Exhibit "C" - Compensation Conditions
Exhibit "D" - Addenda
Contract No. 2004
Bid Document Contract
December 8, 1995 Page 1 of 11
<PAGE>
Exhibit "E" - Technical Specifications
Exhibit "F" - List of Drawings
Contract Drawings
and accept as full compensation for the satisfactory performance of this
Contract the sum of FIFTEEN MILLION FOUR HUNDRED SIXTY-FIVE THOUSAND SIX HUNDRED
NINETEEN DOLLARS AND TWENTY CENTS ($15,465,619.20), which includes the base bid
amount.
The prices named in the Bid are for the completed Work, and include the
furnishing of all materials and all labor, tools, and appliances and all
expense, direct or indirect, connected with the proper execution of the Work and
of maintaining the same until it is accepted by the OWNER. In the event that
unit prices are included in the base bid amount, the sum stated above is an
estimated total Contract amount. Full compensation will be based upon the amount
or number of each unit of work approved by the OWNER as satisfactorily completed
in accordance with the Contract, multiplied by the applicable unit price set
forth in the Bid.
The CONTRACTOR shall commence the Work to be performed under this Contract on
the date set by the OWNER in the written Notice to Proceed, continuing the Work
with diligence and shall complete the entire Work in accordance with ATTACHMENT
NO. TWO TO BID, MILESTONE AND LIQUIDATED DAMAGES DATA. Further, in the event
interim milestone completion dates are established in the above ATTACHMENT NO.
TWO TO BID for separable portions of the Work, the CONTRACTOR agrees to complete
said separable portions of the Work in accordance with said milestone dates.
CONTRACTOR acknowledges that the time for completion of the Work is sufficient
for it to perform all the Work. In case of failure on the part of the CONTRACTOR
to complete the Work within the time(s) specified in the Contract, or within
such additional time(s) as may be granted by formal action of the Board of
County Commissioners or fails to prosecute the Work, or any separable part
thereof, with such diligence as will
Contract No. 2004
Bid Document Contract
December 8, 1995 Page 2 of 11
<PAGE>
insure its completion within the time(s) specified in the Contract or any
extensions thereof, the CONTRACTOR shall pay to the OWNER, as liquidated
damages, the sum(s) indicated in ATTACHMENT NO. TWO TO BID if so established
therein for milestone completion dates of separable parts of the Work and the
final completion of the Work.
The Award of this Contract is subject to the condition precedent that the
CONTRACTOR provide a Performance Bond and a Labor and Material Payment Bond as
required by the Contract Documents.
IN WITNESS WHEREOF, the Board of County Commissioners of Clark County, Nevada,
has authorized it's Director of Aviation to execute this Contract on behalf of
the said OWNER, and the CONTRACTOR has hereunto set his hand and seal the day
and year above written.
CLARK COUNTY, NEVADA
BY: /s/ Robert N. Broadbent
---------------------------------
ROBERT N. BROADBENT
Director of Aviation
NOTE: Witnesses not required for corporation, but Corporate Certificate must be
complete. Two witnesses required for Partnerships and Individuals.
Partnerships must complete Partnership Certificate
-----------------------
- --------------------------- MEADOW VALLEY CONTRACTORS, INC.
WITNESS
(CONTRACTOR)
BY: [SIGNATURE APPEARS HERE]
- --------------------------- ---------------------------------
WITNESS -SEAL-
Contact No. 2004
Bid Document Contract
December 8, 1995 Page 3 of 11
<PAGE>
CONTRACT
--------
THIS CONTRACT, made and entered into this 4th day of June, 1996, between Clark
County, a political subdivision of the State of Nevada, hereinafter referred to
as the "OWNER" and Meadow Valley Contractors, Inc., (a Corporation organized
and existing under the laws of the State of Nevada), hereinafter referred to as
the "CONTRACTOR".
WITNESSETH: That the said CONTRACTOR having been awarded
The Contract for the construction of the SATELLITE "D" SITEWORK AND
ASSOCIATED TAXIWAYS, LAS VEGAS, NEVADA.
in accordance with the Bid therefore and for and in consideration of the
promises and of the covenants and agreements, and of the payments herein
specified, to be made and performed by the CONTRACTOR and the OWNER, the
CONTRACTOR hereby covenants and agrees to and with the OWNER to undertake and
execute all of the said named Work, in a good, substantial and workmanlike
manner, and to furnish all the materials and all the tools and labor necessary
to properly perform and complete the Work ready for use, in strict accordance
with all the provisions of the Contract including the following Exhibits
attached hereto and made a part hereof:
Invitation to Bid
Bid
Contract
Exhibit "B" - Special Conditions
Exhibit "A" - General Conditions
Exhibit "C" - Compensation Conditions
Exhibit "D" - Addenda
Exhibit "E" - Technical Specifications
Contract No. 2010
Conformed Document Contract
June 4, 1996 Page 1 of 11
<PAGE>
Exhibit "F" - List of Drawings
Contract Drawings
and accept as full compensation for the satisfactory performance of this
Contract the sum of FORTY-ONE MILLION, TWENTY-SIX THOUSAND, SEVEN HUNDRED FIVE
DOLLARS AND SEVENTY CENTS ($41,026,705.70), which includes the base bid amount
and Special Allowance.
The prices named in the Bid are for the completed Work, and include the
furnishing of all materials and all labor, tools, and appliances and all
expense, direct or indirect, connected with the proper execution of the Work and
of maintaining the same until it is accepted by the OWNER. In the event that
unit prices are included in the base bid amount, the sum stated above is an
estimated total Contract amount. Full compensation will be based upon the amount
or number of each unit of work approved by the OWNER as satisfactorily completed
in accordance with the Contract, multiplied by the applicable unit price set
forth in the Bid.
The CONTRACTOR shall commence the Work to be performed under this Contract on
the date set by the OWNER in the written Notice to Proceed, continuing the Work
with diligence and shall complete the entire Work in accordance with ATTACHMENT
NO. TWO TO BID, MILESTONE AND LIQUIDATED DAMAGES DATA. Further, in the event
interim milestone completion dates are established in the above ATTACHMENT NO.
TWO TO BID for separable portions of the Work, the CONTRACTOR agrees to
complete said separable portions of the Work in accordance with said milestone
dates.
CONTRACTOR acknowledges that the time for completion of the Work is sufficient
for it to perform all the Work. In case of failure on the part of the CONTRACTOR
to complete the Work within the time(s) specified in the Contract, or within
such additional time(s) as may be granted by formal action of the Board of
County Commissioners or fails to prosecute the Work, or any separable part
thereof, with such diligence as will insure its
Contract No. 2010
Conformed Document Contract
June 4, 1996 Page 2 of 11
<PAGE>
completion within the time(s) specified in the Contract or any extensions
thereof, the CONTRACTOR shall pay to the OWNER, as liquidated damages, the
sum(s) indicated in ATTACHMENT NO. TWO TO BID if so established therein for
milestone completion dates of separable parts of the Work and the final
completion of the Work.
The Award of this Contract is subject to the condition precedent that the
CONTRACTOR provide a Performance Bond and a Labor and Material Payment Bond as
required by the Contract Documents.
IN WITNESS WHEREOF, the Board of County Commissioners of Clark County, Nevada,
has authorized it's Director of Aviation to execute this Contract on behalf of
the said OWNER, and the CONTRACTOR has hereunto set his hand and seal the day
and year above written.
CLARK COUNTY, NEVADA
BY: /s/ Robert N. Broadbent
-------------------------
ROBERT N. BROADBENT
Director of Aviation
NOTE: Witnesses not required
for corporation, but Corporate
Certificate must be complete.
Two witnesses required for [SEAL APPEARS HERE]
Partnerships and Individuals.
Partnerships must complete MEADOWVALLEY CONTRACTORS, INC.
Partnership Certificate
- -------------------------
BY: /s/ Alan Terril
- ----------------------------------- ------------------------
Witness ALAN TERRIL
- ----------------------------------- VICE-PRESIDENT
Witness -SEAL-
Contract No. 2010
Conformed Document Contract
June 4, 1996 Page 3 of 11
<PAGE>
CONTRACT
THIS AGREEMENT made and executed in Four (4) original counterparts this
16th day of October A.D. 1996 between the Utah Department of Transportation,
hereinafter called "Department," first party, and Meadow Valley Contractors,
Inc. hereinafter called "Contractor," second party.
WITNESSETH, That for and in consideration of payments, hereinafter
mentioned, to be made by the Department, the Contractor agrees to furnish all
labor and equipment; to furnish and deliver all materials not specifically
mentioned as being furnished by the Department and to do and perform all work in
the construction of Roadway Widening, Bridge Replacement and Signalization in
Davis County, State of Utah, the same being that section of I-15, I-215 to 2600
South identified as *IM-INH-15-7(193)316 and Pin No. 89 approximately 3.156
kilometers in length for the approximate sum of Fifteen Million Nine Hundred
Eighty-Five Thousand One Hundred Fifty-Five and 47/100 Dollars ($15,985,155.47).
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
[SIGNATURE APPEARS HERE]
- ---------------------------------- [SIGNATURE APPEARS HERE]
Secretary ----------------------------------------
Director of Transportation - First Party
Witnesses:
[SIGNATURE APPEARS HERE]
- ---------------------------------- Meadow Valley Contractors, Inc.
-----------------------------------------
- ----------------------------------
Approved as to form by [SIGNATURE APPEARS HERE]
---------------------------------------
by [SIGNATURE APPEARS HERE] UTAH AREA MANAGER
-------------------------------- -----------------------------------------
Assistant Attorney General Title
CONTRACT RECEIVED AND
PROCESSED BY
APPROVED DIVISION OF FINANCE
-------------------------- -----------------------------------------
Director of Finance Utah Contractor License Number
FUNDS AVAILABLE
--------------------------
[SIGNATURE APPEARS HERE] 10-21-96
-----------------------------------------
Budget Officer Date
<PAGE>
CONTRACT AGREEMENT
THIS AGREEMENT, made and entered into this 6th day of September, 1996, by and
between the STATE OF ARIZONA, acting by and through its State Engineer duly
authorized by the Director, Arizona Department of Transportation to enter into
such agreement, party of the first part, and MEADOW VALLEY CONTRACTORS, INC.
-----------------------------------
hereinafter called the Contractor, party of the second part.
WITNESSETH: That the said Contractor, for in consideration of the sum to be paid
him by said State Arizona in the manner and at the time hereinafter provided,
and of the other covenants and agreements herein contained, hereby agrees, for
himself, heirs, administrators, successors and assigns as follows:
ARTICLE I - SCOPE OF WORK: The Contractor shall perform in a workmanlike
and substantial manner and to the satisfaction of the State Engineer, all the
work specified under TRACS/Project No.
51 MA 009 H205901C RAM 600-2-514
SHEA BLV. TO THUNDERBIRD ROAD
(PHOENIX URBANIZED AREA)
(SR 51 - Squaw Peak Highway)
and furnish at his own cost and expense all necessary machinery, tools,
apparatus, materials and labor to complete the work in the most substantial and
workmanlike manner according to the Plans and Specifications therefor on
file with the State Engineer and such modifications of the same and other
directions that may be made by the State Engineer as provided herein.
ARTICLE II - CONTRACT DOCUMENTS: It is further agreed that the Proposal,
Plans, Standard Specifications, Special Provisions, Contract Bond(s) and any and
all Supplementary Agreements, and any and all requirements necessary to complete
the work in a substantial and acceptable manner, and any and all equipment and
progress statements required, are hereby referred to and made a part of this
contract, and shall have the same force and effect as though all of the same
were fully inserted herein.
ARTICLE III - WARRANTY: The Contractor expressly warrants that he is free
from obligation of any other person or persons for services rendered, or
supposed to have rendered, in the procurement of this contract. He further
agrees that any breach of the Warranty shall constitute adequate cause for the
annulment of the Contract by the State of Arizona and that the State of Arizona
may retain to its own use from any sums of money due or become due thereunder,
an amount thereof equal to any brokerage, commission, or percentage so paid, or
agreed to be paid.
ARTICLE IV - TIME OF COMPLETION: The Contractor further covenants and
agrees that all of the said materials shall be furnished and delivered and all
of the said labor shall be done and performed in every respect to the
satisfaction and approval of the State Engineer and that the said work shall be
turned over to the State Engineer, complete and ready for use, on or before the
specified time herein. The work shall be free and discharged of all claims and
demands whatsoever for, or on account of any and all labor and materials used or
furnished to be used in said work.
It is expressly understood and agreed that in case of failure on the part
of the Contractor, for any reason, except with the written consent of the State
Engineer, to complete the entire work to the satisfaction of the State Engineer,
and within the aforesaid time limit, the party of the first part shall deduct
from any money due, or which may become due the Contractor, as liquidated
damages, an amount in accordance with Subsection 108.09 of the Contract
Specifications.
If no money shall be due the Contractor, the State shall have a cause of
action to recover against the Contractor in a court of competent jurisdiction,
liquidated damages, in accordance with Subsection 108.09 of the Contract
Specifications, said deduction to be made, or said sum to be recovered, not as a
penalty, but as liquidated damages; provided, however, that upon receipt of
written notice from the Contractor, of the existence of causes, as herein
provided, over which said Contractor has no control and which must delay the
completion of said work or any delay occasioned by the Arizona Department of
Transportation, the State Engineer may extend the period hereinbefore specified
for the completion of said work in accordance with the Specifications and in
such case, the Contractor shall become liable for said liquidated damages for
delays commencing from date said extension period shall expire.
After the date as set up in Contract plus any extension granted, no further
payments shall be made the Contractor until all work is completed and accepted
by the State engineer. It is also agreed that the date of completion shall be
that upon which the work is accepted by the State Engineer.
ARTICLE V - CLAIMS FOR EXTRA WORK: It is distinctly understood and agreed
that no claim for extra work or materials, not specifically herein provided,
done or furnished by the Contractor, will be allowed by the State Engineer, nor
shall the Contractor do any work or furnish any materials not covered by these
Specifications and Contract, unless such work is ordered in writing by the State
Engineer. In no event shall the Contractor incur any liability by reason of any
oral direction or instruction that he may be given by the State Engineer, or his
authorized representatives. It is the intent and meaning of this Article that
all orders, directions, instructions, not contained in the Plans,
Specifications, and Special Provisions, pertaining to the work shall be in
writing, and the Contractor hereby waives any claims for compensation for work
done, or materials furnished in violation thereof.
ARTICLE VI - MISUNDERSTANDING OR DECEPTION: The party of the second part
agrees that he has investigated the site of the work and all parts and
appurtenances thereto and hereby waives any right to plead misunderstanding or
deception as to location, character of work or materials, estimates of
quantities or other conditions surrounding or being a part of the work and
understands that the quantities given in the Bidding Schedule are approximate
only, and hereby agrees to accept the quantities as actually placed and finally
determined upon the completion of the work, in accordance with the Contract
Documents.
ARTICLE VII - PAYMENTS: For and in consideration of the faithful
performance of the work herein embraced, as set forth in the Contract Agreement,
Specifications, Special Provisions, Bidding Schedule and all general and
detailed Specifications and Plans, which are a part hereof, and in accordance
with the directions of the State Engineer and to his satisfaction or his
authorized agents, the said State of Arizona agrees to pay to said contractor
the amount earned, computed from the actual quantities of work performed, as
shown by the estimates of the State Engineer, and the unit prices named in the
attached Bidding Schedule and Supplementary Agreements made a part hereof, and
to make such payments in the manner and at the time provided in the
specifications hereto appended.
Sheet 1 of 2
<PAGE>
ARTICLE VIII - IT IS EXPRESSLY UNDERSTOOD AND AGREED that no work shall be
done nor any obligations incurred under this contract during any fiscal year
which are in excess of the funds programmed and budgeted for this project for
that fiscal year.
ARTICLE IX - THE CONTRACTOR SHALL INDEMNIFY AND SAVE HARMLESS THE STATE,
its officers and employees, from all suits, actions or claims of any character
brought because of any injuries or damage received or sustained by any person,
persons or property on account of the operations of the said contractor or an
account of or in consequence of any neglect in safeguarding the work; or through
use of acceptable materials in constructing the work; or because of any act or
omission, neglect or misconduct of said contractor; or because of any claims or
amounts recovered from any infringements of patent, trademark or copyright; or
from any claims or amounts arising or recovered under the Workmen's Compensation
Act or any other law, ordinace, order or decree.
The contractor shall indemnify and save harmless any county or incorporated
city, its officers and employees, within the limits of which county or
incorporated city work is being performed, all in the same manner and to the
same extent as provided in the above paragraph.
IT IS FURTHER UNDERSTOOD AND AGREED that all work required to be done under
this contract in excess of the funds now appropriated and budgeted for this
project shall not be done nor any obligation incurred therefor until such time
as the Legislature appropriates the additional funds and the same are budgeted
for this project by the Arizona Department of Transportation and in that event
the parties hereto are bound to continue performance of this contract to the
extent permitted by the funds so appropriated and budgeted.
In the event that no funds are appropriated or budgeted for this project
for the succeeding fiscal year, then this contract shall be null and void,
except as to that portion for which funds have now been appropriated and
budgeted, therefore, and no right of action or damages shall accrue to the
benefit of the parties hereto as to that portion of the contract that may so
become null and void.
All parties are hereby put on notice that this contract (agreement) is
subject to cancellation by the Governor pursuant to Arizona Revised Statutes
Section 38-511.
IT IS ALSO UNDERSTOOD AND AGREED that this contract is subject to A.R.S.
28-1824, 28-1825, 28-1826, together with all other limitations pursuant to the
applicable laws of the State of Arizona relating to public contracts and
expenditures.
051 MA 009 H205901C RAM 600-2-514
SHEA BLV. TO THUNDERBIRD ROAD (PHOENIX URBANIZED AREA)
(SR 51 - Squaw Peak Highway)
Witness our hands and seals this 6th day of September 1996
STATE OF ARIZONA
By: [SIGNATURE APPEARS HERE]
-----------------------------------
for State Engineer
EVIDENCE OF AUTHORITY TO SIGN
THE CONTRACT MUST BE ON FILE
WITH THE DEPARTMENT, OTHERWISE
IT MUST BE FURNISHED WITH THE
PROPOSAL.
PARTY OF THE FIRST PART
Meadow Valley Contractors, Inc.
--------------------------------------
By: /s/ Bradley E. Larson
-----------------------------------
Contractor
Attest: [SIGNATURE APPEARS HERE] PARTY OF THE SECOND PART
---------------------------
Seal
Article IX 12-0912 R8/88
Sept. 1969 Contract Agreement
July 1969 Sheet 2 of 2
July 1, 1974
<PAGE>
PROMISSORY NOTE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$420,000.00 08-06-1996 08-15-2003 5001 91 5140 7326653 15575 [INITIALS
APPEAR HERE]
- -------------------------------------------------------------------------------------------------------
References in the shaded areas are for Lender's use only and do not limit the applicability of this
document to any particular loan or item.
- -------------------------------------------------------------------------------------------------------
</TABLE>
Borrower: Ready Mix, Inc. (TIN: 08-0171959)
100 W. Country Club Dr.
Henderson, NV 89015
Lender: NEVADA STATE BANK
CORPORATE BANKING
201 SOUTH 4TH STREET
P.O. BOX 980
LAS VEGAS, NV 89125-0980
================================================================================
Principal Amount: $420,000.00 Date of Note: August 6, 1996
PROMISE TO PAY. Ready Mix, Inc. ("Borrower") promises to pay to NEVADA STATE
BANK ("Lender"), or order, in lawful money of the United States of America, the
principal amount of Four Hundred Twenty Thousand & 00/100 Dollars ($420,000.00),
together with interest on the unpaid principal balance from August 15, 1996,
until paid in full.
PAYMENT. Borrower will pay this loan in accordance with the following payment
schedule:
"6 consecutive monthly interest payments, beginning September 15,
1996, with interest calculated on the unpaid principal balances at an
interest rate of 8.330% per annum; and 78 consecutive monthly
principal and interest payments of $7,227.38, each, beginning March
15, 1997, with interest calculated on the unpaid principal balances at
an interest rate of 9.330% per annum. Borrower's final payment of
$7,227.38 will be due on August 15, 2003. This estimated final payment
is based on the assumption that all payments will be made exactly as
scheduled; the actual final payment will be for all principal and
accrued interest not yet paid, together with any other unpaid amounts
under this Note.
Interest on this Note is computed on a 365/360 simple interest basis; that is,
by applying the ratio of the annual interest rate over a year of 360 days,
multiplied by the outstanding principal balance, multiplied by the actual number
of days the principal balance is outstanding. Borrower will pay Lender at
Lender's address shown above or at such other place as Lender may designate in
writing. Unless otherwise agreed or required by applicable law, payments will
be applied first to any unpaid collection costs and any late charges, then to
any unpaid interest, and any remaining amount to principal.
PREPAYMENT. Borrower agrees that all loan fees and other prepaid finance
charges are earned fully as of the date of the loan and will not be subject to
refund upon early payment (whether voluntary or as a result of default), except
as otherwise required by law. Except for the foregoing, Borrower may pay
without penalty all or a portion of the amount owed earlier than it is due.
Early payments will not, unless agreed to by Lender in writing, relieve Borrower
of Borrower's obligation to continue to make payments under the payment
schedule. Rather, they will reduce the principal balances due and may result in
Borrower making fewer payments.
DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any promise
Borrower has made to Lender, or Borrower fails to comply with or to perform when
due any other term, obligation, covenant, or condition contained in this Note or
any agreement related to this Note, or in any other agreement or loan Borrower
has with Lender. (c) Borrower defaults under any loan, extension of credit,
security agreement, purchase or sales agreement, or any other agreement, in
favor of any other creditor or person that may materially affect any of
Borrower's property or Borrower's ability to repay this Note or perform
Borrower's obligations under this Note or any of the Related Documents. (d) Any
representation or statement made or furnished to Lender by Borrower or on
Borrower's behalf is false or misleading in any material respect either now or
at the time made or furnished. (e) Borrower becomes insolvent, a receiver is
appointed for any part of Borrower's property, Borrower makes an assignment for
the benefit of creditors, or any proceeding is commenced either by Borrower or
against Borrower under any bankruptcy or insolvency laws. (f) Any creditor
tries to take any of Borrower's property on or in which Lender has a lien or
security interest. This includes a garnishment of any of Borrower's accounts
with Lender. (g) Any guarantor dies or any of the other events described in this
default section occurs with respect to any guarantor of this Note. (h) A
material adverse change occurs in Borrower's financial condition, or Lender
believes the prospect of payment or performance of the indebtedness is impaired.
(i) Lender in good faith deems itself insecure.
If any default, other than a default in payment, is curable and if Borrower has
not been given a notice of a breach of the same provision of this Note within
the preceding twelve (12) months, it may be cured (and no event of default will
have occurred) if Borrower, after receiving written notice from Lender demanding
cure of such default: (a) cures the default within ten (10) days; or (b) if the
cure requires more than ten (10) days, immediately initiates steps which Lender
deems in Lender's sole discretion to be sufficient to cure the default and
thereafter continues and completes all reasonable and necessary steps sufficient
to produce compliance as soon as reasonably practical.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, without
notice, and then Borrower will pay that amount. Upon default, including failure
to pay upon final maturity, Lender, at its option, may also, if permitted under
applicable law, increase the interest rate on this Note 3.000 percentage points.
The interest rate will not exceed the maximum rate permitted by applicable law.
Lender may hire or pay someone else to help collect this Note if Borrower does
not pay. Borrower also will pay Lender that amount. This includes, subject to
any limits under applicable law, Lender's attorneys' fees and Lender's legal
expenses whether or not there is a lawsuit, including attorneys' fees and legal
expenses for bankruptcy proceedings (including efforts to modify or vacate any
automatic stay or injunction), appeals, and any anticipated post-judgment
collection services. If not prohibited by applicable law, Borrower also will
pay any court costs, in addition to all other sums provided by law. This Note
has been delivered to Lender and accepted by Lender in the State of Nevada. If
there is a lawsuit, Borrower agrees upon Lender's request to submit to the
jurisdiction of the courts of Clark County, the State of Nevada (Initial Here
[INITIALS APPEAR HERE]). Lender and Borrower hereby waive the right to any jury
trial in any action, proceeding, or counterclaim brought by either Lender or
Borrower against the other. This Note shall be governed by and construed in
accordance with the laws of the State of Nevada.
RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory security
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to
Lender all Borrower's right, title and interest in and to, Borrower's accounts
with Lender (whether checking, savings, or some other account), including
without limitation all accounts held jointly with someone else and all accounts
Borrower may open in the future, excluding however all IRA and Keogh accounts,
and all trust accounts for which the grant of a security interest would be
prohibited by law. Borrower authorizes Lender, to the extent permitted by
applicable law, to charge or setoff all sums owing on this Note against any and
all such accounts, and, at Lender's option to administratively freeze all such
accounts to allow Lender to protect Lender's charge and setoff rights provided
on this paragraph.
COLLATERAL. This Note is secured by a Deed of Trust of even date.
ARBITRATION. Lender and borrower agree that:
(a) Any controversy or claim between or among the parties, including but not
limited to those arising out of or relating to this Agreement or any agreements
or instruments relating hereto or delivered in connection herewith, AND
including but not limited to a claim based on or arising from an alleged tort,
shall at the request of any party be determined by arbitration in accordance
with the Commercial Arbitration Rules of the American Arbitration Association.
The arbitration proceedings shall be conducted in Las Vegas, Nevada. The
arbitrator(s) shall have the qualifications set forth in subparagraph (c)
hereto. All statutes of limitations which would otherwise be applicable in a
judicial action brought by a party shall apply to any arbitration or reference
proceeding hereunder.
(b) In any judicial action or proceeding arising out of or relating to this
Agreement or any agreements or instruments relating hereto or delivered in
connection herewith, including but not limited to a claim based on or arising
from an alleged tort, if the controversy or claim is not submitted to
arbitration as provided and limited in subparagraph (a) hereto, all decisions of
fact and law shall be determined by a reference in accordance with Rule 53 of
the Federal Rules of Civil Procedure or Rule 53 of the Nevada Rules of Civil
Procedure or other comparable, applicable reference procedure. The parties
shall designate to the court the referee(s) selected under the auspices of the
American Arbitration Association in the same manner as arbitrators are selected
in Association-sponsored arbitration proceedings. The referee(s) shall have the
qualifications set forth in subparagraph (c) hereto.
(c) The arbitrator(s) or referee(s) shall be selected in accordance with the
rules of the American Arbitration Association from panels maintained
by the Association. A single arbitrator or referee shall be knowledgeable in
the subject matter of the dispute. Where three arbitrators or referees conduct
an arbitration or reference proceeding, the claim shall be decided by a
majority vote of the three arbitrators or referees, at least one of whom must be
knowledgeable in the subject matter of the dispute and at least one of whom must
be a practicing attorney. The arbitrator(s) or referee(s) shall award recovery
of all costs and fees (including attorney's fees, administrative fees,
arbitrator's fees and court costs). The arbitrator(s) or referee(s) also may
grant provisional or ancillary remedies such as, for example, injunctive relief,
attachment, or the appointment of a receiver, either during the pendency of the
arbitration or reference proceeding or as part of the arbitration or reference
award.
(d) Judgment upon an arbitration or reference award may be entered in any court
having jurisdiction, subject to the following limitation, the arbitration or
reference award is binding upon the parties only if the amount does not exceed
Two Million Dollars ($2,000,000), if the award exceeds that limit, either party
may commence legal action for a court trial de novo. Such legal action must be
filed within thirty (30) days following the date of the arbitration or reference
award; if such legal action is not filed within that time period, the amount of
the arbitration or reference award shall be binding. The computation of the
total amount of an arbitration or reference award shall include amounts awarded
for arbitration fees, attorneys' fees and all other related costs.
<PAGE>
CORPORATE RESOLUTION TO GUARANTEE
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------
Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
$420,000.00 08-06-1996 08-15-2003 5001 91 5140 7326653 15575 [INITIALS APPEAR HERE]
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
References in the shaded area are for Lender's use only and do not limit
the applicability of this document to any particular loan or item.
- --------------------------------------------------------------------------------
Borrower: Ready Mix, Inc. (TIN: 88-0171959)
100 W. Country Club Dr.
Henderson, NV 89015
Guarantor: Meadow Valley Corporation
4411 South 40th St. STE D11
Phoenix, AZ 85040
Lender: NEVADA STATE BANK
CORPORATE BANKING
201 SOUTH 4TH STREET
P.O. BOX 990
LAS VEGAS, NV 89125-0990
================================================================================
I, the undersigned Secretary of Assistant Secretary of the Meadow Valley
Corporation (the "Corporation"), HEREBY CERTIFY that the Corporation is
organized and existing under and by virtue of the laws of the State of Arizona
with its principal office at 4411 South 40th St. STE D11, Phoenix, AZ 85040.
I FURTHER CERTIFY that at a meeting of the Directors of the Corporation, duly
called and held on AUG 5, 1996, at which a quorum was present and voting, or
-----------
by other duly authorized corporate action in lieu of a meeting, the following
resolutions were adopted:
BE IT RESOLVED, that any one (1) of the following named officers, employees, or
agents of this Corporation, whose actual signatures are shown below:
NAME POSITION ACTUAL SIGNATURE
---- -------- ----------------
Kenneth Nelson C.F.O. X /s/ Kenneth Nelson
-------------------
acting for and on behalf of the Corporation and as its act and deed be, and he
or she hereby is, authorized and empowered:
Guaranty. To guarantee or act as surety for loans or other financial
accommodations to Ready Mix, Inc. from NEVADA STATE BANK ("Lender") on
such guarantee or surety terms as may be agreed upon betweeen the
officers or employees of this Corporation and Lender and in such sum or
sums of money as in his or her judgment should be guaranteed or assured,
without limit (the "Guaranty").
Grant Security. To mortgage, pledge, transfer, endorse, hypothecate, or
otherwise encumber and deliver to Lender, as security for the Guaranty,
any property now or hereafter belonging to the Corporation or in which
the Corporation now or hereafter may have an interest, including without
limitation all real property and all personal property (tangible or
intangible) of the Corporation. Such property may be mortgaged, pledged,
transferred, endorsed, hypothecated, or encumbered at the time such loans
are obtained or such indebtedness is incurred, or at any other time or
times, and may be either in addition to or in lieu of any property
theretofore mortgaged, pledged, transferred, endorsed, hypothecated, or
encumbered. The provisions of these Resolutions authorizing or relating
to the pledge, mortgage, transfer, endorsement, hypothecation, granting
of a security interest in, or in any way encumbering, the assets of the
Corporation shall include, without limitation, doing so in order to lend
collateral security for the indebtedness, now or hereafter existing, and
of any nature whatsoever, of Ready Mix, Inc. to Lender. The Corporation
has considered the value to itself of lending collateral in support of
such indebtedness, and the Corporation represents to Lender that the
Corporation is benefited by doing so.
Execute Security Documents. To execute and deliver to Lender the forms of
mortgage, deed of trust, pledge agreement, hypothecation agreement, and
other security agreements and financing statements which may be submitted
by Lender, and which shall evidence the terms and conditions under and
pursuant to which such liens and encumbrances, or any of them, are given;
and also to execute and deliver to Lender any other written instruments,
any chattel paper, or any other collateral, of any kind or nature, which
he or she may in his or her discretion deem reasonably necessary or
proper in connection with or pertaining to the giving of the liens and
encumbrances.
Further Acts. To do and perform such other acts and things and to execute
and deliver such other documents and agreements, including agreements
waiving the right to a trail by jury, as he or she may in his or her
discretion deem reasonably necessary or proper in order to carry into
effect the provisions of these Resolutions.
BE IT FURTHER RESOLVED, that the corporation will notify Lender in writing at
Lender's address shown above (or such other addresses as Lender may designate
from time to time) prior to any (a) change in the name of the Corporation, (b)
change in the assumed business name(s) of the Corporation, (c) change in the
management of the Corporation, (d) change in the authorized signer(s) or (e)
change in any other aspect of the Corporation that directly or indirectly
relates to any agreements between the Corporation and Lender. No change in the
name of the Corporation will take effect until after Lender has been notified.
BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to these
Resolutions are performed prior to the passage of these Resoluitons are hereby
ratified and approved, that these Resolutions shall remain in full force and
effect and Lender may rely on these Resolutions until written notice of his or
her revocation shall have been delivered to and received by Lender. Any such
notice shall not affect any of the Corporation's agreements or commitments in
effect at the time notice is given.
I FURTHER CERTIFY that the officer, employee, or agent named above is duly
elected, appointed, or employed by or for the Corporation, as the case may be,
and occupies the position set opposite the name; that the foregoing Resolutions
now stand of record on the books of the Corporation; and that the Resolutions
are in full force and effect and have not been modified or revoked in any
manner whatsoever.
IN TESTIMONY WHEREOF, I have hereunto set my hand on August 6, 1996 and attest
that the signatures set opposite the names listed above are their genuine
signatures.
CERTIFIED TO AND ATTESTED BY:
X
-------------------------------------
X [SIGNATURE APPEARS HERE]
-------------------------------------
NOTE: In case the Secretary or other certifying officer is designated by the
foregoing resolutions as one of the signing officers, it is advisable to have
this certificate signed by a second Officer or Director of the Corporation.
================================================================================
<PAGE>
CORPORATE RESOLUTION TO BORROW
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$420,000.00 08-06-1996 08-15-2003 5001 91 5140 7326653 15575 [INITIALS APPEAR HERE]
- --------------------------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the applicability of this document to any
particular loan or item.
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
Borrower: Ready Mix, Inc. (TIN: 88-0171959) Lender: NEVADA STATE BANK
100 W. Country Club Dr. CORPORATE BANKING
Henderson, NV 89015 201 SOUTH 4TH STREET
P.O. BOX 990
LAS VEGA, NV 89125-0990
================================================================================
I, the undersigned Secretary or Assistant Secretary of Ready Mix, Inc. (the
"Corporation"), HEREBY CERTIFY that the Corporation is organized and existing
under and by virtue of the laws of the State of Nevada as a corporation for
profit, with its principal office at 100 W. Country Club Dr., Henderson, NV
89015, and is duly authorized to transact business in the State of Nevada.
I FURTHER CERTIFY that at a meeting of the Directors of the Corporation, duly
called and held on Aug 5, 1996, at which a quorum was present and voting, or by
other duly authorized corporate action in lieu of a meeting, the following
resolutions were adopted:
BE IT RESOLVED, that any one (1) of the following named officers, employees or
agents of this Corporation, whose actual signatures are shown below:
NAME POSITION ACTUAL SIGNATURE
---- -------- ----------------
Kenneth Nelson Treasurer X /s/ Kenneth Nelson
----------------------
acting for and on behalf of the Corporation and as its act and deed be, and he
or she hereby is, authorized and empowered:
Borrow Money. To borrow from time to time from NEVADA STATE BANK
("Lender"), on such terms as may be agreed upon between the Corporation and
Lender, such sum or sums of money as in his or her judgment should be
borrowed, without limitation.
Execute Notes. To execute and deliver to Lender the promissory note or
notes, or other evidence of credit accomodations of the Corporation, on
Lender's forms, at such rates of interest and on such terms as may be
agreed upon, evidencing the sums of money so borrowed or any indebtedness
of the Corporation to Lender, and also to execute and deliver to Lender one
or more renewals, extensions, modifications, refinancings, consolidations,
or substitutions for one or more of the notes, any portion of the notes, or
any other evidence of credit accomodations.
Grant Security. To mortgage, pledge, transfer, endorse, hypothecate, or
otherwise encumber and deliver to Lender, as security for the payment of
any loans or credit accomodations so obtained, any promissory notes so
executed (including any amendments to or modifications, renewals, and
extensions of such promissory notes), or any other of further indebtedness
of the Corporation to Lender at any time owing, however the same may be
evidenced, any property now or hereafter belonging to the Corporation or in
which the Corporation now or hereafter may have an interest, including
without limitation all real property and all personal property (tangible or
intangible) of the Corporation. Such property may be mortgaged, pledged,
transferred, endorsed, hypothecated, or encumbered at the time such loans
are obtained or such indebtedness is incurred, or at any other time or
times, and may be either in addition to or in lieu of any property
theretofore mortgaged, pledged, transferred, endorsed, hypothecated, or
encumbered.
Execute Security Documents. To execute and deliver to Lender the forms of
mortgage, deed of trust, pledge agreement, hypothecation agreement, and
other security agreements and financing statements which may be submitted
by Lender, and which shall evidence the terms and conditions under and
pursuant to which such liens and encumbrances, or any of them, are given;
and also to execute and deliver to Lender any other written instruments,
any chattel paper, or any other collateral, of any kind or nature, which he
or she may in his or her discretion deem reasonably necessary or proper in
connection with or pertaining to the giving of the liens and encumbrances.
Negotiate Items. To draw, endorse, and discount with Lender all drafts,
trade acceptances, promissory notes, or other evidences of indebtedness
payable to or belonging to the Corporation in which the Corporation may
have an interest, and either to receive cash for the same or to cause such
proceeds to be credited to the account of the Corporation with Lender, or
to cause such other disposition of the proceeds derived therefrom as they
may deem advisable.
Further Acts. In the case of lines of credit, to designate additional or
alternate individuals as being authorized to request advances thereunder,
and in all cases, to do and perform such other acts and things, to pay any
and all fees and costs, and to execute and deliver such other documents and
agreements, including agreements waiving the right to a trial by jury, as
he or she may in his or her discretion deem reasonably necessary or proper
in order to carry into effect the provisions of these Resolutions.
BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to these
Resolutions and performed prior to the passage of these Resolutions are hereby
ratified and approved, that these Resolutions shall remain in full force and
effect and Lender may rely on these Resolutions until written notice of his or
her revocation shall have been delivered to and received by Lender. Any such
notice shall not affect any of the Corporation's agreements or commitments in
effect at the time notice is given.
BE IT FURTHER RESOLVED, that the Corporation will notify Lender in writing at
Lender's address shown above (or such other addresses as Lender may designate
from time to time) prior to any (a) change in the name of the Corporation, (b)
change in the assumed business name(s) of the Corporation, (c) change in the
management of the Corporation, (d) change in the authorized signer(s) or (e)
change in any other aspect of the Corporation that directly or indirectly
relates to any agreements between the Corporation and Lender. No change in the
name of the Corporation will take effect until after Lender has been notified.
I FURTHER CERTIFY that the officer, employee, or agent named above is duly
elected, appointed, or employed by or for the Corporation, as the case may be,
and occupies the position set opposite the name; that the foregoing Resolutions
now stand of record on the books of the Corporation; and that the Resolutions
are in full force and effect and have not been modified or revoked in any manner
whatsoever. The Corporation has no corporate seal, and therefore, no seal is
affixed to this certificate.
IN TESTIMONY WHEREOF, I have hereunto set my hand on August 6, 1996 and attest
that the signatures set opposite the names listed above are their genuine
signatures.
CERTIFIED TO AND ATTESTED BY:
X
--------------------------------
X [SIGNATURE APPEARS HERE]
--------------------------------
NOTE: In case the Secretary or other certifying officer is designated by the
foregoing resolutions as one of the signing officers, it is advisable to have
this certificate signed by a second Officer or Director of the Corporation.
================================================================================
LASER PRO, Reg. U.S. Pat. & T.M. Off., Ver. 3.21(c) 1996 CFI ProServices, Inc.
All rights reserved. [NV-C10 1READYMI.LN R18.OVL]
<PAGE>
COMMERCIAL GUARANTY
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
<S> <C> <C> <C> <C> <C> <C> <C> <C>
91 5140 7326653 15575 [INITIALS APPEAR HERE]
- --------------------------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the applicability of this document to any
particular loan or item.
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
Borrower: Ready Mix, Inc. (TIN: 88-0171959) Lender: NEVADA STATE BANK
100 W. Country Club Dr. CORPORATE BANKING
Henderson, NV 89015 201 SOUTH 4TH STREET
P.O. BOX 990
Guarantor: Meadow Valley Corporation LAS VEGAS, NV 89125-0990
4411 South 40th St. STE D11
Phoenix, AZ 85040
================================================================================
AMOUNT OF GUARANTY. The amount of this Guaranty is Unlimited.
CONTINUING UNLIMITED GUARANTY. For good and valuable consideration, Meadow
Valley Corporation ("Guarantor") absolutely and unconditionally guarantees and
promises to pay to NEVADA STATE BANK ("Lender") or its order, in legal tender of
the United States of America, the indebtedness (as that term is defined below)
of Ready Mix, Inc. ("Borrower") to Lender on the terms and conditions set forth
in this Guaranty. Under this Guaranty, the liability of Guarantor is unlimited
and the obligations of Guarantor are continuing.
DEFINITIONS. The following words shall have the following meanings when used in
this Guaranty:
Borrower. The word "Borrower" means Ready Mix, Inc.
Guarantor. The word "Guarantor" means Meadow Valley Corporation.
Guaranty. The word "Guaranty" means this Guaranty made by Guarantor for the
benefit of Lender dated August 6, 1996.
Indebtedness. The word "Indebtedness" is used in its most comprehensive
sense and means and includes any and all of Borrower's liabilities,
obligations, debts, and indebtedness to Lender, now existing or hereinafter
incurred or created, including, without limitation, all loans, advances,
interest, costs, debts, overdraft indebtedness, credit card indebtedness,
lease obligations, other obligations, and liabilities of Borrower, or any of
them, and any present or future judgments against Borrower, or any of them;
and whether any such indebtedness is voluntarily or involuntarily incurred,
due or not due, absolute or contingent, liquidated or unliquidated,
determined or undetermined; whether Borrower may be liable individually or
jointly with others, or primarily or secondarily, or as guarantor or surety;
whether recovery on the indebtedness may be or may become barred or
unenforceable against Borrower for any reason whatsoever; and whether the
indebtedness arises from transactions which may be voidable on account of
infancy, insanity, ultra vires, or otherwise.
Lender. The word "Lender" means NEVADA STATE BANK, its successors and
assigns.
Related Documents. The words "Related Documents" mean and include without
limitation all promissory notes, credit agreements, loan agreements,
environmental agreements, guaranties, security agreements, mortgages, deeds
of trust, and all other instruments, agreements and documents, whether now
or hereafter existing, executed in connection with the indebtedness.
NATURE OF GUARANTY. Guarantor's liability under this Guaranty shall be open and
continuous for so long as this Guaranty remains in force. Guarantor intends to
guarantee at all times the performance and prompt payment when due, whether at
maturity or earlier by reason of acceleration or otherwise, of all indebtedness.
Accordingly, no payments made upon the indebtedness will discharge or diminish
the continuing liability of Guarantor in connection with any remaining portions
of the indebtedness or any of the indebtedness which subsequently arises or is
thereafter incurred or contracted. Any married person who signs this Guaranty as
the Guarantor hereby expressly agrees that recourse under this agreement may be
had against both his or her separate property and community property, whether
now owned or hereafter acquired.
DURATION OF GUARANTY. This Guaranty will take effect when received by Lender
without the neccessity of any acceptance by Lender, or any notice to Guarantor
or to Borrower, and will continue in full force until all indebtedness incurred
or contracted before receipt by Lender of any notice of revocation shall have
been fully and finally paid and satisfied and all other obligations of Guarantor
under this Guaranty shall have been performed in full. If Guarantor elects to
revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written
notice of revocation must be mailed to Lender, by certified mail, at the address
of Lender listed above or such other place as Lender may designate in writing.
Written revocation of this Guaranty will apply only to advances or new
indebtedness created after actual receipt by Lender of Guarantor's written
revocation. For this purpose and without limitation, the term "new indebtedness"
does not include indebtedness which at the time of notice of revocation is
contingent, unliquidated, undetermined or not due and which later becomes
absolute, liquidated, determined or due. This Guaranty will continue to bind
Guarantor for all indebtedness incurred by Borrower or committed by Lender prior
to receipt of Guarantor's written notice of revocation, including any
extensions, renewals, substitutions of modifications of the indebtedness. All
renewals, extensions, substitutions, and modifications of the indebtedness
granted after Guarantor's revocation, are contemplated under this Guaranty and,
specifically will not be considered to be new indebtedness. This Guaranty shall
bind the estate of Guarantor as to indebtedness created both before and after
the death or incapacity of Guarantor, regardless of Lender's actual notice of
Guarantor's death. Subject to the foregoing, Guarantor's executor or
administrator or other legal representative may terminate this Guaranty in the
same manner in which Guarantor might have terminated it and with the same
effect. Release of any other guarantor or termination of any other guaranty of
the indebtedness shall not affect the liability of Guarantor under this
Guaranty. A revocation received by Lender from any one or more Guarantors shall
not affect the liability of any remaining Guarantors under this Guaranty. It is
anticipated that fluctuations may occur in the aggregate amount of indebtedness
covered by this Guaranty, and it is specifically acknowledged and agreed by
Guarantor that reductions in the amount of indebtedness, even to zero dollars
($0.00), prior to written revocation of this Guaranty by Guarantor shall not
constitute a termination of this Guaranty. This Guaranty is binding upon
Guarantor and Guarantor's heirs, successors and assigns so long as any of the
guaranteed indebtedness remains unpaid and even though the indebtedness
guaranteed may from time to time be zero dollars ($0.00).
GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before
or after any revocation hereof, without notice or demand and without lessening
Guarantor's liability under this Guaranty, from time to time: (a) prior to
revocation as set forth above, to make one or more additional secured or
unsecured loans to Borrower, to lease equipment or other goods to Borrower, or
otherwise to extend additional credit to Borrower; (b) to alter, compromise,
renew, extend, accelerate, or otherwise change one or more times the time for
payment or other terms of the indebtedness or any part of the indebtedness,
including increases and decreases of the rate of interest on the indebtedness;
extensions may be repeated and may be for longer than the original loan term;
(c) to take and hold security for the payment of this Guaranty or the
indebtedness, and exchange, enforce, waive, subordinate, fall or decide not to
perfect, and release any such security, with or without the substitution of new
collateral; (d) to release, substitute, agree not to sue, or deal with any one
or more of Borrower's sureties, endorsers, or other guarantors on any terms or
in any manner Lender may choose; (e) to determine how, when and what application
of payments and credits shall be made on the indebtedness; (f) to apply such
security and direct the order or manner of sale thereof, including without
limitation, any nonjudicial sale permitted by the terms of the controlling
security agreement or deed of trust, as Lender in its discretion may determine;
(g) to sell, transfer, assign, or grant participations in all or any part of the
indebtedness; and (h) to assign or transfer this Guaranty in whole or in part.
GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to
Lender that (a) no representations or agreements of any kind have been made to
Guarantor which would limit or qualify in any way the terms of this Guaranty;
(b) this Guaranty is executed at Borrower's request and not at the request of
Lender; (c) Guarantor has full power, right and authority to enter into this
Guaranty; (d) the provisions of this Guaranty do not conflict with or result in
a default under any agreement or other instrument binding upon Guarantor and
do not result in a violation of any law, regulation, court decree or order
applicable to Guarantor; (e) Guarantor has not and will not, without the prior
written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer,
or otherwise dispose of all or substantially all of Guarantor's assets, or any
interest therein; (f) upon Lender's request, Guarantor will provide to Lender
financial and credit information in form acceptable to Lender, and all such
financial information which currently has been, and all future financial
information which will be provided to Lender is and will be true and correct in
all material respects and fairly present the financial condition of Guarantor as
of the dates the financial information is provided; (g) no material adverse
change has occurred in Guarantor's financial condition since the date of the
most recent financial statements provided to Lender and no event has occurred
which may materially adversely affect Guarantor's financial condition; (h) no
litigation, claim, investigation, administrative proceeding or similar action
(including those for unpaid taxes) against Guarantor is pending or threatened;
(i) Lender has made no representation to Guarantor as to the creditworthiness of
Borrower; and (j) Guarantor has established adequate means of obtaining from
Borrower on a continuing basis information regarding Borrower's financial
condition. Guarantor agrees to keep adequately informed from such means of any
facts, events, or circumstances which might in any way affect Guarantor's risks
under this Guaranty, and Guarantor further agrees that, absent a request for
information, Lender shall have no obligation to disclose to Guarantor any
information or documents acquired by Lender in the course of its relationship
with Borrower.
GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives
any right to require Lender (a) to continue lending money or to extend other
credit to Borrower; (b) to make any presentment, protest, demand, or notice of
any kind, including notice of any nonpayment of the indebtedness or of any
nonpayment related to any collateral, or notice of any action or nonaction on
the part of Borrower, Lender, any surely, endorser, or other guarantor in
connection with the indebtedness or in connection with the creation of new or
additional loans or obligations; (c) to resort for payment or to proceed
directly or at once against any person, including Borrower or any other
guarantor; (d) to proceed directly against or exhaust any
<PAGE>
08-06-1996 COMMERCIAL GUARANTY Page 3
Loan No 5001 (Continued)
================================================================================
subparagraph (c) hereto. All statutes of limitations which would otherwise be
applicable in a judicial action brought by a party shall apply to any
arbitration or reference proceeding hereunder.
(b) In any judicial action or proceeding arising out of or relating to this
Agreement or any agreements or instruments relating hereto or delivered in
connection herewith, including but not limited to a claim based on or arising
from an alleged tort, if the controversy or claim is not submitted to
arbitration as provided and limited in subparagraph (a) hereto, all decisions of
fact and law shall be determined by a reference in accordance with Rule 53 of
the Federal Rules of Civil Procedure or Rule 53 of the Nevada Rules of Civil
Procedure or other comparable, applicable reference procedure. The parties shall
designate to the court the referee(s) selected under the auspices of the
American Arbitration Association in the same manner as arbitrators are selected
in Association-sponsored arbitration proceedings. The referee(s) shall have the
qualifications set forth in subparagraph (c) hereto.
(c) The arbitrator(s) or referee(s) shall be selected in accordance with the
rules of the American Arbitration Association from panels maintained by the
Association. A single arbitrator or referee shall be knowledgeable in the
subject matter of the dispute. Where three arbitrators or referees conduct an
arbitration or reference proceeding, the claim shall be decided by a majority
vote of the three arbitrators or referees, at least one of whom must be
knowledgeable in the subject matter of the dispute and at least one of whom must
be a practicing attorney. The arbitrator(s) or referee(s) shall award recovery
of all costs and fees (including attorneys' fees, administrative fees,
arbitrator's fees and court costs). The arbitrator(s) or referee(s) also may
grant provisional or ancillary remedies such as, for example, injunctive relief,
attachment, or the appointment of a receiver, either during the pendency of the
arbitration or reference proceeding or as part of the arbitration or reference
award.
(d) Judgment upon an arbitration or reference award may be entered in any court
having jurisdiction, subject to the following limitation: the arbitration or
reference award is binding upon the parties only if the amount does not exceed
Two Million Dollars ($2,000,000); if the award exceeds that limit, either party
may commence legal action for a court trial de novo. Such legal action must be
filed within thirty (30) days following the date of the arbitration or reference
award; if such legal action is not filed within that time period, the amount of
the arbitration or reference award shall be binding. The computation of the
total amount of an arbitration or reference award shall include amounts awarded
for arbitration fees, attorneys' fees and all other related costs.
(e) At the Bank's option, foreclosure under a deed of trust or mortgage may be
accomplished either by exercise of a power of sale under the deed of trust or
mortgage or by judicial foreclosure. The institution and maintenance of an
action for judicial relief or pursuit of a provisional or ancillary remedy shall
not constitute a waiver of the right of any party, including the plaintiff, to
submit the controversy or claim to arbitration if any other party contests such
action for judicial relief.
(f) Notwithstanding the applicability of other law to any other provision of
this Agreement, the Federal Arbitration Act, 9 U.S.C. Section 1 et seq., shall
apply to the construction and interpretation of this arbitration paragraph.
EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT
THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS
GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE
MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY." NO FORMAL
ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY
IS DATED AUGUST 6, 1996.
GUARANTOR:
Meadow Valley Corporation
By: /s/ Kenneth Nelson
---------------------------
Kenneth Nelson, C.F.O.
- --------------------------------------------------------------------------------
CORPORATE ACKNOWLEDGMENT
STATE OF Nevada )
-------------------------
)ss
COUNTY OF Clark )
------------------------
On this 9th day of August, 1999, before me, the undersigned Notary Public,
personally appeared Kenneth Nelson, C.F.O. of Meadow Valley Corporation, and
known to me to be an authorized agent of the corporation that executed the
Commercial Guaranty and acknowledged the Guaranty to be the free and voluntary
act and deed of the corporation, by authority of its Bylaws or by resolution of
its board of directors, for the uses and purposes therein mentioned, and on
oath stated that he or she is authorized to execute this Guaranty and in fact
executed the Guaranty on behalf of the corporation.
[SEAL APPEARS HERE]
By /s/ Carol A. Voorhees Residing at
--------------------------- --------------------------
Notary Public in and for the State of
-----------------------------
My commission expires
----------------------------
================================================================================
LASER PRO, Reg. U.S. Pat, & T.M. Off., Ver. 3.21 (c)1996 CFI ProServices, Inc.
All Rights reserved. [NV-E20 1READYMI.LNR18.OVL]
<PAGE>
DISBURSEMENT REQUEST AND AUTHORIZATION
<TABLE>
- --------------------------------------------------------------------------------------------------------------
Principal Loan Date Maturity Loan No Call Collateral Account Officer Initials
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$420,000.00 08-06-1996 08-15-2003 5001 91 5140 7326653 15575 [INITIALS APPEAR HERE]
..............................................................................................................
</TABLE>
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan item.
- --------------------------------------------------------------------------------
Borrower: Lender:
Ready Mix, Inc. (TIN: 88-0171959) NEVADA STATE BANK
100 W. Country Club Dr. CORPORATE BANKING
Henderson, NV 89015 201 SOUTH 4TH STREET
P.O. BOX 990
LAS VEGAS, NV 89125-0990
================================================================================
LOAN TYPE. This is a Fixed Rate (9.330% initial rate), Irregular Payment Loan to
a Corporation for $420,000.00 due on August 15, 2003.
PRIMARY PURPOSE OF LOAN. The primary purpose of this loan is for:
[_] Personal, Family, or Household Purposes or Personal Investment.
[x] Business (Including Real Estate Investment).
SPECIFIC PURPOSE. The specific purpose of this loan is: Acquire Property for
Concrete Batch Plant.
DISBURSEMENT INSTRUCTIONS. Burrower understands that no loan proceeds will be
disbursed until all Lender's conditions for making the loan have been satisfied.
Please disburse the loan proceeds of $420,000.00 as follows:
Amount paid to Borrower directly: $420,000.00
$420,000.00 Lender's Check # CC# 720592
--------------- -------------
Note Principal: $420,000.00
CHARGES PAID IN CASH. Borrower has paid or will pay in cash as agreed the
following charges:
Prepaid Finance Charges Paid in Cash: $2,100.00
$2,100.00 Points
-------------
Total Charges Paid in Cash: $2,100.00
FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND
WARRANTS TO LENDER THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND
THAT THERE HAS BEEN NO MATERIAL ADVERSE CHANGE IN BORROWER'S FINANCIAL CONDITION
AS DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO LENDER. THIS
AUTHORIZATION IS DATED AUGUST______________.
BORROWER:
Ready Mix, Inc.
By: /s/ Kenneth Nelson
--------------------------
Kenneth Nelson, Treasurer
================================================================================
Fixed Rate. Irregular. LASER PRO, Reg. U.S. Pat.& T.M. Off., Ver.3.21(c)
1996 CFI ProServices, Inc. All rights reserved.[NV-120 1READYMI.LN R18.OVL]
<PAGE>
ESCROW SETTLEMENT
NEVADA TITLE INSURANCE COMPANY
SELLER'S CLOSING STATEMENT
- --------------------------------------------------------------------------------
Seller:
MEADOW VALLEY CONTRACTORS THIS IS ______ TO BE A TRUE AND
CORRECT COPY OF THE ORIGINAL.
NEVADA TITLE COMPANY
BY [SIGNATURE APPEARS HERE]
-----------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Buyer/Borrower:
ANN SHERMAN ROSE
- --------------------------------------------------------------------------------
Property Location: 465 EAST ROBINDALE C.O.E. Date: 06/19/96
Escrow Number: 96-04-0786 JH Escrow Oficer: KATHY M. DEICHLER
<TABLE>
<CAPTION>
=================================
CHARGES CREDIT
================================================================================
<S> <C> <C>
PURCHASE PRICE 243,333.00
COMMISSION
COLDWELL BANKER 8,833.65
PURCHASE MONEY DEED OF TRUST: 213,333.00
TAXES 06/19/96 TO: 07/01/96 68.28
SEWER: 06/19/96 TO: 07/01/96 6.24
ESCROW AND TITLE CHARGES
TITLE INSURANCE 1,000.40
ESCROW FEE 224.65
R.P.T.T. (REAL PROPERTY
TRANSFER TAX) 317.20
AMERICAN HOME SHIELD 295.00
NEVADA TITLE LOAN SERVICE 37.50
WALKTHRU WITHHOLD 2,500.00
THIS WILL BE THE ONLY CLOSING
STATEMENT YOU WILL RECEIVE FOR
TAX PURPOSES. A REQUEST FOR
DUPLICATION WILL RESULT IN AN
__________________.
PROCEEDS 16,866.12
================================================================================
This Statement Covers Money Settlement 243,407.52 243,407.52
THROUGH ESCROW ONLY =================================
Keep it as reference for tax NEVADA TITLE INSURANCE
purposes COMPANY
</TABLE>
<PAGE>
NEVADA TITLE COMPANY
LOAN SERVICING CONTRACT PLEASE TYPE
LOAN SERVICE NO. 103569 ESCROW NO. 96-04-0786-JH DATE: 06/10/96
-------------- --------------- --------------
This is your authorization to establish a Loan Service account. We herewith
deposit the following and instruct you to disburse payments as herein directed.
Additional contractual terms are continued on pages 3 and 4.
================================================================================
DOCUMENTS DEPOSITED:
[x] NOTE: Dated May 01, 1996 Amount $213,333.00
----------------- -----------------
[x] DEED OF TRUST: Recording Date: 06/19/96 Book 960619 Doc
----------- ---------- -----
IS THIS AN ALL-INCLUSIVE DEED OF TRUST? [_] YES [_] NO
[_] CONTRACT OF SALE: Dated:
------------------
[_] GRANT, BARGAIN SALE DEED: Dated:
-------------------
================================================================================
NOTE/CONTRACT OF SALE INFORMATION:
Interest 8.00% from 06/19/96
------ --------------
Payable:(mark one) x monthly quarterly
--- ---
semi-annually annually
--- ---
Late Charge % 5 or $ after 15 days
--- ---------- ---------------
1st Payment Due 07/19/96
-------------------
Balloon Payment or Principal Reduction Date(s):
SEVEN YEARS FROM COE 6/19/03
- ----------------------------------------------------
- ----------------------------------------------------
If the Deed of Trust is an ALL-INCLUSIVE, or if there is a Contract of Sale:
Breakdown of payment to underlying Lender:
Principal & Interest $
--------------------
Current Impound Amount $
--------------------
Total Underlying Payment $
--------------------
(ATTACH WRAP OR CONTRACT ADDENDUM)
================================================================================
Original Amount $ 213,333.00
---------------
Present Balance $ 213,333.00
---------------
Note Payment $ 1,565.36
---------------
NTC Impounds:
Taxes 170.61
-----------
Ins. 62.67
-----------
Total $ 233.28
---------------
OR
Pass-through Impounds for All-Inclusive
or Contract of Sale $
Concurrent ---------------
First Mortgage Pymnt $ 1,565.36
---------------
Payor Services Fees $ 9.00
---------------
TOTAL PAYMENT $ 1,807.64
---------------
(ATTACH IMPOUND ADDENDUM)
================================================================================
ADDITIONAL INSTRUCTIONS:
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
Insurance Company FARMERS HOME GROUP Premium $ 752.00 (PREPAID AT COE)
--------------------- ------------------------
Phone 222-0175 Agent DAVE LEDBETTER (attach copy of evidence of insurance)
----------- ------------------
Annual Tax Amount $2,047.32 on 1996(attach copy of tax printout) TAX YEAR 95-96
------------ --
================================================================================
BUYER/TRUST OR/VENDEE (PAYOR) INFORMATION:
Name: ANN SHERMAN ROSE Tax I.D. No.
----------------------------- ---------------------------
Address: P.O. Box 85234 Social Security No. (H) ###-##-####
-------------------------- ---------------
City, State, Zip: N.V. 84105 Social Security No. (W)
----------------- ---------------
Phone No.(home) 379-1453 Phone No.(work) 251-1844 Fax:
-------------- -------------- ------------
================================================================================
SELLER/BENEFICIARY/VENDOR(PAYEE) INFORMATION:
(Space provided for two (2) Sellers - Husband and Wife as One (1) Seller)
1. Name: MEADOW VALLEY CONTRACTORS, A NEVADA CORP Tax I.D. No. 88-0171959
----------------------------------------- --------------
Address: PO BOX 60726 Social Security No. (H)
----------------------------- ---------------
City, State, Zip: PHOENIX, AZ 85082 Social Security No. (W)
-------------------- ---------------
Phone No.(home) Phone No.(work) 602-437-5400 Fax: 702-864-2580
--------------- --------------- -------------
2. Name: Tax I.D. No.
---------------------------------------- --------------
Address: Social Security No. (H)
---------------------------- ---------------
City, State, Zip: Social Security No. (W)
------------------- ---------------
Phone No.(home) Phone No.(work) Fax:
--------------- --------------- -------------
================================================================================
DISTRIBUTION: (if different from above)
1. SELLER/BENEFICIARY/VENDOR(PAYEE):
Checks payable to:
----------------------------------------------------------
in the amount of $ per payment until $ or the principal
------------ -----------
amount shown above has been paid in full, together with any applicable interest.
2. SELLER/BENEFICIARY/VENDOR(PAYEE):
Checks payable to:
----------------------------------------------------------
in the amount of $ per payment until $ or the principal
------------ -----------
amount shown above has been paid in full, together with any applicable interest.
3. EXISTING LENDER:
Checks payable to:
----------------------------------------------------------
Address: Loan No.
----------------------------------- ------------------------
City, State, Zip: Total Payment Amount:
------------------------ -------------
Phone No. Fax:
-------------------------------- ------------------------------
4. ADDITIONAL PAYEE:
Checks payable to:
----------------------------------------------------------
Address: Loan No.
----------------------------------- ------------------------
City, State, Zip: Total Payment Amount:
------------------------ -------------
Phone No. Fax:
-------------------------------- ------------------------------
================================================================================
Page 1
<PAGE>
LOAN SERVICING CONTRACT
DATE: 6/10/96 LOAN SERVICE ACCOUNT: 103569
------------------------ ------------------
The payee and payor named below hereby employ and appoint Nevada Title
Company, hereinafter called "NTC", to act as servicing agent for the receipt and
disbursement of payments and the holding of documents pursuant to their terms
herein stated. NTC shall have no liability or responsibility for the legal
sufficiency of documents attached hereto. However, payor and payee agree that
NTC may examine all such documents held hereunder to determine whether they are
acceptable according to the policies and requirements of NTC.
Servicing agent is authorized and instructed to hold the documents itemized
on page one of the loan servicing contract, and, this agreement is your
instructions for their use and delivery. The company WILL NOT enforce the
obligation deposited herein, and assumes responsibility only for disbursing
funds deposited with them as herein directed.
Upon payoff, the payee(s) understand(s) that it is their statutory duty to
sign the authorization and request for reconveyance and hereby agree(s) to do so
when notified by NTC. Upon payment in full of the security instrument noted, NTC
is authorized to record the appropriate reconveyance or release/payoff
documents.
1. INTEREST CALCULATION: All interest calculations by NTC shall be calculated
on a 30 day month, 360 day year unless otherwise stated. Payoffs will be
calculated on a 365 day year unless otherwise stated. Monthly payments shall be
applied in sequential order, regardless of date processed.
2. FEES: NTC shall be entitled to receive fees in accordance with its current
fee schedule, a copy of which is attached hereto as Schedule "A". Fees for
processing regularly scheduled payments shall be payable as provided herein in
addition to amount due for each payment. All other fees shall be payable in
advance by the party requesting the service. NTC may deduct from any installment
due payee, such service fees which are not paid by payor and add same to the
principal balance under the agreement, note, or deed of trust. Regular fees are
accrued on a monthly basis and are due and payable with the frequency of the
scheduled payment. NTC reserves the right to make additional charges in unusual
circumstances with notice given to the party(ies) obligated to pay for that
charge. All fees are based on present costs and are subject to change without
written notice.
The _______ payee/seller, ______payor/buyer agrees to pay periodic servicing
fees. /s/A R initials
-------
3. ACCOUNT CLOSE-OUT, WITHDRAWAL, AND RESIGNATION OF ACCOUNT SERVICING AGENT:
Payee by written instruction, may direct NTC to deliver the file to a successor
servicing agent for servicing at any time, at which time all servicing fees then
due NTC will be due and payable. The payee shall have the right to withdraw the
note and deed of trust or any modification thereof at any time without prior
notice to payor upon payment of fees due NTC. NTC, at its election, shall have
the right to resign as servicing agent under this agreement upon written notice
via first class mail to payee, payor and any other parties requesting notice as
reflected in NTC's file. NTC will return all original documents to payee
personally or by registered mail. Notice shall be sent to the last address for
each party in NTC's records. Thereafter, NTC shall have no further duty,
responsibility or liability in connection with this agreement.
4. INSUFFICIENT FUNDS: The seller agrees to refund any remittance NTC makes in
reliance on a check given by payor or their representative, which is
subsequently dishonored. The payor will be responsible for any charges required
to clear any payments made by personal check. Any returned item will be subject
to NTC's current return item charge. NTC reserves the right to hold funds until
the payor's draft has been cleared or certified funds have been received.
5. DEFAULT: The parties hereto agree that NTC may decline (for any reason) to
conduct a trustee's sale proceeding. NTC will not conduct a forfeiture on any
contract of sale.
6. ASSIGNMENTS: No transfer or assignment of any rights hereunder shall be made
by anyone having an interest herein unless made in such manner and accompanied
by such deed and other instruments as shall be required by NTC and the related
costs have been fully paid and all instruments deposited with NTC.
7. ADDRESS CHANGE: All address changes must be made in writing to NTC. The last
notice of change of address delivered in writing to NTC and signed by the
respective party shall be used by NTC in mailing any notice, demand, funds. etc.
Page 3
<PAGE>
LOAN SERVICING CONTRACT
DATE: 06/10/96 LOAN SERVICE ACCOUNT: 103569
-------------------- ----------------
8. ADDITIONAL INSTRUCTIONS: Any additional instructions shall become a part of
this agreement as if same were stated herein. In the case of any inconsistency
between the additional instructions or other documents and this Loan Servicing
Contract, the Loan Servicing Contract shall control NTC's duties and
obligations.
9. FIRE INSURANCE: It is the responsibility of the payor and payee to obtain
fire and/or casualty insurance in a sufficient amount and to renew the policy
upon expiration and otherwise keep the policy in force while this account is
being serviced, notwithstanding the servicing of an impound account by NTC.
10. CERTIFIED FUNDS REQUIREMENT: To expedite disbursement by NTC, all payments
other than one regular monthly installment must be paid in the form of a
certified or cashier's check. NTC may at its sole option require certified or
cashier's check from payor, or present payor's checks for clearance prior to
disbursement. Any late charges or penalties that may accrue as result of NTC's
clearance of any payments will be the responsibility of the payor. Any payment
received by NTC is subject to acceptance of same by the payee.
11. BILLING: It is the intention of NTC to provide billing notices or payment
coupons for the convenience of the payor; however, billing notices and payment
coupons are sent as a courtesy only, and, the failure to forward a billing
notice or payment coupons does NOT excuse the payor's responsibility to make
timely payments. Only one payor will be designated to remit total payment due in
the event of multiple payors.
12. JOINT TENANCY CLAUSE: ATTENTION PAYEE: By signing below the payee(s) {does
____ does not ____}{choose one} elect to hold contract interest and take the
proceeds of the sale or mortgage or deed of trust not as tenants in common and
not as community property estate, but as joint tenants with the right of
survivorship.
13. NOTICE: Late notices are not sent to the payor unless specifically requested
through the late notice program. Notices can be sent to the payor and/or a copy
to the payee. The fee is based on the number of parties receiving notice.
Notices requested are charged monthly based on current fee schedule. Indicate
below parties to receive notices: payor/payees_________________
14. INTERPLEADER AND INDEMNITY: In the event conflicting demand is made upon NTC
concerning these or subsequent instructions, NTC may, at its election, hold any
funds and documents deposited hereunder until an action shall be brought in a
court of competent jurisdiction to determine the rights of payee and payor or,
NTC may interplead funds or documents. Payee and payor, jointly and severally,
agree to indemnify and hold harmless NTC against all costs, damages, attorney's
fees, expenses and liabilities which NTC may incur or sustain in connection with
servicing the account or any court action arising therefrom, including any
interpleader action brought by NTC. Payee or Payor jointly and severally agree
to pay NTC promptly upon demand for any costs, damages, attorney's fees,
expenses and liabilities so incurred.
15. OVERPAYMENT (RIGHT OF OFFSET): The undersigned agree that if payor or payee
are unjustly enriched, due to error or otherwise, they will immediately
reimburse NTC such amount as requested. NTC shall have a right of offset against
the funds it is holding or against funds which come into its possession, in
order to correct any such overpayment to the party unjustly enriched. In the
event a post-disbursement adjustment is necessary, payor and payees authorize
NTC at its discretion to advance funds on their behalf to effect an accurate
disbursement. The undersigned agree to fully cooperate and pay to NTC any and
all funds so advanced on their behalf.
This agreement shall be binding upon and benefit the parties and their
heirs, devisees, personal representatives, officers, directors, employees,
shareholders, receivers and assigns. The undersigned acknowledge that they have
thoroughly read and approved each of the provisions contained herein and
acknowledge receipt of a copy of this contract.
PAYOR /s/ Ann Sherman Rose PAYEE /s/ Kenneth D. Nelson
------------------------- -------------------------
ANN SHERMAN ROSE MEADOW VALLEY CONTRACTORS
PAYOR PAYEE
------------------------- -------------------------
PAYOR PAYEE
------------------------- -------------------------
Page 4
<PAGE>
NEVADA TITLE COMPANY
LOAN SERVICING CONTRACT PLEASE TYPE
LOAN SERVICE NO. 103569 ESCROW NO. 96-04-0786-JH DATE: 06/10/96
-------------- --------------- --------------
This is your authorization to establish a Loan Service account. We herewith
deposit the following and instruct you to disburse payments as herein directed.
Additional contractual terms are continued on pages 3 and 4.
================================================================================
DOCUMENTS DEPOSITED:
[x] NOTE: Dated May 01, 1996 Amount $213,333.00
----------------- -----------------
[x] DEED OF TRUST: Recording Date: Book Doc
----------- ---------- -----
IS THIS AN ALL-INCLUSIVE DEED OF TRUST? [_] YES [_] NO
[_] CONTRACT OF SALE: Dated:
------------------
[_] GRANT, BARGAIN SALE DEED: Dated:
-------------------
================================================================================
NOTE/CONTRACT OF SALE INFORMATION:
Interest 8.00% from
------ --------------
Payable:(mark one) x monthly quarterly
--- ---
semi-annually annually
--- ---
Late Charge % 5 or $ after 15 days
--- ---------- ---------------
1st Payment Due
-------------------
Balloon Payment or Principal reduction Date(s):
SEVEN YEARS FROM COE / /
- ----------------------------------------------------
- ----------------------------------------------------
If the Deed of Trust is an ALL-INCLUSIVE, or if there is a Contract of Sale:
Breakdown of payment to underlying Lender:
Principal & Interest $
--------------------
Current Impound Amount $
--------------------
Total Underlying Payment $
--------------------
(ATTACH WRAP OR CONTRACT ADDENDUM)
================================================================================
Original Amount $
---------------
Present Balance $
---------------
Note Payment $
---------------
NTC Impounds:
Taxes 170.61
-----------
Ins.
-----------
Total $
---------------
OR
Pass-through Impounds for All-Inclusive
or Contract of Sale $
Concurrent ---------------
First Mortgage Pymt $ 1,565.36
---------------
Payor Service Fees $
---------------
TOTAL PAYMENT $
---------------
(ATTACH IMPOUND ADDENDUM)
================================================================================
ADDITIONAL INSTRUCTIONS:
- ---------------------------------------------------------------------
- ---------------------------------------------------------------------
Insurance Company Premium $
--------------------- ---------------------
Phone Agent (attach copy of evidence of insurance)
----------- ------------------
Annual Tax Amount $ on 19 (attach copy of tax printout)
----------- --
================================================================================
BUYER/TRUST OR/VENDEE (PAYOR) INFORMATION:
Name: ANN SHERMAN ROSE Tax I.D. No.
----------------------------- ---------------------------
Address: P.O. Box 85234 Social Security No. (H) ###-##-####
-------------------------- ---------------
City, State, Zip: N.V. 89185 Social Security No. (W)
----------------- ---------------
Phone No.(home) 379-1453 Phone No.(work) 251-1844 Fax:
-------------- -------------- ------------
================================================================================
SELLER/BENEFICIARY/VENDOR(PAYEE) INFORMATION:
(Space provided for two (2) Sellers - Husband and Wife as One (1) Seller)
1. Name: MEADOW VALLEY CONTRACTORS, A NEVADA CORP Tax I.D. No. 88-0171959
------------------------------------------ --------------
Address: PO BOX 60726 Social Security No. (H)
----------------------------- ---------------
City, State, Zip: PHOENIX, AZ 85082 Social Security No. (W)
-------------------- ---------------
Phone No.(home) Phone No.(work) 602-437-5400 Fax: 702-864-2580
--------------- --------------- -------------
2. Name: Tax I.D. No.
------------------------------------------ --------------
Address: Social Security No. (H)
----------------------------- ---------------
City, State, Zip: Social Security No. (W)
-------------------- ---------------
Phone No.(home) Phone No.(work) Fax:
--------------- --------------- -------------
================================================================================
DISTRIBUTION: (if different from above)
1. SELLER/BENEFICIARY/VENDOR(PAYEE):
Checks payable to:
----------------------------------------------------------
in the amount of $ per payment until $ or the principal
------------ -----------
amount shown above has been paid in full, together with any applicable interest.
2. SELLER/BENEFICIARY/VENDOR(PAYEE):
Checks payable to:
----------------------------------------------------------
in the amount of $ per payment until $ or the principal
------------ -----------
amount shown above has been paid in full, together with any applicable interest.
3. EXISTING LENDER:
Checks payable to:
----------------------------------------------------------
Address: Loan No.
----------------------------------- ------------------------
City, State, Zip: Total Payment Amount:
------------------------ -------------
Phone No. Fax:
-------------------------------- ------------------------------
4. ADDITIONAL PAYEE:
Checks payable to:
----------------------------------------------------------
Address: Account No.
----------------------------------- ---------------------
City, State, Zip: Total Payment Amount:
------------------------ -------------
Phone No. Fax:
-------------------------------- ------------------------------
================================================================================
Page 1
<PAGE>
Nevada Title Company
Financial Services Department
FEE SCHEDULE
<TABLE>
<S> <C>
Set up fee - Regular Note up to 4 payees .................... $50.00
Set up fee - Lease or Rental Agreement ...................... $75.00
Set up fee - All-Inclusive and Contract of Sale ............. $75.00
Set up fee - Impound account ................................ $75.00
Additional fee per payee - 5 or more ........................ $5.00
Periodic Service Fees:
Monthly per check fee ....................................... $6.00
Monthly impound fee ......................................... $9.00
Quarterly per check fee ..................................... $10.00
Semi-Annual per check fee ................................... $12.00
Annual per check fee ........................................ $15.00
Late Notice upon request to payee ........................... $2.00
Return check fee ............................................ $25.00
Cancellation fee ............................................ $25.00
Assignment fee .............................................. $25.00
Beneficiary Statement/Assumption fee ........................ $50.00
Payoff Statement (Demand) fee ............................... $50.00
Update Fee (per request) .................................... $10.00
Modification fee ............................................ $50.00
Full Reconveyance (Trustee) fee ............................. $100.00
Partial Reconveyance (Trustee) fee .......................... $100.00
Recording fee ............................. per Clark County Recorder
</TABLE>
At the time the loan service account is closed or canceled, or at any time while
the account is open, should Nevada Title Company be required to maintain funds
on deposit, not specifically identified for impounds, they are hereby authorized
to retain out of those funds held in said account, a reasonable service charge
in an amount not less than twenty-five ($25.00) dollars per month for the
administration of said funds.
All fees are minimum. The fees set forth herein are subject to change without
notice, and are subject adjustment based on the transaction. Additional fees may
be incurred where unusual conditions are present.
Initials [INITIALS APPEAR HERE]
--------
Initials [INITIALS APPEAR HERE]
--------
Initials
--------
Initials
--------
Initials
--------
(Loan Servicing Contract continued on Page 3)
Page 2
#73 Rev. 1/95
<PAGE>
LOAN SERVICING CONTRACT
DATE: 6/10/96 LOAN SERVICE ACCOUNT: 103569
------------ -------------
The payee and payor named below hereby employ and appoint Nevada Title
Company, hereinafter called "NTC", to act as servicing agent for the receipt and
disbursement of payments and the holding of documents pursuant to their terms
herein stated. NTC shall have no liability or responsibility for the legal
sufficiency of documents attached hereto. However, payor and payee agree that
NTC may examine all such documents held hereunder to determine whether they are
acceptable according to the policies and requirements of NTC.
Servicing agent is authorized and instructed to hold the documents itemized
on page one of the loan servicing contract, and, this agreement is your
instructions for their use and delivery. The company WILL NOT enforce the
obligation deposited herein, and assumes responsibility only for disbursing
funds deposited with them as herein directed.
Upon payoff, the payee(s) understand(s) that it is their statutory duty to
sign the authorization and request for reconveyance and hereby agree(s) to do so
when notified by NTC. Upon payment in full of the security instrument noted, NTC
is authorized to record the appropriate reconveyance or release/payoff
documents.
1. INTEREST CALCULATION: All interest calculations by NTC shall be calculated on
a 30 day month, 360 day year unless otherwise stated. Payoffs will be calculated
on a 365 day year unless otherwise stated. Monthly payments shall be applied in
sequential order, regardless of date processed.
2. FEES: NTC shall be entitled to receive fees in accordance with its current
fee schedule, a copy of which is attached hereto as Schedule "A". Fees for
processing regularly scheduled payments shall be payable as provided herein in
addition to amount due for each payment. All other fees shall be payable in
advance by the party requesting the service. NTC may deduct from any installment
due payee, such service fees which are not paid by payor and add same to the
principal balance under the agreement, note, or deed of trust. Regular fees are
accrued on a monthly basis and are due and payable with the frequency of the
scheduled payment. NTC reserves the right to make additional charges in unusual
circumstances with notice given to the party(ies) obligated to pay for that
charge. All fees are based on present costs and are subject to change without
written notice.
The 50% payee/seller, 50% payor/buyer agrees to pay periodic servicing fees.
------- -------
[INITIALS APPEAR HERE]
- ----------------------- Initials
[INITIALS APPEAR HERE]
3. ACCOUNT CLOSE-OUT, WITHDRAWAL, AND RESIGNATION OF ACCOUNT SERVICING AGENT:
Payee by written instruction, may direct NTC to deliver the file to a successor
servicing agent for servicing at any time, at which time all servicing fees then
due NTC will be due and payable. The payee shall have the right to withdraw the
note and deed of trust or any modification thereof at any time without prior
notice to payor upon payment of fees due NTC. NTC, at its election, shall have
the right to resign as servicing agent under this agreement upon written notice
via first class mail to payee, payor and any other parties requesting notice as
reflected in NTC's file. NTC will return all original documents to payee
personally or by registered mail. Notice shall be sent to the last address for
each party in NTC's records. Thereafter, NTC shall have no further duty,
responsibility or liability in connection with this agreement.
4. INSUFFICIENT FUNDS: The seller agrees to refund any remittance NTC makes in
reliance on a check given by payor or their representative, which is
subsequently dishonored. The payor will be responsible for any charges required
to clear any payments made by personal check. Any returned item will be subject
to NTC's current returned item charge. NTC reserves the right to hold funds
until the payor's draft has been cleared or certified funds have been received.
5. DEFAULT: The parties hereto agree that NTC may decline (for any reason) to
conduct a trustee's sale proceeding. NTC will not conduct a forfeiture on any
contract of sale.
6. ASSIGNMENTS: No transfer or assignment of any rights hereunder shall be made
by anyone having an interest herein unless made in such manner and accompanied
by such deed and other instruments as shall be required by NTC and the related
costs have been fully paid and all instruments deposited with NTC.
7. ADDRESS CHANGE: All address changes must be made in writing to NTC. The last
notice of change of address delivered in writing to NTC and signed by the
respective party shall be used by NTC in mailing any notice, demand, funds, etc.
Page 3
<PAGE>
DO NOT DESTROY THIS NOTE: When paid, this note with Deed of Trust
securing same must be surrendered to Trustee for cancellation before
reconveyance will be made.
- --------------------------------------------------------------------------------
No.
--------------
Note Secured by Deed of Trust
(STRAIGHT NOTE)
$213,333.00 LAS VEGAS , Nevada, May 1, 1996
- ----------- ------------------------------- ---------------------------
DUE ON OR BEFORE for value
- ----------------------------------------------------------------------
received, undersigned promise to pay to MEADOW VALLEY CONTRACTORS, A NEVADA
----------------------------------------
CORPORATION
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
or order, at LAS VEGAS, NEVADA OR AS DIRECTED BY PAYEE
-------------------------------------------------------------------
the sum of Two Hundred Thirteen Thousand Three Hundred Thirty-Three DOLLARS,
---------------------------------------------------------
with interest from 06/19/96 until paid, at the rate of 8.00%
------------------------ ---------
per cent per annum, payable monthly beginning 07/19/96 in the amount of
----------------------------------------------------
1,565.36 or more and continuing on the same day of each month until 06/19/03, at
which time the entire unpaid principal balance plus accrued interest shall
become all due and payable.
In addition to the payments of principal and interest, payor agrees to pay
impounds in an amount equal to 1/12th of the annual real estate taxes, and
1/12th of the annual fire insurance premium.
If any installment is not received within Fifteen (15) days following the
scheduled due date a late charge of 5% shall be assessed to said installment.
The Deed of Trust securing this Note contains an alienation (due on sale)
provision.
Should default be made in payment of any principal or interest or in
performance of any obligation contained in Deed of Trust by which this note is
secured, the whole sum of principal and interest shall become immediately due at
the option of the holder hereof. Principal and interest payable in lawful money
of the United States. If action be instituted in any Court to enforce any
obligation secured by such Deed of Trust, undersigned promise to pay such sum as
the court may fix as attorney's fees in said action. This Note is secured by a
DEED OF TRUST, of even date herewith, to NEVADA TITLE COMPANY, a Nevada
Corporation.
/s/ Ann Rose
- ------------------------------------- ---------------------------------------
ANN SHERMAN ROSE
- ------------------------------------- ---------------------------------------
- ------------------------------------- ---------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
SHORT FORM DEED OF TRUST AND ASSIGNMENT OF RENTS
This Deed of Trust, made this 1ST day of May, 1996, between ANN SHERMAN ROSE,
AN UNMARRIED WOMAN
herein called GRANTOR or TRUSTOR
whose address is 465 EAST ROBINDALE LAS VEGAS, NEVADA
------------------ ---------- ------ -----
(number and street) (city) (state) (zip)
NEVADA TITLE COMPANY, a Nevada Corporation, herein called TRUSTEE, and MEADOW
VALLEY CONTRACTORS, A NEVADA CORPORATION
, herein called BENEFICIARY,
Witnesseth: That Trustor IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS TO TRUSTEE IN
TRUST, WITH POWER OF SALE, that property CLARK County, Nevada, described
as:
THAT PORTION OF THE NORTHWEST QUARTER (NW 1/4) OF THE SOUTHWEST QUARTER (SW 1/4)
OF SECTION 10, TOWNSHIP 22 SOUTH, RANGE 61 EAST, M.D.B. & M., DESCRIBED AS
FOLLOWS: (SEE THE EXHIBIT "A" ATTACHED HERETO AND MADE A PART HEREOF BY THIS
REFERENCE FOR THE COMPLETE LEGAL DESCRIPTION)
"IF THE TRUSTOR SHALL SELL, CONVEY OR ALIENATE THE HEREIN DESCRIBED PROPERTY
OR ANY PART THEREOF OR ANY INTEREST THEREIN, OR SHALL BE DIVESTED OF HER TITLE
OR ANY INTEREST THEREIN, IN ANY MANNER OR WAY, WITHOUT HAVING FIRST OBTAINED
BENEFICIARY'S WRITTEN CONSENT TO DO SO, THE ENTIRE BALANCE OF THE NOTE SECURED
HEREBY SHALL AT THE OPTION OF THE HOLDER THEREOF, AND WITHOUT DEMAND OR NOTICE
IMMEDIATELY BECOME DUE AND PAYABLE.
Together with all and singular the tenements, hereditaments and appurtenances
thereunto belonging or in anywise appertaining. TOGETHER WITH the rents, issues
and profits thereof, reserving the right to collect and use the same except
during continuance of some default hereunder and during continuance of such
default authorizing Beneficiary to collect and enforce the same by any lawful
means in the name of any party hereto. For the Purpose of Securing: 1.
Performance of each agreement of Trustor incorporated by reference or contained
herein. 2. Payment of the indebtedness evidenced by one promissory note of even
date herewith, and any extension or renewal thereof, in the principal sum of
$213,333.000 executed by Trustor in favor of Beneficiary or order. 3. Payment of
such additional sums as may hereafter be advanced for the account of Trustor or
Assigns by Beneficiary with interest thereon.
To Protect the Security of This Deed of Trust, Trustor Agrees: By the execution
and delivery of this Deed of Trust and the note secured hereby, that provisions
(1) to (16) inclusive of the Deed of Trust recorded in the Book and at the page,
or document No. of Official Records in the Office of the county recorder of the
county where said property is located, noted below opposite the name of such
county, viz:
<TABLE>
COUNTY DOCUMENT No. BOOK PAGE COUNTY DOCUMENT No. BOOK PAGE COUNTY DOCUMENT No. BOOK PAGE
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Clark 413987 514 Humboldt 116986 3 83 Nye 47157 67 163
Churchill 104132 34 mtgs. 591 Lander 41172 3 758 Ormsby 72637 19 102
Douglas 24495 22 415 Lincoln 41292 0 mtgs. 467 Pershing 57488 28 58
Elko 14831 43 343 Washoe 407205 734 221 Storey 28573 R mtgs. 112
Esmeralda 26291 3H deeds 138-141 Lyon 88486 31 mtgs. White Pine 128126 261 341-344
Eureka 39602 3 283 Mineral 76648 16 mtgs. 534-537
</TABLE>
(which provisions, identical in all countries, are printed on the reverse
hereof) hereby are adopted and incorporated herein and made a part hereof as
fully as though set forth herein at length; that he will observe and perform
said provisions, and that the references to property, obligations, and parties
in said provisions shall be construed to refer to the property, obligations, and
parties set forth in the Deed of Trust.
The parties agree with respect to provision 16, the amount of fire insurance
required by covenant 2 shall be $213,333.00 and with respect to attorney's fees
provided by for covenant 7 the percentage shall be reasonable as determined by
a court with jurisdiction.
The undersigned Trustor requests that a copy of any Notice of Default and of
any Notice of Sale hereunder be mailed to him at his address hereinabove set
forth.
STATE OF NEVADA )
COUNTY OF CLARK ) ss.
)
On June 11, 1996 /s/ Ann Sherman Rose
Before me a Notary Public, personally appeared ----------------------------
ANN SHERMAN ROSE
- ------------------------------------------------- ----------------------------
ANN SHERMAN ROSE
- ------------------------------------------------- ----------------------------
- ------------------------------------------------- ----------------------------
- ------------------------------------------------- ----------------------------
- ------------------------------------------------- ----------------------------
- ------------------------------------------------- ----------------------------
personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person
whose name is subscribed to this instrument
and acknowledged that executed it.
Signature /s/ Anna M. Hensley
--------------------------
(Notary Public)
[SEAL OF NOTARY PUBLIC APPEARS HERE] Escrow No. 96-04-0786 JH
Name MEADOW VALLEY CONTRACTORS THE ORIGINAL OF THIS DOCUMENT
Street Address WAS RECORDED ON 06/19/96
City & State AS INSTRUMENT NO. 00131
IN BOOK 960619
<PAGE>
Debtor's Copy
-------------
[LOGO OF THE ASSOCIATED
GENERAL CONTRACTORS CONVEYOR SALES COMPANY
OF AMERICA APPEARS HERE] 425 S. 48TH STREET
Phoenix, Arizona 85034
Phone: 602-273-1455 Fax: 602-273-1457
CONDITIONAL SALES CONTRACT AND SECURITY AGREEMENT
This Conditional Sales Contract and Security Agreement is made this 18th day of
December, 1996 between MEADOW VALLEY CONTRACTORS, INC. hereafter referred to as
"Debtor" and Conveyor Sales Company, an Arizona Corporation, hereafter referred
to as "Seller". Debtor hereby grants to Seller a security interest in the
personal property described in Exhibit "A" hereto, together with all attachments
replacements, substitutions, additions, and proceeds.
For Mailing, Billing, and Notice Purposes, the following Addresses, Phone
Numbers and Facsimile Numbers shall be used:
For Debtor: For Seller:
Meadow Valley Contractors, Inc. Conveyor Sales Company
4411 South 40th Street., Suite D-11 425 S. 48th Street
Phoenix, AZ 85040 Phoenix, Arizona 85034
Attention:_____________________________________ Attention: Paul C. Helmick
Phone:_________________________________________ Phone: 602-273-1455
Fax:___________________________________________ Fax: 602-273-1457
Seller has sold the personal property described in Exhibit "A" to this Agreement
to Debtor. The personal property described in Exhibit "A" shall at all times
remain personal property and shall be located at Moapa, Nevada during the term
of this Agreement. The personal property described in Exhibit "A" shall be
hereafter referred to as "Equipment".
The Equipment is to be used for only business, commercial or farming use.
The agreed total purchase price to be paid for the Equipment exclusive of
interest is $33,180.00.
Debtor has made a down payment of $ZERO.
The agreed balance owed by Debtor after application of the down payment is
$33,180.00.
The balance owed by Debtor shall be paid for a maximum period of 36 months as
follows:
1. Interest Rate: Monthly payments of $921.67 or more per month plus monthly
interest based on a 360 day year at the rate equal to 10.0%.
In the event that Norwest Bank Arizona ceases to publish its "Prime Lending
Rate" a comparable reference rate of interest shall apply during the term of
this Agreement.
Seller shall notify Debtor in writing of the interest rate which shall apply to
a particular month's payment. The interest rate for the first monthly payment
shall be at 10.0% per annum.
2. Due Date of Payments: Monthly payments shall be due and payable at the
office of Seller on or before the 18th day of each calendar month which date
shall hereafter be referred to as the "due date". The first monthly payment
under this Agreement shall be due on January 18, 1997.
3. Delinquent Payments: In the event that Seller receives a payment 5 days
after its due date, there shall be added a late charge of 5% of the monthly
payment amount due.
In the event that a payment remains delinquent 15 days after its due date, the
interest rate due from Debtor shall be increased from the amount specified in
paragraph 1 by 5% or the interest rate shall be increased to the maximum rate
allowed by Arizona State law for business or commercial loans, whichever rate is
greater.
-1-
<PAGE>
Example: The interest rate specified in paragraph 1 is 9% per annum. A monthly
payment remains delinquent 15 days after its due date. In such event, the
interest rate would be increased to 14% per annum. In the event that the
interest rate permitted under Arizona State Law for business or commercial loans
was 18% per annum, the interest rate would be increased to 18%.
In the event that the interest rate permitted under Arizona State Law for
business or commercial loans was 12% per annum, then the interest rate would be
increased to 14% per annum.
4. Disputes: Should any dispute arise between Seller and Debtor, the parties
agree to negotiate such dispute in good faith. If the parties are unable to so
resolve such dispute, the dispute shall be submitted to binding arbitration.
The arbitration shall be conducted in Phoenix, Arizona under the rules and
procedures of the American Arbitration Association as soon as is practicable
after notice to arbitrate has been given in writing from one party to the other.
The decision of the arbitrator shall be dispositive of the dispute and shall be
binding on the parties. The arbitrator's award against the non-prevailing party
shall include an award of any attorney's fees and costs incurred in preparation
for and completion of such arbitration.
The decision of the arbitrator may be registered as a judgment against the
non-prevailing party in the county and state of domicile of the non-prevailing
party.
5. Title to Remain In Seller: No title to the Equipment shall pass to the
Debtor except as provided in this paragraph. Seller reserves a purchase money
security interest in the Equipment until all sums due under this Contract are
fully paid in cash and until all of the terms and conditions of this Contract
are fully performed by Debtor.
Upon the full performance of all of the terms and conditions of this Contract,
title to the Equipment shall pass to Debtor.
6. Condition of Equipment: Debtor agrees that Debtor has inspected the
Equipment and has approved the condition of such Equipment "AS IS" and "WHERE
IS".
Debtor acknowledges and agrees that Seller has made no representations of any
kind or sort regarding the condition of the Equipment, its merchantability, its
fitness for a particular purpose, nor its fitness for Debtor's Use.
7. Liability of Debtor: Debtor's liability under this Contract shall not be
reduced, diminished, or affected by any of the following:
a. Loss, Injury, or Destruction of the Equipment.
b. Transfer, Renewal, Extension, or Assignment of this Contract.
c. Any defects either actual or alleged in the Equipment including its
lack of merchantability, its fitness for a particular purpose, or its
fitness for Debtor's Use.
8. Assignment of Contract By Seller: Seller may assign this Contract. Upon
assignment, Seller's assignee shall have all of the rights of Seller in and
to this Contract.
Debtor shall not transfer any interest in this Contract nor in the Equipment
without the written consent of Seller or Seller's assignee. Debtor shall not
place the Equipment for hire or allow use of such Equipment by third parties
without the written consent of Seller or Seller's assignee.
9. Insurance: The Debtor shall keep the Equipment insured for liability and
against loss of any kind for the full insurable value of such Equipment. The
insurance shall be placed with an insurance company acceptable to Seller. Such
policy shall have a loss payable to the seller and the Debtor as their interests
may appear. Debtor hereby assigns to Seller any interest Debtor may have to any
insurance proceeds. Debtor hereby authorizes Seller to make any settlement or
compromise with such insurance carrier.
10. Obligations of Debtor under this Contract: Debtor agrees that Debtor has
the following obligations under this Contract:
a. To make all payments called for in this Contract in a timely manner.
b. To keep the Equipment free from all liens, taxes, encumbrances,
attachments, levies or legal process.
c. To keep the Equipment insured in conformance with the provisions of
paragraph 9 herein.
d. To provide proof to Seller in form satisfactory to Seller, and at such
times as Seller shall require, that Debtor has paid all taxes and
insurance premiums as they become due.
e. To keep the Equipment in good working order and repair and to preserve
the condition of such Equipment at all times during the term of this
Contract.
-2-
<PAGE>
f.To use the Equipment for only legal purposes and to operate such
Equipment in conformance with all rules, regulations, and operating
standards issued by any governmental entities having authority over the
operation of such Equipment.
g.To obtain the written permission of Seller or Seller's assignee before
moving or relocating the Equipment from the agreed location of the
Equipment shown on page 1 of this Contract.
11.Default: The following events shall constitute a default under the terms of
this Contract:
a.Debtor fails to fulfill any of its obligations under the terms of this
Contract.
b.Debtor becomes insolvent.
c.Debtor files or is placed into Bankruptcy.
d.Debtor makes a general assignment for the benefit of creditors or a
Receiver is appointed for Debtor.
e.Debtor makes a material misrepresentation to Seller about its financial
condition, the operation, condition, or maintenance of the Equipment.
f.Debtor takes such actions or omits such actions so as to give reasonable
cause to Seller to believe that the Equipment is in danger of misuse,
removal, concealment, or confiscation.
12.Rights of Seller Upon Default: In the event of default by Debtor, Seller or
Seller's assignee shall have all of the rights of a secured party of an unpaid
Seller of goods under the Uniform Commercial Code of Arizona and other
applicable Arizona state laws.
Such rights shall include the right of Seller to require Debtor to assemble the
Equipment and make it available to Seller at a place designated by Seller.
The laws of the State of Arizona shall apply to this Contract.
13.No Waiver of Default: Debtor agrees that time is of the essence for this
Contract.
The following shall not be deemed to be a waiver of any of Seller's rights under
this Contract nor shall the following be deemed to be a waiver of Seller's right
to strictly enforce the terms of this Contract:
a.The acceptance by Seller or Seller's assignee, after default by Debtor,of
any payment.
b.The acceptance by Seller or Seller's assignee, after default by Debtor,of
any other performance by Debtor.
c.The failure of Seller or Seller's assignee to promptly enforce the terms
of this Contract.
This Contract cannot be modified except by a written modification signed by both
Seller and Debtor. This Contract cannot be modified by the course of conduct or
dealings between Seller and Debtor.
<PAGE>
EXHIBIT "A" TO CONDITIONAL SALES CONTRACT AND SECURITY AGREEMENT
BETWEEN CONVEYOR SALES COMPANY as SELLER
---------------------------------------------------------------
AND Meadow Valley Contractors, Inc.
-----------------------------------------------------------------------------
as DEBTOR
- -----------------------------------------------------------------------
Description of Personal Property ("Equipment") being sold and in which a
Security Interest is Granted:
1. 36" x 60" Channel Conveyor (9-36-7511AA) w/Marathon 20hp motor (9M20M-370)
- --------------------------------------------------------------------------------
& Leroy Somer 215 Reducer (19153040/001), valued @ 12,500.00. Less 10%
- --------------------------------------------------------------------------------
2. 30" x 84" Lattice Conveyor (9-30-7284AA), w/Westinghouse 20hp motor
- --------------------------------------------------------------------------------
(9M20W-321) & Leroy Somer 215 Reducer (794313/023)w/Carrier (9-2496AA),
- --------------------------------------------------------------------------------
valued @ $23,700.00 Less 10% Freight = $600.00
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
CONVEYOR SALES COMPANY MEADOW VALLEY CONTRACTORS, INC.
- --------------------------------------------------------------------------------
BY: [SIGNATURE APPEARS HERE] (President) BY: /s/ Kenneth D. Nelson
- --------------------------------------------------------------------------------
(Seller) (Debtor)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
#35226
TRANSFER AND ASSUMPTION
OF INSTALLMENT SALE CONTRACT (SECURITY AGREEMENT)
This Agreement, dated as of June 28, 1996, is between Wiser Construction,
Limited Liability Co., Lewis Ranch, Moapa NV 89025 ("Transferor") and Meadow
Valley Contractors, Inc., P.O. Box 60726, Phoenix AZ 85082 ("Tranferee")
WHEREAS, Transferor and Cashman Equipment Company ("Dealer") have entered into
that certain Installment Sale Contract (Security Agreement), dated as of
February 15, 1996 (the "Contract"), pursuant to which Dealer sold (1)
Caterpillar 980F Wheel Loader S/N: 8JN00629 (the "Property"); and
WHEREAS, the Dealer assigned all of its rights and interest in the Contract and
the Property to Caterpillar Financial Services Corporation ("Caterpillar")
pursuant to that certain Assignment entered between Dealer and Caterpillar dated
as of the 15th day of February, 1996; and
WHEREAS, the installments remaining due under the Contract as of June 11, 1996,
are Fifty-seven (57) installments of $5,669.49, with the next installment due on
June 15, 1996; and
WHEREAS, Transferee wishes to assume all and whatever interest Transferor has in
and to the Contract and the Property and all duties and obligations of the
Transferor under the Contract; and
WHEREAS, under the terms of the Contract, Transferor may not assign the Contract
or any right or obligation thereunder or any right in the Property without the
prior written consent of Caterpillar.
NOW, THEREFORE, for valuable consideration received, Transferor and Transferee
agree as follows:
1. Transferor hereby grants and conveys to Transferee, its successors and
assigns, all of Transferor's right, title and interest in and to the Contract
and the Property, subject, however, to the Contract and all the terms,
conditions and provisions thereof, and upon the condition that (i) the Consent
set forth below be executed and delivered by Caterpillar and (ii) Transferee
executes all agreements, statements and related documents Caterpillar may
reasonably require to effect and maintain Caterpillar's first priority security
interest in the Property.
SEE REVERSE SIDE FOR ADDITIONAL TERMS AND CONDITIONS.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement.
Wiser Construction, Limited-Liability Co. Meadow Valley Contractors, Inc.
Transferor Transferee
Signature /s/ Paul Ronald Lewis Signature /s/ Kenneth D. Nelson
------------------------ -------------------------
Name (PRINT) Paul Ronald Lewis Name (PRINT) Kenneth D. Nelson
--------------------- ----------------------
Title Managing Member Title Vice President/CFO
---------------------------- -----------------------------
Date Date
----------------------------- ------------------------------
<PAGE>
FORM OF CONSENT:
Caterpillar Financial Services Corporation hereby accepts and consents to the
foregoing Transfer and Assumption of this Installment Sale Contract (Security
Agreement) this 28th day of June, 1996.
Caterpillar Financial Services
Corporation
Signature /s/ Mubeen Khan
--------------------------
Name (PRINT) Mubeen Khan
-----------------------
Title CSR
------------------------------
3-Party
<PAGE>
2. To induce Catepillar to execute and deliver the Consent and in consideration
of its so doing, Transferor and Transferee hereby promise and bind themselves
jointly and severally to pay (i) all installments in the amounts set forth above
and (ii) all other monies that become due under the Contract after the date
hereof to Caterpillar, its successors and assigns.
3. Transferee hereby unconditionally assumes, becomes a party to, and agrees to
perform the Contract and all the terms, conditions and provisions thereof and
further agrees to pay all amounts that become due under the Contract, as though
Transferee were the purchaser named in the Contract.
4. Transferee agrees not to assert against Caterpillar any defense, setoff,
recoupment, claim or counterclaim which Transferee might have against Transferor
arising from the assumption of the Contract or otherwise. Transferor and
Transferee hereby waive and discharge any defense or claim each or both may have
against Caterpillar arising from or in relation to the Contract, this Agreement,
or the Property.
5. Transferor is in no way released from the Contract, but shall remain and
continue fully liable thereon until the full performance thereof and payment
therefor, notwithstanding any agreements, arrangements, releases, compromises or
novations whatsoever which may be made by Caterpillar with Transferee or any
other party concerning the Contract, the Property, or this Agreement. Transferee
acknowledges having read the Contract and agrees to be fully bound by all terms,
conditions and provisions of the Contract.
6. Transferee will not sell, rent, transfer, encumber or dispose of any of the
Property without the prior written consent of Caterpillar, its successors or
assigns.
<PAGE>
SECOND AMENDMENT TO LEASE
-------------------------
This Second Amendment to Lease Agreement ("Second Agreement") is entered into as
of the 1st day of April, 1996 between Broadway Commerce Centre Limited
Partnership, an Arizona limited partnership ("Landlord") and Meadow Valley
Contractors, Inc., a Nevada corporation ("Tenant").
Landlord and Tenant entered into that certain Lease Agreement dated May 16, 1995
and that First Amendment to Lease dated June 22, 1995 (the "Lease"), covering
the office space located at 4001 East Broadway Road, (the "Building"), Suite
D-11 (the "Premises"), which previously has been erroneously referred to as
Suite D-9, Phoenix, Arizona.
Tenant wishes to lease additional space from Landlord on the terms set out
below.
Landlord and Tenant agree the Lease is amended as follows:
1. Additional Space. Effective as of April 1, 1996 Tenant will lease from
----------------
Landlord the following additional space (the "Additional Premises") on the terms
and conditions set out below:
Additional Premises: That certain 1,177.41 rentable square feet of
Suite D-10, located at 4001 East Broadway Road,
Phoenix, AZ, as outlined in red on Exhibit "A"
and incorporated fully by this reference.
That certain 510.72 rentable square feet to be
added to Suite D-11 ("D-11 Addition:), located
at 4001 East Broadway Road, Phoenix, AZ as
outlined in red on Exhibit "A" and incorporated
fully by this reference.
Rentable Square Feet: 1,688.13
Lease Rate (Monthly): Suite D-10 $.32 per RSF - 4/1/96 - 8/30/96;
----------
$.65 per RSF - 9/1/96 - 7/31/97
D-11 Addition $.65 per RSF - 4/1/96 - 7/31/97
-------------
These amounts do not include any other sums
payable to Landlord under the Lease, all of
which sums will remain payable during the
remainder of the Lease term.
Additional Monthly Rent: 4/1/96 - 8/30/96 9/1/96 - 7/31/97
---------------- ----------------
Suite D-10 $376.77 $765.32
Suite D-11
Addition $331.97 $331.97
------- -------
Total $708.74 $1,097.29
======= =========
These amounts do not include any other sums
payable to Landlord under the Lease, all of
which sums will remain payable during the
remainder of the Lease term.
Additional Security Deposit: $1,097.29
Term: Commencing April 1, 1996 and co-terminous with
Original Lease ending July 31, 1997.
Use: Administrative Office.
Tenant Improvements: Landlord will provide Tenant with an allowance
of $5,184.88 ("Allowance") for the tenant
improvements described in the Estimate which is
attached as Exhibit "B" ("Tenant Improvements").
Landlord will amortize all Tenant Improvement
costs in excess of the Allowance, up to $8,000
("Excess Costs"), as additional rent subject to
the provisions of Paragraph 3 of the Lease, over
the term of the Lease including an 11% rate of
interest. Tenant will be responsible for all
costs of the Tenant Improvements that exceed the
Excess Costs and such amount will be payable to
Landlord upon completion of the Tenant
Improvements, but in no event later than June 1,
1996.
The provisions of the Lease will apply to Tenant's lease of the Additional
Premises as if the Additional Premises were included as part of the Premises,
except as otherwise provided in this Section 1.
<PAGE>
2. Except as expressly amended by this Second Amendment, all the terms,
covenants and conditions of the Lease remain in full force and effect. In the
event of any conflict between the provisions of the Lease and this Second
Amendment, this Second Amendment will control.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Second Amendment as
of the date written above.
"LANDLORD" "TENANT"
BROADWAY COMMERCE CENTRE MEADOW VALLEY CONTRACTORS, INC.,
LIMITED PARTNERSHIP, an Arizona a Nevada corporation
limited partnership
By: GRANT, JESTADT & GRANT By /s/ Kenneth D. Nelson
INVESTMENT AND MANAGEMENT ------------------------------------
COMPANY, an Arizona corporation Its V.P.
Its General Partner --------------------------------
By [SIGNATURE APPEARS HERE]
-------------------------------
Member
<PAGE>
THIRD AMENDMENT TO LEASE
------------------------
This Third Amendment to Lease Agreement ("Third Amendment") is entered into as
of the 15th day of April, 1996 between Broadway Commerce Centre Limited
Partnership, an Arizona limited partnership ("Landlord") and Meadow Valley
Contractors, Inc., a Nevada corporation ("Tenant").
Landlord and Tenant entered into that certain Lease Agreement dated May 16,
1995, that First Amendment to Lease dated June 22, 1995, and that Second
Amendment to Lease dated April 1, 1996 (the "Lease"), covering the office space
located at 4001 East Broadway Road, (the "Building"), Suites D-10 and D-11 (the
"Premises").
Tenant wishes to occupy Suite D-10 earlier than anticipated and Landlord and
Tenant agree the Lease is amended as follows:
1. Effective Date. Unless specifically indicated otherwise, the effective
--------------
date of the Lease amendments set forth herein is May 1, 1996 (the "Effective
Date").
2. Rent for Suite D-10. As of the Effective Date, the Minimum Rent per
-------------------
month for Suite D-10, which is due and payable on the first day of each month,
shall be: $765.32.
These amounts do not include any other sums payable to Landlord under
the Lease, all of which sums will remain payable during the remainder of the
Lease term.
3. Remaining Lease Terms. Except as expressly amended by this Third
---------------------
Amendment, all the terms, covenants and conditions of the Lease remain in full
force and effect. In the event of any conflict between the provisions of the
Lease and this Third Amendment, this Third Amendment will control.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Third Amendment as of
the date written above.
"LANDLORD" "TENANT"
BROADWAY COMMERCE CENTRE LIMITED MEADOW VALLEY CONTRACTORS, INC., a
PARTNERSHIP, an Arizona limited Nevada corporation
partnership
By: SCOTTSDALE PROPERTY MANAGEMENT By: /s/ Kenneth D. Nelson
L.L.C., an Arizona limited liability ----------------------------------
company
Its: Vice President
By [signature appears here] ---------------------------------
----------------------------------
Principal
<PAGE>
SCHEDULE TO MASTER LEASE AGREEMENT [LOGO FOR U.S. BANCORP
APPEARS HERE]
Schedule Number 11389.001
---------
THIS SCHEDULE made as of December 17, 1996, by and between U.S. BANCORP
LEASING & FINANCIAL ("Lessor"), having its principal place of business at 825
N.E. Multnomah, Suite 800, Portland, Oregon 97232, and Ready-Mix, Inc.
("Lessee"), having its principal place of business located at 3430 E. Flamingo,
Suite 100, Las Vegas, Nevada 89121, to the Master Lease Agreement dated as of
December 17, 1996 between the Lessee and the Lessor (the "Lease"). Capitalized
terms used but not defined herein are used with the respective meanings
specified in the Lease.
LESSOR AND LESSEE HEREBY COVENANT AND AGREE AS FOLLOWS:
(a) The following specified equipment (the "Property") is hereby made and
constituted Property for all purposes pursuant to the Lease:
Twelve (12) new International trucks, model F5070, mounted with 11 cubic
yard Bridgemaster III mixers. The serial number and mixer number for each
vehicle follows: 2HTTWAHTOVC029176, 43133-09079; 2HTTWAHT6VC029196, 43132-
09078; 2HTTWAHT9VC027118, 43147-09086; 2HTTWAHT3VCO29169, 43145-09084;
2HTTWAHT1VC029171, 43168-09098; 2HTTWAHTXVCO29170, 43178-09101;
2HTTWAHT9VC029175, 43165-09095; 2HTTWAHT1VC029185, 42938-08979;
2HTTWAHT3VC029172, 42873-08955; 2HTTWAHT2VC029177, 42940-08981;
2HTTWAHT6VC029179, 43101-09063; 2HTTWAHT4VC029178, 42877-08956.
Each of the above units are complete as equipped including, but not limited
to, all attachments, accessories & replacements relating thereto.
(b) The cost of the Property is $1,330,800.00;
Please Initial Here: /s/ KDN
---
(c) This Schedule shall commence on January 1, 1997 and shall continue for 60
months thereafter.
(d) Lessee shall owe 60 basic monthly rental payments in arrears each in the
amount of $20,557.13 (plus applicable sales/use taxes). The first such
payment shall be due on February 1, 1997 and shall continue on the same day
of each month thereafter until the end of the term of this Schedule. In
addition, Lessee shall pay daily pro rata rental in the amount of $685.24
per day (plus applicable sales/use taxes) from the date on which Lessee
executes the Delivery and Acceptance Certificate for the Property through
December 31, 1996. Such daily pro rata rental shall be due and payable at
signing of the Certificate.
(e) The Property will be installed or stored at the following address: 1501
Highway 168, Moapa, Nevada 89025, COUNTY: Clark;
(f) The record owner of the premises at which the Property will be installed or
stored is: ;
1. LATE CHARGE. If any installment of Rent shall not be received by Lessor or
Lessor's Assignee within ten (10) days after such amount is due, Lessee shall
pay to Lessor a late charge equal to five percent (5.0%) of such overdue amount.
2. TRAC OBLIGATION. a. In addition to the rental payments specifies above,
Lessor is also entitled to recover a residual value equal to thirty percent
(30%) of the cost of the Property as set forth herein (the "Residual Value")
plus a Lease Termination Fee of $500.00.
b. At the end of the Term hereof, Lessee may purchase the Property for the
Residual Value. Lessee shall give written notice ninety (90) days prior to Lease
expiration of Lessee's intent to purchase the Property. Should Lessee elect not
to purchase the Property, Lessor shall dispose of any or all of the Property by
selling such Property for the highest cash offer then reasonably available, or
by re-leasing such Property on terms and conditions acceptable to Lessor. The
proceeds of any sale of the property shall be deemed to be the "Market Value" of
the Property. If the disposition is by re-lease, the Market Value of the
Property shall be the present value of the rental stream of the re-lease
discounted at a rate acceptable to the Lessee and Lessor.The Market Value shall
then be reduced by a Lease Termination Fee of $500.00 plus all expenses incurred
by Lessor in
<PAGE>
2
connection with the recovery and disposition of the Property. The remaining
balance shall be referred to as the "Residual Credit." If the Residual Credit
exceeds the Residual Value, Lessor shall promptly pay the amount of such excess
to Lessee as adjusted rent. If the Residual Credit is less than the Residual
Value, Lessee shall promptly pay the amount of such deficiency to Lessor as
adjusted rent. However, in no event shall Lessee's obligation be greater than
9.0% of the total cost of the Property.
c. Upon receipt of payment from Lessee of the Residual Value together with
any and all applicable sales or other taxes due in connection 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.
d. Should Lessee fail to comply with the foregoing, then Lessor, at its
sole option, shall have the right to: a) demand immediate return of the
Property, or, b) extend the Term for an additional six (6) months (the "Extended
Term"). Should Lessor elect to extend the Term, Lessee shall be irrevocably
obligated to remit basic monthly rent for the period beginning on the day
immediately succeeding the last day of the original Term (the "Holdover Date")
and ending at the end of the sixth (6) month thereafter, a payment of such rent
being due on the Holdover Date and on the same day of each consecutive month
thereafter. Each payment of such rent shall be in the amount of the basic
monthly rent for the last month of the Term in accordance with the provisions of
this Schedule. All Lessee's other obligations under the Lease shall remain in
full force and effect for so long as Lessee shall continue to possess the
Property. Any and all rental payments pursuant to this Paragraph shall be
deemed for all intents and purposes to be payments for possession and use of the
Property after the expiration of the Term, and shall not be credited to any
other obligation of Lessee to Lessor. Lessor's invoicing and/or accepting any
such payment shall not give rise to any right, title or interest of Lessee
other than to possession and use of the Property during the period to which such
rent applies in accordance with this Paragraph. The aforesaid right to charge
Lessee rent for possession and use of the Property is not in limitation or
derogation of any of Lessor's rights pursuant to the Lease.
3. DEPRECIATION. Lessor will be entitled to modified accelerated cost recovery
depreciation based on 100% of Property Cost using the 200% declining balance
method, switching to straight line, for 5 year Property, and zero salvage value.
IN WITNESS WHEREOF, the Lessor and the Lessee have each caused this Schedule
to be duly executed as of the day and year first above written.
Ready-Mix, Inc.
By: /s/Kenneth D. Nelson
-----------------------------------------
Kenneth D. Nelson
Vice President
U.S. BANCORP LEASING & FINANCIAL
By:
-----------------------------------------
An Authorized Officer Thereof
Address for All Notices:
U.S. BANCORP LEASING & FINANCIAL
825 N.E. Multnomah, Suite 800
Portland, Oregon 97232
Machine Tool Finance Group General Equipment Group
(800) 225-8029 (503) 7970-0222 (800) 253-3468 (503) 797-0200
<PAGE>
[LOGO OF U.S. BANCORP
APPEARS HERE]
TRAC ADDENDUM TO
LEASE AGREEMENT
(USAGE/OWNERSHIP)
Schedule Number 11389.001
Addendum to the Master Lease Agreement ("Lease") dated as of December
17, 1996 and Schedule Number 11389.001 dated December 18, 1996 between U.S.
Bancorp Leasing & Financial ("Lessor"), and Ready-Mix, Inc. ("Lessee").
Capitalized terms used but not defined herein are used with the same meaning as
set forth in the Lease.
Lessee certifies, under penalty of perjury, that it intends that more
than 50% of the use of the Property will be in the trade or business of the
Lessee.
Lessee hereby acknowledges and agrees that Lessee has been advised that
Lessee will not be treated as the owner of the Property for Federal income tax
purposes.
Dated: December 18, 1996
(LESSEE)
Ready-Mix, Inc.
By /s/ Kenneth D. Nelson
-----------------------------
Kenneth D. Nelson
Vice President
ADDRESS FOR ALL NOTICES:
825 N.E. Multnomah, Suite 800
Portland, OR 97232
<PAGE>
DELIVERY AND ACCEPTANCE CERTIFICATE [LOGO OF U.S. BANCORP
AND LEASE AMENDMENT APPEARS HERE]
Schedule Number 11389.001
---------
This Certificate is delivered to and for the benefit of Lessor and
pertains to the following personal property (the "Property") which is the
subject of Schedule Number 11389.001, dated as of December 17, 1996, to Master
Lease Agreement, dated as of December 17, 1996, between U.S. BANCORP LEASING &
FINANCIAL as Lessor and Ready-Mix, Inc. as Lessee (the "Lease"):
Twelve (12) new International trucks, model F5070, mounted with 11
cubic yard Bridgemaster III mixers. The serial number and mixer number
for each vehicle follows: 2HTTWAHTOVC029176,43133-09079;
2HTTWAHT6VC029196, 43132-09078; 2HTTWAHT9VC02118, 43147-09086;
2HTTWAHT3VCO29169, 43145-09084; 2HTTWAHT1VC029171, 43168-09098;
2HTTWAHTXVCO29170, 43178-09101; 2HTTWAHT9VC029175, 43165-09095;
2HTTWAHT1VC029185, 42938-08979; 2HTTWAHT3VC029172, 42873-08955;
2HTTWAHT2VC029177, 42940-08981; 2HTTWAHT6VC029179, 43101-09063;
2HTTWAHT4VC029178, 42877-08956.
Each of the above units are complete as equipped including, but not
limited to, all attachments, accessories & replacements relating
thereto.
To the extent that the above description has been altered by us or
differs from the Property description set forth in the Lease (including, but not
limited to, changes to model or serial numbers), we certify that such
alterations or differences are accurate and we acknowledge that, based upon this
certification: 1) the Lease is hereby amended to reflect the above Property
description; and 2) Lessor is hereby authorized to execute on our behalf and to
file amendment(s) to any Financing Statements filed under the Uniform Commerical
Code in connection with the Lease, provided that all such amendments are
consistent with the above Property description.
WE HEREBY CERTIFY AND ACKNOWLEDGE THAT: a) the Property has been
delivered to us; b) any necessary installation of the Property has been fully
and satisfactorily performed; c) after full inspection thereof, we have accepted
the Property for all purposes as of the date hereof; d) Lessor has fully and
satisfactorily satisfied all its obligations under the Lease; e) any and all
conditions to the effectiveness of the Lease or to our obligations thereunder
have been satisfied; f) we have no defenses, set-offs or counterclaims to any
such obligations; g) the Lease is in full force and effect; and, h) no Event of
Default has occurred under the Lease.
WE HEREBY REPRESENT AND WARRANT THAT: a) any right we may have now or
in the future to reject the Property or to revoke our acceptance thereof has
terminated as of the date of hereof; b) we hereby waive any such right by the
execution hereof; c) the date of this Certificate is the earliest date upon
which the certifications, acknowledgments, representations and warranties made
herein could be correctly and properly made. We hereby acknowledge that Lessor
is relying on this Certificate as a condition to making payment for the
Property.
IN WITNESS WHEREOF, we have executed this Certificate as of the 23rd
day of December, 1996.
Ready-Mix, Inc.
---------------
Upon satisfactory installation and
delivery please sign, date and return to:
U.S. BANCORP LEASING & FINANCIAL
825 N.E. Multnomah, Suite 800 By: /s/ Kenneth D. Nelson
Portland, Oregon 97232 -----------------------------
Kenneth D. Nelson
Vice President
ADDRESS FOR ALL NOTICES:
825 N.E. Multnomah, Suite 800
Portland, Oregon 97232
<PAGE>
[LOGO OF U.S. BANCORP APPEARS HERE]
INSURANCE AUTHORIZATION
Note/Schedule Number 11389.001
---------
To: __________________[Agent Name]
__________________[Street Address]
__________________[City, State, Zip]
__________________[Agent Phone]
From: Ready-Mix, Inc.
1501 Highway 168
Moapa, Nevada 89025
In connection with one or more financing arrangements (the "Transactions")
between ourselves and U. S. BANCORP LEASING & FINANCIAL (USBLF), you are hereby
authorized to issue a certificate of insurance naming U.S. BANCORP LEASING &
FINANCIAL OR ASSIGNEE THEREOF as Additional Insured and as Loss Payee as its
interest may appear.
Property Cost: $1,330,800.00:
With respect to physical damage coverage, please describe USBLF's interest as
follows:
"Certificate Holder is an Additional Insured and Loss Payee with
regard to all equipment financed or leased by Policy Holder
through or from Certificate Holder."
The required coverage is to be as provided in the Transaction, including,
without limitation, fire, extended coverage, vandalism, theft and general
liability.
We understand that if such certificate is not provided, U.S. BANCORP
LEASING FINANCIAL has the right under the Transactions to purchase such
insurance at our expense.
Ready-Mix, Inc.
---------------
By: /s/ Kenneth D. Nelson
----------------------
Kenneth D. Nelson
Vice President
ADDRESS FOR ALL NOTICES:
825 N.E. Multnomah, Suite 800
Portland, OR 97232
<PAGE>
<TABLE>
<CAPTION>
MUST BE SIGNED BY DEBTOR-1
UNIFORM COMMERCIAL CODE--FINANCING STATEMENT
FORM UCC-1(1)
This Financing Statement is presented to filing officer pursuant to the Uniform
Commercial Code. This Statement remains effective for a period of five years from
the date of filing, subject to extensions for additional periods of five years by
refiling or filing a continuation statement (UCC-3)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
XA. Debtor(s): 2a. Secured party(ies)
(if individual(s) last name first)
U.S. Bancorp Leasing & Financial
Ready-Mix, Inc. Tax I.D. #930594454
Tax I.D.86-0830443
----------
2B. Address of Secured Party from which
XB. Mailing address(es) Security Information is obtainable
3430 E. Flamingo, Suite 100 825 N.E. Multnomah Street, Suite 800
Las Vegas, Nevada 89121 Portland, Oregon 97232-2151
Phone # 503 797-0200 Reserved for Filing Officer Use Only
- ------------------------------------------------------------------------------------------------------------------------------------
X. This financing statement covers the following types (or items) of collateral No. of additional sheets attached____.
Twelve (12) new International trucks, model F5070, mounted with 11 cubic yard Bridgemaster III mixers. The serial number and mixer
number for each vehicle follows:
2HTTWAHT0VC029176, 43133-09079; 2HTTWAHT6VC029196, 43132-09078; 2HTTWAHT9VC027118, 43147-09086; 2HTTWAHT3VCO29169, 43145-09084;
2HTTWAHT1VC029171, 43168-09098; 2HTTWAHTXVCO29170, 43178-09101; 2HTTWAHT9VC029175, 43165-09095; 2HTTWAHT1VC029185, 42938-08979;
2HTTWAHT3VC029172, 42873-08955; 2HTTWAHT2VC029177, 42940-08981; 2HTTWAHT6VC029179, 43101-09063; 2HTTWAHT4VC029178, 42877-08956.
Each of the above units are complete as equipped including, but not limited to, all attachments, accessories & replacements
relating thereto.
TOGETHER WITH ALL REPLACEMENTS, PARTS, REPAIRS, ADDITIONS, ACCESSIONS AND ACCESSORIES INCORPORATED THEREIN OR AFFIXED OR ATTACHED
THERETO AND ANY AND ALL PROCEEDS OF THE FOREGOING, INCLUDING, WITHOUT LIMITATION, INSURANCE RECOVERIES.
--------------------------------------
4A. Assignee of Secured Party if any:
Located at 1501 Highway 168, Moapa, Nevada 89025 (Clark)
First State Bank of Taos
dba First Capital Group
4b. Address of Assignee:
111 Lomas N.W., Suite 502
Albuquerque, NM 87102
Attn: Susan Yulo
- ------------------------------------------------------------------------------------------------------------------------------------
This statement is filed without the Debtor's signature to perfect a security interest in
collateral. (Check [X] if so)
[_] already subject to a security interest in another jurisdiction when it was brought
into this state.
[_] which is proceeds of the original collateral described above in which a security
interest was perfected:
- ------------------------------------------------------------------------------------------------------------------------------------
Check [x] if covered: [X] Proceeds of collateral are also covered. [_] Products of collateral are also covered.
- ------------------------------------------------------------------------------------------------------------------------------------
Filed with : Secretary of State - NV
- ------------------------------------------------------------------------------------------------------------------------------------
Ready-Mix, Inc. U.S. BANCORP LEASING & FINANCIAL
- ----------------------------------------------------------- ---------------------------------------------------------------
by: /s/ Kenneth D. Nelson, Vice President by:
------------------------------------------------------- ------------------------------------------------------------
Kenneth D. Nelson, Vice President Documentation Specialist
Signature(s) of Debtors Signature(s) of Secured Party(ies)
STANDARD FORM - FORM UCC-1
- ------------------------------------------------------------------------------------------------------------------------------------
RETURN TO:
U.S. BANCORP LEASING & FINANCIAL
ATTEN: COLLATERAL REVIEW DEPT.
825 N.E. MULTNOMAH, SUITE 800
PORTLAND, OREGON 97232
RE: LEASE# 11389.001
</TABLE>
<PAGE>
MUST BE SIGNED BY DEBTOR-1
UNIFORM COMMERCIAL CODE--FINANCING STATEMENT
FORM UCC-1(1)
This Financing Statement is presented to filing officer pursuant to the
Uniform Commercial Code. This Statement remains effective for a period of five
years from the date of filing, subject to extensions for additional periods of
five years by refiling or filing a continuation statement (UCC-3)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
1A. Debtor(s): 2A. Secured party(ies)
(if individual(s) last name first)
U.S. Bancorp Leasing & Financial
Ready-Mix, Inc. Tax I.D. #930594454
Tax I.D.86-0830443
----------
2B. Address of Secured Party form which
1B. Mailing address(es) Security Information is obtainable
3430 E. Flamingo, Suite 100 825 N.E. Multnomah Street, Suite 800
Las Vegas, Nevada 89121 Portland, Oregon 97232-2151
Phone # 503 797-0200 Reserved for Filing Officer Use Only
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
3. This financing statement covers the following types (or items) of collateral
No. of additional sheets attached____.
Twelve (12) new International trucks, model F5070, mounted with 11 cubic yard
Bridgemaster III mixers. The serial number and mixer number for each vehicle
follows: 2HTTWAHTOVC027010, 42868-08952; 2HTTWAHT0VC029176, 43133-09079;
2HTTWAHT6VC029196, 43132-09078; 2HTTWAHT9VC027118, 43147-09086;
2HTTWAHT3VCO29169, 43145-09084; 2HTTWAHT1VC029171, 43168-09098;
2HTTWAHTXVCO29170, 43178-09101; 2HTTWAHT9VC029175, 43165-09095;
2HTTWAHT1VC029185, 42938-08979; 2HTTWAHT3VC029172, 42873-08955;
2HTTWAHT2VC029177, 42940-08981; 2HTTWAHT6VC029179, 43101-09063;
2HTTWAHT4VC029178, 42877-08956.
Each of the above units are complete as equipped including, but not limited
to, all attachments, accessories & replacements relating thereto.
TOGETHER WITH ALL REPLACEMENTS, PARTS, REPAIRS, ADDITIONS, ACCESSIONS AND
ACCESSORIES INCORPORATED THEREIN OR AFFIXED OR ATTACHED THERETO AND ANY AND ALL
PROCEEDS OF THE FOREGOING, INCLUDING, WITHOUT LIMITATION, INSURANCE RECOVERIES.
<TABLE>
--------------------------------------
<S> <C>
4A. Assignee of Secured Party if any:
Located at 1501 Highway 168, Moapa, Nevada 89025 (Clark County)
First State Bank of Taos
DBA First Capital Group
4b. Address of Assignee:
111 Lomas N.W., Suite 502
Albuquerque, NM 87102
Attn: Susan Yulo
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
This statement is filed without the Debtor's signature to perfect a security
interest in collateral. (Check [X] if so)
[_] already subject to a security interest in another jurisdiction when it
was brought into this state.
[_] which is proceeds of the original collateral described above in which a
security interest was perfected:
- --------------------------------------------------------------------------------
Check [x] if covered: [X] Proceeds of collateral are also covered.
[_] Products of collateral are also covered.
- --------------------------------------------------------------------------------
Filed with : Secretary of State - NV
- --------------------------------------------------------------------------------
Ready-Mix, Inc.
- -----------------------------------------------------------
by: /s/ Kenneth D. Nelson, Vice President
-------------------------------------------------------
Kenneth D. Nelson, Vice President
Signature(s) of Debtors
U.S. BANCORP LEASING & FINANCIAL
- ----------------------------------------------------------------------
by:
-------------------------------------------------------------------
Documentation Specialist
Signature(s) of Secured Party(ies)
STANDARD FORM - FORM UCC-1
- --------------------------------------------------------------------------------
RETURN TO:
U.S. BANCORP LEASING & FINANCIAL
ATTEN: COLLATERAL REVIEW DEPT.
825 N.E. MULTNOMAH, SUITE 800
PORTLAND, OREGON 97232
RE: LEASE# 11389.001
<PAGE>
<TABLE>
<CAPTION>
MUST BE SIGNED BY DEBTOR-1
UNIFORM COMMERCIAL CODE--FINANCING STATEMENT
FORM UCC-1(1)
This Financing Statement is presented to filing officer pursuant to the Uniform
Commercial Code. This statement remains effective for a period of five years from
the date of filing, subject to extensions for additional periods of five years by
refiling or filing a continuation statement (UCC-3)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
XA. Debtor(s): 2a. Secured party(ies)
(if individual(s) last name first)
U.S. Bancorp Leasing & Financial
Ready-Mix, Inc. Tax I.D. #930594454
Tax I.D.86-0830443
----------
2B. Address of Secured Party from which
XB. Mailing address(es) Security Information is obtainable
3430 E. Flamingo, Suite 100 825 N.E. Multnomah Street, Suite 800
Las Vegas, Nevada 89121 Portland, Oregon 97232-2151
Phone # 503 797-0200 Reserved for Filing Officer Use Only
- ------------------------------------------------------------------------------------------------------------------------------------
X. This financing statement covers the following types (or items) of collateral No. of additional sheets attached____.
Twelve (12) new International trucks, model F5070, mounted with 11 cubic yard Bridgemaster III mixers. The serial number and mixer
number for each vehicle follows:
2HTTWAHT0VC029176, 43133-09079; 2HTTWAHT6VC029196, 43132-09078; 2HTTWAHT9VC027118, 43147-09086; 2HTTWAHT3VCO29169, 43145-09084;
2HTTWAHT1VC029171, 43168-09098; 2HTTWAHTXVCO29170, 43178-09101; 2HTTWAHT9VC029175, 43165-09095; 2HTTWAHT1VC029185, 42938-08979;
2HTTWAHT3VC029172, 42873-08955; 2HTTWAHT2VC029177, 42940-08981; 2HTTWAHT6VC029179, 43101-09063; 2HTTWAHT4VC029178, 42877-08956.
Each of the above units are complete as equipped including, but not limited to, all attachments, accessories & replacements
relating thereto.
TOGETHER WITH ALL REPLACEMENTS, PARTS, REPAIRS, ADDITIONS, ACCESSIONS AND ACCESSORIES INCORPORATED THEREIN OR AFFIXED OR ATTACHED
THERETO AND ANY AND ALL PROCEEDS OF THE FOREGOING, INCLUDING, WITHOUT LIMITATION, INSURANCE RECOVERIES.
--------------------------------------
4A. Assignee of Secured Party if any:
Located at 1501 Highway 168, Moapa, Nevada 89025
First State Bank of Taos
DBA First Capital Group
4b. Address of Assignee:
111 Lomas N.W., Suite 502
Albuquerque, NM 87102
Attn: Susan Yulo
- ------------------------------------------------------------------------------------------------------------------------------------
This statement is filed without the Debtor's signature to perfect a security interest in
collateral. (Check [X] if so)
[_] already subject to a security interest in another jurisdiction when it was brought
into this state.
[_] which is proceeds of the original collateral described above in which a security
interest was perfected:
- ------------------------------------------------------------------------------------------------------------------------------------
Check [x] if covered: [X] Proceeds of collateral are also covered. [_] Products of collateral are also covered.
- ------------------------------------------------------------------------------------------------------------------------------------
Filed with : Secretary of State - NV
- ------------------------------------------------------------------------------------------------------------------------------------
Ready-Mix, Inc. U.S. BANCORP LEASING & FINANCIAL
- ----------------------------------------------------------- ---------------------------------------------------------------
by: /s/ Kenneth D. Nelson, Vice President by:
------------------------------------------------------- ------------------------------------------------------------
Kenneth D. Nelson, Vice President Documentation Specialist
Signature(s) of Debtors Signature(s) of Secured Party(ies)
STANDARD FORM - FORM UCC-1
- ------------------------------------------------------------------------------------------------------------------------------------
RETURN TO:
U.S. BANCORP LEASING & FINANCIAL
ATTEN: COLLATERAL REVIEW DEPT.
825 N.E. MULTNOMAH, SUITE 800
PORTLAND, OREGON 97232
RE: LEASE# 11389.001
</TABLE>
<PAGE>
SCHEDULE TO MASTER LEASE AGREEMENT
[LOGO OF U.S. BANCORP APPEARS HERE]
Schedule Number 11389.002
---------
THIS SCHEDULE made as of December 17, 1996, by and between U.S.BANCORP
LEASING & FINANCIAL ("Lessor"), having its principal place of business at 825
N.E. Multnomah, Suite 800, Portland, Oregon 97232, and Ready-Mix, Inc.
("Lessee"), having its principal place of business located at 3430 E. Flamingo,
Suite 100, Las Vegas, Nevada 89121, to the Master Lease Agreement dated as of
December 17, 1996 between the Lessee and the Lessor (the "Lease"). Capitalized
terms used but not defined herein are used with the respective meanings
specified in the Lease.
LESSOR AND LESSEE HEREBY COVENANT AND AGREE AS FOLLOWS:
(a) The following specified equipment (the "Property") is hereby made and
constituted Property for all purposes pursuant to the Lease:
Ten (10) new International trucks, model F5070, mounted with 11 cubic yard
Bridgemaster III mixers. The serial number and mixer number for each
vehicle follows: 2HTTWAHTOVCO27010, 42868-08952; 2HTTWAHT0VC027007, 42854-
08946; 2HTTWAHT7VC027120, 43042-09033; 2HTTWAHT7VCO27117, 42928-08975;
2HTTWAHT2VC027123, 42919-08971; 2HTTWAHT5VCO17208, 43026-09024;
2HTTWAHT0VC027122, 42920-08972; 2HTTWAHT2VCO29180, 43078-09049;
2HTTWAHT9VC027121, 43077-09048; 2HTTWAHT4VC027012, 42872-08954.
Each of the above units are complete as equipped including, but not limited to,
all attachments, accessories & replacements relating thereto.
(b) The cost of the Property is $1,109,000.00;
Please Initial Here: ?
---
(c) This Schedule shall commence on January 1, 1997 and shall continue for 60
months thereafter.
(d) Lessee shall owe 60 basic monthly rental payments in arrears each in the
amount of $17,130.94 (plus applicable sales/use taxes). The first such
payment shall be due on February 1, 1997 and shall continue on the same day
of each month thereafter until the end of the term of this Schedule. In
addition, Lessee shall pay daily pro rata rental in the amount of $571.03
per day (plus applicable sales/use taxes) from the date on which Lessee
executes a Delivery and Acceptance Certificate for the Property through
December 31, 1996. Such daily pro rata rental shall be due and payable at
signing of the Certificate.
(e) The Property will be installed or stored at the following address: 1501
Highway 168, Moapa, Nevada 89025, COUNTY: Clark;
(f) The record owner of the premises at which the Property will be installed or
stored is: ;
1. LATE CHARGE. If any installment of Rent shall not be received by Lessor or
Lessor's Assignee within ten (10) days after such amount is due, Lessee shall
pay to Lessor a late charge equal to five percent (5.0%) of such overdue amount.
2. TRAC OBLIGATION. a. In addition to the rental payments specified above,
Lessor is also entitled to recover a residual value equal to thirty percent
(30%) of the cost of the Property as set forth herein (the "Residual Value")
plus a Lease Termination Fee of $500.00.
b. At the end of the Term hereof, Lessee may purchase the Property for
the Residual Value. Lessee shall give written notice ninety (90) days prior to
Lease expiration of Lessee's intent to purchase the Property. Should Lessee
elect not to purchase the Property, Lessor shall dispose of any or all of the
Property by selling such Property for the highest cash offer then reasonably
available, or by re-leasing such Property on terms and conditions acceptable to
Lessor. The proceeds of any sale of the Property shall be deemed to be the
"Market Value" of the Property. If the disposition is by re-lease, the Market
Value of the Property shall be the present value of the rental stream of the
re-lease discounted at a rate acceptable to Lessee and Lessor. The Market Value
shall then be reduced by a Lease Termination Fee of $500.00 plus all expenses
incurred by Lessor in connection with the recovery and disposition of the
Property. The remaining balance shall be referred to as the "Residual Credit."
If the Residual Credit exceeds the Residual Value, Lessor shall promptly pay the
amount of such excess to Lessee as adjusted rent. If the Residual Credit is less
than the Residual Value, Lessee shall promptly pay the amount of such deficiency
to Lessor
<PAGE>
2
as adjusted rent. However, in no event shall Lessee's obligation be greater than
9.0% of the total cost of the Property.
c. Upon receipt of payment from Lessee of the Residual Value together with
any and applicable sales or other taxes due in connection 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.
d. Should Lessee fail to comply with the foregoing, then Lessor, at its
sole option, shall have the right to: a) demand immediate return of the
Property; or, b) extend the Term for an additional six (6) months (the "Extended
Term"). Should Lessor elect to extend the Term, Lessee shall be irrevocably
obligated to remit basic monthly rent for the period beginning on the day
immediately succeeding the last day of the original Term (the "Holdover Date")
and ending at the end of the sixth (6) month thereafter, a payment of such rent
being due on the Holdover Date and on the same day of each consecutive month
thereafter. Each payment of such rent shall be in the amount of the basic
monthly rent for the last month of the Term in accordance with the provisions of
this Schedule. All Lessee's other obligations under the Lease shall remain in
full force and effect for so long as Lessee shall continue to possess the
Property. Any and all rental payments pursuant to this Paragraph shall be deemed
for all intents and purposes to be payments for possession and use of the
Property after the expiration of the Term, and shall not be credited to any
other obligation of Lessee to Lessor. Lessor's invoicing and/or accepting any
such payment shall not give rise to any right, title or interest of Lessee other
than to possession and use of the Property during the period to which such rent
applies in accordance with this Paragraph. The aforesaid right to charge Lessee
rent for possession and use of the Property is not in limitation or derogation
of any Lessor's rights pursuant to the Lease.
3. DEPRECIATION. Lessor will be entitled to modified accelerated cost recovery
depreciation based on 100% of Property Cost using the 200% declining balance
method, switching to straight line, for 5 year Property, and zero salvage value.
IN WITNESS WHEREOF, the Lessor and the Lessee have each caused this
Schedule to be duly executed as of the day and year first above written.
Ready-Mix, Inc.
By: /s/ Kenneth D. Nelson
---------------------------
Kenneth D. Nelson
Vice President
U.S. BANCORP LEASING & FINANCIAL
By:
-----------------------------
An Authorized Officer Thereof
Address for All Notices:
U.S. BANCORP LEASING & FINANCIAL
825 N.E. Multnomah, Suite 800
Portland, Oregon 97232
Machine Tool Finance Group General Equipment Group
(800) 225-8029 (503) 797-02222 (800) 253-3468 (503) 797-0200
<PAGE>
TRAC ADDENDUM TO [LOGO OF U.S. BANCORP APPEARS HERE]
LEASE AGREEMENT
(USAGE/OWNERSHIP)
Schedule Number 11389.002
Addendum to the Master Lease Agreement ("Lease") dated as of December 17,
1996 and Schedule Number 11389.002 dated December 17, 1996 between U.S. Bancorp
Leasing & Financial ("Lessor"), and Ready-Mix, Inc. ("Lessee"). Capitalized
terms used but not defined herein are used with the same meaning as set forth in
the Lease.
Lessee certifies, under penalty of perjury, that it intends that more than
50% of the use of the Property will be in the trade or business of the Lessee.
Lessee hereby acknowledges and agrees that Lessee has been advised that
Lessee will not be treated as the owner of the Property for Federal income tax
purposes.
Dated: December 17, 1996
(LESSEE)
Ready-Mix, Inc.
By: /s/ Kenneth D. Nelson
----------------------
Kenneth D. Nelson
Vice President
ADDRESS FOR ALL NOTICES:
825 N.E. Multnomah, Suite 800
Portland, OR 97232
<PAGE>
[LOGO OF U.S. BANCORP APPEARS HERE]
DELIVERY AND ACCEPTANCE CERTIFICATE
AND LEASE AGREEMENT
Schedule Number 11389.002
---------
This Certificate is delivered to and for the benefit of Lessor and
pertains to the following personal property (the "Property") which is the
subject of Schedule Number 11389.002, dated as of December 17, 1996, to Master
--------- -----------------
Lease Agreement, dated as of December 17, 1996, between U.S. BANCORP LEASING &
-----------------
FINANCIAL as Lessor and Ready-Mix, Inc. as Lessee (the "Lease"):
---------------
Ten(10) new International trucks, model F5070, mounted with 11 cubic
yard Bridgemaster III mixers. The serial number and mixer number for
each vehicle follows: 2HTTWAHTOVC027010, 42868-08952;
2HTTWAHT0VC027007, 42854-08946; 2HTTWAHT7VC027120, 43042-09033;
2HTTWAHT7VCO27117, 42928-08975; 2HTTWAHT2VC027123,42919-08971;
2HTTWAHT5VCO17208,43026-09024; 2HTTWAHT0VC027122,42920-08972;
2HTTWAHT2VC029180,43078-09049; 2HTTWAHT9VC027121,43077-09048;
2HTTWAHT4VC027012,42872-08954.
Each of the above units are complete as equipped including, but not
limited to, all attachments, accessories & replacements relating
thereto.
To the extent that the above description has been altered by us or
differs from the Property description set forth in the Lease (including, but
not limited to, changes to model or serial numbers), we certify that such
alterations or differences are accurate and we acknowledge that, based upon this
certification: 1) the Lease is hereby amended to reflect the above Property
description; and 2) Lessor is hereby authorized to execute on our behalf and to
file amendments(s) to any Financing Statements filed under the Uniform
Commercial Code in connection with the Lease, provided that all such amendments
are consistent with the above Property description.
WE HEREBY CERTIFY AND ACKNOWLEDGE THAT: a) the Property has been
delivered to us; b) any necessary installation of the Property has been fully
and satisfactorily performed; c) after full inspection thereof, we have accepted
the Property for all purposes as of the date hereof; d) Lessor has fully and
satisfactorily satisfied all its obligations under the Lease; e) any and all
conditions to the effectiveness of the Lease or to our obligations thereunder
have been satisfied; f) we have no defenses, set-offs or counterclaims to any
such obligations; g) the Lease is in full force and effect; and, h) no Event of
Default has occurred under the Lease.
WE HEREBY REPRESENT AND WARRANT THAT: a) any right we may have now or in
the future to reject the Property or to revoke our acceptance thereof has
terminated as of the date of hereof; b) we hereby waive any such right by the
execution hereof; c) the date of this Certificate is the earliest date upon
which the certifications, acknowledgments, representations and warranties made
herein could be correctly and properly made. We hereby acknowledge that Lessor
is relying on this Certificate as a condition to making payment for the
Property.
IN WITNESS WHEREOF, we have executed this Certificate as of the 23rd day
of December, 1996.
Ready-Mix, Inc.
---------------
Upon satisfactory installation and
delivery please sign, date and return to:
U.S. BANCORP LEASING & FINANCIAL
825 N.E. Multnomah, Suite 800
Portland, Oregon 97232 By: /s/ Kenneth D. Nelson
----------------------------
Kenneth D. Nelson
Vice President
ADDRESS FOR ALL NOTICES:
825 N.E. Multnomah, Suite 800
Portland, Oregon 97232
<PAGE>
INSURANCE AUTHORIZATION [LOGO OF U.S. BANCORP
APPEARS HERE]
Note/Schedule Number 11389.002
---------
To: ______________________[Agent Name]
______________________[Street Address]
______________________[City, State, Zip]
______________________[Agent Phone]
From: Ready-Mix, Inc.
1501 Highway 168
Moapa, Nevada 89025
In connection with one or more financing arrangements (the "Transactions")
between ourselves and U.S. BANCORP LEASING & FINANCIAL (USBLF), you are hereby
authorized to issue a certified of insurance naming U.S. BANCORP LEASING &
FINANCIAL OR ASSIGNEE THEREOF as Additional Insured and as Loss Payee as its
interest may appear.
Property Cost: $1,109,000.00:
With respect to physical damage coverage, please describe USBLF's interest as
follows:
"Certificate Holder is an Additional Insured and Loss Payee with regard to
all equipment financed or leased by Policy Holder through or from
Certificate Holder."
The required coverage is to be as provided in the Transaction, including,
without limitation, fire, extended coverage, vandalism, theft and general
liability.
We understand that if such certificate is not provided, U.S. BANCORP LEASING &
FINANCIAL has right under the Transactions to purchase such insurance at our
expense.
Ready-Mix, Inc.
---------------
By: /s/ Kenneth D. Nelson
-----------------------
Kenneth D. Nelson
Vice President
[LETTERHEAD OF U.S. BANCORP APPEARS HERE]
<PAGE>
<TABLE>
<CAPTION>
MUST BE SIGNED BY DEBTOR-1
UNIFORM COMMERCIAL CODE--FINANCING STATEMENT
FORM UCC-1(1)
This Financing Statement is presented to filing officer pursuant to the Uniform
Commercial Code. This Statement remains effective for a period of five years from
the date of filing, subject to extensions for additional periods of five years by
refiling or filing a continuation statement (UCC-3)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
XA. Debtor(s): 2a. Secured party(ies)
(if individual(s) last name first)
U.S. Bancorp Leasing & Financial
Xeady-Mix, Inc. Tax I.D. #930594454
Xax I.D.86-0830443
----------
2B. Address of Secured Party from which
XB. Mailing address(es) Security Information is obtainable
X430 E. Flamingo, Suite 100 825 N.E. Multnomah Street, Suite 800
Las Vegas, Nevada 89121 Portland, Oregon 97232-2151
Phone # 503 797-0200 Reserved for Filing Officer Use Only
- ------------------------------------------------------------------------------------------------------------------------------------
X. This financing statement covers the following types (or items) of collateral No. of additional sheets attached____.
Ten (10) new International trucks, model F5070, mounted with 11 cubic yard Bridgemaster III mixers. The serial number and mixer
number for each vehicle follows: 2HTTWAHTOVC027010, 42868-08952; 2HTTWAHT0VC027007, 42854-08946; 2HTTWAHT7VC027120, 43042-09033;
2HTTWAHT7VCO27117, 42928-08975; 2HTTWAHT2VC027123, 42919-08971; 2HTTWAHT5VCO17208, 43026-09024; 2HTTWAHT0VC027122, 42920-08972;
2HTTWAHT2VC029180, 43078-09049; 2HTTWAHT9VC027121, 43077-09048; 2HTTWAHT4VC027012, 42872-08954.
Each of the above units are complete as equipped including, but not limited to, all attachments, accessories & replacements
relating thereto.
TOGETHER WITH ALL REPLACEMENTS, PARTS, REPAIRS, ADDITIONS, ACCESSIONS AND ACCESSORIES INCORPORATED THEREIN OR AFFIXED OR ATTACHED
THERETO AND ANY AND ALL PROCEEDS OF THE FOREGOING, INCLUDING, WITHOUT LIMITATION, INSURANCE RECOVERIES.
--------------------------------------
4A. Assignee of Secured Party if any:
Located at 1501 Highway 168, Moapa, Nevada 89025 (Clark County)
4b. Address of Assignee:
- ------------------------------------------------------------------------------------------------------------------------------------
This statement is filed without the Debtor's signature to perfect a security interest in collateral. (Check [X] if so)
[_] already subject to a security interest in another jurisdiction when it was brought into this state.
[_] which is proceeds of the original collateral described above in which a security interest was perfected:
- ------------------------------------------------------------------------------------------------------------------------------------
Check [x] if covered: [X] Proceeds of collateral are also covered. [_] Products of collateral are also covered.
- ------------------------------------------------------------------------------------------------------------------------------------
Filed with : Secretary of State - NV
- ------------------------------------------------------------------------------------------------------------------------------------
Ready-Mix, Inc. U.S. BANCORP LEASING & FINANCIAL
- ----------------------------------------------------------- ---------------------------------------------------------------
by: /s/ Kenneth D. Nelson by:
------------------------------------------------------- ------------------------------------------------------------
Kenneth D. Nelson, Vice President Documentation Specialist
Signature(s) of Debtors Signature(s) of Secured Party(ies)
STANDARD FORM - FORM UCC-1.
- ------------------------------------------------------------------------------------------------------------------------------------
RETURN TO:
U.S. BANCORP LEASING & FINANCIAL
ATTEN: COLLATERAL REVIEW DEPT.
825 N.E. MULTNOMAH, SUITE 800
PORTLAND, OREGON 97232
RE: LEASE# 11389.002
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MUST BE SIGNED BY DEBTOR-1
UNIFORM COMMERCIAL CODE--FINANCING STATEMENT
FORM UCC-1(1)
This Financing Statement is presented to filing officer pursuant to the Uniform
Commercial Code. This statement remains effective for a period of five years from
the date of filing, subject to extensions for additional periods of five years by
refiling or filing a continuation statement (UCC-3)
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
XA. Debtor(s): 2A. Secured party(ies)
(if individual(s) last name first)
U.S. Bancorp Leasing & Financial
Ready-Mix, Inc. Tax I.D. #930594454
Tax I.D.86-0830443
----------
2B. Address of Secured Party form which
XB. Mailing address(es) Security Information is obtainable
3430 E. Flamingo, Suite 100 825 N.E. Multnomah Street, Suite 800
Las Vegas, Nevada 89121 Portland, Oregon 97232-2151
Phone # 503 797-0200 Reserved for Filing Officer Use Only
- ------------------------------------------------------------------------------------------------------------------------------------
X. This financing statement covers the following types (or items) of collateral No. of additional sheets attached____.
Ten (10) new International trucks, model F5070, mounted with 11 cubic yard Bridgemaster III mixers. The serial number and mixer
number for each vehicle follows: 2HTTWAHTOVC027010, 42868-08952; 2HTTWAHT0VC027007, 42854-08946; 2HTTWAHT7VC027120, 43042-09033;
2HTTWAHT7VCO27117, 42928-08975; 2HTTWAHT2VC027123, 42919-08971; 2HTTWAHT5VCO17208, 43026-09024; 2HTTWAHT0VC027122, 42920-08972;
2HTTWAHT2VC029180, 43078-09049; 2HTTWAHT9VC027121, 43077-09048; 2HTTWAHT4VC027012, 42872-08954.
Each of the above units are complete as equipped including, but not limited to, all attachments, accessories & replacements
relating thereto.
TOGETHER WITH ALL REPLACEMENTS, PARTS, REPAIRS, ADDITIONS, ACCESSIONS AND ACCESSORIES INCORPORATED THEREIN OR AFFIXED OR ATTACHED
THERETO AND ANY AND ALL PROCEEDS OF THE FOREGOING, INCLUDING, WITHOUT LIMITATION, INSURANCE RECOVERIES.
--------------------------------------
4A. Assignee of Secured Party if any:
Located at 1501 Highway 168, Moapa, Nevada 89025 (Clark County)
4b. Address of Assignee:
- ------------------------------------------------------------------------------------------------------------------------------------
This statement is filed without the Debtor's signature to perfect a security interest in
collateral. (Check [X] if so)
[_] already subject to a security interest in another jurisdiction when it was brought
into this state.
[_] which is proceeds of the original collateral described above in which a security
interest was perfected:
- ------------------------------------------------------------------------------------------------------------------------------------
Check [x] if covered: [X] Proceeds of collateral are also covered. [_] Products of collateral are also covered.
- ------------------------------------------------------------------------------------------------------------------------------------
Filed with : Secretary of State - NV
- ------------------------------------------------------------------------------------------------------------------------------------
Ready-Mix, Inc. U.S. BANCORP LEASING & FINANCIAL
- ----------------------------------------------------------- ---------------------------------------------------------------
by: /s/ Kenneth D. Nelson, Vice President by:
------------------------------------------------------- ------------------------------------------------------------
Kenneth D. Nelson, Vice President Documentation Specialist
Signature(s) of Debtors Signature(s) of Secured Party(ies)
STANDARD FORM - FORM UCC-1
- ------------------------------------------------------------------------------------------------------------------------------------
RETURN TO:
U.S. BANCORP LEASING & FINANCIAL
ATTEN: COLLATERAL REVIEW DEPT.
825 N.E. MULTNOMAH, SUITE 800
PORTLAND, OREGON 97232
RE: LEASE# 11389.002
</TABLE>
<PAGE>
MUST BE SIGNED BY DEBTOR-1
UNIFORM COMMERCIAL CODE-FINANCING STATEMENT
FORM UCC-1(1)
This Financing Statement is presented to filing officer pursuant to the
Uniform Commercial Code.
This statement remains effective for a period of five years from the date of
filing, subject to extensions for additional periods of five years by
refiling or filing a continuation statement (UCC-3)
<TABLE>
<S> <C> <C>
- -----------------------------------------------------------------------------------------
1. Debtor(s): 2a. Secured party(ies)
(if individual(s) last name first)
U.S. Bancorp Leasing & Financial
Ready-Mix, Inc. Tax I.D. #930594454
Tax i.D.86-0830443
----------
2B. Address of Secured Party from which
b. Mailing address(es) Security Information is obtainable
3430 E. Flamingo, Suite 100 825 N.E. Multnomah Street, Suite 800
Las Vegas, Nevada 89121 Portland, Oregon 97232-2151
Phone # 503 797-0200 Reserved For Filing Officer Use Only
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
This financing statement covers the following types (or items) of collateral
Ten (10) new International trucks, model F5070, mounted with 11 cubic yard
Bridgemaster III mixers. The serial number and mixer number for each vehicle
follows: HTTWAHTOVC027010, 42868-08952; 2HTTWAHT0VC027007, 42854-08946;
2HTTWAHT7VC027120, 43042-09033; 2HTTWAHT7VCO27117, 42928-08975;
HTTWAHT2VC027123, 42919-08971; 2HTTWAHT5VCO17208, 43026-09024;
2HTTWAHT0VC027122, 42920-08972; 2HTTWAHT2VC029180, 43078-09049;
HTTWAHT9VC027121, 43077-09048; 2HTTWAHT4VC027012, 42872-08954.
Each of the above units are complete as equipped including, but not limited to,
all attachments, accessories & replacements relating thereto.
TOGETHER WITH ALL REPLACEMENTS, PARTS, REPAIRS, ADDITIONS, ACCESSIONS AND
ACCESSORIES INCORPORATED THEREIN OR AFFIXED OR ATTACHED THERETO AND ANY AND ALL
PROCEEDS OF THE FOREGOING, INCLUDING, WITHOUT LIMITATION, INSURANCE
RECOVERIES.
<TABLE>
------------------------------------------
<S> <C>
Located at 1501 Highway 168, Moapa, Nevada 89025 (Clark County) 4A. Assignee of Secured Party if any:
4b. Address of Assignee:
</TABLE>
- -----------------------------------------------------------------------------
This statement is filed without the Debtor's signature to perfect a security
interest in collateral. (Check [x] if so)
[_] already subject to a security interest in another jurisdiction when it
was brought into this state.
[_] which is proceeds of the original collateral described above in which a
security interest was perfected:
- -----------------------------------------------------------------------------
Check [x] if covered: [X] Proceeds of collateral are also covered. [] Products
of collateral are also covered.
- -----------------------------------------------------------------------------
Filed with: Secretary of State - NV
- -----------------------------------------------------------------------------
Ready-Mix, Inc. U.S. BANCORP LEASING & FINANCIAL
- ---------------------------- -------------------------------------------
by: /s/ Kenneth D. Nelson by:
------------------------- ----------------------------------------
Kenneth D. Nelson, Documentation Specialist
Vice President Signature(s) of Secured Party(ies)
Signature(s) of Debtors
STANDARD FORM - FORM UCC-1.
- -----------------------------------------------------------------------------
RETURN TO:
U.S. BANCORP LEASING & FINANCIAL
ATTEN: COLLATERAL REVIEW DEPT.
825 N.E. MULTNOMAH, SUITE 800
PORTLAND, OREGON 97232
RE: LEASE# 11389.002
<PAGE>
SCHEDULE TO MASTER LEASE AGREEMENT [U.S. BANCORP LOGO APPEARS HERE]
Schedule Number 11389.004
---------
THIS SCHEDULE made as of December 17, 1996, by and between U.S. BANCORP
LEASING & FINANCIAL ("Lessor"), having its principal place of business at 825
N.E. Multnomah, Suite 800, Portland, Oregon 97232, and Ready-Mix, Inc.
("Lessee"), having its principal place of business located at 3430 E. Flamingo,
Suite 100, Las Vegas, Nevada 89121, to the Master Lease Agreement dated as of
December 17, 1996 between the Lessee and the Lessor (the "Lease"). Capitalized
terms used but not defined herein are used with the respective meanings
specifie in the Lease.
LESS AND LESSEE HEREBY COVENANT AND AGREE AS FOLLOWS:
(a) The following specified equipment (the "Property") is hereby made and
constituted Property for all purposes pursuant to the Lease:
Eight (8) new 1997 International trucks, model F5070, mounted with 11 cubic
yard Bridgemaster III mixers. The serial number and mixer number for each
vehicle follows: 2HTTWAHT7VC029174, 43047-09034; 2HTTWAHT8VC027143, 43067-
09044 2HTTWAHT5VC029173, 43029-09027; 2HTTWAHT4VCO27009, 42869-08953;
2HTTWAHT6VC027013, 42863-08950; 2HTTWAHT2VCO27140, 43058-09040;
2HTTWAHT4VC027141, 43069-09046; 2HTTWAHT3VC017210, 43087-09055;
Each of the above units are complete as equipped including, but not limited
to, all attachments, accessories & replacements relating thereto.
(b) The cost of the Property is $887,200.00;
Please Initial Here:KDN
-----
(c) This Schedule shall commence on January 1, 1997 and shall continue for 60
months thereafter.
(d) Lessee shall owe 60 basic monthly rental payments in arrears each in the
amount of $13,704.76 (plus applicable sales/use taxes). The first such
payment shall be due on February 1, 1997 and shall continue on the same day
of each month thereafter until the end of the term of this Schedule. In
addition, Lessee shall pay daily pro rata rental in the amount of $456.83
per day (plus applicable sales/use taxes) from the date on which Lessee
executes a Delivery and Acceptance Certificate for the Property through
December 31, 1996. Such daily pro rata rental shall be due and payable at
signing of the Certificate.
(e) The Property will be installed or stored at the following address: 1501
Highway 168, Moapa, Nevada 89025, COUNTY: Clark;
(f) The record owner of the premises at which the Property will be installed or
stored is: ;
1. LATE CHARGE. If any installment of Rent shall not be received by Lessor or
Lessor's Assignee within ten (10) days after such amount is due, Lessee shall
pay to Lessor a late charge equal to five percent (5.0%) of such overdue amount.
2. TRAC OBLIGATION. a. In addition to the rental payments specified above,
Lessor is also entitled to recover a residual value equal to thirty percent
(30%) of the cost of the Property as set forth herein (the "Residual Value")
plus a Lease Termination Fee $500.00.
b. At the end of the Term hereof, Lessee may purchase the Property for the
Residual Value. Lessee shall give written notice ninety (90) days prior to
Lease expiration of Lessee's intent to purchase the Property. Should Lessee
elect not to purchase the Property, Lessor shall dispose of any or all of the
Property by selling such Property for the highest cash offer then reasonably
available, or by re-leasing such Property on terms and conditions acceptable to
Lessor. The proceeds of any sale of the Property shall be deemed to be the
"Market Value" of the Property. If the disposition is by re-lease, the Market
Value of the Property shall be the present value of the rental stream of the
re-lease discounted at a rate acceptable to Lessee and Lessor. The Market Value
shall then be reduced by a Lease Termination Fee of $500.00 plus all expenses
incurred by Lessor in connection with the recovery and disposition of the
Property. The remaining balance shall be referred to as the "Residual Credit."
If the Residual Credit exceeds the Residual Value, Lessor shall promptly pay the
amount of such excess to Lessee as adjusted rent. If the Residual Credit is
less than the Residual Value, Lessee shall promptly pay the amount of such
deficiency to Lessor
<PAGE>
2
as adjusted rent. However, in no event shall Lessee's obligation be greater
than 9.0% of the total cost of the Property.
c. Upon receipt of payment from Lessee of the Residual Value together with
any and all applicable sales or other taxes due in connection therewith, and any
and all remaining sums or other amounts payable under this Schedule, Lessor
shall transfer all its right, tile 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.
d. Should Lessee fail to comply with the foregoing, then Lessor, at its
sole option, shall have the right to: a)demand immediate return of the Property;
or, b) extend the Term for an additional six (6) months (the "Extended Term").
Should Lessor elect to extend the Term, Lessee shall be irrevocably obligated to
remit basic monthly rent for the period beginning on the day immediately
succeeding the last day of the original Term (the "Holdover Date") and ending at
the end of the sixth (6) month thereafter, a payment of such rent being due on
the Holdover Date and on the same day of each consecutive month thereafter. Each
payment of such rent shall be in the amount of the basic monthly rent for the
last month of the Term in accordance with the provisions of this Schedule. All
Lessee's other obligations under the Lease shall remain in full force and effect
for so long as l:Lessee shall continue to possess the Property. Any and all
rental payments pursuant to this Paragraph shall be deemed for all intents and
purposes to be payments for possession and use of the Property after the
expiration of the Term, and shall not be credited to any other obligation of
Lessee to Lessor. Lessor's invoicing and/or accepting any such payment shall
not give rise to any right, title or interest of Lessee other than to possession
and use of the Property during the period to which such rent applies in
accordance with this Paragraph. The aforesaid right to charge Lessee rent for
possession and use of the Property is not in limitation or derogation of any of
Lessor's rights pursuant to the Lease.
3. DEPRECIATION. Lessor will be entitled to modified accelerated cost
recovery depreciation based on 100% of Property Cost using the 200% declining
balance method, switching to straight line, for 5 year Property, and zero
salvage value.
IN WITNESS WHEREOF, the Lessor and the Lessee have each caused this
Schedule to be duly executed as of the day and year first above written.
Ready-Mix, Inc.
By:/s/ Kenneth D. Nelson
------------------------------------
Kenneth D. Nelson
Vice President
U.S. BANCORP LEASING & FINANCIAL
By:
-----------------------------------
An Authorized Officer Thereof
Address for All Notices:
U.S. BANCORP LEASING & FINANCIAL
825 N.E. Multnomah, Suite 800
Portland, Oregon 97232
Machine Tool Finance Group General Equipment Group
(800) 225-8029 (503) 797-0222 (800) 253-3468 (503) 797-0200
<PAGE>
TRAC ADDENDUM TO [LOGO OF U.S. BANCORP APPEARS HERE]
LEASE AGREEMENT
(USAGE/OWNERSHIP)
Schedule Number 11389.004
Addendum to the Master Lease Agreement ("Lease") dated as of December
17, 1996 and Schedule Number 11389.004 dated December 17, 1996 between U.S.
Bancorp Leasing & Financial ("Lessor"), and Ready-Mix, Inc. ("Lessee").
Capitalized terms used but not defined herein are used with the same meaning as
set forth in the Lease.
Lessee certifies, under penalty of perjury, that it intends that more
than 50% of the use of the Property will be in the trade or business of the
Lessee.
Lessee hereby acknowledges and agrees that Lessee has been advised that
Lessee will not be treated as the owner of the Property for Federal income tax
purposes.
Dated: December 17, 1996
(LESSEE)
Ready-Mix, Inc.
By /s/ Kenneth D. Nelson
----------------------
Kenneth D. Nelson
Vice President
ADDRESS FOR ALL NOTICES:
825 N.E. Multnomah, Suite 800
Portland, OR 97232
<PAGE>
DELIVERY AND ACCEPTANCE CERTIFICATE [LOGO OF U.S. BANCORP APPEARS HERE]
AND LEASE AMENDMENT
Schedule Number 11389.004
---------
This Certificate is delivered to and for the benefit of Lessor and
pertains to the following personal property (the "Property") which is the
subject of Schedule Number 11389.004, dated as of December 17, 1996, to Master
--------- -----------------
Lease Agreement, dated as of December 17, 1996, between U.S. BANCORP LEASING &
-----------------
FINANCIAL as Lessor and Ready-Mix, Inc. as Lessee (the "Lease"):
---------------
Eight (8) new 1997 International trucks, model F5070, mounted with 11
cubic yard Bridgemaster III mixers. The serial number and mixer number
for each vehicle follows: 2HTTWAHT7VC029174, 43047-09034;
2HTTWAHT8VC027143, 43067-09044 2HTTWAHT5VC029173, 43029-09027;
2HTTWAHT4VCO27009, 42869-08953; 2HTTWAHT6VC027013, 42863-08950;
2HTTWAHT2VCO27140, 43058-09040; 2HTTWAHT4VC027141, 43069-09046;
2HTTWAHT3VC017210, 43087-09055;
Each of the above units are complete as equipped including, but not
limited to, all attachments, accessories & replacements relating
thereto.
To the extent that the above description has been altered by us or
differs from the Property description set forth in the Lease (including, but not
limited to, changes to model or serial numbers), we certify that such
alterations or differences are accurate and we acknowledge that, based upon this
certification: 1) the Lease is hereby amended to reflect the above Property
description; and 2) Lessor is hereby authorized to execute on our behalf and to
file amendment(s) to any Financing Statements filed under the Uniform Commercial
Code in connection with the Lease, provided that all such amendments are
consistent with the above Property description.
WE HEREBY CERTIFY AND ACKNOWLEDGE THAT: a) the Property has been
delivered to us; b) any necessary installation of the Property has been fully
and satisfactorily performed; c) after full inspection thereof, we have accepted
the Property for all purposes as of the date hereof; d) Lessor has fully and
satisfactorily satisfied all its obligations under the Lease; e) any and all
conditions of the effectiveness of the Lease or to our obligations thereunder
have been satisfied; f) we have no defenses, set-offs or counterclaims to any
such obligations; g) the Lease is in full force and effect; and, h) no Event of
Default has occurred under the Lease.
WE HEREBY REPRESENT AND WARRANT THAT: a) any right we may have now or in
the future to reject the Property or to revoke our acceptance thereof has
terminated as of the date of hereof; b) we hereby waive any such right by the
execution hereof; c) the date of this Certificate is the earliest date upon
which the certifications, acknowledgements, representations and warranties made
herein could be correctly and properly made. We hereby acknowledge that Lessor
is relying on this Certificate as a conditions to making payment for the
Property.
IN WITNESS WHEREOF, we have executed this Certificate as of the 23rd day
of December, 1996.
Ready-Mix, Inc.
---------------
Upon satisfactory installation and
delivery please sign, date and return to:
U.S. BANCORP LEASING & FINANCIAL
825 N.E. Multnomah, Suite 800 By: /s/ Kenneth D. Nelson
Portland, Oregon 97232 --------------------------
Kenneth D. Nelson
Vice President
ADDRESS FOR ALL NOTICES:
825 N.E. Multnomah, Suite 800
Portland, Oregon 97232
<PAGE>
INSURANCE AUTHORIZATION [LOGO OF U.S. BANCORP APPEARS HERE]
Note/Schedule Number 11389.004
---------
To: _______________________[Agent Name]
_______________________[Street Address]
_______________________[City, State, Zip]
_______________________[Agent Phone]
From: Ready-Mix, Inc.
1501 Highway 168
Moapa, Nevada 89025
In connection with one or more financing arrangements (the "Transactions")
between ourselves and U.S. BANCORP LEASING & FINANCIAL (USBLF), you are hereby
authorized to issue a certificate of insurance naming U.S. BANCORP LEASING &
FINANCIAL OR ASSIGNEE THEREOF as Additional Insured and as Loss Payee as its
interest may appear.
Property Cost: $887,200.00:
With respect to physical damage coverage, please describe USBLF's interest as
follows:
"Certificate Holder is an Additional Insured and Loss Payee with regard
to all equipment financed or leased by Policy Holder through or from
Certificate Holder."
The required coverage is to be as provided in the Transaction, including,
without limitation, fire, extended coverage, vandalism, theft and general
liability.
We understand that if such certificate is not provided, U.S. BANCORP LEASING &
FINANCIAL has the right under the Transactions to purchase such insurance at our
expense.
Ready-Mix, Inc.
---------------
By: /s/ Kenneth D. Nelson
------------------------
Kenneth D. Nelson
Vice President
ADDRESS FOR ALL NOTICES:
825 N.E. Multnomah, Suite 800
Portland, OR 97232
<PAGE>
MUST BE SIGNED BY DEBTOR-1
UNIFORM COMMERCIAL CODE--FINANCING STATEMENT
FORM UCC-1(1)
This Financing Statement is presented to filing
officer pursuant to the Uniform Commercial Code.
This statement remains effective for a period of
five years from the date of filing,
subject to extensions for additional
periods of five years by refiling or
filing a continuation statement (UCC-3)
- ---------------------------------------------------------
1a. Debtor(s): 2a. Secured party(ies)
(if individual(s) last
name first) U.S. Bancorp Leasing &
Financial
Ready-Mix, Inc. Tax I.D. #930594454
Tax i.D.86-0830443
----------
1b. Mailing address(es) 2B. Address of Secured Party
from which Security
Information is obtainable
3 430 E. Flamingo, 825 N.E. Multnomah Street
Suite 100 Suite 800
Las Vegas, Nevada 89121 Portland, Oregon 97232-2151
Reserved For Filing
Phone # 503 797-0200 Officer Use Only
- --------------------------------------------------------------------------------
This financing statement covers the following No. of additional
types (or items) of collateral sheets attached _____.
Eight (8) new 1997 International trucks, model F5070, mounted with 11 cubic yard
Bridgemaster III mixers. The serial number and mixer number for each vehicle
are as follows:
2HTTWAHT7VC029174, 43047-09034; 2HTTWAHT8VC027143, 43067-09044 2HTTWAHT5VC02173,
43029-09027; 2HTTWAHT4VCO27009, 42869-08953; HTTWAHT6VCO27013, 42863-08950;
2HTTWAHT2VCO27140, 43058-09040; 2HTTWAHT4VC027141, 43069-09046;
2HTTWAHT3VC017210, 43087-09055;
Each of the above units are complete as equipped including, but not limited to,
all attachments, accessories & replacements relating thereto.
TOGETHER WITH ALL REPLACEMENTS, PARTS, REPAIRS, ADDITIONS, ACCESSIONS AND
ACCESSORIES INCORPORATED THEREIN OR AFFIXED OR ATTACHED THERETO AND ANY AND ALL
PROCEEDS OF THE FOREGOING, INCLUDING, WITHOUT LIMITATION, INSURANCE RECOVERIES.
------------------------
Located at 1501 Highway 168, 4A. Assignee of Secured
Moapa, Nevada 89025 (Clark County) Party if any:
KeyCorp Leasing Ltd.
4b. Address of Assignee:
54 State Street
Albany, NY 12207
Attn: Kathy Miller
- --------------------------------------------------------------------------------
This statement is filed without the Debtor's signature to perfect a security
interest in collateral. (Check [x] if so)
[_] already subject to a security interest in another jurisdiction when it
was brought into this state.
[_] which is proceeds of the original collateral described above in which a
security interest was perfected.
- --------------------------------------------------------------------------------
Check[x] if covered: [X] Proceeds of collateral [_] Products of collateral are
are also covered. also covered.
- --------------------------------------------------------------------------------
Filed with: Secretary of State - NV
- --------------------------------------------------------------------------------
Ready-Mix, Inc. U.S. BANCORP LEASING & FINANCIAL
- ------------------------------------ ----------------------------------------
by: /s/ Kenneth D. Nelson by:
--------------------------------- -------------------------------------
Kenneth D. Nelson, Documentation Specialist
Vice President
Signature(s) of Debtors Signature(s) of Secured
Party(ies)
STANDARD FORM - FORM UCC-1.
- --------------------------------------------------------------------------------
RETURN TO:
U.S. BANCORP LEASING & FINANCIAL
ATTEN: COLLATERAL REVIEW DEPT.
825 N.E. MULTNOMAH, SUITE 800
PORTLAND, OREGON 97232
RE: LEASE# 11389.004
<PAGE>
<TABLE>
<CAPTION>
MUST BE SIGNED BY DEBTOR-1
UNIFORM COMMERCIAL CODE--FINANCING STATEMENT
FORM UCC-1(1)
This Financing Statement is presented to filing officer pursuant to the Uniform Commercial Code.
This statement remains effective for a period of five years from the date of filing, subject to extensions
for additional periods of five years by refiling or filing a continuation statement (UCC-3)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Debtor(s): 2A. Secured party(ies)
(if individual(s) last name first)
U.S. Bancorp Leasing & Financial
Ready-Mix, Inc. Tax I.D. #930594454
I.D.86-0830443
---------- 2B. Address of Secured Party from which
Security Information is obtainable
Mailing address(es)
3430 E. Flamingo, Suite 100 825 N.E. Multnomah Street, Suite 800
Las Vegas, Nevada 89121 Portland, Oregon 97232-2151
Phone # 503 797-0200 Reserved For Filing Officer
Use Only
- -----------------------------------------------------------------------------------------------------------------------------------
This financing statement covers the following types (or items) of collateral No. of additional sheets
attached ____.
</TABLE>
Eight (8) new 1997 International trucks, model F5070, mounted with 11 cubic yard
Bridgemaster III mixers. The serial number and mixer number for each vehicle
follows: 2HTTWAHT7VC029174, 43047-09034; 2HTTWAHT8VC027,43067-09044
2HTTWAHT5VC029173, 43029-09027; 2HTTWAHT4VCO27009, 42869-08953;
2HTTWAHT6VC02713, 42863-08950; 2HTTWAHT2VCO27140, 43058-09040;
2HTTWAHT4VC027141, 43069-09046; 2HTTWAHT3VC017210, 43087-09055;
Each of the above units are complete as equipped including, but not limited to,
all attachments, accessories & replacements relating thereto.
TOGETHER WITH ALL REPLACEMENTS, PARTS, REPAIRS, ADDITIONS, ACCESSIONS AND
ACCESSORIES INCORPORATED THEREIN OR AFFIXED OR ATTACHED THERETO AND ANY AND ALL
PROCEEDS OF THE FOREGOING, INCLUDING, WITHOUT LIMITATION, INSURANCE RECOVERIES.
4A. Assignee of Secured Party if any:
01 Highway 168, Moapa, Nevada 89025
(Clark County) | KeyCorp Leasing Ltd.
4b. Address of Assignee:
54 State Street
Albany, NY 12207
Attn: Kathy Miller
- --------------------------------------------------------------------------------
This statement is filed without the Debtor's signature to perfect a security
interest in collateral. (Check [X] if so)
[_] already subject to a security interest in another jurisdiction when it was
brought into this state.
[_] which is proceeds of the original collateral described above in which a
security interest was perfected:
- --------------------------------------------------------------------------------
Check [X] if covered: [X] Proceeds of collateral are also covered. [_] Products
of collateral are also covered.
- --------------------------------------------------------------------------------
Filed with: Secretary of State - NV
- --------------------------------------------------------------------------------
Ready-Mix, Inc. U.S. BANCORP LEASING & FINANCIAL
- ------------------------------------ ----------------------------------------
by:/s/ Kenneth D. Nelson by:
--------------------------------- -------------------------------------
Kenneth D. Nelson, Vice President Documentation Specialist
Signature(s) of Debtors Signature(s) of Secured Party(ies)
STANDARD FORM - FORM UCC-1.
- --------------------------------------------------------------------------------
RETURN TO:
U.S. BANCORP LEASING & FINANCIAL
ATTEN: COLLATERAL REVIEW DEPT.
25 N.E. MULTNOMAH, SUITE 800
PORTLAND, OREGON 97232
RE: LEASE# 11389.004
0860.595
<PAGE>
<TABLE>
<CAPTION>
MUST BE SIGNED BY DEBTOR-1
UNIFORM COMMERCIAL CODE--FINANCING STATEMENT
FORM UCC-1(1)
This Financing Statement is presented to filing officer pursuant to the Uniform Commercial Code.
This statement remains effective for a period of five years from the date of filing, subject to extensions
for additional periods of five years by refiling or filing a continuation statement (UCC-3)
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. Debtor(s): 2a. Secured party(ies)
(if individual(s) last name first)
U.S. Bancorp Leasing & Financial
Ready-Mix, Inc. Tax I.D. #930594454
Mix i.D.86-0830443
---------- 2B. Address of Secured Party from which
Security Information is obtainable
Mailing address(es)
3430 E. Flamingo, Suite 100 825 N.E. Multnomah Street, Suite 800
Las Vegas, Nevada 89121 Portland, Oregon 97232-2151
Phone # 503 797-0200 Reserved For Filing Officer
Use Only
- -----------------------------------------------------------------------------------------------------------------------------------
This financing statement covers the following types (or items) of collateral No. of additional sheets
attached ____.
</TABLE>
Eight (8) new 1997 International trucks, model F5070, mounted with 11 cubic yard
Bridgemaster III mixers. The serial number and mixer number for each vehicle
follows: 2HTTWAHT7VCO29174, 43047-09034; 2HTTWAHT8VC027143, 43067-09044
2HTTWAHT5VC029173, 43029-09027; 2HTTWAHT4VCO27009, 42869-08953;HTTWAHT6VC02713,
42863-08950; 2HTTWAHT2VCO27140, 43058-09040; 2HTTWAHT4VC027141, 43069-09046;
2HTTWAHT3VC017210, 43087-09055;
Much of the above units are complete as equipped including, but not limited to,
all attachments, accessories & replacements relating thereto.
TOGETHER WITH ALL REPLACEMENTS, PARTS, REPAIRS, ADDITIONS, ACCESSIONS AND
ACCESSORIES INCORPORATED THEREIN OR AFFIXED OR ATTACHED THERETO AND ANY AND ALL
PROCEEDS OF THE FOREGOING, INCLUDING, WITHOUT LIMITATION, INSURANCE RECOVERIES.
4A. Assignee of Secured Party if any:
Located at 1501 Highway 168,
Moapa, Nevada 89025 Key Corp Leasing Ltd.
(Clark County)
4b. Address of Assignee:
54 State Street
Albany, NY 12207
Attn: Kathy Miller
- --------------------------------------------------------------------------------
This statement is filed without the Debtor's signature to perfect a security
interest in collateral. (Check [X] if so)
[_] already subject to a security interest in another jurisdiction when it was
brought into this state.
[_] which is proceeds of the original collateral described above in which a
security interest was perfected:
- --------------------------------------------------------------------------------
Check [X] if covered: [X] Proceeds of collateral are also covered. [_] Products
of collateral are also covered.
- --------------------------------------------------------------------------------
Filed with: Secretary of State - NV
- --------------------------------------------------------------------------------
Ready-Mix, Inc. U.S. BANCORP LEASING & FINANCIAL
- ------------------------------------ ----------------------------------------
By:/s/ Kenneth D. Nelson By:
--------------------------------- -------------------------------------
Kenneth D. Nelson, Vice President Documentation Specialist
Signature(s) of Debtors Signature(s) of Secured Party(ies)
STANDARD FORM - FORM UCC-1.
- --------------------------------------------------------------------------------
RETURN TO:
U.S. BANCORP LEASING & FINANCIAL
ATTEN: COLLATERAL REVIEW DEPT.
825 N.E. MULTNOMAH, SUITE 800
PORTLAND, OREGON 97232
RE: LEASE# 11389.004
<PAGE>
SCHEDULE TO MASTER LEASE AGREEMENT [LOGO OF U.S. BANCORP APPEARS HERE]
Schedule Number 11389.003
---------
THIS SCHEDULE made as of December 17, 1996, by and between U.S. BANCORP
LEASING & FINANCIAL ("Lessor"), having its principal place of business at 825
N.E. Multnomah, Suite 800, Portland, Oregon 97232, and Ready-Mix, Inc.
("Lessee"), having its principal place of business located at 3430 E. Flamingo,
Suite 100, Las Vegas, Nevada 89121, to the Master Lease Agreement dated as of
December 17, 1996 between the Lessee and the Lessor (the "Lease"). Capitalized
terms used but not defined herein are used with the respective meanings
specified in the Lease.
LESSOR AND LESSEE HEREBY COVENANT AND AGREE AS FOLLOWS:
(a) The following specified equipment (the "Property") is hereby made and
constituted Property for all purposes pursuant to the Lease:
Ten (10) new International trucks, model F5070, mounted with 11 cubic yard
Bridgemaster III mixers. The serial number and mixer number for each
vehicle follows: 2HTTWAHT2VC027008, 42855-08947; 2HTTWAHTXC027015,
42860-08948; 2HTTWAHT1VC027016, 42882-08957; 2HTTWAHT6VCO27142,
43023-09023; 2HTTWAH7TVC017209, 43100-09062; 2HTTWAHT8VCO27014,
43090-09058; 2HTTWAHT2VC027011, 43130-09076; 2HTTWAHT0VC027119,
43125-09075; 2HTTWAHT1VC029168, 43148-09087; 2HTTWAHT6VC027139,
43149-09088.
Each of the above units are complete as equipped including, but not limited
to, all attachments, accessories & replacements relating thereto.
(b) The cost of the Property is $1,109,000.00;
Please Initial Here:[INITIALS APPEAR HERE]
----
(c) This Schedule shall commence on January 1, 1997 and shall continue for 60
months thereafter.
(d) Lessee shall owe 60 basic monthly rental payments in arrears each in the
amount of $17,130.94 (plus applicable sales/use taxes). The first such
payment shall be due on February 1, 1997 and shall continue on the same day
of each month thereafter until the end of the term of this Schedule. In
addition, Lessee shall pay daily pro rata rental in the amount of $571.03
per day (plus applicable sales/use taxes) from the date on which Lessee
executes a Delivery and Acceptance Certificate for the Property through
December 31, 1996. Such daily pro rata rental shall be due and payable at
signing.
(e) The Property will be installed or stored at the following address: 1501
Highway 168, Moapa, Nevada 89025, COUNTY: Clark;
(f) The record owner of the premises at which the Property will be installed or
stored is: ;
1. LATE CHARGE. If any installment of Rent shall not be received by Lessor or
Lessor's Assignee within ten (10) days after such amount is due, Lessee shall
pay to Lessor a late charge equal to five percent (5.0%) of such overdue amount.
2. TRAC OBLIGATION. a. In addition to the rental payments specified above,
Lessor is also entitled to recover a residual value equal to thirty percent
(30%) of the cost of the Property as set forth herein (the "Residual Value")
plus a Lease Termination Fee of $500.00.
b. At the end of the Term hereof, Lessee may purchase the Property for
the Residual Value. Lessee shall give written notice ninety (90) days prior to
Lease expiration of Lessee's intent to purchase the Property. Should Lessee
elect not to purchase the Property, Lessor shall dispose of any or all of the
Property by selling such Property for the highest cash offer then reasonably
available, or by re-leasing such Property on terms and conditions acceptable to
Lessor. The proceeds of any sale of the Property shall be deemed to be the
"Market Value" of the Property. If the disposition is by re-lease, the Market
Value of the Property shall be the present value of the rental stream of the
re-lease discounted at a rate acceptable to Lessee and Lessor. The Market Value
shall then be reduced by a Lease Termination Fee of $500.00 plus all expenses
incurred by Lessor in connection with the recovery and disposition of the
Property. The remaining balance shall be referred to as the "Residual Credit."
If the Residual Credit exceeds the Residual Value, Lessor shall promptly pay the
amount of such excess to Lessee as adjusted rent. If the Residual Credit is less
than the Residual Value, Lessee shall promptly pay the amount of such deficiency
to Lessor as adjusted rent. However, in no event shall Lessee's obligation be
greater than 9.0% of the total cost of the Property.
<PAGE>
2
c. Upon receipt of payment from Lessee of the Residual Value together
with any and all applicable sales or other taxes due in connection 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.
d. Should Lessee fail to comply with the foregoing, then Lessor, at its
sole option, shall have the right to: a) demand immediate return of the
Property; or, b) extend the Term for an additional six (6) months (the "Extended
Term"). Should Lessor elect to extend the Term, Lessee shall be irrevocably
obligated to remit basic monthly rent for the period beginning on the day
immediately succeeding the last day of the original Term (the "Holdover Date")
and ending at the end of the sixth (6) month thereafter, a payment of such rent
being due on the Holdover Date and on the same day of each consecutive month
thereafter. Each payment of such rent shall be in the amount of the basic
monthly rent for the last month of the Term in accordance with the provisions of
this Schedule. All Lessee's other obligations under the Lease shall remain in
full force and effect for as long as Lessee shall continue to posses the
Property. Any and all rental payments pursuant to this Paragraph shall be deemed
for all intents and purposes to be payments for possession and use of the
Property after the expiration of the Term, and shall not be credited to any
other obligation of Lessee to Lessor. Lessor's invoicing and/or accepting any
such payment shall not give rise to any right, title or interest of Lessee other
than to possession and use of the Property during the period to which such rent
applies in accordance with this Paragraph. The aforesaid right to charge Lessee
rent for possession and use of the Property is not in limitation or derogation
of any of Lessor's rights pursuant to the Lease.
IN WITNESS WHEREOF, the Lessor and the Lessee have each caused this
Schedule to be duly executed as of the day and year first above written.
Ready-Mix, Inc.
By: /s/ Kenneth D. Nelson
-------------------------
Kenneth D. Nelson
Vice President
U.S. BANKCORP LEASING & FINANCIAL
By:
-------------------------
An Authorized Officer Thereof
Address for All Notices:
U.S. BANCORP LEASING & FINANCIAL
825 N.E. Multnomah, Suite 800
Portland, Oregon 97232
Machine Tool Finance Group General Equipment Group
(800) 225-8029 (503) 797-0222 (800) 253-3468 (503) 797-0200
<PAGE>
TRAC ADDENDUM TO [LOGO OF U.S. BANCORP APPEARS HERE]
LEASE AGREEMENT
(USAGE/OWNERSHIP) Schedule Number 11389.003
Addendum to the Master Lease Agreement ("Lease") dated as of December 17,
1996 and Schedule Number 11389.003 dated December 17, 1996 between U.S. Bancorp
Leasing & Financial ("Lessor"), and Ready-Mix, Inc. ("Lessee"). Capitalized
terms used but not defined herein are used with the same meaning as set forth in
the Lease.
Lessee certifies, under penalty of perjury, that it intends that more than
50% of the use of the Property will be in the trade or business of the Lessee.
Lessee hereby acknowledges and agrees that Lessee has been advised that
Lessee will not be treated as the owner of the Property for Federal income tax
purposes.
Dated: December 17, 1996
(LESSEE)
Ready-Mix, Inc.
By /s/ Kenneth D. Nelson
----------------------------
Kenneth D. Nelson
Vice President
ADDRESS FOR ALL NOTICES:
825 N.E. Multnomah, Suite 800
Portland, OR 97232
<PAGE>
DELIVERY AND ACCEPTANCE CERTIFICATE [LETTERHEAD OF U.S. BANCORP
AND LEASE AMENDMENT APPEARS HERE]
Schedule Number 11389.003
---------
This Certificate is delivered to and for the benefit of Lessor and pertains
to the following personal property (the "Property") which is the subject of
Schedule Number 11389.003, dated as of December 17, 1996, to Master Lease
--------- -----------------
Agreement, dated as of December 17, 1996, between U.S. BANCORP LEASING &
-----------------
FINANCIAL as Lessor and Ready-Mix, Inc. as Lessee (the "Lease"):
--------------
Ten (10) new International trucks, model F5070, mounted with 11 cubic yard
Bridgemaster III mixers. The serial number and mixer number for each
vehicle follows: 2HTTWAHT2VC027008, 42855-08947; 2HTTWAHTXC027015, 42860-
08948; 2HTTWAHT1VC027016, 42882-08957; 2HTTWAHT6VCO27142, 43023-09023;
2HTTWAH7TVC017209, 43100-09062; 2HTTWAHT8VCO27014, 43090-09058;
2HTTWAHT2VC027011, 43130-09076; 2HTTWAHT0VC027119, 43125-09075;
2HTTWAHT1VC029168, 43148-09087; 2HTTWAHT6VC027139, 43149-09088.
Each of the above units are complete as equipped including, but not limited
to, all attachments, accessories & replacements relating thereto.
To the extent that the above description has been altered by us or differs
from the Property description set forth in the Lease (including, but not limited
to, changes to model or serial numbers), we certify that such alterations or
differences are accurate and we acknowledge that, based upon this
certification: 1) the Lease is hereby amended to reflect the above Property
description; and 2) Lessor is hereby authorized to execute on our behalf and to
file amendment(s) to any Financing Statements filed under the Uniform Commercial
Code in connection with the Lease, provided that all such amendments are
consistent with the above Property description.
WE HEREBY CERTIFY AND ACKNOWLEDGE THAT: a) the Property has been delivered
to us; b) any necessary installation of the Property has been fully and
satisfactorily performed; c) after full inspection thereof, we have accepted the
Property for all purposes as of the date hereof; d) Lessor has fully and
satisfactorily satisfied all its obligations under the Lease; e) any and all
conditions to the effectiveness of the Lease or to our obligations thereunder
have been satisfied; f) we have no defenses, set-offs or counterclaims to any
such obligations; g) the Lease is in full force and effect; and, h) on Event of
Default has occurred under the Lease.
WE HEREBY REPRESENT AND WARRANT THAT: a) any right we may have now or in
the future to reject the Property or to revoke our acceptance thereof has
terminated as of the date of hereof; b) we hereby waive any such right by the
execution hereof; c) the date of this Certificate is the earliest date upon
which the certifications, acknowledgments, representations and warranties made
herein could be correctly and properly made. We hereby acknowledge that Lessor
is relying on this Certificate as a condition to making payment for the
Property.
IN WITNESS WHEREOF, we have executed this Certificate as of the 23rd day of
December, 1996.
Ready-Mix, Inc.
---------------
Upon satisfactory installation and
delivery please sign, date and return to:
U.S. BANCORP LEASING & FINANCIAL
825 N.E. Multnomah, Suite 800 By:/s/ Kenneth D. Nelson
Portland, Oregon 97232 -------------------------
Kenneth D. Nelson
Vice President
ADDRESS FOR ALL NOTICES:
825 N.E. Multnomah, Suite 800
Portland, Oregon 97232
<PAGE>
[LOGO U.S. BANCORP
APPEARS HERE]
INSURANCE AUTHORIZATION
Note/Schedule Number 11389.003
---------
To: [Agent Name]
------------------------
[Street Address]
------------------------
[City, State, Zip]
------------------------
[Agent Phone]
------------------------
From: Ready-Mix, Inc.
1501 Highway 168
Moapa, Nevada 89025
In connection with one or more financing arrangements (the "Transactions")
between ourselves and U.S. BANCORP LEASING & FINANCIAL (USBLF), you are hereby
authorized to issue a certificate of insurance naming U.S. BANCORP LEASING &
FINANCIAL OR ASSIGNEE THEREOF as Additional Insured and as Loss Payee as its
interest may appear.
Property Cost $1,109,000.00:
With respect to physical damage coverage, please describe USBLF's interest as
follows:
"Certificate Holder is an Additional Insured and Loss Payee with regard to
all equipment financed or leased by Policy Holder through or from
Certificate Holder."
The required coverage is to be as provided in the Transaction, including,
without limitation, fire, extended coverage, vandalism, theft and general
liability.
We understand that if such certificate is not provided, U.S. BANCORP LEASING &
FINANCIAL has the right under the Transactions to purchase such insurance at our
expense.
Ready-Mix, Inc.
---------------
By: /s/ Kenneth D. Nelson
------------------------
Kenneth D. Nelson
Vice President
ADDRESS FOR ALL NOTICES:
825 N.E. Multnomah, Suite 800
Portland, OR 97232
<PAGE>
MUST BE SIGNED BY DEBTOR-1
UNIFORM COMMERCIAL CODE--FINANCING STATEMENT
FORM UCC-1(1)
This Financing Statement is presented to filing officer pursuant to the
Uniform Commercial Code. This statement remains effective for a period of five
years from the date of filing, subject to extensions for additional periods of
five years by refiling or filing a continuation statement (UCC-3)
<TABLE>
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
1A. Debtor(s): 2A. Secured party(ies)
(if individual(s) last name first)
U.S. Bancorp Leasing & Financial
Ready-Mix, Inc. Tax I.D. #930594454
Tax I.D.86-0830443
----------
2B. Address of Secured Party from which
1B. Mailing address(es) Security Information is obtainable
3430 E. Flamingo, Suite 100 825 N.E. Multnomah Street, Suite 800
Las Vegas, Nevada 89121 Portland, Oregon 97232-2151
Phone # 503 797-0200 Reserved for Filing Officer Use Only
- ------------------------------------------------------------------------------------------------------------------------------------
3. This financing statement covers the following types (or items) of collateral No. of additional sheets attached____.
Ten (10) new International trucks, model F5070, mounted with 11 cubic yard Bridgemaster III mixers. The serial number and mixer
number for each vehicle follows: 2HTTWAHT2VC027008, 42855-08947; 2HTTWAHTXC027015, 42860-08948; 2HTTWAHT1VC027016, 42882-08957;
2HTTWAHT6VCO27142, 43023-09023; 2HTTWAH7TVC017209, 43100-09062; 2HTTWAHT8VCO27014, 43090-09058; 2HTTWAHT2VC027011, 43130-09076;
2HTTWAHT0VC027119, 43125-09075; 2HTTWAHT1VC029168, 43148-09087; 2HTTWAHT6VC027139, 43149-09088.
Each of the above units are complete as equipped including, but not limited to, all attachments, accessories & replacements
relating thereto.
TOGETHER WITH ALL REPLACEMENTS, PARTS, REPAIRS, ADDITIONS, ACCESSIONS AND ACCESSORIES INCORPORATED THEREIN OR AFFIXED OR ATTACHED
THERETO AND ANY AND ALL PROCEEDS OF THE FOREGOING, INCLUDING, WITHOUT LIMITATION, INSURANCE RECOVERIES.
--------------------------------------
4A. Assignee of Secured Party if any:
Located at 1501 Highway 168, Moapa, Nevada 89025 (Clark County)
The CIT Group/Equipment Financing, Inc.
4b. Address of Assignee:
1620 W. Fountainhead Parkway, Suite 600
Tempe, AZ 85282
Attn: Kelly Carroll
- ------------------------------------------------------------------------------------------------------------------------------------
This statement is filed without the Debtor's signature to perfect a security interest in
collateral. (Check [X] if so)
[_] already subject to a security interest in another jurisdiction when it was brought
into this state.
[_] which is proceeds of the original collateral described above in which a security
interest was perfected:
- ------------------------------------------------------------------------------------------------------------------------------------
Check [x] if covered: [X] Proceeds of collateral are also covered. [_] Products of collateral are also covered.
- ------------------------------------------------------------------------------------------------------------------------------------
Filed with: Secretary of State - NV
- ------------------------------------------------------------------------------------------------------------------------------------
Ready-Mix, Inc. U.S. BANCORP LEASING & FINANCIAL
- ----------------------------------------------------------- ---------------------------------------------------------------
by: /s/ Kenneth D. Nelson by:
------------------------------------------------------- ------------------------------------------------------------
Kenneth D. Nelson, Vice President Documentation Specialist
Signature(s) of Debtors Signature(s) of Secured Party(ies)
STANDARD FORM - FORM UCC-1.
- ------------------------------------------------------------------------------------------------------------------------------------
RETURN TO:
U.S. BANCORP LEASING & FINANCIAL
ATTEN: COLLATERAL REVIEW DEPT.
825 N.E. MULTNOMAH, SUITE 800
PORTLAND, OREGON 97232
RE: LEASE# 11389.003
</TABLE>
<PAGE>
MUST BE SIGNED BY DEBTOR-1
UNIFORM COMMERCIAL CODE--FINANCING STATEMENT
FORM UCC-1(1)
This Financing Statement is presented to filing officer pursuant to the
Uniform Commercial Code. This statement remains effective for a period of five
years from the date of filing, subject to extensions for additional periods of
five years by refiling or filing a continuation statement (UCC-3)
<TABLE>
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
1A. Debtor(s): 2A. Secured party(ies)
(if individual(s) last name first)
U.S. Bancorp Leasing & Financial
Ready-Mix, Inc. Tax I.D. #930594454
Tax I.D.86-0830443
----------
2B. Address of Secured Party from which
1B. Mailing address(es) Security Information is obtainable
3430 E. Flamingo, Suite 100 825 N.E. Multnomah Street, Suite 800
Las Vegas, Nevada 89121 Portland, Oregon 97232-2151
Phone # 503 797-0200 Reserved for Filing Officer Use Only
- ------------------------------------------------------------------------------------------------------------------------------------
3. This financing statement covers the following types (or items) of collateral No. of additional sheets attached____.
Ten (10) new International trucks, model F5070, mounted with 11 cubic yard Bridgemaster III mixers. The serial number and mixer
number for each vehicle follows: 2HTTWAHT2VC027008, 42855-08947; 2HTTWAHTXC027015, 42860-08948; 2HTTWAHT1VC027016, 42882-08957;
2HTTWAHT6VCO27142, 43023-09023; 2HTTWAH7TVC017209, 43100-09062; 2HTTWAHT8VCO27014, 43090-09058; 2HTTWAHT2VC027011, 43130-09076;
2HTTWAHT0VC027119, 43125-09075; 2HTTWAHT1VC029168, 43148-09087; 2HTTWAHT6VC027139, 43149-09088.
Each of the above units are complete as equipped including, but not limited to, all attachments, accessories & replacements
relating thereto.
TOGETHER WITH ALL REPLACEMENTS, PARTS, REPAIRS, ADDITIONS, ACCESSIONS AND ACCESSORIES INCORPORATED THEREIN OR AFFIXED OR ATTACHED
THERETO AND ANY AND ALL PROCEEDS OF THE FOREGOING, INCLUDING, WITHOUT LIMITATION, INSURANCE RECOVERIES.
--------------------------------------
4A. Assignee of Secured Party if any:
Located at 1501 Highway 168, Moapa, Nevada 89025 (Clark County)
The CIT Group/Equipment Financing, Inc.
4b. Address of Assignee:
1620 W. Fountainhead Parkway, Suite 600
Tempe, AZ 85282
Attn: Kelly Carroll
- ------------------------------------------------------------------------------------------------------------------------------------
This statement is filed without the Debtor's signature to perfect a security interest in
collateral. (Check [X] if so)
[_] already subject to a security interest in another jurisdiction when it was brought
into this state.
[_] which is proceeds of the original collateral described above in which a security
interest was perfected:
- ------------------------------------------------------------------------------------------------------------------------------------
Check [x] if covered: [X] Proceeds of collateral are also covered. [_] Products of collateral are also covered.
- ------------------------------------------------------------------------------------------------------------------------------------
Filed with: Secretary of State - NV
- ------------------------------------------------------------------------------------------------------------------------------------
Ready-Mix, Inc. U.S. BANCORP LEASING & FINANCIAL
- ----------------------------------------------------------- ---------------------------------------------------------------
by: /s/ Kenneth D. Nelson, by:
------------------------------------------------------- ------------------------------------------------------------
Kenneth D. Nelson, Vice President Documentation Specialist
Signature(s) of Debtors Signature(s) of Secured Party(ies)
STANDARD FORM - FORM UCC-1.
- ------------------------------------------------------------------------------------------------------------------------------------
RETURN TO:
U.S. BANCORP LEASING & FINANCIAL
ATTEN: COLLATERAL REVIEW DEPT.
825 N.E. MULTNOMAH, SUITE 800
PORTLAND, OREGON 97232
RE: LEASE# 11389.003
</TABLE>
<PAGE>
MUST BE SIGNED BY DEBTOR-1
UNIFORM COMMERCIAL CODE--FINANCING STATEMENT
FORM UCC-1(1)
This Financing Statement is presented to filing officer pursuant to the
Uniform Commercial Code. This statement remains effective for a period of five
years from the date of filing, subject to extensions for additional periods of
five years by refiling or filing a continuation statement (UCC-3)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------
<S> <C> <C>
1A. Debtor(s): 2a. Secured party(ies)
(if individual(s) last name first)
U.S. Bancorp Leasing & Financial
Ready-Mix, Inc. Tax I.D. #930594454
Tax I.D.86-0830443
----------
2B. Address of Secured Party from which
1B. Mailing address(es) Security Information is obtainable
3430 E. Flamingo, Suite 100 825 N.E. Multnomah Street, Suite 800
Las Vegas, Nevada 89121 Portland, Oregon 97232-2151
Phone # 503 797-0200 Reserved for Filing Officer Use Only
- ------------------------------------------------------------------------------------------------------------------------------------
3. This financing statement covers the following types (or items) of collateral No. of additional sheets attached____.
Ten (10) new International trucks, model F5070, mounted with 11 cubic yard Bridgemaster III mixers. The serial number and mixer
number for each vehicle follows: 2HTTWAHT2VC027008, 42855-08947; 2HTTWAHTXC027015, 42860-08948; 2HTTWAHT1VC027016, 42882-08957;
2HTTWAHT6VCO27142, 43023-09023; 2HTTWAH7TVC017209, 43100-09062; 2HTTWAHT8VCO27014, 43090-09058; 2HTTWAHT2VC027011, 43130-09076;
2HTTWAHT0VC027119, 43125-09075; 2HTTWAHT1VC029168, 43148-09087; 2HTTWAHT6VC027139, 43149-09088.
Each of the above units are complete as equipped including, but not limited to, all attachments, accessories & replacements
relating thereto.
TOGETHER WITH ALL REPLACEMENTS, PARTS, REPAIRS, ADDITIONS, ACCESSIONS AND ACCESSORIES INCORPORATED THEREIN OR AFFIXED OR ATTACHED
THERETO AND ANY AND ALL PROCEEDS OF THE FOREGOING, INCLUDING, WITHOUT LIMITATION, INSURANCE RECOVERIES.
--------------------------------------
4A. Assignee of Secured Party if any:
Located at 1501 Highway 168, Moapa, Nevada 89025 (Clark County)
The CIT Group/Equipment Financing, Inc.
4b. Address of Assignee:
1620 W. Fountainhead Parkway, Suite 600
Tempe, AZ 85282
Attn: Kelly Carroll
- ------------------------------------------------------------------------------------------------------------------------------------
This statement is filed without the Debtor's signature to perfect a security interest in
collateral. (Check [x] if so)
[_] already subject to a security interest in another jurisdiction when it was brought
into this state.
[_] which is proceeds of the original collateral described above in which a security
interest was perfected:
- ------------------------------------------------------------------------------------------------------------------------------------
Check [x] if covered: [X] Proceeds of collateral are also covered. [_] Products of collateral are also covered.
- ------------------------------------------------------------------------------------------------------------------------------------
Filed with: Secretary of State - NV
- ------------------------------------------------------------------------------------------------------------------------------------
Ready-Mix, Inc. U.S. BANCORP LEASING & FINANCIAL
- ----------------------------------------------------------- ---------------------------------------------------------------
by: /s/ Kenneth D. Nelson by:
------------------------------------------------------- ------------------------------------------------------------
Kenneth D. Nelson, Vice President Documentation Specialist
Signature(s) of Debtors Signature(s) of Secured Party(ies)
STANDARD FORM - FORM UCC-1.
- ------------------------------------------------------------------------------------------------------------------------------------
RETURN TO:
U.S. BANCORP LEASING & FINANCIAL
ATTEN: COLLATERAL REVIEW DEPT.
825 N.E. MULTNOMAH, SUITE 800
PORTLAND, OREGON 97232
RE: LEASE# 11389.003
</TABLE>
<PAGE>
Master Lease
MASTER LEASE AGREEMENT ("Master Lease") dated as of 9-20-96 between The CIT
---------
Group/Equipment Financing, Inc. (Lessor), having a place of business at:
P.O. Box 27248 Tempe AZ 85285-7248
- --------------------------------------------------------------------------------
Address City State Zip Code
and Meadow Valley Contractors, Inc. ("Lessee"),
-----------------------------------------------------------------
having a place of business at
4411 South 40th Street Phoenix AZ 85040
- --------------------------------------------------------------------------------
Address City State Zip Code
Lessee wants from time to time to lease from Lessor personal property to be
described in one or more equipment schedules ("Schedule"). Lessor is willing to
lease such personal property to Lessee at the rent, for the term and upon the
conditions provided hereinafter. Any present and future Schedule executed by
Lessor and Lessee which is identified as being a part of this Lease, shall be
deemed to incorporate by reference all the terms and conditions of this Lease
except as provided in any such Schedule.
1. Equipment Leased and Term.
This Lease shall cover such personal property as is described in any Schedule
executed by or pursuant to the authority of Lessee, accepted by Lessor in
writing and identified as a part of this Lease (which personal property with all
replacement parts, additions, repairs, accessions and accessories incorporated
therein and/or affixed thereto is hereinafter called the "Equipment"). Lessor
hereby leases to Lessee and Lessee hereby hires and takes from Lessor, upon and
subject to the covenants and conditions hereinafter contained, the Equipment
described in any Schedule. Notwithstanding the commencement date of the term of
this Lease with respect to any item of Equipment, Lessee agrees that all risk of
loss of the Equipment shall be on Lessee from and after shipment of the
Equipment to Lessee by the seller thereof, F.O.B. seller's point of shipment,
the date of such shipment being hereinafter called "date of shipment." The term
of this Lease with respect to any item of Equipment shall be for the period as
set forth in the Schedule. Lessee hereby gives Lessor authority to insert the
actual commencement date and date of first monthly rental for any item of
Equipment in any Schedule as well as such items as serial numbers if such are
not already inserted when such Schedule is executed by Lessee. "Seller" as used
in this Lease means the supplier from which Lessor acquires any item of
Equipment.
2. Rent.
Lessee shall pay to Lessor rent for each item of Equipment in the amounts and at
the times specified in the Schedule. Any payment not made when due shall, at the
option of Lessor, bear late charges thereon calculated at the rate of 1 1/2% per
month, but in no event greater than the highest rate permitted by relevant law.
All rent shall be paid at Lessor's place of business shown above, or such other
place as Lessor may designate by written notice to the Lessee. All rents shall
be paid without notice or demand and without abatement, deduction or set off of
any amount whatsoever. The operation and use of the Equipment shall be at the
risk of Lessee and not of Lessor and the obligation of Lessee to pay rent
hereunder shall be unconditional.
3. No Warranties by Lessor; Maintenance and Compliance with Laws.
Lessor, not being the manufacturer of the Equipment, nor manufacturer's agent,
MAKES NO WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO THE
FITNESS, QUALITY, DESIGN, CONDITION, CAPACITY, SUITABILITY, MERCHANTABILITY OR
PERFORMANCE OF THE Equipment OR OF THE MATERIAL OR WORKMANSHIP THEREOF, IT BEING
AGREED THAT THE Equipment IS LEASED "AS IS" AND THAT ALL SUCH RISKS, AS BETWEEN
LESSOR AND LESSEE, ARE TO BE BORNE BY LESSEE AT ITS SOLE RISK AND EXPENSE,
Lessee accordingly agrees not to assert any claim whatsoever against Lessor
based thereon. Lessee further agrees, regardless of cause, not to assert any
claim whatsoever against Lessor for loss of anticipatory profits or
consequential damages. Lessor shall have no obligation to install, erect, test,
adjust or service the Equipment. Lessee shall look to the manufacturer and/or
Seller for any claims related to the Equipment. Lessor hereby acknowledges that
any manufacturer's and/or Seller's warranties are for the benefit of both Lessor
and Lessee.
55-SA-2287(9/95) Master Lease - TAX Page 1 of 7
<PAGE>
3. No Warranties by Lessor; Maintenance and Compliance with Laws (Continued)
No oral agreement, guaranty, promise, condition, representation or warranty
shall be binding; all prior conversations, agreements or representations related
hereto and/or to the Equipment are integrated herein, and no modification
hereof shall be binding unless in writing signed by Lessor. Lessee agrees, at
its own cost and expense:
(a) to pay all shipping charges and other expenses incurred in connection with
the shipment of the Equipment by the Seller to Lessee;
(b) to pay all charges and expenses in connection with the operation of each
item of Equipment;
(c) to comply with all governmental laws, ordinances, regulations, requirements
and rules with respect to the use, maintenance and operation of the
Equipment; and
(d) to make all repairs and replacements required to be made to maintain the
Equipment in the condition set forth in Rider A to the Schedule.
4. Insurance.
Lessee shall maintain at all times on the Equipment, at its expense, all-risk
physical damage insurance and comprehensive general and/or automobile (as
appropriate) liability insurance (covering bodily injury and property damage
exposures including, but not limited to, contractual liability and products
liability) in such amounts, against such risks, in such form and with such
insurers as shall be satisfactory to Lessor; provided, that the amount of
all-risk physical damage insurance shall not on any date be less than the
greater of the full replacement value or the Stipulated Loss Value of the
Equipment as of such date.
Each physical damage insurance policy will name Lessor as loss payee. Each
liability insurance policy will name Lessor as additional insured. Each
insurance policy will also require that the insurer give Lessor at least thirty
(30) days prior written notice of any alteration in or cancellation of the terms
of such policy and require that Lessor's interests be continued insured
regardless of any breach or violation by Lessee or others of any warranties,
declarations or conditions contained in such insurance policy. In no event shall
Lessor be responsible for premiums, warranties or representations to any insurer
or any agent thereof. Lessee shall furnish to Lessor a certificate or other
evidence satisfactory to Lessor that such insurance coverage is in effect, but
Lessor shall be under no duty to ascertain the existence or adequacy of such
insurance. The insurance maintained by Lessee shall be primary without any right
of contribution from insurance which may be maintained by Lessor. Lessee shall
be liable for all deductible portions of all required insurance. Lessor may, at
its own expense, for its own benefit, purchase insurance in excess of that
required under this Lease Agreement. Physical damage insurance proceeds shall be
applied as set forth in Section 5.
5. Loss and Damage.
Lessee agrees to assume and bear the entire risk of any partial or complete loss
with respect to the Equipment from any and every cause whatsoever including
theft, loss, damage, destruction or governmental taking, whether or not such
loss is covered by insurance or caused by any default or neglect of Lessee.
Lessee agrees to give Lessor prompt notice of any damage to or loss of any
Equipment. All physical damage insurance proceeds shall be payable directly to
Lessor. If any of the Equipment is lost, destroyed, damaged beyond repair, or
taken by governmental action, Lessee shall pay to Lessor on the next rent
payment date following such loss or taking the Stipulated Loss Value for such
Equipment (computed as of the rent payment date on or immediately preceding the
date of such loss or taking), and any other amounts then due and owing hereunder
(including all rent payments due on or prior to the date of such Stipulated Loss
Value payment) with respect to that Equipment, and the Lease for such Equipment
shall terminate when such payment is made. Following payment of any Stipulated
Loss Value, and if no Event of Default as defined in Section 10 has occurred and
remains continuing, Lessor will then:
(a) transfer to Lessee Lessor's rights to such Equipment "as-is, where-is and
with all defects," without recourse and without representation or warranty,
express or implied, other than a warranty that the Equipment is free and
clear of any liens created by Lessor; and
(b) remit to Lessee any physical damage insurance proceeds arising out of such
loss up to the amount of the Stipulated Loss Value paid.
Lessee shall determine in the exercise of its reasonable judgment whether the
Equipment is damaged beyond repair, subject to Lessor's approval. In the event
of damage or loss which does not result in damage beyond repair or a total loss
of the Equipment or any item thereof, Lessee shall cause the affected Equipment
to be restored to the condition required by the terms of this Lease. Upon
completion of such repair and after supplying Lessor with satisfactory evidence
thereof (and provided no Event of Default has occurred and remains continuing),
Lessee shall be entitled to receive any insurance proceeds or other recovery to
which Lessor would otherwise be entitled in connection with such loss up to the
amount expended by Lessee in making the repair.
Lessor shall not be obligated to undertake by litigation or otherwise the
collection of any claim against any person for loss of, damage to, or
governmental taking of the Equipment, but Lessor will cooperate with Lessee at
Lessee's expense to pursue such claims.
55-SA-2287(9/95) Master Lease - TAX Page 2 of 7
<PAGE>
Except as expressly provided above, the total or partial destruction of any
Equipment or Lessee's total or partial loss of use or possession thereof shall
not release or relieve Lessee from its obligations under this Master Lease or
any Schedule including the duty to pay the rent(s) herein provided.
6. Taxes.
Lessee shall pay, and shall indemnify and hold Lessor harmless from and against,
on an after-tax basis, all fees, taxes, withholdings, assessments and other
governmental charges, however designated together with any penalties, fines or
interest, if any, thereon, (collectively, the "Impositions") which are at any
time levied or imposed against Lessor, Lessee, this Lease, the Equipment or any
part thereof by any Federal, state, local or foreign government or taxing
authority upon, with respect to, as a result of or measured by (i) the Equipment
(or any part thereof), or this Lease or the interest of the Lessor therein; or
(ii) the purchase, ownership, delivery, leasing, possession, maintenance, use,
operation, return, sale or other disposition of the Equipment or any part
thereof; or (iii) the rentals, receipts or earnings payable under this Lease or
otherwise arising from the Equipment or any part thereof; excluding, however,
taxes based on or measured by the net income of Lessor. Lessor (a) shall pay,
and promptly upon receipt of Lessor's invoice therefor Lessee shall reimburse
Lessor for paying, any Impositions, and (b) in case any report or return is
required to be filed with respect to any Impositions, Lessor will make such
report or return to show Lessor's ownership of the Equipment. Lessor and Lessee
may instead agree in writing that Lessee will pay any Impositions directly or
file any such reports or returns. Lessee's obligations under this Section shall
survive the expiration or termination of this Lease.
7. Lessor's Title, Right of Inspection and Identification of Equipment.
Title to the Equipment shall at all times remain in Lessor and Lessee will at
all times protect and defend, at its own cost and expense, the title of Lessor
from and against all claims, liens and legal processes of creditors of Lessee
and keep all the Equipment free and clear from all such claims, liens and
processes. The Equipment is and shall remain personal property. Upon the
expiration or termination of this Lease with respect to any item of Equipment
Lessee shall return such Equipment in accordance with the provisions set forth
in Rider A to the Schedule.
Lessor shall have the right from time to time during reasonable business hours
to enter upon Lessee's premises or elsewhere for the purpose of confirming the
existence, condition and proper maintenance of the Equipment and during any
period of storage Lessor shall also have the right to demonstrate and show the
Equipment to others. The foregoing rights of entry are subject to any applicable
governmental laws, regulations and rules concerning industrial security. Lessee
shall, upon the request of Lessor, and at its own expense firmly affix to the
Equipment, in a conspicuous place, such a decalcomania or metal plate as shall
be supplied by Lessor showing the Lessor as the owner and lessor of such
Equipment.
8. Possession, Use and Changes in Location of Equipment.
So long as Lessee shall not be in default under the Lease it shall be entitled
to the possession and use of the Equipment in accordance with the terms of this
Lease. The Equipment shall be used in the conduct of the lawful business of
Lessee, and no item of Equipment shall be removed from its location shown on the
Schedule, without the prior written consent of Lessor. Lessee shall not, without
Lessor's prior written consent, part with possession or control of the Equipment
or attempt or purport to sell, pledge, mortgage or otherwise encumber any of the
Equipment or otherwise dispose of or encumber any interest under this Lease.
9. Performance of Obligations of Lessee by Lessor.
In the event that the Lessee shall fail duly and promptly to perform any of its
obligations under the provisions of Sections 3, 4, 5, 6 and 7 of this Lease,
Lessor may, at its option, perform the same for the account of Lessee without
thereby waiving such default, and any amount paid or expense (including
reasonable attorneys' fees), penalty or other liability incurred by Lessor in
such performance, together with interest at the rate of 1 1/2% per month thereon
(but in no event greater than the highest rate permitted by relevant law) until
paid by Lessee to Lessor, shall be payable by Lessee upon demand as additional
rent for the Equipment.
10. Default.
An Event of Default shall occur if:
(a) Lessee fails to pay when due any installment of rent and such failure
continues for a period of 10 days;
(b) Lessee shall fail to perform or observe any covenant, condition or agreement
to be performed or observed by it hereunder and such failure continues
uncured for 15 days after written notice thereof to Lessee by Lessor;
(c) Lessee ceases doing business as a going concern, makes an assignment for the
benefit of creditors, admits in writing its inability to pay its debts as
they become due, files a voluntary petition in bankruptcy, is adjudicated a
bankrupt or an insolvent, files a petition seeking for itself any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar arrangement under any present or future statute, law
or regulation or files an answer admitting the material allegations of a
petition filed against it in any such proceeding, consents to or acquiesces
in the appointment of a trustee, receiver, or liquidator of it or of all or
any substantial part of its assets or properties, or if it or its
shareholders shall take any action looking to its dissolution or
liquidation;
55-SA-2287(9/95) Master Lease - TAX Page 3 of 7
<PAGE>
10. Default (Continued)
(d) within 60 days after the commencement of any proceedings against Lessee
seeking reorganization, arrangement, readjustment, liquidation, dissolution
or similar relief under any present or future statute, law or regulation,
such proceedings shall not have been dismissed, or if within 60 days after
the appointment without Lessee's consent or acquiescence of any trustee,
receiver or liquidator of it or of all or any substantial part of its assets
and properties, such appointment shall not be vacated:
(e) Lessee attempts to remove, sell, transfer, encumber, part with possession or
sublet the Equipment or any item thereof;
(f) Lessee defaults in payment or performance of any obligation or indebtedness
of any kind or description, whether direct, indirect, absolute or
contingent, due or to become due, now existing or hereafter arising owing to
Lessor or any of its agents or affiliates; or
(g) Any warranty, representation or statement made or furnished to Lessor by or
on behalf of Lessee in or in connection with this Lease proves to have been
false in any material respect when made or furnished.
11. Remedies Upon Default.
Upon the occurrence of an Event of Default, Lessor shall have all the rights and
remedies provided by applicable law and by this Lease. Notwithstanding that this
Agreement is a lease and title to the Equipment is at all times in Lessor,
Lessor may nevertheless at its option choose those rights and remedies of a
secured party under the Uniform Commercial Code. In addition, Lessor, at its
option, may:
(a) by notice to Lessee terminate this Lease effective on the date such Event of
Default first occurred;
(b) proceed by appropriate court action or actions or other proceedings either
at law or equity to enforce performance by the Lessee of any and all
covenants of this Lease and to recover damages for the breach thereof;
(c) Lessor and/or its agents may without notice or liability or legal process,
enter into any premises of or under control or jurisdiction of Lessee or any
agent of Lessee where the Equipment may be or by Lessor is believed to be,
and repossess all or any item thereof, disconnecting and separating all
thereof from any other property and using all force necessary or permitted
by applicable law so to do, Lessee hereby expressly waiving all further
rights to possession of the Equipment and all claims for injuries suffered
through or loss caused by such repossession or demand that Lessee deliver
the Equipment forthwith to Lessor at Lessee's expense at such place as
Lessor may designate; and
(d) elect to sell, release or otherwise dispose of all or part of the Equipment
or to retain all or part thereof, in such manner and on such terms and
conditions as Lessor may determine in its sole discretion, with or without
notice to Lessee which Lessee hereby waives to the extent permitted by
applicable law;
(e) declare immediately due and payable any unpaid rent, late charges and any
other amounts due hereunder that accrued on or before the occurrence of the
Event of Default, plus as liquidated damages for loss of the bargain and not
as a penalty, an amount equal to the Stipulated Loss Value for the Equipment
as of the rent payment date immediately preceding the date Lessor declares
the Lease in default, and, in addition, all attorney and court cost incurred
by Lessor relating to the enforcement of its rights under the Lease. Lessor
may sell the Equipment at private or public sale, in bulk or in parcels,
with or without notice, without having the Equipment present at the place of
sale; or Lessor may lease, otherwise dispose of or keep idle all or part of
the Equipment, subject, however, to its obligation to mitigate damages; and
Lessor may use Lessee's premises for any or all of the foregoing. Lessor may
sell or lease the Equipment at a time and location of its choosing provided
that the Lessor acts in good faith and in a commercially reasonable manner.
The proceeds of sale, lease or other disposition, if any, of the Equipment
shall be applied (1) to all Lessor's costs, charges and expenses incurred in
taking, removing, holding, repairing and selling, leasing or otherwise
disposing of the Equipment including attorney fees; then (2) to the extent
not previously paid by Lessee, to pay Lessor the Stipulated Loss Value of
the Equipment plus any accrued and unpaid rent, late charges, indemnities
and any other amounts then remaining unpaid under the Lease; then (3) to
reimburse to Lessee any such sums previously paid by Lessee as liquidated
damages; (4) any surplus shall be retained by Lessor. In no event shall
Lessee upon demand by Lessor for payment hereunder or otherwise be obligated
to pay any amount in excess of that permitted by law.
The waiver by Lessor of any breach of any obligation of Lessee shall not be
deemed a waiver of any future breach of the same or any other obligation. No
remedy of Lessor hereunder shall be exclusive of any remedy herein or by law
provided, but each shall be cumulative and in addition to every other remedy.
55-SA-2287(9/95) Master Lease - TAX Page 4 of 7
<PAGE>
12. Indemnity.
Lessee agrees that Lessor shall not be liable to Lessee for, and Lessee shall
indemnify and save Lessor harmless from and against any and all liability, loss,
damage, expense, causes of action, suits, claims or judgments arising from or
caused directly or indirectly by:
(a) Lessee's failure to promptly perform any of its obligations under the
provisions of Sections 3, 4, 5, 6 and 7 of this Lease; or
(b) injury to persons or damage to property resulting from or based upon actual
or alleged use, operation, delivery or transportation of any or all of the
Equipment or its location or condition; or
(c) inadequacy of the Equipment, or any part thereof, for any purpose or any
deficiency or defect therein or the use or maintenance thereof or any
repairs, servicing or adjustments thereto or any delay in providing or
failure to provide any thereof or any interruption or loss of service or use
thereof or any loss of business; and shall, at its own cost and expense,
defend any and all suits which may be brought against Lessor, either alone
or in conjunction with others upon any such liability or claim or claims and
shall satisfy, pay and discharge any and all judgments and fines that may be
recovered against Lessor in any such action or actions, provided, however,
that Lessor shall give Lessee written notice of any such claim or demand.
Lessee agrees that its obligations under this Section 12 shall survive the
expiration or termination of this Lease.
13. Lessee's Warranties.
Lessee warrants that each item of Equipment has the recovery period under
Section 168(c) of the Internal Revenue Code of 1986 as amended or any comparable
successor law ("Code") as set forth on the Schedule and will be eligible for
depreciation deductions determined by using the method specified in Section
168(b)(i) of the Code commencing with the taxable year of Lessor that includes
the delivery date and using a basis equal to Lessor's cost as set forth on the
Schedule; a reasonable estimate of the useful life of each item of Equipment is
at least 125% of its lease term; a reasonable estimate of the fair market value
of each item of Equipment at the end of its lease term is at least 20% of
Lessor's cost therefor; and Lessee will not use the Equipment in a manner which
will result in foreign source income for Lessor.
14. Tax Indemnity.
Lessor has calculated the rent payments and Stipulated Loss Values for each
Schedule based in part on Lessee's warranties herein and on the assumptions that
Lessor shall be entitled to all tax benefits of ownership with respect to the
Equipment (the "Tax Benefits"), including but not limited to, (i) the
accelerated cost recovery deductions determined in accordance with Section
168(b)(1) of the Code for each item of Equipment based on the cost and
depreciable life thereof specified on the Schedule, (ii) deductions for interest
on any indebtedness incurred by Lessor to finance any item of Equipment and
(iii) sourcing of income and losses attributable to this Lease to the United
States. Lessee agrees to take no action inconsistent with the foregoing or
which would result in the loss, disallowance or unavailability to Lessor of all
or any part of the Tax Benefits. Lessee, for any reason whatsoever, including
as a result of any amendment to the Code or any other change in tax law
occurring after the date of the Lease ("Tax Law Change"), hereby indemnifies and
holds harmless Lessor from and against (i) any of the following: (1) the loss,
disallowance, unavailability or recapture of all or any part of the Tax
Benefits, if Lessor shall not be entitled or shall determine that it shall not
have substantial authority to claim, shall suffer a disallowance of, or shall be
required to recapture all or any part of the Tax Benefits; (2) Lessor's
originally contemplated after-tax rate of return ("Net Return") is otherwise
adversely affected by a Tax Law Change (including a tax rate change); (3) Lessor
shall be required to include in its gross income for any period before the
expiration or termination of this Lease any amount other than (a) the rent in
the respective specified monthly payment amounts and not prior to the respective
periods to which rent is allocable under the terms of this Lease and (b) any
other amounts to the extent not offset by deductions for such amounts in
Lessor's taxable year in which such amounts are includible in gross income; or
(4) any item of income, gain, loss, deduction or credit with respect to the
Equipment shall be treated or derived from, or allocable to, sources without the
United States and consequently Lessor shall be able to utilize as a credit
against its Federal Income tax liability in any year, a smaller amount of
foreign taxes than it would have been able to utilize had such item of income,
gain, loss, deduction or credit not been treated as derived from, or allocable
to sources without the United States; plus (ii) all interest, penalties, fines
or additions to tax resulting from such loss, disallowance, unavailability or
recapture; plus (iii) all taxes required to be paid by Lessor upon receipt of
the indemnity set forth in this paragraph which shall be computed at the highest
marginal statutory tax rate then applicable to Lessor. Any indemnity payments
made by Lessee shall be calculated so as to allow Lessor to maintain its Net
Return with respect to the Lease. Payment shall be made in immediately
available funds within 30 days after receipt of a written demand therefor from
Lessor. In the event of any indemnity payment, Stipulated Loss Values shall be
adjusted by Lessor to those values determined by Lessor as necessary to maintain
Lessor's Net Return. For the purposes of this Section, "Lessor" includes for
all tax purposes the consolidated taxpayer group of which Lessor is a part.
15. Assignment, Notices and Waivers.
This Lease and all rights of Lessor hereunder shall be assignable by Lessor
without Lessee's consent, but Lessee shall not be obligated to any assignee of
Lessor except after written notice of such assignment from Lessor. Following
such assignment, solely for the purpose of determining assignee's rights
hereunder, the term "Lessor" shall be deemed to include or refer to Lessor's
assignee. Without the prior written consent of Lessor, Lessee shall not assign
this Lease or its interests hereunder or enter into any sub-lease with respect
to the Equipment covered hereby.
All notices to Lessor shall be delivered in person to an officer of the Lessor,
or shall be sent certified mail return receipt requested to Lessor at its
address shown herein or at any later address last known to the sender. All
notices to Lessee shall be in writing and shall be delivered by mail at its
address shown herein or at any later address last known to the sender. A waiver
of a default shall not be a waiver of any other or a subsequent default.
55-SA-2287 (9/95) Master Lease - TAX Page 5 of 7
<PAGE>
16. Further Assurances.
Lessee shall execute and deliver to Lessor, upon Lessor's request such
instruments and assurances as Lessor deems necessary or advisable for the
confirmation or perfection of this Lease and Lessor's rights hereunder and to
enable Lessor to fulfill all of its tax filing obligations. Lessee may not
terminate any Schedule without the written consent of Lessor. If Lessor in good
faith believes itself insecure or performance impaired, it may declare a default
hereunder or, instead of declaring a default, Lessor may demand, and Lessee
hereby agrees to give, additional Equipment or other collateral as security for
the obligations hereunder.
17. Lease Irrevocability and Charges.
This Lease is irrevocable for the full terms thereof as set forth in any
Schedule and for the aggregate rentals therein reserved and the rent shall not
abate by reason of termination of Lessee's right of possession and/or the taking
of possession by the Lessor or for any other reason. Lessee shall be
responsible for and pay to Lessor a returned check fee, not to exceed the
maximum permitted by law, which fee will be equal to the sum of (i) the actual
bank charges incurred by Lessor plus (ii) all other actual costs and expenses
incurred by Lessor. The returned check fee is payable upon demand as additional
rent under this Lease.
18. Purchase Option.
So long as no Event of Default shall have occurred and be continuing, Lessee
may, at the expiration of an applicable lease term and upon payment of all sums
due under the Lease, purchase the Equipment for its fair market sale value as of
that expiration date. If Lessee elects to purchase hereunder, it must give
irrevocable written notice to Lessor at least 90 days (but not more than 360
days) prior to the expiration date of the lease term applicable to the
Equipment. Any purchase must apply to all (but not less than all) of the
Equipment on a Schedule.
Lessee's Initials [INITIALS APPEAR HERE]
If Lessee elects to purchase hereunder, Lessee will also pay all taxes (other
than taxes based on Lessor's income), costs and expenses (including legal fees)
incurred in connection with the sale. After Lessee exercises the option, Lessor
shall transfer title to Lessee "as-is, where-is," without recourse,
representation or warranty of any kind except that Lessor will warrant that the
item of Equipment is free and clear of any liens created by Lessor.
19. Miscellaneous.
(a) This Lease constitutes the entire agreement between Lessor and Lessee with
respect to the Equipment and supersedes all prior correspondence between the
parties. No covenant, condition or other term of provision hereof shall be
deemed waived, amended, or modified by either party unless such waiver,
amendment, or modification is in writing and signed by each of the parties
hereto. Section headings are for convenience only and shall not be construed
as part of this Lease. Lessee's initials [INITIALS APPEAR HERE]
(b) This Lease shall be binding upon and inure to the benefit of the parties
hereto and their respective successors and assigns, except as otherwise
provided herein.
(c) Any provision of this Lease which may be prohibited or unenforceable in any
jurisdiction shall not, as to such jurisdiction, invalidate the remaining
provisions hereof and shall not invalidate or render unenforceable such
provision in any other jurisdiction.
(d) LESSOR AND LESSEE IN ANY LITIGATION RELATING TO OR IN CONNECTION WITH THIS
LEASE IN WHICH THEY SHALL BE ADVERSE PARTIES WAIVE TRIAL BY JURY.
(e) In the event this Lease or any part hereof is deemed to be a lease intended
as security, Lessee grants Lessor a security interest in each item of
Equipment as security for all of Lessee's indebtedness and obligations owing
under this Lease and under each Schedule as well as all other present and
future indebtedness and obligations of Lessee to Lessor of every kind and
nature whatsoever.
55-SA-2287 (9/95) Master Lease - TAX Page 6 of 7
<PAGE>
20. Special Provisions.
If Lessee is a corporation, this Lease is executed by authority of its Board of
Directors. If Lessee is a partnership or joint venture, this Lease is executed
by authority of all its partners or co-venturers.
Dated: 9-20-96
-----------------
Lessee:
Meadow Valley Contractors, Inc.
- ---------------------------------------------------------
Name of individual, corporation or partnership
By /s/ Bradley E. Larson Title President
------------------------------- -------------------
If corporation, have signed by President, Vice President or Treasurer, and
give official title.
If owner or partner, state which.
Lessor:
THE CIT GROUP/EQUIPMENT FINANCING, INC.
By /s/ Kathy Taylor Title Agent
------------------------------- -------------------
- --------------------------------------------------------------------------------
If Lessee is partnership, enter:
Partners' names Home addresses
- --------------- --------------
55-SA-2287 (9/95) Master Lease - TAX Page 7 of 7
<PAGE>
SCHEDULE "A"
ATTACHED TO AND BY THIS REFERENCE MADE A PART HEREOF.
CMI
PTD-400 PORTABLE TRI - DRUM S/N 132
REVERSIBLE SLINGER FEEDER
LONG REACH STARJET BURNER SJ-580
SIDE INLET RECYCEL ENTRY
AUTOMATIC BURNER CONTROL
FINES RETURN AUGER
AIR TRANSITION - KNOCKOUT BOX
AUTOMATIC ASPHALT PROPORTIONING
EASI-ERECT HYDRAULIC JACK SYSTEM
SUPPORT STANDS
RA-418/P792 PORTABLE ROTO-AIRE BAGHOUSE S/N 120
BAGS AND CAGES
CONTROL PANEL
INERTIAL DUST COLLECTOR
AIRDUCTS FROM COLLECTOR TO COUNTER FLOW
EXHAUST FAN - 300 HP #660
AUGER DUST RETURN SYSTEM (2 @ 20 HP)
TUBE SHEET HOLE PLUGS
PAB-432 4 32T COLD FEED S/N 188
T & P CONTROL PANEL
COLLECTOR CONVEYOR EXTENSION
SELF-STORE BLOCKING PADS
HYDRAULIC CYLINDERS
RAMPING BULKHEAD
BELT FEEDER GUARDS
COLLECTING CONVEYOR GUARD
PC-3047 CONVEYOR FOR VIRGIN AGGREGATE S/N 227
DUAL IDLER BELT SCALE
GRAVITY TAKE-UP
HYDRAULIC SELF-ERECT SYSTEM
4' x 10' SINGLE DECK SCALPING SCREEN
CONVEYOR BELT GUARD
SE-195 SURGE SYSTEM, 500-600 TPH - 60 HP S/N 150
MANUAL LOADING AND UNLOADING PANEL
MODEL 5611 COMPUTER LOADOUT SYSTEM
AIR COMPRESSOR - 25 HP
HYDRAULIC PUMP PACKAGE - NON-DETACHABLE
CT-20/15-P PORTABLE COILED ASPHALT/FUEL TANK S/N 105
3" UNLOADING PUMP 15 HP - MOUNTED
MOUNT PLANT PUMP PACKAGE
SELF-STORE BLOCKING
3" JACKETED ASPHALT PIPING
MOUNT HOT OIL HEATER
FLOAT LEVEL INDICATOR
MOUNT BURNER FUEL OIL PUMP
<PAGE>
4" DUPLEX STRAINER WITH VALVE AND PIPING
CT 35 P PORTABLE COILED ASPHALT TANK S/N 106
INTERCONNECT UNLOADING PUMP
INTERCONNECT PLANT PUMP PACKAGE
SELF STORE BLOCKING
FLOAT LEVEL INDICATOR
IMPULSE PLANT CONTROL W/COLOR MONITOR
FIRST RECYCLE CONTROL WITH PROCESSOR
SECOND RECYCLE CONTROL
FIFTH AND SIXTH AGGREGATE CONTROLS
AI 1800 I PEC-3U LIGHTNING PROTECTION SYSTEM 12' X 16'
PORTABLE ENERGY CENTER WITH AIR COND. S/N 01896
CIRCUIT BREAKER AND CABLE FOR H.O.H.
MOUNT CUSTOMER'S 3508 900 KW GEN SET
GENERATOR MOUNTS
MOUNT CUSTOMER'S 45 KW GEN SET
NIGHT GENERATOR SWITCH
MFS-700PH PORTABLE HYD S E SILO S/N 114
PJ-159 PULSE JET BAG VENT
AERATION BLOWER, 2 HP 40 CFM @ 6.5
PSI
FT-11 VANE FEEDER
12" AUGER, 5 HP
500 BASE PUGMILL LESS BY-PASS CHUTE
SC-3030 STATIONARY INCLINED CONVEYOR S/N 115
CONVEYOR BELT GUARD
SKID MOUNT CONVEYOR - PUGMILL
4,000 GALLON WATER TANK WITH PUMP
CEI-1500 MODEL 1500 CEI HEATER
ONE CATERPILLAR GENERATOR SET MODEL 3508 DITA "B" SERIES S/N 6PN 00197
RATED AT 900KW, 480 VOLT, 1800 RPM, 60 HERTZ, EQUIPPED WITH
RADIATOR COOLING (9' WIDE x 10 1/2' HIGH), RAIL MOUNTED, CAT
SR-4 GENERATOR, BATTERY CHARGING SYSTEM, AUTOMATIC SHUTDOWN
SAFETIES, ELECTRIC START, METER PANEL WITH BREAKER, MUFFLER,
INSTALLED BATTERIES, DUAL STAGE AIR CLEANERS
ONE CATEPILLAR/OLYMPIAN PACKAGE GENERATOR SET MODEL CD060 S/N 202420
AND ALL ATTACHMENTS, REPLACEMENTS, SUBSTITUTIONS, ADDITIONS
AND ALL PROCEEDS THEREOF.
INITIAL BEL
---------
<PAGE>
Equipment Schedule No. 1
-----
Dated as of 9-20-96
--------------------------
To Master Lease dated 9-20-96
----------------
Acceptance Date 9-20-96
-----------------
Commencement Date 10-27-96
---------------
Equipment Schedule to MASTER LEASE AGREEMENT dated as of between
-----------------
THE CIT GROUP/EQUIPMENT FINANCING, INC., as Lessor
and Meadow Valley Contractors, Inc. as Lessee.
------------------------------------------------------------------
This Equipment Schedule is entered into pursuant to the Master Lease Agreement.
All the terms and conditions of the Master Lease Agreement are hereby
incorporated herein and made a part hereof. In the event of a conflict between
the Master Lease Agreement and this Equipment Schedule, the provisions of this
Equipment Schedule shall prevail.
1. EQUIPMENT DESCRIPTION:
<TABLE>
<S> <C> <C> <C> <C> <C>
Quantity Manufacturer Model/Feature Serial Number Description Cost Per Unit
- -------- ------------ ------------- ------------- ----------- -------------
</TABLE>
See Schedule "A" attached to and by this reference
made a part hereof.
2. LESSOR'S AGGREGATE COST OF EQUIPMENT. $1,779,225.00
----------------------
3. EQUIPMENT LOCATION. 4411 South 40th Street, Phoenix, AZ 85040
---------------------------------------------------------
4. ACCEPTANCE: Lessee confirms that (a) the Equipment described herein has been
delivered to it in good working order and condition, and has been inspected
and accepted by Lessee as of the Acceptance Date set forth above, (b) no
Event of Default exists, (c) no Event of Default will be caused by the
execution of this Schedule, (d) all Lessee's representations and warranties
are true and correct, and (e) the terms and provisions of the Master Lease
are hereby incorporated by reference and reaffirmed.
5. LEASE TERM.
a. Interim Lease Term. The interim term of the lease of the Equipment shall
commence on the Acceptance Date and shall continue until the commencement of
the Primary Lease Term defined below.
b. Primary Lease Term. The primary term of the lease of Equipment shall
commence on the Commencement Date and shall continue for a term of 120 months
---
from such Commencement Date.
6. RENT PAYMENTS.
a. Interim Rent. The rent for each item of Equipment during the Interim Lease
Term shall be an amount equal to 1/30th of the Primary Rent (defined below)
multiplied by the number of days from and including the Acceptance Date to
the Commencement Date which amount shall be payable on the Commencement Date.
b. Primary Rent. The rent for each item of Equipment during the Primary Lease
Term shall consist of 120 payments of $19,078.62 , payable monthly
--- ---------------
commencing on the Commencement Date and a like sum on the same day of each
month thereafter.
55-SA-2287(9/95) Master Lease - TAX Page 1 of 2
<PAGE>
EXHIBIT 23.07
CERTIFIED PUBLIC ACCOUNTANTS' REPORT
To the Stockholders and Board of Directors of
Meadow Valley Corporation
We have audited the accompanying consolidated balance sheets of Meadow Valley
Corporation and Subsidiaries as of December 31, 1995 and 1996, and the related
consolidated statements of operations, changes in stockholders' equity and cash
flows for the period from the date of inception, September 15, 1994, through
December 31, 1994 and the years ended December 31, 1995 and 1996. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted audit standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the consolidated financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe our audits of the
consolidated financial statements provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Meadow
Valley Corporation and Subsidiaries as of December 31, 1995 and 1996, and the
consolidated results of their operations, and cash flows for the period from
the date of inception, September 15, 1994, through December 31, 1994 and for
the years ended December 31, 1995 and 1996, in conformity with generally
accepted accounting principles.
/s/ BDO Seidman, LLP
Los Angeles, California
February 28, 1997
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 12-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1995
<PERIOD-START> JAN-01-1996 JAN-01-1995
<PERIOD-END> DEC-31-1996 DEC-31-1995
<CASH> 2,856,096 0
<SECURITIES> 0 0
<RECEIVABLES> 30,845,361 0
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 34,539,398 0
<PP&E> 5,954,946 0
<DEPRECIATION> 676,556 0
<TOTAL-ASSETS> 42,121,334 0
<CURRENT-LIABILITIES> 25,800,578 0
<BONDS> 5,651,961 0
0 0
0 0
<COMMON> 3,601 0
<OTHER-SE> 11,673,168 0
<TOTAL-LIABILITY-AND-EQUITY> 42,121,334 0
<SALES> 133,723,645 90,048,523
<TOTAL-REVENUES> 133,723,645 90,048,523
<CGS> 130,913,060 85,694,068
<TOTAL-COSTS> 130,913,060 85,694,068
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 611,828 1,116,464
<INCOME-PRETAX> (106,863) 1,608,997
<INCOME-TAX> (21,635) 549,650
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (85,228) 1,059,347
<EPS-PRIMARY> (.02) .65
<EPS-DILUTED> 0 0
</TABLE>
