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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission file number 0-25428
MEADOW VALLEY CORPORATION
(Exact name of registrant as specified in its charter)
Nevada 88-0328443
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
4411 South 40th Street, Suite D-11, Phoenix, AZ 85040
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (602) 437-5400
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Title of each class: Name of exchange on which registered:
------------------- ------------------------------------
Common stock, $.001 par value Nasdaq National Market
Common stock purchase warrants Nasdaq National Market
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes x No ___
---
Indicated by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K.
On February 16, 2000, the aggregate market value of the registrant's voting
stock held by non-affiliates was $11,237,196.
On February 16, 2000, there were 3,501,250 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, 1999.
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MEADOW VALLEY CORPORATION
ANNUAL REPORT ON FORM 10-K
FOR THE YEAR ENDED DECEMBER 31, 1999
TABLE OF CONTENTS
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PART I PAGE
<S> <C>
Item 1. Business 3
Item 2. Properties 10
Item 3. Legal Proceedings 10
Item 4. Submission of Matters to a Vote of Security Holders 10
PART II
Item 5. Market for the Registrant's Common Stock and Related
Stockholders Matters 10
Item 6. Selected Financial Data 11
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations 12
Item 7A. Quantitative and Qualitative Disclosures About Market Risk 18
Item 8. Financial Statements and Supplementary Data 18
Item 9. Change in and Disagreements with Accountants on Accounting and
Financial Disclosure 18
PART III
Item 10. Directors and Executive Officers of the Registrant 18
Item 11. Executive Compensation 18
Item 12. Security Ownership of Certain Beneficial Owners and Management 19
Item 13. Certain Relationships and Related Transactions 19
PART IV
Item 14. Exhibits, Financial Statement Schedule and Reports on Form 8-K 19
</TABLE>
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PART I
Item 1. Business
General
The following is a summary of certain information contained in this Report
and is qualified in its entirety by the detailed information and financial
statements that appear elsewhere herein. Except for the historical information
contained herein, the matters set forth in this Report include forward-looking
statements within the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements are
subject to risks and uncertainties that may cause actual results to differ
materially. These risks and uncertainties are detailed throughout this Report
and will be further discussed from time to time in the Company's periodic
reports filed with the Commission. The forward-looking statements included in
this Report speak only as of the date hereof.
Meadow Valley Corporation (the "Company") was incorporated in Nevada on
September 15, 1994. On October 1, 1994, the Company purchased all of the
outstanding Common Stock of Meadow Valley Contractors, Inc. ("MVC") for $11.5
million comprised of a $10 million promissory note and $1.5 million paid by the
issuance of 500,000 restricted shares of the Company's Common Stock valued at
$3.00 per share. On January 4, 1999, the $10 million promissory note was paid in
full. MVC was founded in 1980 as a heavy construction contractor and has been
engaged in that activity since inception. References to the Company's history
include the history of MVC.
On October 16, 1995, the Company sold 1,675,000 Units of its securities to
the public at $6.00 per Unit (the "Public Offering"). Each Unit consisted of one
share of $.001 par value common stock and one common stock purchase warrant. In
November 1995, the Company sold an additional 251,250 Units pursuant to its
underwriters' overallotment option.
The Company, through its subsidiaries, primarily operates as a heavy
construction contractor specializing in infrastructure projects including the
construction of bridges and overpasses, channels, roadways, highways and airport
runways. The Company generally serves as the prime contractor for public sector
customers (such as federal, state and local governmental authorities) in the
states of Nevada, Arizona, Utah and New Mexico. The Company primarily seeks
public sector customers because public sector projects are less cyclical than
private sector projects, payment is more reliable, work required by the project
is generally standardized and little marketing expense is incurred in obtaining
projects.
The Company owns and leases portable hot mix asphalt plants and related
paving equipment and a rubberized asphalt plant. The asphalt paving capabilities
provide the Company the opportunity to expand its existing geographic market,
enhance its construction operations in its existing market, improve its
competitiveness and may generate increased revenues on projects that call for
large quantities of asphaltic concrete, recycled asphalt or rubberized asphalt.
The Company had a project backlog of approximately $104 million at December
31, 1999, which included the remainder of a $94.6 million portion of the
reconstruction of the core of the interchange at I-15 and US 95 in Las Vegas,
NV, the remainder of $87.8 million of projects which are portions of the Beltway
Continuation projects in Las Vegas, Nevada, the remainder of a $29.3 million
portion of the State Route 87 Continuation, in Sunflower, AZ, the remainder of a
$17.5 million portion of the Reconstruction of US 89, in Cherry Hills, UT and
the $13.0 million Storm Drain Channel Construction, in Chandler, AZ. The
Company's backlog includes approximately $100 million of work that is scheduled
for completion during 2000. The Company has acted as the prime contractor on
projects funded by a number of governmental authorities, including the Federal
Highway Administration, the Arizona Department of Transportation, the Nevada
Department of Transportation, the Utah Department of Transportation, the Clark
County (Nevada) Department of Public Works, the Salt Lake City (Utah) Airport
Authority, the New Mexico State Highway and Transportation Department and the
City of Phoenix.
In 1996, the Company expanded its Nevada construction industry activities
with the formation of Ready Mix, Inc. ("RMI") as a wholly-owned subsidiary. RMI
manufactures and distributes ready mix concrete and owns and operates a
construction materials processing plant in the Las Vegas, Nevada area. RMI
primarily targets prospective customers such as concrete subcontractors, prime
contractors, home builders, commercial and industrial property developers, pool
builders and homeowners. RMI began its ready mix concrete operation from its
first location in March 1997 and began processing construction materials in
November 1999. Financed with internal funds, a $2 million line of credit, notes
payable and operating leases, RMI intends
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to operate from two or more sites using at least 104 mixer trucks. During
January 2000, the Company ordered 64 mixer trucks at an estimated cost of
$8,400,000.
In 1996, the Company formed Prestressed Products Incorporated ("PPI") as a
wholly-owned subsidiary to design, manufacture and erect precast prestressed
concrete building components for use on commercial, institutional and public
construction projects throughout the Southwest. Product lines included
architectural and structural building components and prestressed bridge girders
for highway construction. During 1997, PPI began operations with a precast yard
and concrete batch plant located on leased property adjacent to the Company's
office in Moapa, Nevada. As a result of continuing operating losses, in June
1998, the Company adopted a formal plan (the "plan") to discontinue the
operations of PPI. The plan included the completion of approximately $2.8
million of uncompleted contracts and the disposition of approximately $1.2
million of equipment. The Company recorded an estimated loss of $1,950,000 (net
of income tax benefit of $1,300,000), related to the disposal of assets of PPI,
which included a provision of $1,350,000 for estimated losses during the
phase-out period of July 1, 1998 through June 30, 1999. During the twelve months
ended December 31, 1998 and 1999, $1,134,112 and $598,172 of the expected losses
were incurred (net of income tax benefit of $756,073 and $398,743).
In 1999, the Company expanded its construction materials processing
operations within its geographic area. During January 2000, the Company
purchased equipment in the amount of $159,000 and has requested finance
proposals for equipment totaling approximately $7,433,840, related to its
construction materials processing operations.
Business Strategy
The Company seeks to grow revenue and improve profitability by pursuing the
following business strategy:
(i) Expand construction-related niche markets. The Company will continue
to explore niche markets which may increase the Company's competitiveness,
diversify its revenue base, increase project revenue and improve profitability.
This may include acquiring equipment and personnel to increase the amount of
work to be performed by the Company.
(ii) Increase the Company's ownership and/or control of strategic
aggregate resources and develop commercial construction materials production and
sale operations to focus on increasing sales of construction materials to third
parties. In recent years, the Company has successfully obtained mineral leases
on a number of aggregate resources in Nevada, Arizona, Utah and New Mexico and
will consider expansion into other western states. The Company intends to
further develop its position as a commercial supplier and producer of aggregates
and related materials such as ready mix concrete and asphalt. As a commercial
supplier of construction materials, the Company will focus on sales to unrelated
third parties engaged in residential and commercial construction, as well as
public infrastructure. Control of aggregate resources may enhance the Company's
competitiveness on new contract work that it performs and may generate
additional revenue with improved profit margins on materials sold to third
parties.
(iii) Seek to acquire other businesses. The Company may 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 geographic locations not
currently served by the Company. For certain projects, the Company may join with
one or more companies to combine expertise, financial strength, and/or bonding
capacity. Through joint ventures, the Company may elect to pursue projects which
might otherwise exceed its staffing or bonding resources, including design-build
type projects within the Company's existing market.
(iv) Increase bonding capacity. The Company will continue to seek to
increase its bonding capacity in order to allow it to increase its volume of
bids and work. See "Insurance and Bonding."
Market Overview
The passage of the Transportation Equity Act for the 21st Century ("TEA
21") not only assured continued federal funding through 2003 for transportation
infrastructure, but also substantially increased the levels of funding over the
previous authorizing legislation. The increase in federal funds from TEA-21
combined with the existing high volume of infrastructure work in the healthy
construction economies of the Company's markets leads the Company to believe
that infrastructure construction (primarily highways, bridges, overpasses,
tunnels and other transportation projects) in the western United States is
substantial.
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The increased federal funding from the TEA-21 legislation has yet to reach the
construction industry with the impact originally expected. Federally-funded
highway projects are administered through each respective state department of
transportation and therefore, the rate at which federal funds are expended is
contingent upon the execution of each individual state's capital improvement
program. Since the passage of TEA-21, the pace at which federal funds have been
invested in the infrastructure has been significantly less than originally
projected. Construction industry belief is that the system has likely been
constrained by some combination of funding, planning or availability of
contractors, equipment or labor. It is expected that the effects of TEA-21 will
become more visible in the year 2000. Some industry projections expect an
overall increase in highway construction in the year 2000 to reach $6.1 billion
or 12% more than 1999.
Growth in the Company's current four-state market continues to outperform
many areas of the country. The states of Arizona, Nevada and Utah remain among
the leaders in key growth statistics such as population growth and employment
gains. Between 1990 and 1998, Nevada and Utah were number one and two in overall
housing growth. Arizona was fourth behind Idaho. The consensus of economic
predictions indicates a slowing over the high growth rates experienced in recent
years, but most indicators point toward a continuing healthy construction
economy. While expected to diminish slightly from 1999, continuing positive
growth in population and employment and the overall good health of the economy
in the year 2000 in the Company's market should continue to provide funding for
construction of key transportation facilities. Multi-billion dollar freeway
construction programs in metropolitan Phoenix, Arizona and Las Vegas, Nevada are
continuing to be funded by sales tax measures that are in addition to monies
obtained from TEA-21 and other local user fees.
The Company's commercial construction materials operations are impacted to
a greater degree by the conditions of the residential and commercial sectors of
the construction economy. Local economic forecasts for 2000 predict that
residential and commercial construction in both Las Vegas, Nevada and Phoenix,
Arizona areas will be less than 1999 levels but should still show positive
growth. The primary customers of RMI, the Company's wholly-owned ready mix
concrete subsidiary, are residential and commercial builders and subcontractors.
As a result, the Company may be faced with increased competition from other
local suppliers of ready mix concrete. RMI plans to increase its activity in the
infrastructure portion of the market and may more frequently provide concrete to
MVC.
The Company believes the overall economic health in its existing market
will present opportunities for improved performance.
Operations
In addition to the construction of highways, bridges, overpasses and
airport runways, the Company constructs other heavy civil projects. From its
Phoenix, Arizona corporate office and area offices in Phoenix, Arizona, Moapa,
Nevada, Farmington, Utah and Ruidoso, New Mexico, the Company markets (primarily
by responding to solicitations for competitive bids) and manages all of its
projects. Project management is also located on-site to provide direct
supervision to the operations.
In addition to profitability, the Company considers a number of factors
when determining whether to bid on a project, including the location of the
project, likely competitors and the Company's current and projected workloads.
The Company uses a computer-based project estimating system which reflects its
bidding and construction experience and performs detailed quantity take-offs
from bidding documents, which the Company believes helps identify a project's
risks and opportunities. The Company develops comprehensive estimates with each
project divided into phases and line items for which separate labor, equipment,
material, subcontractor and overhead cost estimates are compiled. Once a project
begins, the estimate provides the Company with a budget against which ongoing
project costs are measured. There can be no assurance that every project will
attain its budgeted costs. A number of factors can affect a project's
profitability including weather, availability of a quality workforce and actual
productivity rates. Each month the project manager updates the project's
projected performance at completion by using actual costs-to-date and
re-forecasted costs-to-complete for the balance of the work remaining. Regular
review of these estimated costs-to-complete allow project, area and corporate
management to be as responsive as possible to cost overruns or other problems
that may affect profitability.
The Company owns some of the equipment used in its business lines,
including cranes, backhoes, scrapers, graders, loaders, trucks, trailers,
pavers, rollers, construction material processing plants, batch plants and
related equipment. The net book value of the Company's equipment at December 31,
1999 was approximately $15.1 million. During 1999, the Company acquired $6.5
million of equipment, related primarily to the construction material processing
plants and additional equipment needed for the
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added construction workload. The Company leases a significant portion of its
equipment and attempts to keep the equipment as fully utilized as possible.
Equipment may be rented on a short-term basis to subcontractors.
The Company's corporate management oversees operational and strategic
issues and, through the corporate accounting staff, provides administrative
support services to subsidiary managers, area managers and individual project
management at the project site. The latter are responsible for planning,
scheduling and budgeting operations, equipment maintenance and utilization and
customer satisfaction. Subsidiary managers, area managers and project managers
monitor project costs on a daily and weekly basis while corporate management
monitors such costs monthly.
Raw materials (primarily concrete, aggregate and steel) used in the
Company's operations are available from a number of sources. There are a
sufficient number of materials suppliers within the Company's market area to
assure the Company of adequate competitive bids for supplying such raw
materials. Generally, the Company will obtain several bids from competing
concrete, asphalt or aggregate suppliers whose reserves of such materials will
normally extend beyond the expected completion date of the project. Costs for
raw materials vary depending upon project duration, construction season, or
other factors; but, generally, prices quoted to the Company for raw materials
are fixed for the project's duration.
The Company initiated its commercial construction materials operations in
the first quarter 1997 with the start-up of RMI. RMI currently operates one
concrete batch plant in North Las Vegas with 40 ready mix trucks. All of RMI's
internal sand and gravel needs are manufactured from its own rock quarry in
Moapa, Nevada. Production capacity at the Moapa quarry was increased
substantially during 1999. Additional sales staff was added to promote sales of
rock and sand products and landscape rock resulting from the Company's increased
production capacity. Currently, the Company sells rock and sand products from
its other commercial materials production sites in Ruidoso, New Mexico,
Alamagordo, New Mexico and Prescott Valley, Arizona. The Company intends to
expand its production capabilities at its Prescott Valley quarry. Recently, the
Company obtained the rights to mine sand and gravel from sites in Nephi and
Payson, Utah and expects to begin producing and selling sand and gravel, ready
mix concrete and asphalt from these sites during the year 2000. The Company is
negotiating the acquisition of mineral rights on properties in Phoenix, Arizona
and Henderson, Nevada. If these mineral rights can be successfully acquired, the
Company intends to accelerate the development of these properties into producing
commercial sites as soon as possible. Ultimately, it is the Company's intent to
generate approximately one-third of its revenue from commercial material sales.
Projects and Customers
The Company specializes in public sector construction projects and its
principal customers are the state departments of transportation in Nevada,
Arizona, Utah and New Mexico and bureaus and departments of municipal and county
governments in those states. For the year ended December 31, 1999, revenue
generated from six projects in Nevada, Arizona and Utah represented 67% 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. For the years ended December 31, 1997, 1998 and
1999, the Company recognized a significant portion of its consolidated revenue
from three customers (shown as an approximate percentage of consolidated
revenue):
For the Years Ended December 31,
------------------------------------
1997 1998 1999
------------------------------------
Arizona Department of Transportation... 27.8% 29.9% 26.2%
Clark County General Services.......... 33.0% 12.5% 28.7%
Nevada Department of Transportation.... 7.6% 24.3% 17.2%
Backlog
The Company's backlog (anticipated revenue from the uncompleted portions of
awarded projects) was approximately $104 million at December 31, 1999, compared
to approximately $220 million at December 31, 1998. At December 31, 1999, the
Company's backlog included approximately $100 million of work that is scheduled
for completion during 2000. Accordingly, revenue in 2000 and 2001 will be
significantly reduced if the Company is unable to obtain substantial new
projects in 2000. 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
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customers to modify or cancel the contracts at any time upon payment of a
relatively small cancellation fee. The Company has not been materially adversely
affected by contract cancellations or modifications in the past. Revenue is
impacted in any one period by the backlog at the beginning of the period. The
Company's backlog depends upon the Company's success in the competitive bid
process. Bidding strategies and priorities may be influenced and changed from
time to time by the level of the Company's backlog and other internal and
external factors. A portion of the Company's anticipated revenue in any year is
not reflected in its backlog at the start of the year because some projects are
initiated and completed in the same year.
Competition
The Company believes that the primary competitive factors as a prime
contractor in the construction industry are price, reputation for quality work,
financial strength, and knowledge of local market conditions and estimating
abilities. The Company believes that it competes favorably with respect to each
of the foregoing factors. Most of the Company's projects involve public sector
work for which contractors are first pre-qualified to bid and then are chosen by
a competitive bidding process, primarily on the basis of price. Because the
Company's bids are often determined by the cost to it of subcontractor services
and materials, the Company believes it is often able to lower its overall
construction bids due to its prompt payments to, consistent workloads for, and
good relationships with its subcontractors and suppliers. The Company competes
with a large number of small owner/operator contractors that tend to dominate
smaller (under $4 million) projects. When bidding on larger infrastructure
projects, the Company also competes with larger, well capitalized regional and
national contractors (including Granite Construction Incorporated, Peter Kiewit
Sons', Inc., Sundt Corp. and Morrison Knudsen), many of whom have larger net
worths, higher bonding capacities and more construction personnel than the
Company. Due to currently favorable market conditions in Nevada, Arizona, Utah
and New Mexico, which have resulted in an increase in heavy construction
projects in these states, additional competition may be expected. Such
additional competition could reduce the Company's profit margins on certain
projects.
The Company has received single project bond approval up to $110 million
and has an aggregate program bond capacity of over $300 million. The Company
believes its bonding capacity is sufficient to sustain anticipated growth.
Larger competitors typically have unlimited bonding capacity and, therefore, may
be able to bid on more work than the Company. Except for bonding capacity, the
Company does not believe it is at a competitive disadvantage in relation to its
larger competitors. With respect to its smaller competitors, the Company
believes that its larger bonding capacity, long relationships with
subcontractors and suppliers and the perceived stability of having been in
business since 1980 may be competitive advantages.
The Company does not believe that the competitive environment is materially
different in other western states in which the Company may expand. Initially,
the Company will be at a competitive disadvantage in new geographic locations
until it obtains information on those locations and develops relationships with
local subcontractors and suppliers.
To some extent, the Company faces the same competitors for sales of
construction materials as it does for its contracting work. It is common for
prime contractors in the heavy highway construction industry to develop some
degree of vertical integration into construction materials. Companies such as
Granite Construction, Kiewitt, Oldcastle and LaFarge, among others, provide
contracting services and produce construction materials. The quality of the
product and the customer service are often just as important, if not more so,
than price in successfully marketing construction materials. Vertical
integration into construction materials may occasionally allow the Company to be
more competitive in its bidding for construction contracts. However, the
Company's marketing strategy is to make third party sales its top priority. To
accomplish this, the Company recognizes that its construction materials
customers must receive a consistently high quality product and first-priority
service.
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
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(iv) analyzing the local market to determine the availability and cost of labor
and the degree of competition. Since 1987, the Company has been awarded
contracts for approximately 21% of the projects upon which it has bid. A
substantial portion of the Company's revenue is derived from projects that
involve "fixed unit price" contracts under which the Company is committed to
provide materials or services at fixed unit prices (such as dollars per cubic
yard of earth or concrete, or linear feet of pipe). The unit price is determined
by a number of factors including haul distance between the construction site and
the warehouses or supply facilities of local material suppliers and to or from
disposal sites, site characteristics and the type of equipment to be used. While
the fixed unit price contract generally shifts the risk of estimating the
quantity of units for a particular project to the customer, any increase in the
Company's unit cost over its unit bid price, whether due to inefficiency, faulty
estimates, weather, inflation or other factors, must be borne by the Company.
Most public sector contracts provide for termination of the contract at the
election of the customer. In such event the Company is generally entitled to
receive a small cancellation fee in addition to reimbursement for all costs it
incurred on the project. Many of the Company's contracts are subject to
completion requirements with liquidated damages assessed against the Company if
schedules are not met. The Company has not been materially adversely affected by
these provisions in the past.
Contracts often involve work periods in excess of one year. Revenue on
uncompleted fixed price contracts is recorded under the percentage of completion
method of accounting. The Company begins to recognize revenue on its contracts
when it first accrues direct costs. Pursuant to construction industry practice,
a portion of billings, generally not exceeding 10%, may be retained by the
customer until the project is completed and all obligations of the contractor
are paid. The Company has not been subject to a loss in connection with any such
retention.
The Company acts as prime contractor on most of its construction projects
and subcontracts certain jobs such as electrical, mechanical, guardrail and
fencing, signing and signals, foundation drilling, steel erection and other
specialty work to others. As prime contractor, the Company bills the customer
for work performed and pays the subcontractors from funds received from the
customer. Occasionally the Company provides its services as a subcontractor to
another prime contractor. As a subcontractor, the Company will generally receive
the same or similar profit margin as it would as a prime contractor, although
revenue to the Company will be smaller because the Company only contracts a part
of the project. As prime contractor, the Company is responsible for the
performance of the entire contract, including work assigned to subcontractors.
Accordingly, the Company is subject to liability associated with the failure of
subcontractors to perform as required under the contract. The Company
occasionally requires its subcontractors to furnish bonds guaranteeing their
performance, although affirmative action regulations require the Company to use
its best efforts to hire minority subcontractors for a portion of the project
and some of these subcontractors may not be able to obtain surety bonds. On
average, the Company has required performance bonds for less than 10% of the
dollar amount of its subcontracted work. However, the Company is generally aware
of the skill levels and financial condition of its subcontractors through its
direct inquiry of the subcontractors and contract partners of the
subcontractors, as well as its review of financial information provided by the
subcontractors and third party reporting services including credit reporting
agencies and bonding companies. The Company has not been materially adversely
affected by subcontractor related losses over the past five years. As the
Company expands into new geographic areas, it expects to obtain references and
examine the financial condition of prospective subcontractors before entering
into contracts with them, requiring bonding as deemed appropriate.
In connection with public sector contracts, the Company is required to
provide various types of surety bonds guaranteeing its own performance. The
Company's ability to obtain surety bonds depends upon its net worth, working
capital, past performance, management expertise and other factors. Surety
companies consider such factors in light of the amount of the Company's surety
bonds then outstanding and the surety companies' current underwriting standards,
which may change from time to time. See "Insurance and Bonding".
Insurance and Bonding
The Company maintains general liability and excess liability insurance
covering its owned and leased construction equipment and workers' compensation
insurance in amounts it believes are consistent with its risks of loss and in
compliance with specific insurance coverage required by its customers as a part
of the bidding process. The Company carries liability insurance of $27 million
per occurrence, which management believes is adequate for its current operations
and consistent with the requirements of projects currently under construction by
the Company. The Company carries builders risk insurance on a limited number of
projects and is dependent upon management's assessment of the project risk
versus the cost of insurance.
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The Company is required to provide a surety bond on most of its projects.
The Company's ability to obtain bonding, and the amount of bonding required, is
primarily determined by the Company's management experience, net worth, liquid
working capital (consisting of cash and accounts receivable in excess of
accounts payable and accrued liabilities), the Company's performance history,
the number and size of projects under construction and other factors. Surety
companies consider such factors in light of the amount of the Company's surety
bonds then outstanding and the surety companies' current underwriting standards,
which may change from time to time. The larger the project and/or the more
projects in which the Company is engaged, the greater the Company's bonding, net
worth and liquid working capital requirements. Bonding requirements vary
depending upon the nature of the project to be performed. The Company generally
pays a fee to bonding companies of 1/2% to 1% of the amount of the contract to
be performed. Because these fees are generally payable at the beginning of a
project, the Company must maintain sufficient working capital to satisfy the fee
prior to receiving revenue from the project. The Company has received single
project bonding approval up to $110 million and has an aggregate program bond
capacity of over $300 million.
Marketing
The Company obtains its projects primarily through the process of
competitive bidding. Accordingly, the Company's marketing efforts are limited to
subscribing to bid reporting services and monitoring trade journals and other
industry sources for bid solicitations by various government authorities. In
response to a bid request, the Company submits a proposal detailing its
qualifications, the services to be provided and the cost of the services to the
soliciting entity which then, based on its evaluation of the proposals
submitted, awards the contract to the successful bidder. Generally, the contract
for a project is awarded to the lowest bidder, although other factors may be
taken into consideration such as the bidder's track record for compliance with
bid specifications and procedures and its construction experience.
A more focused marketing effort and greater emphasis on customer care and
service are important tools in promoting sales of construction materials.
Certification of plants and facilities must be obtained and maintained in order
to comply with certain project and specification requirements. Membership and
participation in selected industry associations help increase the Company's
exposure to potential clients and are two means by which the Company stays
informed on industry developments and future prospects within the marketplace.
Building and maintaining customer relations and reputation for quality work are
essential elements to the marketing efforts of RMI.
Government Regulation
The Company's operations are subject to compliance with regulatory
requirements of federal, state and municipal authorities, including regulations
covering labor relations, safety standards, affirmative action and the
protection of the environment including requirements in connection with water
discharge, air emissions and hazardous and toxic substance discharge. Under the
Federal Clean Air Act and Clean Water Act, the Company must apply water or
chemicals to reduce dust on road construction projects and to contain water
contaminants in run-off water at construction sites. The Company may also be
required to hire subcontractors to dispose of hazardous wastes encountered on a
project. The Company believes that it is in substantial compliance with all
applicable laws and regulations. However, amendments to current laws or
regulations imposing more stringent requirements could have a material adverse
effect on the Company.
Employees
On December 31, 1999, the Company employed approximately 68 salaried
employees (including its management personnel and executive officers) and
approximately 417 hourly employees. The number of hourly employees varies
depending upon the amount of construction in progress. For the year ended
December 31, 1999, the number of hourly employees ranged from approximately 417
to approximately 640 and averaged approximately 563. At December 31, 1999, the
Company is party to four project agreements in Arizona with the Arizona State
District Council of Carpenters, AFL-CIO which covers approximately 7% of the
Company's hourly workforce. At December 31, 1999, the Company believes its
relations with its employees are satisfactory.
9
<PAGE>
Item 2. Properties
The following properties were leased by the Company at December 31, 1999:
(1) 8,300 square feet of executive office space at 4411 South 40th
Street, Suites D-10 and D-11, Phoenix, Arizona, 85040, pursuant
to a lease which expires in December 2000, at a monthly rental
rate of $8,026 per month.
(2) 2,000 square feet of office space for the Company's ready mix
operations, at 3430 E. Flamingo, Suite 100, Las Vegas, Nevada,
pursuant to a lease that expires in October 2000, at a monthly
rental rate of $2,692.
(3) 2,000 square feet of office space at 1501 Highway 168, Moapa,
Nevada 89025, on a month-to-month basis, at a rental rate of $840
per month, from a Company controlled by Kim A. Marshall, a
principal stockholder. The Company believes that its Moapa rental
rate is fair, reasonable and consistent with rates charged by
unaffiliated third parties in the same market area.
The Company owns approximately five acres of land at 109 W. Delhi, North
Las Vegas, Nevada 89030, which is used for the manufacturing of ready mix
concrete.
The Company owns approximately 24.5 acres of land in Moapa, Nevada, which
is currently being held for sale.
The Company has determined that the above properties are sufficient to meet
the Company's current needs.
Item 3. Legal Proceedings
The Company is a party to legal proceedings in the ordinary course of its
business. The Company believes that the nature of these proceedings (which
generally relate to disputes between the Company and its subcontractors,
material suppliers or customers regarding payment for work performed or
materials supplied) are typical for a construction firm of its size and scope,
and no pending 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 year
ended December 31, 1999.
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.
1998 1999
---------------------------------------
High Low High Low
---------------------------------------
First Quarter.......... 6 5/8 5 1/8 5 7/16 4
Second Quarter ...... 7 5 1/2 4 3/4 4
Third Quarter ........ 7 1/4 5 4 9/16 3 15/16
Fourth Quarter ....... 6 1/4 4 5/8 4 3/8 3 3/8
Holders of Record
As of February 16, 2000, there were 675 record and beneficial owners of the
Company's Common Stock.
10
<PAGE>
Item 6. Selected Financial Data
Years Ended December 31,
- ------------------------
<TABLE>
<CAPTION>
Income Statement Data:
1995 1996 1997 1998 1999
----------- ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenue............................................. $90,048,523 $133,723,645 $146,273,286 $187,036,077 $210,002,272
Gross Profit........................................ 4,354,455 2,810,585 7,861,972 9,444,231 9,931,446
Income (loss) from Operations....................... 2,364,676 (255,072) 3,172,430 3,084,983 3,260,411
Interest Expense.................................... 1,116,464 611,828 624,048 435,358 209,872
Income (loss) from continuing operations
before income taxes............................... 1,608,997 (30,410) 3,235,458 3,592,019 3,930,586
Net income (loss) from continuing operations........ 1,059,347 (37,531) 2,072,567 2,169,579 2,340,106
Discontinued Operations:
Loss from discontinued operations (1)............. - (47,697) (860,952) (635,246) -
Estimated loss on disposal of net assets of
discontinued operations (2)..................... - - - (1,950,000) -
Net income (loss)................................... 1,059,347 (85,228) 1,211,615 (415,667) -
Basic net income (loss) per common share:
Income (loss) from continuing operations.......... $.65 $(.01) $.58 $.60 $.67
Loss from discontinued operations................. - (.01) (.24) (.18) -
Estimated loss on disposal of net assets of
discontinued operations......................... - - - (.54) -
Basic net income (loss) per common share............ $.65 $(.02) $.34 $(.12) $.67
Diluted net income (loss) per common share:
Income (loss) from continuing operations.......... $.65 $(.01) $.57 $.60 $.66
Loss from discontinued operations................. - (.01) (.24) (.17) -
Estimated loss on disposal of net assets of
discounted operations........................... - - - (.54) -
Diluted net income (loss) per common share.......... $.65 $(.02) $.33 $(.11) $.66
Basic weighted average common shares
outstanding....................................... 1,641,663 3,601,250 3,601,250 3,601,250 3,518,510
Diluted weighted average common shares
outstanding....................................... 1,641,663 3,601,250 3,651,360 3,644,651 3,529,705
Financial Position Data:
Working capital..................................... $11,319,107 $ 8,689,123 $ 5,152,550 $ 5,760,414 $ 6,167,161
Total assets........................................ 28,909,786 42,171,030 47,737,762 49,297,063 58,425,361
Long-term debt...................................... 3,689,055 4,631,377 5,847,659 5,977,643 7,121,634
Stockholders' equity................................ 11,761,997 11,676,769 12,888,384 12,472,717 14,812,823
</TABLE>
(1) Includes the net income tax benefit of $28,756, $443,520 and $423,497 for
the years ended December 31, 1996, 1997 and 1998 for the discontinued
operations of Prestressed Products Incorporated.
(2) Estimated loss on disposal of net assets of Prestressed Products
Incorporated (net of income tax benefit of $1,300,000), including
$1,350,000 for operating losses during the phase-out period.
11
<PAGE>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
General
The following is a summary of certain information contained in this Report
and is qualified in its entirety by the detailed information and financial
statements that appear elsewhere herein. Except for the historical information
contained herein, the matters set forth in this Report include forward-looking
statements within the meaning of the "safe harbor" provisions of the Private
Securities Litigation Reform Act of 1995. These forward-looking statements are
subject to risks and uncertainties that may cause actual results to differ
materially. These risks and uncertainties are detailed throughout the Report and
will be further discussed from time to time in the Company's periodic reports
filed with the Commission. The forward-looking statements included in the Report
speak only as of the date hereof.
The Company was incorporated in Nevada on September 15, 1994. On October 1,
1994, the Company purchased all of the outstanding Common Stock of Meadow Valley
Contractors, Inc. ("MVC"), for $11.5 million comprised of a $10 million
promissory note and $1.5 million paid by the issuance of 500,000 restricted
shares of the Company's Common Stock valued at $3.00 per share. On January 4,
1999, the $10 million promissory note was paid in full. MVC was founded in 1980
as a heavy construction contractor and has been engaged in that activity since
inception. References to the Company's history include the history of MVC.
The Company, through its subsidiaries, primarily operates as a heavy
construction contractor specializing in infrastructure projects including the
construction of bridges and overpasses, channels, roadways, highways and airport
runways. The Company generally serves as the prime contractor for public sector
customers (such as federal, state and local governmental authorities) in the
states of Nevada, Arizona, Utah and New Mexico. The Company primarily seeks
public sector customers because public sector projects are less cyclical than
private sector projects, payment is more reliable, work required by the project
is generally standardized and little marketing expense is incurred in obtaining
projects.
The Company owns and leases portable hot mix asphalt plants and related
paving equipment and a rubberized asphalt plant. The asphalt paving capabilities
provide the Company the opportunity to expand its existing geographic market,
enhance its construction operations in its existing market, improve its
competitiveness and may generate increased revenues on projects that call for
large quantities of asphaltic concrete, recycled asphalt or rubberized asphalt.
In 1996, the Company expanded its Nevada construction industry activities
with the formation of Ready Mix, Inc. ("RMI") as a wholly-owned subsidiary. RMI
manufactures and distributes ready mix concrete and owns and operates a
construction materials processing plant in the Las Vegas, NV area. RMI primarily
targets prospective customers such as concrete subcontractors, prime
contractors, home builders, commercial and industrial property developers, pool
builders and homeowners. RMI began its ready mix concrete operation from its
first location in March 1997 and began processing construction materials in
November 1999. Financed with internal funds, a $2 million line of credit, notes
payable and operating leases, RMI intends to operate from two or more sites
using at least 104 mixer trucks. During January 2000, the Company ordered 64
mixer trucks at an estimated cost of $8,400,000.
In 1996, the Company formed Prestressed Products Incorporated ("PPI") as a
wholly-owned subsidiary to design, manufacture and erect precast prestressed
concrete building components for use on commercial, institutional and public
construction projects throughout the Southwest. Product lines included
architectural and structural building components and prestressed bridge girders
for highway construction. During 1997, PPI began operations with a precast yard
and concrete batch plant located on leased property adjacent to the Company's
office in Moapa, Nevada. As a result of continuing operating losses, in June
1998, the Company adopted a formal plan (the "plan") to discontinue the
operations of PPI. The plan included the completion of approximately $2.8
million of uncompleted contracts and the disposition of approximately $1.2
million of equipment. The Company recorded an estimated loss of $1,950,000 (net
of income tax benefit of $1,300,000), related to the disposal of assets of PPI,
which included a provision of $1,350,000 for estimated losses during the
phase-out period of July 1, 1998 through June 30, 1999. During the twelve months
ended December 31, 1998 and 1999, $1,134,112 and $598,172 of the expected losses
were incurred (net of income tax benefit of $756,073 and $398,743).
In 1999, the Company expanded its construction materials processing
operations within its geographic area. During January 2000, the Company
purchased equipment in the amount of $159,000 and has requested finance
proposals for equipment totaling
12
<PAGE>
approximately $7,433,840, related to its construction materials processing
operations.
The Company's backlog (anticipated revenue from the uncompleted portions of
awarded projects) was approximately $104 million at December 31, 1999, compared
to approximately $220 million at December 31, 1998. At December 31, 1999, the
Company's backlog included approximately $100 million of work that is scheduled
for completion during 2000. Accordingly, revenue in 2000 and 2001 will be
significantly reduced if the Company is unable to obtain substantial new
projects in 2000. The Company includes a construction project in its backlog at
such time as a contract is awarded or a firm letter of commitment is obtained.
The Company believes that its backlog figures are firm, subject to provisions
contained in its contracts which allow customers to modify or cancel the
contracts at any time upon payment of a relatively small cancellation fee. The
Company has not been materially adversely affected by contract cancellations or
modifications in the past. Revenue is impacted in any one period by the backlog
at the beginning of the period. The Company's backlog depends upon the Company's
success in the competitive bid process.
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.
Revenue on uncompleted fixed price contracts is recorded under the
percentage of completion method of accounting. The Company begins to recognize
revenue on its contracts when it first accrues direct costs. Contracts often
involve work periods in excess of one year and revisions in cost and profit
estimates during construction are reflected in the accounting period in which
the facts that require the revision become known. Losses on contracts, if any,
are provided in total when determined, regardless of the percent complete.
Claims for additional contract revenue are recognized only to the extent that
contract costs relating to the claim have been incurred and evidence provides a
legal basis for the claim. Pursuant to construction industry practice, a portion
of billings, generally not exceeding 10%, may be retained by the customer until
the project is completed and all obligations of the contractor are paid. The
Company has not been subject to a loss in connection with any such retention.
The Company 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 67% of the Company's revenue for the year ended
December 31, 1999. Results for any one calendar quarter may fluctuate widely
depending upon the stage of completion of the Company's active projects.
13
<PAGE>
Results of 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,
---------------------------------
1997 1998 1999
------ ------ ------
<S> <C> <C> <C>
Revenue.................................................... 100.00% 100.00% 100.00%
Cost of revenue............................................ 94.63 94.95 95.27
Gross profit............................................... 5.37 5.05 4.73
General and administrative expenses........................ 3.21 3.40 3.18
Income from operations..................................... 2.16 1.65 1.55
Interest income............................................ .46 .46 .32
Interest expense........................................... (.43) (.23) (.10)
Other income............................................... .01 .05 .10
Net income from continuing operations...................... 1.42 1.16 1.11
Loss from discontinued operations.......................... (.59) (.34) -
Estimated loss on disposal of net assets of
discontinued operations............................... - (1.04) -
Net income (loss).......................................... .83 (.22) 1.11
</TABLE>
Year Ended December 31, 1999 compared to Year Ended December 31, 1998
Revenue and Backlog. Revenue increased 12.3% to $210.0 million for the year
ended December 31, 1999 from $187.0 million for the year ended December 31,
1998. The increase was the result of an increase in contract revenue of $22.7
million and a $.3 million increase in revenue generated from construction
materials production and manufacturing sold to non-affiliates. Backlog decreased
to $104.0 million at December 31, 1999 compared to $220.0 million at December
31, 1998. Revenue is impacted in any one period by the backlog at the beginning
of the period.
Gross Profit. As a percentage of revenue, consolidated gross profit margin
decreased from 5.05% for 1998 to 4.73% for 1999. The decrease in gross profit
margin was the result of (i) cost overruns on certain projects (ii) weather and
execution difficulties related to a bridge substructure and (iii) costs to
remove and repair a portion of a partially constructed bridge that was damaged
by the collapse of a temporary support system, offset, in part, by increased
profit recognition related to several projects nearing completion at December
31, 1999. Gross profit margins are affected by a variety of factors including
construction delays and difficulties due to weather conditions, availability of
materials, the timing of work performed by other subcontractors and the physical
and geological condition of the construction site.
General and Administrative Expenses. General and administrative expenses
increased from $6,359,248 for 1998 to $6,671,035 for 1999. The increase
resulted, in part, from costs related to various employee incentive plans
amounting to $206,000, $44,000 in costs related to the education and training of
corporate and area personnel, $69,000 in costs related to legal and accounting
and a variety of other costs related to the administration of the corporate and
area offices.
Interest Income and Expense. Interest income for 1999 decreased to $668,928
from $856,191 for 1998 resulting primarily from a decrease in invested cash
reserves. Interest expense decreased for 1999 to $209,872 from $435,358 for 1998
due primarily to a $1,000,000 reduction in related party debt during January
1999.
Net Income from Continuing Operations After Income Taxes. Net income from
continuing operations after income taxes was $2,340,106 for 1999 as compared to
$2,169,579 for 1998. The increase resulted from higher revenues offset by
increased general and administrative expenses and decreased gross profit
margins, as well as lower interest income and lower interest expense.
14
<PAGE>
Discontinued Operations. In June 1998, due to continuing operating losses,
the Company decided to dispose of its wholly-owned subsidiary Prestressed
Products Incorporated. Accordingly, the Company has reclassified the operations
of Prestressed Products Incorporated as discontinued operations in the
accompanying financial statements. In June 1998, the Company accrued a
$1,950,000 charge (net of income tax benefit of $1,300,000), related to the
disposal of assets for the Prestressed Products business, which included a
provision of $1,350,000 for estimated operating losses during the phase-out
period. During the years ended December 31, 1998 and 1999, $1,134,112 and
$598,172 of the expected losses were incurred (net of income tax benefit of
$756,073 and $398,743).
Net Income (loss). Net income (loss), after discontinued operations, for
1999 was $2,340,106 as compared to $(415,667) for 1998.
Year Ended December 31, 1998 compared to Year Ended December 31, 1997
Revenue and Backlog. Revenue increased 27.9% to $187.0 million for the year
ended December 31, 1998 from $146.3 million for the year ended December 31,
1997. The increase was the result of an increase in contract revenue of $36.6
million and a $4.1 million increase in revenue generated from construction
materials production and manufacturing sold to non-affiliates. Backlog increased
to $220 million at December 31, 1998 compared to $214 million at December 31,
1997. Revenue is impacted in any one period by the backlog at the beginning of
the period.
Gross Profit. As a percentage of revenue, consolidated gross profit
decreased from 5.37% in 1997 to 5.05% in 1998. The decrease in MVC's gross
profit margin was the result of (i) cost overruns on certain projects (ii)
subcontractor difficulties and (iii) costs related to plan or specification
errors. Gross profit margins are affected by a variety of factors including
construction delays and difficulties due to weather conditions, availability of
materials, the timing of work performed by other subcontractors and the physical
and geological condition of the construction site.
General and Administrative Expenses. General and administrative expenses
increased to $6,359,248 for 1998 from $4,689,542 for 1997. The increase
resulted, in part, from costs associated with expansion into the white paving
market amounting to approximately $323,000, $267,000 in corporate labor,
$871,000 in costs related to various employee incentive plans, $120,000 in legal
costs, $35,000 in costs related to the Company's safety plan, $32,000 in costs
related to the administration of various employee incentive and benefit plans
and a variety of other costs related to the administration of the corporate and
area offices.
Interest Income and Expense. Interest income for 1998 increased to $856,191
from $666,397 in 1997 due to an increase in cash reserves resulting primarily
from billings in excess of costs and estimated earnings on uncompleted projects.
Interest expense decreased in 1998 to $435,358 from $624,048, due to a
$1,000,000 reduction in related party debt during the fourth quarter 1997 and a
$1,500,000 reduction in 1998. At December 31, 1998 the remaining balance on the
related party promissory note was $1,000,000. During January 1999, the Company
made the final principal payment of $1,000,000.
Net Income from Continuing Operations After Income Taxes. Net income from
continuing operations after income taxes was $2,169,579 in 1998 as compared to
$2,072,567 for 1997. The slight increase resulted from higher revenues offset by
increased general and administrative expenses and decreased gross profit
margins, as well as higher interest income and lower interest expense.
Discontinued Operations. In June 1998, due to continuing operating losses,
the Company decided to dispose of its wholly-owned subsidiary Prestressed
Products Incorporated. Accordingly, the Company has reclassified the operations
of Prestressed Products Incorporated as discontinued operations in the
accompanying financial statements. In June 1998, the Company accrued a
$1,950,000 charge (net of income tax benefit of $1,300,000), related to the
disposal of assets for the Prestressed Products business, which included a
provision of $1,350,000 for estimated operating losses during the phase-out
period. During the year ended December 31, 1998, $1,134,112 of the expected
losses were incurred (net of income tax benefit of $756,073).
Net Loss. Net loss, after discontinued operations, for 1998 was $415,667.
15
<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 $146.3 million in 1997 to $210.0
million in 1999. Growth has resulted in the need for additional capital to
finance increased receivables, inventory, retentions and capital expenditures,
and to address fluctuations in the work-in-process billing cycle.
The following table sets forth, for the periods presented, certain items
from the Statements of Cash Flows of the Company.
<TABLE>
<CAPTION>
For The Years Ended December 31,
----------------------------------------------
1997 1998 1999
------------ ----------- ------------
<S> <C> <C> <C>
Cash Provided By (Used in) Operating Activities........... $ 7,545,827 $ 10,889,235 $ (2,248,335)
Cash Provided By (Used in) Investing Activities........... (4,432,322) 331,646 681,483
Cash Used in Financing Activities......................... (1,738,860) (3,043,020) (3,248,684)
</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 provided by operating activities during 1997 amounted to $7.5 million,
primarily the result of net income of $1.2 million, depreciation and
amortization of $1.3 million, a decrease in accounts receivable of $2.8 million,
an increase in net billings in excess of costs of $3.1 million, $.4 million
increase in deferred income tax payable, offset by a decrease in accounts
payable of $1.3 million.
Cash provided by operating activities during 1998 amounted to $10.9
million, primarily the result of a decrease in accounts receivable of $8.7
million, depreciation and amortization of $1.8 million, an increase in net
billings in excess of costs of $4.8 million, an increase in accrued liabilities
of $1.3 million, offset by a decrease in accounts payable of $4.6 million and an
increase in prepaid expenses and other of $.8 million and a net loss of $.4
million.
Cash used in operating activities during 1999 amounted to $2.2 million,
primarily the result of an increase in net costs in excess of billings of $7.9
million, an increase in inventory of $3.6 million, an increase in accounts
receivable of $3.8 million, offset in part by an increase in accounts payable of
$7.0 million, an increase in accrued liabilities of $.3 million, a decrease in
prepaid expense and other of $.6 million, an increase in deferred income taxes
payable of $.6 million, net income of $2.3 million and depreciation and
amortization of $2.0 million.
Cash used in investing activities during 1997 amounted to $4.4 million
related primarily to an increase in net assets of discontinued operations of
$2.6 million and the purchase of property and equipment of $1.8 million.
Cash provided by investing activities during 1998 amounted to $.3 million
related primarily to the decrease in related party note receivable of $.3
million, a decrease in net assets of discontinued operations of $2.5 million and
proceeds from the sale of property and equipment in the amount of $.2 million,
offset by the increase in restricted cash of $2.0 million and the purchase of
property and equipment of $.6 million. The aforementioned note receivable
related party was due from Paul R. Lewis, an officer and director of the
Company.
Cash provided by investing activities during 1999 amounted to $.7 million
related primarily to a decrease in restricted cash of $1.5 million, the
collection of a note receivable of $.2 million, proceeds from the sale of
property and equipment of $.4 million and a decrease in net assets of
discontinued operations of $.2 million, offset by the purchase of property and
equipment of $1.4 million and the purchase of mineral rights of $.2 million.
16
<PAGE>
Cash used in financing activities during 1997 amounted to $1.7 million
including $.5 million repayment of a loan from a related party plus $.5 million
prepayment of a loan from a related party and repayments of notes payable and
capital lease obligations in the amount of $.7 million. Cash used in financing
activities during 1998 amounted to $3.0 million including a total of $1.5
million of prepayments of a loan from a related party and repayments of notes
payable and capital lease obligations in the amount of $1.5 million. Cash used
in financing activities during 1999 amounted to $3.2 million including the $1.0
million prepayment of a loan from a related party and the repayments of notes
payable and capital lease obligations in the amount of $2.2 million. The
aforementioned note payable related party was due to a principal shareholder of
the Company, the Richard C. Lewis Family Revocable Trust I.
The Company currently has available from a commercial bank a $2 million
operating line of credit at an interest rate of the commercial bank's prime plus
.50% ("line of credit"). At December 31, 1999, and as of the filing date of this
report, nothing had been drawn on the line of credit. Under the line 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, 1999, the
Company was in full compliance with all such covenants and there are no material
covenants or restrictions in the line of credit which the Company believes would
impair its operations. The line of credit expires September 15, 2000.
During January 2000, the Company solicited finance proposals for equipment
totaling $7,433,840, related to its construction materials processing
operations. In addition, the Company ordered 64 mixer trucks at an estimated
cost of $8,400,000. The Company anticipates the equipment and mixer trucks will
be financed using notes payable and/or operating leases. In February 2000, the
Company ordered an asphalt hot mix plant, which is included in the solicited
finance proposals, with an estimated cost of $1,900,000.
The Company anticipates that a substantial portion of the costs associated
with a planned second ready-mix plant and related equipment will be financed
through bank financing and operating leases. In addition, the Company is
currently leasing approximately 40 ready-mix trucks with annual lease payments
of approximately $882,000.
Management believes that the Company's cash reserves, together with its
lines of credit and its capacity to enter into other financing arrangements are
sufficient to fund its cash requirements for the next 12 months and that the
Company's working capital will be adequate to fund its short term and long term
requirements.
Impact of Inflation
The Company believes that inflation has not had a material impact on its
operations. However, substantial increases in labor costs, worker compensation
rates and employee benefits, equipment costs, material or subcontractor costs
could adversely affect the operations of the Company for future periods.
Year 2000
At this time, the Company has not been adversely affected by the Year
2000. The Company does not anticipate any future disruptions to business, but
cannot be assured that any disruptions to business arising from customers or
vendors may not affect its operations.
Known and Anticipated Future Trends and Contingencies
During 1998 and early 1999, the Company was the focal point of a union
organizing effort spearheaded by the Building and Trades Organizing Project
("BTOP"). In mid-1999 the BTOP reduced its presence in the Las Vegas area and,
as a result, the Company has currently ceased being the target of their
organizing activities.
Subject to the Company's profitability and increases in retained earnings,
it is anticipated that its bonding limits will increase proportionately, thereby
allowing the Company to bid on and perform more and larger projects.
The Company believes that government at all levels will continue to be the
primary source of funding for infrastructure work. TEA-21 establishes a total
budget authority of $215 billion over the six-year period 1998-2003. TEA-21
ensures that tax
17
<PAGE>
revenue deposited into the Highway Trust Fund will be spent on transportation
improvements by guaranteeing $165 billion for highways and $35 billion for
transit and by further stipulating that appropriators can spend trust fund
dollars only on transportation. See "Market Overview".
The competitive bidding process will continue to be the dominant method for
determining contract award. However, other innovative bidding methods will be
tried and may gain favor, namely "A Plus B" contracts, where the bidders'
proposals are selected on both price and scheduling criteria. Design-build
projects are becoming more common and are likely to increase in frequency.
Design-build projects also tend to be of more worth to the owner when the
contract size is substantial, usually $50 million or more.
In light of the rising needs for infrastructure work throughout the nation
and the tendency of the current needs to out-pace the supply of funds, it is
anticipated that alternative funding sources will continue to be sought. Funding
for infrastructure development in the United States is coming from a growing
variety of innovative sources. An increase of funding measures is being
undertaken by various levels of government to help solve traffic congestion and
related air quality problems. Sales taxes, fuel taxes, user fees in a variety of
forms, vehicle license taxes, private toll roads and quasi-public toll roads are
examples of how transportation funding is evolving. Transportation norms are
being challenged by federally mandated air quality standards. Improving traffic
movement, eliminating congestion, increasing public transit, adding or
designating high occupancy vehicle (HOV) lanes to encourage car pooling and
other solutions are being considered in order to help meet EPA-imposed air
quality standards.
Seasonality
The construction industry is seasonal, generally due to inclement weather
occurring in the winter months. Accordingly, the Company may experience a
seasonal pattern in its operating results with lower revenue in the first and
fourth quarters of each calendar year than other quarters. Quarterly results may
also be affected by the timing of bid solicitations by governmental authorities,
the stage of completion of major projects and revenue recognition policies.
Results for any one quarter, therefore, may not be indicative of results for
other quarters or for the year.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Not Applicable
Item 8. Financial Statements and Supplementary Data
The Company's Consolidated Financial Statements are indexed on page F-2.
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, 1999, 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,
1999, which is hereby incorporated by reference.
18
<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, 1999, which is
hereby incorporated by reference.
Item 13. Certain Relationships and Related Transactions
Information on certain relationships and related transactions including
information with respect to management indebtedness will be included under the
caption "Certain Relationships and Related Transactions" and "Information
Regarding Indebtedness of Management to the Company" of the Company's definitive
Proxy Statement relating to the Annual Meeting of Shareholders for the year
ended December 31, 1999, which is hereby incorporated by reference.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
(a)(1) Financial Statements
See Item 8 of Part II hereof.
(a)(2) Financial Statement Schedules
The schedules specified under Regulation S-X are either not
applicable or immaterial to the Company's consolidated
financial statements for the years ended December 31, 1997,
1998 and 1999.
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the fourth
quarter ended December 31, 1999.
(c) Exhibits
Exhibit
No. Title
------- ---------------------------------------------------
1.01 Form of Underwriting Agreement with Spelman & Co.,
Inc. (1)
1.02 Form of Selected Dealer Agreement (1)
1.03 Form of Representatives' Warrant (1)
1.04 Consulting Agreement with the Representative (1)
1.05 Form of Amended Underwriting Agreement (Spelman &
Co., Inc.) (1)
1.06 Form of Amended Representatives' Warrant (Spelman &
Co., Inc.)(1)
1.07 Form of Underwriting Agreement (H D Brous & Co.,
Inc.)(1)
1.08 Form of Selected Dealer Agreement (H D Brous & Co.,
Inc.)(1)
1.09 Form of Representatives' Unit Warrant (H D Brous &
Co., Inc.)(1)
1.10 Warrant Agreement (1)
1.11 Agreement Among Underwriters (1)
1.12 Form of Underwriting Agreement (H D Brous & Co.,
Inc. and Neidiger/Tucker/Bruner, Inc.)(1)
1.13 Form of Agreement Among Underwriters (H D Brous &
Co., Inc. and Neidiger/Tucker/Bruner, Inc.)(1)
19
<PAGE>
Exhibit
No. Title
------- -------------------------------------------------
1.14 Form of Selected Dealer Agreement (H D Brous & Co.,
Inc. and Neidiger/Tucker/Bruner, Inc.)(1)
1.15 Form of Representatives' Warrant Agreement,
including Form of Representatives' Warrant (H D
Brous & Co., Inc. and Neidiger/Tucker/ Bruner, Inc.
)(1)
3.01 Articles of Incorporation and Amendments thereto of
the Registrant (1)
3.02 Bylaws of the Registrant (1)
3.03 Bylaws of the Registrant Effective October 20, 1995
(1)
5.01 Opinion of Gary A. Agron, regarding legality of the
Common Stock (includes Consent)(1)
5.02 Opinion of Gary A. Agron, regarding legality of the
Units, Common Stock and Warrants (1)
10.01 Incentive Stock Option Plan (1)
10.02 Office lease of the Registrant (1)
10.03 Office lease of the Registrant (1)
10.04 Contract between the State of Arizona and the
Registrant dated October 22, 1993 (1)
10.05 Surety Bond between the Registrant and St. Paul
Fire & Marine Insurance Company (1)
10.06 Surety Bond between the Registrant and United States
Fidelity and Guaranty Company (1)
10.07 Contract between Clark County, Nevada and the
Registrant dated October 6, 1992 (1)
10.08 Surety Bond between the Registrant and St. Paul
Fire and Marine Insurance Company (1)
10.09 Agreement between Salt Lake City Corporation and
the Registrant dated May 5, 1993 (1)
10.10 Contract between Clark County, Nevada and the
Registrant dated July 21, 1993 (1)
10.11 Contract between Clark County, Nevada and the
Registrant dated August 17, 1993 (1)
10.12 Promissory Note executed by Robert C. Lewis and
Richard C. Lewis (1)
10.13 Promissory Note executed by Moapa Developers, Inc.
(1)
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 Contact between Clark County, Nevada and the
Registrant dated April 5, 1994 (1)
10.19 Statutory Payment Bond dated September 8, 1994 (1)
10.20 Employment Agreement with Mr. Lewis (1)
10.21 Employment Agreement with Mr. Black (1)
10.22 Employment Agreement with Mr. Terril (1)
10.23 Employment Agreement with Mr. Nelson (1)
10.24 Employment Agreement with Ms. Danley (1)
10.25 Employment Agreement with Mr. Jessop (1)
10.26 Employment Agreement with Mr. Larson (1)
10.27 Stock Purchase Agreement (1)
10.28 Form of Lockup Letter (1)
10.29 Revolving Credit Loan Agreement (1)
20
<PAGE>
Exhibit
No. Title
------- ----------------------------------------------------------------
10.30 Contract Award Notification - Arizona Department of
Transportation (1)
10.31 Contract Award Notification - McCarran International Airport (1)
10.32 Contract Award Notification - City of Henderson (1)
10.33 Contract between Registrant and Arizona Department of
Transportation (1)
10.34 Contract between Registrant and Arizona Department of
Transportation (1)
10.35 Office Lease of the Registrant (1)
10.36 Contract between Registrant and Arizona Department of
Transportation (2)
10.37 Contract Award Notification - Clark County (2)
10.38 Joint Venture Agreement (2)
10.39 Employment Agreement with Mr. Grasmick (2)
10.40 Contract between Registrant and Clark County, Nevada (2)
10.41 Contract between Registrant and Clark County, Nevada (2)
10.42 Contract between Registrant and Utah Department of
Transportation (2)
10.43 Contract between Registrant and Arizona Department of
Transportation (2)
10.44 Promissory Note executed by Nevada State Bank (2)
10.45 Escrow Settlement Documents and related Promissory Note (2)
10.46 Conveyor Sales Contract and Security Agreement (2)
10.47 CAT Financial Installment Sale Contract (2)
10.48 Second and Third Amendments to Office Lease of the Registrant (2)
10.49 Lease Agreement with US Bancorp (2)
10.50 Lease Agreement with CIT Group (2)
10.51 CAT Financial Installment Sale Contract (3)
10.52 CAT Financial Installment Sale Contract (3)
10.53 CAT Financial Installment Sale Contract (3)
10.54 CAT Financial Installment Sale Contract (3)
10.55 CAT Financial Installment Sale Contract (3)
10.56 Escrow Settlement Documents (3)
10.57 Promissory Note executed by General Electric Capital
Corporation (3)
10.58 Promissory Note executed by General Electric Capital
Corporation (3)
10.59 Promissory Note executed by General Electric Capital
Corporation (3)
10.60 Promissory Note executed by General Electric Capital
Corporation (3)
10.61 Promissory Note executed by Nevada State Bank (3)
10.62 KDC Sales Contract (3)
10.63 Lease Agreement with CIT (3)
10.64 Lease Agreement with CIT (3)
10.65 Contract between Registrant and Utah Department of
Transportation (3)
10.66 Contract between Registrant and Clark County, Nevada (3)
10.67 Contract between Registrant and New Mexico State Highway and
Transportation Department (3)
10.68 Contract between Registrant and Salt Lake City Corporation (3)
10.69 Contract between Registrant and Utah Department of
Transportation (3)
10.70 Contract between Registrant and Arizona Department of
Transportation (3)
10.71 Contract between Registrant and Nevada Department of
Transportation (3)
21
<PAGE>
Exhibit
No. Title
------- -----------------------------------------------------------------
10.72 Employment and Indemnification Agreements with Mr. Nelson (3)
10.73 Employment and Indemnification Agreements with Mr. Terril (3)
10.74 Employment and Indemnification Agreements with Mr. Lewis (3)
10.75 Employment and Indemnification Agreements with Mr. Larson (3)
10.76 Employment and Indemnification Agreements with Mr. Burnell (3)
10.77 Lease Agreement with Banc One Leasing Corp. (4)
10.78 Lease Agreement with Banc One Leasing Corp. (4)
10.79 Lease Agreement with Banc One Leasing Corp. (4)
10.80 Lease Agreement with US Bancorp. (4)
10.81 Security Agreement with Associates Commercial Corporation (4)
10.82 Lease Agreement with Caterpillar Financial Services (4)
10.83 Contract between Registrant and Clark County, Nevada (4)
10.84 Contract between Registrant and Arizona Department of
Transportation (4)
10.85 Contract between Registrant and New Mexico State Highway and
Transportation Department (4)
10.87 Contract between Registrant and New Mexico State Highway and
Transportation Department (4)
10.88 Joint Venture Agreement between Registrant and R.E. Monks
Construction Co. (4)
10.89 Contract between Meadow Valley Contractors, Inc./R.E. Monks
Construction Co. (JV) and Arizona Department of Transportation
(4)
10.90 Contract between the Registrant and Utah Department of
Transportation (4)
10.91 Contract between the Registrant and Clark County, Nevada (4)
10.92 General Agreement of Indemnity between the Registrant and Liberty
Mutual Insurance Company (4)
10.93 Employment Agreement with Mr. Larson (4)
10.94 Lease Agreement between the Registrant and Ken Nosker (4)
10.95 Promissory Note executed by General Electric Capital Corporation
10.96 Promissory Note executed by General Electric Capital Corporation
10.97 Promissory Note executed by John Deere Construction Equipment
Company
10.98 Promissory Note executed by John Deere Construction Equipment
Company
10.99 Transfer and Assumption Agreement executed by Associates
Leasing, Inc
10.100 Lease Agreement with Banc One Leasing Corp.
10.101 Lease Agreement with Caterpillar Financial Services
10.102 Lease Agreement with Trinity Capital Corporation
10.103 Lease Agreement with Banc One Leasing Corp.
10.104 Wheeler Machinery Co. Installment Sale Contract
10.105 Wheeler Machinery Co. Installment Sale Contract
10.106 Bank One, Arizona Restated Revolving Line of Credit Note
10.107 Promissory Note executed by General Electric Capital Corporation
10.108 Employment Agreement with Mr. Larson
10.109 Lease Agreement with Banc One Leasing Corp.
10.110 Master Lease Agreement with Banc One Leasing Corp.
10.111 Contract between Registrant and Arizona Department of
Transportation
10.112 Contract between Registrant and Arizona Department of
Transportation
22
<PAGE>
Exhibit
No. Title
------- ---------------------------------------------------------------
10.113 Contract between Registrant and Utah Department of Transportation
10.114 Contract between Registrant and Flood Control District of
Maricopa County
10.115 Contract between Registrant and Johnson and Danley Construction
16.01 Letter re: Change in Certifying Accountant (1)
21.01 Subsidiaries of the Registrant (1)
23.01 Consent of Semple & Cooper (Meadow Valley Contractors, Inc.)(1)
23.02 Consent of Semple & Cooper (Meadow Valley Corporation)(1)
23.03 Consent of Gary A. Agron, Esq. (See 5.01, above.)(1)
23.04 Consent of Semple & Cooper (Meadow Valley Contractors, Inc.)(1)
23.05 Consent of BDO Seidman, LLP (Meadow Valley Corporation)(1)
23.06 Consent of Semple & Cooper (Meadow Valley Contractors, Inc.)(1)
23.07 Consent of BDO Seidman, LLP (Meadow Valley Corporation) (1)
23.08 Consent of Semple & Cooper (Meadow Valley Contractors, Inc.)(1)
23.09 Consent of BDO Seidman, LLP (Meadow Valley Corporation and Meadow
Valley Contractors, Inc.)(1)
23.10 Consent of Semple & Cooper (Meadow Valley Contractors, Inc.)(1)
23.11 Consent of BDO Seidman, LLP (Meadow Valley Corporation and Meadow
Valley Contractors, Inc.)(1)
23.12 Consent of Semple & Cooper (Meadow Valley Contractors, Inc.) (1)
23.13 Consent of BDO Seidman, LLP (Meadow Valley Corporation and Meadow
Valley Contractors, Inc.)(1)
23.14 Consent of Semple & Cooper (Meadow Valley Contractors, Inc.)(1)
23.15 Consent of BDO Seidman, LLP (Meadow Valley Corporation and Meadow
Valley Contractors, Inc.)(1)
27.1 Financial Data Schedule
_________
(1) Incorporated by reference to the Company's Registration Statement on Form
S-1, File Number 33-87750 declared effective on October 16, 1995.
(2) Incorporated by reference to the Company's December 31, 1996 Annual Report
on Form 10-K.
(3) Incorporated by reference to the Company's December 31, 1997 Annual Report
on Form 10-K
(4) Incorporated by reference to the Company's December 31, 1998 Annual Report
on Form 10-K
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
/s/ Bradley E. Larson
-------------------------------
Bradley E. Larson
President and Chief Executive Officer
Date: March 15, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
/s/ Bradley E. Larson /s/ Earle C. May
- ------------------------------------- ------------------------------------
Bradley E. Larson, Earle C. May
Director, President and Chief Executive Director
Officer Date: March 15, 2000
Date: March 15, 2000
/s/ Kenneth D. Nelson /s/ Paul R. Lewis
- ------------------------------------- ------------------------------------
Kenneth D. Nelson, Paul R. Lewis,
Director, Chief Administrative Officer Director and Chief Operating Officer
and Vice President Date: March 15, 2000
Date: March 15, 2000
/s/ Alan A. Terril /s/ Gary A. Agron
- ------------------------------------- ------------------------------------
Alan A. Terril, Gary A. Agron,
Director and Vice President Nevada Director
Operations Date: March 15, 2000
Date: March 15, 2000
/s/ Charles E. Cowan /s/ Charles R. Norton
- ------------------------------------- ------------------------------------
Charles E. Cowan, Charles R. Norton
Director Director
Date: March 15, 2000 Date: March 15, 2000
/s/ Julie L.Bergo
- -------------------------------------
Julie L. Bergo
Secretary and Principal Accounting Officer
Date: March 15, 2000
24
<PAGE>
INDEX TO FINANCIAL STATEMENTS
Meadow Valley Corporation and Subsidiaries
<TABLE>
<S> <C>
Independent Auditors' Report.......................................................................... F-3
Consolidated Balance Sheets at December 31, 1998 and 1999............................................. F-4
Consolidated Statements of Operations for the years ended December 31, 1997, 1998, and 1999........... F-5
Consolidated Statements of Changes in Stockholders' Equity for the years ended December 31,
1997, 1998 and 1999................................................................................... F-6
Consolidated Statements of Cash Flows for the years ended December 31, 1997, 1998 and 1999............ F-7
Notes to Consolidated Financial Statements............................................................ F-9
</TABLE>
F-2
<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 (the "Company") as of December 31, 1998 and 1999,
and the related consolidated statements of operations, changes in stockholders'
equity and cash flows for each of the three years in the period ended December
31, 1999. 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 that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Meadow
Valley Corporation and Subsidiaries as of December 31, 1998 and 1999, and the
consolidated results of their operations, and cash flows for each of the three
years in the period ended December 31, 1999, in conformity with generally
accepted accounting principles.
February 25, 2000
F-3
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, December 31,
Assets: 1998 1999
--------------- ---------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents (Notes 1 and 2)................................... $ 10,993,025 $ 6,177,489
Restricted cash (Notes 1, 2 and 17)......................................... 3,678,685 2,143,507
Accounts receivable, net (Notes 1, 3 and 17)................................ 15,434,491 19,256,882
Prepaid expenses and other.................................................. 1,858,184 1,193,912
Inventory (Note 1).......................................................... - 3,603,517
Note receivable - other (Note 10)........................................... 2,386 -
Costs and estimated earnings in excess of billings on uncompleted
contracts (Note 4)....................................................... 3,850,619 8,858,933
--------------- ---------------
Total Current Assets............................................... 35,817,390 41,234,240
Property and equipment, net (Notes 1, 5, 8, 11, 12 and 22)....................... 10,995,846 15,077,673
Refundable deposits (Note 21).................................................... 191,433 83,680
Note receivable - other (Note 10)................................................ 206,421 -
Goodwill, net (Note 1)........................................................... 1,660,792 1,580,762
Mineral rights................................................................... - 255,168
Net assets of discontinued operations (Note 20).................................. 425,181 193,838
--------------- ---------------
Total Assets..................................................... $ 49,297,063 $ 58,425,361
=============== ===============
Liabilities and Stockholders' Equity:
Current Liabilities:
Notes payable - other (Note 8).............................................. $ 1,145,621 $ 1,304,092
Obligations under capital leases (Note 13).................................. 678,562 1,114,722
Accounts payable (Notes 6 and 11)........................................... 13,797,436 20,807,792
Accrued liabilities (Notes 7 and 11)........................................ 3,091,362 3,387,320
Billings in excess of costs and estimated earnings on uncompleted
contracts (Note 4)........................................................ 11,343,995 8,453,153
--------------- ---------------
Total Current Liabilities........................................ 30,056,976 35,067,079
Deferred income taxes (Notes 1 and 12)........................................... 789,727 1,423,825
Obligations under capital leases (Note 13)....................................... 2,031,316 4,410,854
Note payable - related party (Note 11)........................................... 1,000,000 -
Notes payable - other (Note 8)................................................... 2,946,327 2,710,780
--------------- ---------------
Total Liabilities................................................. 36,824,346 43,612,538
--------------- ---------------
Commitments and contingencies (Notes 9, 11, 13 and 15)
Stockholders' Equity:
Preferred stock - $.001 par value; 1,000,000 shares authorized, none issued
and outstanding (Note 14)................................................. - -
Common stock - $.001 par value; 15,000,000 shares authorized, 3,601,250
issued and 3,501,250 outstanding (Notes 14 and 18)....................... 3,601 3,601
Additional paid-in capital.................................................. 10,943,569 10,943,569
Capital adjustments......................................................... (799,147) (799,147)
Retained earnings........................................................... 2,324,694 4,664,800
--------------- ---------------
Total Stockholders' Equity........................................ 12,472,717 14,812,823
--------------- ---------------
Total Liabilities and Stockholders' Equity........................ $ 49,297,063 $ 58,425,361
=============== ===============
</TABLE>
The Accompanying Notes are an Integral Part of the Consolidated Financial
Statement
F-4
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
For the Years Ended December 31,
--------------------------------------------------------
1997 1998 1999
---------------- --------------- --------------
<S> <C> <C> <C>
Revenue (Note 17)........................................... $ 146,273,286 $ 187,036,077 $ 210,002,272
Cost of revenue (Note 11)................................... 138,411,314 177,591,846 200,070,826
---------------- --------------- --------------
Gross profit................................................ 7,861,972 9,444,231 9,931,446
General and administrative expenses (Note 11)............... 4,689,542 6,359,248 6,671,035
---------------- --------------- --------------
Income from operations...................................... 3,172,430 3,084,983 3,260,411
---------------- --------------- --------------
Other Income (Expense):
Interest income............................................. 666,397 856,191 668,928
Interest expense (Note 11).................................. (624,048) (435,358) (209,872)
Other income................................................ 20,679 86,203 211,119
---------------- --------------- --------------
63,028 507,036 670,175
---------------- --------------- --------------
Income from continuing operations before income taxes....... 3,235,458 3,592,019 3,930,586
Income tax expense (Note 12)................................ (1,162,891) (1,422,440) (1,590,480)
---------------- --------------- --------------
Net income from continuing operations....................... 2,072,567 2,169,579 2,340,106
Discontinued operations (Note 20):
Loss from operations of Prestressed Products subsidiary,
net of income tax benefit of $443,520 and $423,497...... (860,952) (635,246) -
Estimated loss on disposal of net assets of Prestressed
Products subsidiary (net of income tax benefit of
$1,300,000), including $1,350,000 for operating losses
during phase-out period................................. - (1,950,000) -
---------------- --------------- --------------
Net income (loss) (Note 18)................................. $ 1,211,615 $ (415,667) $ 2,340,106
================ =============== ==============
Basic net income (loss) per common share (Note 19):
Income (loss) from continuing operations.................. $ .58 $ .60 $ .67
Loss from operations of Prestressed Products subsidiary... (.24) (.18) -
Estimated loss on disposal of net assets of Prestressed
Products subsidiary..................................... - (.54) -
---------------- --------------- --------------
Basic net income (loss) per common share.................... $ .34 $ (.12) $ .67
================ =============== ==============
Diluted net income (loss) per common share (Note 19):
Income (loss) from continuing operations.................. $ .57 $ .60 $ .66
Loss from operations of Prestressed Products subsidiary... (.24) (.17) -
Estimated loss on disposal of net assets of Prestressed
Products subsidiary..................................... - (.54) -
---------------- --------------- --------------
Diluted net income (loss) per common share.................. $ .33 $ (.11) $ .66
================ =============== ==============
Basic weighted average common shares outstanding
(Note 19)................................................. 3,601,250 3,601,250 3,518,510
================ =============== ==============
Diluted weighted average common shares outstanding
(Note 19)................................................. 3,651,360 3,644,651 3,529,705
================ =============== ==============
</TABLE>
The Accompanying Notes are an Integral Part of the Consolidated Financial
Statements
F-5
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
For the Years Ended December 31, 1997, 1998 and 1999
<TABLE>
<CAPTION>
Common Stock
-----------------------------
Number of
Shares Paid-in Capital Retained
Outstanding Amount Capital Adjustment Earnings
--------------- ----------- ------------ ------------- ------------
<S> <C> <C> <C> <C> <C>
Balance at January 1, 1997........................... 3,601,250 $ 3,601 $ 10,943,569 $ (799,147) $ 1,528,746
Net income for the year.............................. 1,211,615
------------- ---------- ------------ ------------ -----------
Balance at December 31, 1997......................... 3,601,250 3,601 10,943,569 (799,147) 2,740,361
Net loss for the year................................ (415,667)
------------- ---------- ------------ ------------ -----------
Balance at December 31, 1998......................... 3,601,250 3,601 10,943,569 (799,147) 2,324,694
Treasury stock held for funding employer
retirement plan contributions.................... (100,000)
Net income for the year.............................. 2,340,106
------------- ---------- ------------ ------------ -----------
Balance at December 31, 1999......................... 3,501,250 $ 3,601 $ 10,943,569 $ (799,147) $ 4,664,800
============= ========== ============ ============ ===========
</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
<TABLE>
<CAPTION>
For the Years Ended December 31,
---------------------------------------------------
1997 1998 1999
-------------- ----------------- --------------
<S> <C> <C> <C>
Increase (Decrease) in Cash and Cash Equivalents:
Cash flows from operating activities:
Cash received from customers................................. $ 152,130,455 $ 200,534,004 $ 198,476,899
Cash paid to suppliers and employees......................... (143,994,944) (188,760,555) (200,249,598)
Interest received............................................ 615,008 878,517 695,759
Interest paid................................................ (658,622) (488,474) (235,899)
Income taxes paid............................................ (546,070) (1,274,257) (935,496)
-------------- --------------- ---------------
Net cash provided by (used in) operating activities..... 7,545,827 10,889,235 (2,248,335)
-------------- --------------- ---------------
Cash flows from investing activities:
Decrease (increase) in restricted cash....................... (304,191) (1,958,917) 1,535,178
Collection of notes receivable - related party............... - 257,575 -
Collection of note receivable - other........................ 1,184 2,466 208,807
Proceeds from sale of property and equipment................. 322,960 165,182 361,138
Purchase of property and equipment........................... (1,819,960) (588,784) (1,399,815)
Purchase of mineral rights.................................... - - (255,168)
Decrease (increase) in net assets of discontinued
operations................................................ (2,632,315) 2,454,124 231,343
-------------- --------------- ---------------
Net cash provided by (used in) investing activities..... (4,432,322) 331,646 681,483
-------------- --------------- ---------------
Cash flows from financing activities:
Repayment of capital lease obligations....................... (319,428) (645,534) (882,677)
Repayment of notes payable - other........................... (419,432) (897,486) (1,366,007)
Repayment of note payable - related party.................... (1,000,000) (1,500,000) (1,000,000)
-------------- --------------- ---------------
Net cash used in financing activities................... (1,738,860) (3,043,020) (3,248,684)
-------------- --------------- ---------------
Net increase (decrease) in cash and cash equivalents.............. 1,374,645 8,177,861 (4,815,536)
Cash and cash equivalents at beginning of year.................... 1,440,519 2,815,164 10,993,025
-------------- --------------- ---------------
Cash and cash equivalents at end of year.......................... $ 2,815,164 $ 10,993,025 $ 6,177,489
============== =============== ===============
</TABLE>
The Accompanying Notes are an Integral Part of the Consolidated Financial
Statements
F-7
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
<TABLE>
<CAPTION>
For the Years Ended December 31,
----------------------------------------------------------
1997 1998 1999
------------------- ----------------- -----------------
<S> <C> <C> <C>
Increase (Decrease) in Cash and Cash Equivalents (Continued):
Reconciliation of Net Income (Loss) to Net Cash Provided by
(Used in) Operating Activities:
Net Income (loss)..................................................... $ 1,211,615 $ (415,667) $ 2,340,106
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Depreciation and amortization.................................... 1,277,764 1,849,628 2,012,592
(Gain) Loss on sale of property and equipment.................... (24,890) (29,777) 11,886
Deferred income taxes payable.................................... 399,951 377,166 634,098
Changes in Assets and Liabilities:
Accounts receivable, net......................................... 2,770,489 8,685,541 (3,849,222)
Prepaid expenses and other....................................... (152,550) (801,540) 643,386
Costs and estimated earnings in excess of billings on
uncompleted contracts.......................................... (187,147) 62,856 (5,008,314)
Inventory........................................................ - - (3,603,517)
Refundable deposits.............................................. - - (26,027)
Interest payable................................................. (34,574) (53,116) 107,461
Accounts payable................................................. (1,258,450) (4,573,921) 7,010,356
Accrued liabilities.............................................. 100,100 1,301,618 321,985
Billings in excess of costs and estimated earnings on
uncompleted contracts.......................................... 3,278,038 4,693,104 (2,890,842)
Interest receivable.............................................. (51,389) 22,326 26,831
Income tax receivable............................................ 216,870 (228,983) 20,886
-------------- ------------- --------------
Net cash provided by (used in) operating activities................... $ 7,545,827 $ 10,889,235 $ (2,248,335)
============== ============= ==============
</TABLE>
The Accompanying Notes are an Integral Part of the Consolidated Financial
Statements
F-8
<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) and Ready Mix, Inc. (RMI). MVC is a general contractor, primarily engaged
in the construction of structural concrete highway bridges and overpasses, and
the paving of highways and airport runways in the states of Nevada, Arizona,
Utah and New Mexico. RMI is a producer and retailer of ready-mix concrete
operating in the Las Vegas metropolitan area. Formed by the Company, RMI
commenced operations in 1997.
Principles of Consolidation:
The accompanying consolidated financial statements include the accounts of
the Company and its wholly-owned subsidiaries MVC and RMI. Intercompany
transactions and balances have been eliminated in consolidation.
Accounting Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Actual results could differ from those estimates.
Significant estimates are used when accounting for the percentage of
completion and the estimated gross profit on projects in progress, allowance for
doubtful accounts, depreciation and amortization, accruals, taxes, contingencies
and goodwill, which are discussed in the respective notes to the consolidated
financial statements.
Revenue and Cost Recognition:
Revenues and costs from fixed-price and modified fixed-price construction
contracts are recognized for each contract on the percentage-of-completion
method, measured by the percentage of costs incurred to date to the estimated
total of direct costs. Direct costs include, among other things, direct labor,
field labor, equipment rent, subcontracting, direct materials, and direct
overhead. General and administrative expenses are accounted for as period costs
and are, therefore, not included in the calculation of the estimates to complete
construction contracts in progress. Project losses are provided in the period in
which such losses are determined, without reference to the
percentage-of-completion. As contracts can extend over one or more accounting
periods, revisions in costs and earnings estimated during the course of the work
are reflected during the accounting period in which the facts that required such
revisions become known.
Claims for additional contract revenue are recognized only to the extent
that contract costs relating to the claim have been incurred and evidence
provides a legal basis for the claim. During the year ended December 31, 1999,
revenue and costs in the amount of $3,500,000 were recorded related to claims.
The estimated total claims that have been filed or will be filed total
$10,205,211 at December 31, 1999.
The asset "costs and estimated earnings in excess of billings on
uncompleted contracts" represents revenue recognized in excess of amounts
billed. The liability "billings in excess of costs and estimated earnings on
uncompleted contracts" represents billings in excess of revenues recognized.
Restricted Cash:
At December 31, 1998 and 1999 funds in the amount of $3,678,685 and
$2,143,507 were held in trust, in lieu of retention, on certain of the Company's
construction contracts and will be released to the Company after the contracts
are completed.
Inventory:
Inventories, which consist primarily of raw materials, are stated at the
lower of cost, determined by the first-in, first-out method, or market.
Inventory quantities are determined by physical measurements.
Accounts Receivable:
Included in accounts receivable are trade receivables that represent
amounts billed but uncollected on completed construction contracts and
construction contracts in progress.
F-9
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1. Summary of Significant Accounting Policies (Continued):
Accounts Receivable (Continued):
The Company follows the allowance method of recognizing uncollectible
accounts receivable. The allowance method recognizes bad debt expense based on a
review of the individual accounts outstanding, and the Company's prior history
of uncollectible accounts receivable. At December 31, 1998 and December 31, 1999
the Company had established an allowance for potentially uncollectible accounts
receivable in the amounts of $59,178 and $97,324. During the years ended
December 31, 1997, 1998 and 1999 the Company incurred bad debt expense in the
amounts of $35,441, $59,273 and $79,681.
Property and Equipment:
Property and equipment are recorded at cost. Depreciation charged to
operations during the years ended December 31, 1997, 1998 and 1999 was
$1,185,147, $1,757,422 and $1,932,272. Depreciation is provided for on the
straight-line method, over the following estimated useful lives.
Plant 15 years
Computer equipment 5-7 years
Equipment 5-10 years
Vehicles 5 years
Office furniture and equipment 7 years
Leasehold Improvements 2-5 years
At December 31, 1998 and 1999, property and equipment with a net book value
of $7,219,459 and $10,872,442 were pledged as collateral for notes payable and
capital lease obligations.
Goodwill:
Goodwill represents the excess of the costs of acquiring Meadow Valley
Contractors, Inc. over the fair value of its net assets and is being amortized
on the straight-line method over twenty-five (25) years. Amortization expense
charged to operations for each of the years ended December 31, 1997, 1998 and
1999 was $80,029. The carrying value of goodwill will be periodically reviewed
by the Company and impairments, if any, will be recognized when expected future
operating cash flows derived from goodwill is less than its carrying value.
Tradename:
On January 2, 1996, the Company acquired the tradename of AKR Contracting
in the amount of $36,531. The tradename amortization is provided for on a
straight line basis over three years. Amortization expense charged to operations
in each of the years ended December 31, 1997 and 1998 was $12,177.
Income Taxes:
The Company accounts for income taxes in accordance with the Financial
Accounting Standards No. 109, "Accounting for Income Taxes" (SFAS 109). SFAS 109
requires the Company to recognize deferred tax assets and liabilities for the
expected future tax consequences of events that have been recognized in a
Company's financial statements or tax returns. Under this method, deferred tax
assets and liabilities are determined based on the difference between the
financial statement carrying amounts and tax basis of assets and liabilities
using enacted tax rates in effect in the years in which the differences are
expected to reverse. The Company files consolidated tax returns with MVC, RMI
and PPI for federal and state tax reporting purposes.
Cash Flow Recognition:
For purposes of the statement of cash flows, the Company considers all
highly liquid instruments purchased with an initial maturity of three (3) months
or less to be cash equivalents.
Fair Value of Financial Instruments:
The carrying amounts of financial instruments including cash, restricted
cash, accounts receivable, costs and estimated earnings in excess of billings on
uncompleted contracts, current maturities of long-term debt, accounts payable,
billings in excess of costs and estimated earnings on uncompleted contracts,
accrued liabilities and long-term debt approximate fair value because of their
short maturity.
F-10
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
1. Summary of Significant Accounting Policies (Continued):
Accounting for the Impairment of Long-Lived Assets and Long-Lived Assets to
Be Disposed of:
Statement of Financial Accounting Standards No. 121, "Accounting for the
Impairment of Long-Lived Assets and Long-Lived Assets to be Disposed of" (SFAS
121) establishes new guidelines regarding when impairment losses on long-lived
assets, which include plant and equipment, and certain identifiable intangible
assets, should be recognized and how impairment losses should be measured.
Stock-Based Compensation:
Statements of Financial Accounting Standards No. 123, "Accounting for
Stock-Based Compensation" (SFAS No. 123) establishes a fair value method of
accounting for stock-based compensation plans and for transactions in which an
entity acquires goods or services from nonemployees in exchange for equity
instruments. SFAS 123 also encourages, but does not require companies to record
compensation cost for stock-based employee compensation. The Company has chosen
to continue to account for stock-based compensation utilizing the intrinsic
value method prescribed in Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees." Accordingly, compensation cost for
stock options is measured as the excess, if any, of the fair market price of the
Company's stock at the date of grant over the amount an employee must pay to
acquire the stock.
Earnings per Share:
Statement of Financial Accounting Standards No. 128, "Earnings per Share,"
("SFAS 128") provides for the calculation of Basic and Diluted earnings per
share. Basic earnings per share includes no dilution and is computed by dividing
income available to common shareholders by the weighted average number of common
shares outstanding for the period. Diluted earnings per share reflects the
potential dilution of securities that could share in the earnings of an entity,
similar to fully diluted earnings per share. The Company adopted this accounting
standard on December 15, 1997. The effect of adopting this standard was that
diluted earnings per share for the year ended December 31, 1997, decreased by
$.01 over the calculations under APB Opinion No. 15. There was no effect on
prior years.
Reporting Comprehensive Income:
Statement of Financial Accounting Standard No. 130, "Reporting
Comprehensive Income," ("SFAS 130") establishes standards for reporting and
display of comprehensive income and its components in a full set of
general-purpose financial statements. The Company adopted this accounting
standard on December 15, 1997. There was no effect on the financial position or
results of operations for all years presented.
Disclosures about Segments of an Enterprise and Related Information:
Statement of Financial Accounting Standards No. 131, "Disclosures about
Segments of an Enterprise and Related Information," ("SFAS 131") requires that
public companies report certain information about operating segments, products,
services and geographical areas in which they operate and their major customers.
The Company adopted this accounting standard on December 15, 1997. There was no
material effect on the financial position or results of operations as the
Company operates in one segment.
Reporting on the Costs of Start-Up Activities:
Statement of Position 98-5, "Reporting on the Costs of Start-Up
Activities," ("SOP 98-5"), issued by the American Institute of Certified Public
Accountants is effective for years beginning after December 15, 1998. Early
adoption is permitted. SOP 98-5 requires that costs of start-up activities
should be expensed as incurred. The Company adopted this accounting standard
this year and there was no material effect on the financial position or results
of operations.
2. Concentration of Credit Risk:
The Company maintains cash balances at various financial institutions.
Deposits not to exceed $100,000 for each institution are insured by the Federal
Deposit Insurance Corporation. At December 31, 1998 and December 31, 1999, the
Company has uninsured cash, cash equivalents, and restricted cash in the amount
of $16,909,324and $9,682,808.
F-11
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
3. Accounts Receivable:
Following is a summary of receivables at December 31, 1998 and 1999:
<TABLE>
<CAPTION>
December 31, December 31,
1999 1999
------------ ------------
<S> <C> <C>
Contracts in progress........................ $ 9,249,373 $ 8,046,857
Contracts in progress - retention............ 2,627,812 7,543,315
Completed contracts.......................... 10,063 3,000
Completed contracts - retention.............. 412,310 598,408
Other trade receivables...................... 2,624,593 3,068,583
Other receivables............................ 569,518 94,043
------------ ------------
15,493,669 19,354,206
Less: Allowance for doubtful accounts (59,178) (97,324)
------------ ------------
$ 15,434,491 $ 19,256,882
============ ============
</TABLE>
4. Contracts in Progress:
Costs and estimated earnings in excess of billings and billings in
excess of costs and estimated earnings on uncompleted contracts consist of the
following:
<TABLE>
<CAPTION>
December 31, December 31,
1998 1999
-------------- -------------
<S> <C> <C>
Costs incurred on uncompleted contracts........ $ 314,134,398 $ 395,414,292
Estimated earnings to date..................... 17,538,432 19,077,844
-------------- -------------
331,672,830 414,492,136
Less: billings to date......................... (339,166,206) (414,086,356)
-------------- -------------
$ (7,493,376) $ 405,780
============== =============
</TABLE>
Included in the accompanying balance sheet under the following
captions:
<TABLE>
<CAPTION>
December 31, December 31,
1998 1999
---------------- ----------------
<S> <C> <C>
Costs and estimated earnings in excess of billings on
uncompleted contracts............................... $ 3,850,619 $ 8,858,933
Billings in excess of costs and estimated earnings on
uncompleted contracts............................... (11,343,995) (8,453,153)
--------------- ---------------
$ (7,493,376) $ 405,780
=============== ===============
</TABLE>
F-12
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
5. Property and Equipment:
Property and equipment consists of the following:
<TABLE>
<CAPTION>
December 31, December 31,
1998 1999
----------------- ----------------
<S> <C> <C>
Land.................................................... $ 827,206 $ 852,243
Plant................................................... 2,804,757 6,013,967
Computer equipment...................................... 306,902 324,710
Equipment............................................... 7,746,895 10,389,473
Vehicles (Note 13)...................................... 2,808,540 2,449,844
Office furniture and equipment.......................... 50,311 50,311
Leasehold improvements.................................. 6,863 8,926
---------------- ----------------
14,551,474 20,089,474
Accumulated depreciation................................ (3,555,628) (5,011,801)
---------------- ----------------
$ 10,995,846 $ 15,077,673
================ ================
</TABLE>
6. Accounts Payable:
Accounts payable consist of the following:
<TABLE>
<CAPTION>
December 31, December 31,
1998 1999
----------------- -----------------
<S> <C> <C>
Trade.................................................... $ 10,027,339 $ 13,934,908
Retentions............................................... 3,770,097 6,872,884
---------------- ----------------
$ 13,797,436 $ 20,807,792
================ ================
</TABLE>
7. Accrued Liabilities:
Accrued liabilities consist of the following:
<TABLE>
<CAPTION>
December 31, December 31,
1998 1999
----------------- -----------------
<S> <C> <C>
Compensation.............................................. $ 1,275,775 $ 1,516,610
Outside service........................................... - 524,780
Interest.................................................. 26,027 -
Taxes..................................................... 610,254 534,388
Insurance................................................. 534,699 224,456
Other..................................................... 644,607 587,086
--------------- ----------------
$ 3,091,362 $ 3,387,320
=============== ================
</TABLE>
F-13
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
8. Notes payable - other:
Notes payable - other consist of the following:
<TABLE>
<CAPTION>
December 31, December 31,
1998 1999
---------------- -----------------
<S> <C> <C>
Notes payable, interest rates ranging from 6.382% to 10% with monthly payments
of $106,129, due dates ranging from 12/18/99 to 1/1/03,
collateralized by equipment......................................................... $ 3,615,618 $ 2,479,456
Notes payable, interest rates ranging from 9.0% to 9.33% with monthly payments
of $9,958, due dates ranging from 8/15/03 to 12/31/04,
collateralized by land.............................................................. 476,330 398,825
Note payable, interest rate of 6.28% with monthly payments of $1,316,
due 12/25/03, collateralized by equipment........................................... - 55,282
Note payable, interest rate of 7.15% with monthly payments of $5,529,
due 2/19/04, collateralized by equipment............................................ - 238,480
Note payable, interest rate of 7.81% with monthly payments of $6,840,
due 6/4/04, collateralized by equipment............................................. - 305,763
Note payable, interest rate of 3.9% with monthly payments of $2,499, due
7/1/03, collateralized by equipment................................................. - 97,987
Note payable, interest rate of 7.75% with monthly payments of $1,367,
due 7/1/03, collateralized by equipment............................................. - 50,169
Note payable, interest rate of 6.28% with monthly payments of $1,946,
due 12/1/03, collateralized by equipment............................................ - 80,915
Note payable, interest rate of 6.96% with monthly payments of $7,239,
due 1/15/04, collateralized by equipment............................................ - 307,995
--------------- ---------------
4,091,948 4,014,872
Less: current portion............................................................... (1,145,621) (1,304,092)
--------------- ---------------
$ 2,946,327 $ 2,710,780
=============== ===============
</TABLE>
Following are maturities of long-term debt for each of the next 5 years:
2000..................... $ 1,304,092
2001..................... 1,055,516
2002..................... 980,109
2003..................... 592,248
2004..................... 82,907
--------------
$ 4,014,872
==============
9. Line of Credit:
At December 31, 1999, the Company had available from a commercial bank
a $2,000,000 operating line of credit ("line of credit") at an interest rate of
8.5%, the commercial bank's prime, plus .50%. At December 31, 1999, nothing had
been drawn on the line of credit. Under the line 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, 1999, the Company was in
compliance with all such covenants. The line of credit expires September 15,
2000.
F-14
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
10. Note receivable - other:
Note receivable - other consist of the following:
<TABLE>
<CAPTION>
December 31, December 31,
1998 1999
----------------- -------------------
<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.................................. $ 208,807 $ -
Less: current portion................................................................ (2,386) -
-------------- ------------
$ 206,421 $ -
============== ============
</TABLE>
11. Related Party Transactions:
Note receivable - related party:
Note receivable - related party consists of a 6% note receivable from a
corporate officer, dated December 15, 1994, due June 15, 1997, collateralized by
100,000 share of the Company's common stock. During June 1997, the Company
extended the due date to June 15, 1998. Note receivable - related party was
$257,575 at December 31, 1997. During January 1998, the note receivable -
related party was paid in full.
Equipment:
During the year ended December 31, 1998, the Company purchased
equipment used in the construction business from a related party in the amount
of $295,000.
Professional Services:
During the years ended December 31, 1997, 1998 and 1999, a related
party rendered professional services to the Company in the amounts of $16,060,
$10,904 and $7,944. During each of the years ended December 31, 1997, 1998 and
1999, the Company paid outside board of directors a total of $5,000.
Subcontractor/Supplier:
Various related parties provided materials and equipment used in the
Company's construction business during the years ended December 31, 1997, 1998
and 1999, in the amounts of $153,189, $191,694 and $65,441. Included in accounts
payable at December 31, 1998 and 1999 are amounts due to related parties, in the
amount of $1,114 and $821, related to supplies.
Royalties:
During the years ended December 31, 1997, 1998 and 1999, the Company
paid various related parties mining royalties in the amounts of $76,392,
$186,949 and $182,061. Included in accounts payable at December 31, 1998 and
1999 are amounts due to related parties, in the amount of $10,424 and $1,158,
related to royalties.
Accrued Interest:
During the years ended December 31, 1997 and 1998, the Company incurred
interest expense in the amounts of $412,842 and $243,322 related to notes
payable to a principal stockholder. Included in accrued liabilities at December
31, 1998 are amounts due to related parties, in the amounts of $26,027. During
January 1998, the accrued interest receivable in the amount of $15,793 was paid
in full.
Note payable - related party:
<TABLE>
<CAPTION>
December 31, December 31,
1998 1999
------------------ ----------------
<S> <C> <C>
12.5% note payable from a related party, due October 16, 2000, due in
equal annual installments of $1,000,000 plus accrued interest............ $ 1,000,000 $ -
Less: current portion.................................................... - -
-------------- -----------
$ 1,000,000 $ -
============== ===========
</TABLE>
F-15
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
11. Related Party Transactions (Continued):
Commitments:
The Company leases office space in Moapa, Nevada on a month-to-month
basis from a Company controlled by a principal stockholder with monthly payments
of $840. The lease terms also require the Company to pay common area
maintenance, taxes, insurance and other costs. Rent expense under the lease for
the year ended December 31, 1997, 1998 and 1999 amounted to $9,600, $10,040 and
$10,080, respectively.
The Company leased additional space for its prestressed concrete
operations on a month-to-month basis from a Company controlled by a principal
stockholder with monthly payments of $2,500. The lease terminated January 31,
1999 under the plan to discontinue operations of PPI. Rent expense under the
lease for the years ended December 31, 1997 and 1998 amounted to $30,000 and
$42,369.
12. Income Taxes:
The provisions for income taxes from continuing operations consist of
the following:
<TABLE>
<CAPTION>
For the Years Ended December 31,
----------------------------------------------------------------------
1997 1998 1999
----------------------- ------------------------ --------------------
<S> <C> <C> <C>
Current:
Federal................................... $ 669,566 $ 932,032 $ 851,180
State..................................... 93,374 113,242 105,202
--------------- ----------------- ---------------
762,940 1,045,274 956,382
Deferred....................................... 399,951 377,166 634,098
--------------- ----------------- ---------------
$ 1,162,891 $ 1,422,440 $ 1,590,480
=============== ================= ===============
</TABLE>
The Company's deferred tax liability consists of the following, all of
which is long-term in nature:
<TABLE>
<CAPTION>
December 31, December 31,
1998 1999
---------------------- ------------------------
<S> <C> <C>
Deferred tax asset:
Other...................................... $ 34,107 $ 129,461
Deferred tax liability:
Depreciation.............................. (823,834) (1,553,286)
-------------- ----------------
Net deferred tax liability.................... $ (789,727) $ (1,423,825)
============== ================
</TABLE>
For the years ended December 31, 1997, 1998 and 1999, the effective tax
rate differs from the federal statutory rate primarily due to state income
taxes.
13. Commitments:
The Company is currently leasing office space in Phoenix, Arizona under
a non-cancelable operating lease agreement expiring in December 2000. During
December 1998, the Company amended the original lease. The amended lease
agreement provides for monthly payments of $6,998 through December 31, 1999 and
$7,431 from January 1, 2000 through December 31, 2000. The lease also requires
the Company to pay common area maintenance, taxes, insurance and other costs.
Rent under the aforementioned operating lease was $56,576, $66,117 and $89,152
for the years ended December 31, 1997, 1998 and 1999.
F-16
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
13. Commitments (Continued):
The Company leases equipment under operating leases expiring on various
years through 2006. Rent under the aforementioned operating lease was
$1,351,805, $1,839,891 and $2,374,109 for the years ended December 31, 1997,
1998 and 1999. Minimum future rental payments under non-cancelable operating
leases having remaining terms in excess of one year as of December 31, 1999 for
each of the next five years in aggregate are:
<TABLE>
<CAPTION>
Year Ended December 31, Amount
--------------------------------------------------------
<S> <C>
2000................................... $ 2,511,950
2001................................... 2,289,385
2002................................... 1,203,657
2003................................... 934,882
Subsequent to 2003..................... 1,098,224
---------------
Total minimum payments................. $ 8,038,098
===============
</TABLE>
The Company has entered into employment contracts with each of its
executive officers that provide for an annual salary, issuance of the Company's
common stock and various other benefits and incentives. At December 31, 1998 and
1999, the total commitments, excluding benefits and incentives amount to
$1,011,250 and $1,530,438.
The Company is the lessee of vehicles and equipment under capital
leases expiring in various years through 2006. The assets and liabilities under
a capital lease are initially recorded at the lower of the present value of the
minimum lease payments or the fair value of the asset. Each asset is depreciated
over its expected useful life. Depreciation on the assets under capital leases
charged to expense in 1997, 1998 and 1999 was $298,283, $533,008 and $1,152,306.
At December 31, 1998 and 1999, property and equipment included $2,785,777 and
$5,893,238, net of accumulated depreciation, of vehicles and equipment under
capital leases.
Minimum future lease payments under capital leases as of December 31,
1999 for each of the next five years and in aggregate are:
<TABLE>
<CAPTION>
Year Ended December 31, Amount
-------------------------------------------------------------
<S> <C>
2000............................................$ 1,519,499
2001............................................ 1,359,971
2002............................................ 1,139,056
2003............................................ 979,301
2004............................................ 1,802,621
Subsequent to 2004.............................. -
------------
Total minimum payments.......................... 6,800,448
Less: executory costs........................... (20,145)
------------
Net minimum lease payments...................... 6,780,303
Less: amount representing interest.............. (1,254,727)
------------
Present value of net minimum lease payment .....$ 5,525,576
============
</TABLE>
14. Stockholders' Equity:
Preferred Stock:
The Company has authorized 1,000,000 shares of $.001 par value
preferred stock to be issued, with such rights, preferences, privileges, and
restrictions as determined by the Board of Directors.
F-17
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
14. Stockholders' Equity (Continued):
Initial Public Offering:
During October 1995, the Company completed an initial public offering
("Offering") of Units of the Company's securities. Each unit consisted of one
share of $.001 par value common stock and one redeemable common stock purchase
warrant ("Warrant"). Each Warrant is exercisable to purchase one share of common
stock at $7.20 per share for a period of 5 years from the date of the Offering.
The Offering included the sale of 1,926,250 Units at $6.00 per Unit. Net
proceeds of the Offering, after deducting underwriting commissions and offering
expenses of $2,122,080, amounted to $9,435,420. In connection with the Offering,
the Company granted the underwriters warrants to purchase 167,500 shares of
common stock at $7.20 per share for a period of twelve months from the date of
the offering and for a period of four years thereafter.
15. Litigation Matters:
The Company is defending a claimed preference in connection with a
payment made to it by an insurance Company in the approximate amount of
$100,000. The Company believes that the payment is not a preference, and is
vigorously defending the action.
16. Statement of Cash Flows:
Non-Cash Investing and Financing Activities:
The Company recognized investing and financing activities that affected
assets, liabilities, and equity, but did not result in cash receipts or
payments. These non-cash activities are as follows:
During the years ended December 31, 1997, 1998 and 1999, the Company
financed the purchase of property, plant and equipment in the amount of
$3,658,608, $3,273,137 and $4,987,308.
During the year ended December 31, 1999, the Company received $135,000
trade in value on equipment.
17. Significant Customers:
For the years ended December 31, 1997, 1998 and 1999, the Company
recognized a significant portion of its revenue from four Customers (shown as an
approximate percentage of total revenue):
<TABLE>
<CAPTION>
For the Years Ended December 31,
----------------------------------------------------------------------
1997 1998 1999
----------------------- ------------------------ --------------------
<S> <C> <C> <C>
A............................. 27.8% 29.9% 26.2%
B............................. 33.0% 12.5% 28.7%
C............................. 7.6% 24.3% 17.2%
</TABLE>
At December 31, 1998 and 1999, amounts due from the customers that are
greater than 10% included in restricted cash and accounts receivables, are as
follows:
<TABLE>
<CAPTION>
December 31,
--------------------------------------
1998 1999
------------- ----------------
<S> <C> <C>
A..................................... $ 8,369,999 $ 4,947,425
B..................................... 1,805,712 8,866,348
C..................................... 1,709,294 1,082,888
</TABLE>
F-18
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
18. Stock Option Plan:
In November, 1994, the Company adopted a Stock Option Plan providing
for the granting of both qualified incentive stock options and non-qualified
stock options. The Company has reserved 1,200,000 shares of its common stock for
issuance under the Plan. Granting of the options is at the discretion of the
Board of Directors and may be awarded to employees and consultants. Consultants
may receive only non-qualified stock options. The maximum term of the stock
options are 10 years and may be exercised as follows: 33.3% after one year of
continuous service, 66.6% after two years of continuous service and 100.0% 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 Price
Shares Per Share
--------------- --------------------------
<S> <C> <C>
Outstanding January 1, 1998.............................................. 524,025 $ 5.87
Granted............................................................. 144,350 5.28
Forfeited........................................................... (46,300) 5.28
-----------
Outstanding December 31, 1998............................................ 622,075 5.43
Granted............................................................. (165,500) 5.43
Forfeited........................................................... (14,700) 5.43
-----------
Outstanding December 31, 1999............................................ 772,875 5.12
===========
</TABLE>
Information relating to stock options at December 31, 1999 summarized
by exercise price are as follows:
<TABLE>
<CAPTION>
Outstanding Exercisable
-------------------------------------------------- ------------------------------------
Weighted Average Weighted Average
----------------------------------- -----------------------
Exercise Price Per Share Shares Life (Year) Exercise Price Shares Exercise Price
- ------------------------------ -------- ------------- ---------------- -------- -----------------------
<S> <C> <C> <C> <C> <C>
$6.25 196,250 10 $ 6.25 196,250 $ 6.25
$4.375 to $5.41 198,225 10 5.36 198,225 5.36
$5.31 80,000 10 5.31 53,333 5.31
$5.875 132,900 10 5.875 44,300 5.875
$4.563 20,000 10 4.563 - -
$4.00 20,000 10 4.00 - -
$3.875 125,500 10 3.875 - -
- ------------------------------ -------- ------- ---------- -------- --------
$3.875 to $6.25 772,875 10 $ 5.12 492,108 $ 5.12
============================== ======== ======= ========== ======== ========
</TABLE>
F-19
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
18. Stock Option Plan (Continued):
All stock options issued to employees have an exercise price not less
than the fair market value of the Company's Common Stock on the date of grant.
In accordance with accounting for such options utilizing the intrinsic value
method, there is no related compensation expense recorded in the Company's
financial statements for the years ended December 31, 1997, 1998 and 1999. Had
compensation cost for stock-based compensation been determined based on the fair
value of the options at the grant dates consistent with the method of SFAS 123,
the Company's net income and earnings per share for the years ended December 31,
1997, 1998 and 1999 would have been reduced to the proforma amounts presented
below:
<TABLE>
<CAPTION>
1997 1998 1999
------------- ------------ -------------
<S> <C> <C> <C>
Net income (loss)
As reported......................................... $ 1,211,615 $ (415,667) $ 2,340,106
Proforma............................................ 989,003 (933,371) 1,784,024
Basic net income (loss) per common share
As reported......................................... $ .34 $ (.12) $ .67
Proforma............................................ .26 (.24) .44
Diluted net income (loss) per common share
As reported......................................... $ .33 $ (.11) $ .66
Proforma............................................ .26 (.23) .44
</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 1997 and 1998: expected life of options of 5
years, expected volatility of 48.65%, risk-free interest rates of 8.0%, and a 0%
dividend yield and 1999: expected life of options of 5 years, expected
volatility of 54.87%, risk-free interest rates of 8.0%, and a 0% dividend yield.
The weighted average fair value at date of grant for options granted during
1997, 1998 and 1999 approximated $1.01, $1.44 and $1.13.
19. Basic Earnings (Loss) Per Share:
The Company's basic net income (loss) per share at December 31, 1997
and 1998 was computed by dividing net income for the period by 3,601,250, the
basic weighted average number of common shares outstanding during the period.
The Company's basic net income per share at December 31, 1999 was
computed by dividing net income for the period by 3,518,510, the basic weighted
average number of common shares outstanding during the period.
The Company's diluted net income per common share at December 31, 1997
includes 50,110 common shares that would be issued upon exercise of outstanding
stock options. Options to purchase 217,200 at $6.25 per share were outstanding
during 1997, but were not included in the computation of diluted net income per
common share because the options' exercise price was greater than the average
market price of the common share.
The Company's diluted net income per common share at December 31, 1998
includes 43,401 common shares that would be issued upon exercise of outstanding
stock options. Options to purchase 199,500 at $6.25 per share and options to
purchase 142,550 at $5.875 per share were outstanding during 1998, but were not
included in the computation of diluted net income per common share because the
options' exercise price was greater than the average market price of the common
share.
The Company's diluted net income per common share at December 31, 1999
includes 11,195 common shares that would be issued upon exercise of outstanding
stock options. Options to purchase 429,705 at a range of $5.31 to $6.25 per
share were outstanding during 1999, but were not included in the computation of
diluted net income per common share because the options' exercise price was
greater than the average market price of the common share.
F-20
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
20. Discontinued Operations:
In June 1998, the Company adopted a formal plan ( the "plan") to
discontinue the operations of Prestressed Products Incorporated ("PPI"). The
plan included the completion of approximately $2.8 million of uncompleted
contracts and the disposition of approximately $1.2 million of equipment.
Accordingly, the Company has reclassified the operations of PPI as discontinued
operations in the accompanying statements of operations. The Company recorded an
estimated loss of $1,950,000 (net of income tax benefit of $1,300,000), related
to the disposal of assets for PPI, which included a provision of $1,350,000 for
estimated operating losses during the phase-out period. During the year ended
December 31, 1998 and 1999, $1,134,112 and $598,172 of the expected losses were
incurred (net of income tax benefit of $756,073 and $398,743).
Operating results of PPI for the six months ended June 30, 1998 are
shown separately in the accompanying statement of operations. The statements of
operations for the year ended December 31, 1997 have been restated and operating
results of PPI are also shown separately.
The revenue of PPI for the years ended December 31, 1997, 1998 and 1999
were $3,706,109, $5,419,036 and $1,460,381. These amounts are not included in
revenue in the accompanying statements of operations.
The accompanying consolidated balance sheets as of December 31, 1998 and
December 31, 1999, have been restated to reflect the net liabilities and the
estimated loss as a single amount as follows:
<TABLE>
<CAPTION>
December 31,
--------------------------------
1998 1999
------------- ------------
<S> <C> <C>
Current assets.......................................... $ 1,204,192 $ 653,668
Non-current assets...................................... 481,331 -
Liabilities............................................. (444,454) (242,113)
------------- ------------
Net assets........................................... 1,241,069 411,555
Estimated loss on disposition........................... (815,888) (217,717)
------------- ------------
Net assets of discontinued operations................... $ 425,181 $ 193,838
============= ============
</TABLE>
21. Subsequent Events:
During January 2000, the Company purchased equipment totaling $143,167.
In addition, the Company made a deposit of $128,000 related to the ordering of
64 ready mix trucks, with an estimated cost of $8,400,000.
During January 2000, the Company solicited finance proposals for
equipment totaling $7,433,840, related to its construction materials processing
operations. The Company anticipates the equipment and mixer trucks will be
financed using notes payable and/or operating leases.
During February 2000, the Company made a deposit of $20,000 related to
the ordering of an asphalt plant, with an estimated cost of $1,900,000.
F-21
<PAGE>
MEADOW VALLEY CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
22. Year 2000 (Unaudited):
At this time, the Company has not been adversely affected by the Year
2000. The Company does not anticipate any future disruptions to business, but
cannot be assured that any disruptions to business arising from customers or
vendors may not affect its operations.
F-22
<PAGE>
EXHIBIT 10.95
PROMISSORY NOTE
2/19/99
----------------
(Date)
4411 S. 40th Street, Suite D-11, Phoenix, Maricopa County, AZ 85040
- --------------------------------------------------------------------------------
(Address of Maker)
FOR VALUE RECEIVED, Meadow Valley Contractors, Inc. ("Maker") promises, jointly
and severally if more than one, to pay to the order of General Electric Capital
Corporation or any subsequent holder hereof (each, a "Payee") at its office
located at One Lincoln Centre, 5400 LBJ Freeway Suite 1280, L.B. 3, Dallas, TX
75240 or at such other place as Payee or the holder hereof may designate, the
principal sum of Two hundred seventy-eight thousand two hundred fifty and no/100
Dollars ($278,250.00), with interest on the unpaid principal balance, from the
date hereof through and including the dates of payment, at a fixed, simple
interest rate of Seven and 15/100 percent (7.15%) per annum, to be paid in
lawful money of the United States, in Sixty (60) consecutive monthly
installments of principal and interest as follows:
Periodic
Installment Amount
----------- ------
1 thru 59 $ 5,529.40
each ("Periodic Installment") and a final installment which shall be in the
amount of the total outstanding principal and interest. The first Periodic
Installment shall be due and payable on March 15, 1999 and the following
Periodic Installments and the final installment shall be due and payable on the
same day of each succeeding period (each, a "Payment Date"). All payments shall
be applied first to interest and then to principal. The acceptance by Payee of
any payment which is less than payment in full of all amounts due and owing at
such time shall not constitute a waiver of Payee's right to receive payment in
full at such time or at any prior or subsequent time. Interest shall be
calculated on the basis of a 365 day year (366 day leap year). The payment of
any Periodic Installment after its due date shall result in a corresponding
decrease in the portion of the Periodic Installment credited to the remaining
unpaid principal balance. The payment of any Periodic Installment prior to its
due date shall result in a corresponding increase in the portion of the Periodic
Installment credited to the remaining unpaid principal balance.
The Maker hereby expressly authorizes the Payee to insert the date value is
actually given in the blank space on the face hereof and on all related
documents pertaining hereto.
This Note may be secured by a security agreement, chattel mortgage, pledge
agreement or like instrument (each of which is hereinafter called a "Security
Agreement").
Time is of the essence hereof. If any installment or any other sum due under
this Note or any Security Agreement is not received within ten (10) days after
its due date, the Maker agrees to pay, in addition to the amount of each such
installment or other sum, a late payment charge of five percent (5%) of the
amount of said installment or other sum, but not exceeding any lawful maximum.
If (i) Maker fails to make payment of any amount due hereunder within ten (10)
days after the same becomes due and payable; or (ii) Maker is in default under,
or fails to perform under any term or condition contained in any Security
Agreement, then the entire principal sum remaining unpaid, together with all
accrued interest thereon and any other sum payable under this Note or any
Security Agreement, at the election of Payee, shall immediately become due and
payable, with interest thereon at the lesser of eighteen percent (18%) per annum
or the highest rate not prohibited by applicable law from the date of such
accelerated maturity until paid (both before and after any judgment).
The Maker may prepay in full, but not in part, its entire indebtedness hereunder
upon payment of the entire indebtedness plus an additional sum as a premium
equal to the following percentages of the original principal balance for the
indicated period:
Prior to the first annual anniversary date of this Note:
One percent (1%)
and zero percent (0%) thereafter, plus all other sums due hereunder or under any
Security Agreement.
It is the intention of the parties hereto to comply with the applicable usury
laws; accordingly, it is agreed that, notwithstanding any provision to the
contrary in this Note or any Security Agreement, in no event shall this Note or
any Security Agreement require the payment or permit the collection of interest
in excess of the maximum amount permitted by applicable law. If any such excess
interest is contracted for, charged or received under this Note or any Security
Agreement, or if all of the principal balance shall be prepaid, so that under
any of such circumstances the amount of interest contracted for, charged or
received under this Note or any Security Agreement on the principal balance
shall exceed the maximum amount of interest permitted by applicable law, then in
such event (a) the provisions of this paragraph shall govern and control, (b)
neither Maker nor any other person or entity now or hereafter liable for the
payment hereof shall be obligated to pay the amount of such interest to the
extent that it is in excess of the maximum amount of interest permitted by
applicable law, (c) any such excess which may have been collected shall be
either applied as a credit against the then unpaid principal balance or refunded
to Maker, at the option of the Payee, and (d) the effective rate of
<PAGE>
interest shall be automatically reduced to the maximum lawful contract rate
allowed under applicable law as now or hereafter construed by the courts having
jurisdiction thereof. It is further agreed that without limitation of the
foregoing, all calculations of the rate of interest contracted for, charged or
received under this Note or any Security Agreement which are made for the
purpose of determining whether such rate exceeds the maximum lawful contract
rate, shall be made, to the extent permitted by applicable law, by amortizing,
prorating, allocating and spreading in equal parts during the period of the full
stated term of the indebtedness evidenced hereby, all interest at any time
contracted for, charged or received from Maker or otherwise by Payee in
connection with such indebtedness; provided, however, that if any applicable
state law is amended or the law of the United States of America preempts any
applicable state law, so that it becomes lawful for the Payee to receive a
greater interest per annum rate than is presently allowed, the Maker agrees
that, on the effective date of such amendment or preemption, as the case may be,
the lawful maximum hereunder shall be increased to the maximum interest per
annum rate allowed by the amended state law or the law of the United States of
America.
The Maker and all sureties, endorsers, guarantors or any others (each such
person, other than the Maker, an "Obilgor") who may at any time become liable
for the payment hereof jointly and severally consent hereby to any and all
extensions of time, renewals, waivers or modifications of, and all substitutions
or releases of, security or of any party primarily or secondarily liable on this
Note or any Security Agreement or any term and provision of either, which may be
made, granted or consented to by Payee, and agree that suit may be brought and
maintained against any one or more of them, at the election of Payee without
joinder of any other as a party thereto, and that Payee shall not be required
first to foreclose, proceed against, or exhaust any security hereof in order to
enforce payment of this Note. The Maker and each Obligor hereby waives
presentment, demand for payment, notice of nonpayment, protest, notice of
protest, notice of dishonor, and all other notices in connection herewith, as
well as filing of suit (if permitted by law) and diligence in collecting this
Note or enforcing any of the security hereof, and agrees to pay (if permitted by
law) all expenses incurred in collection, including Payee's reasonable
attorneys' fees.
THE MAKER HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS
NOTE, ANY OF THE RELATED DOCUMENTS, ANY DEALINGS BETWEEN MAKER AND PAYEE
RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS,
AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN MAKER AND PAYEE. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS,
TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS.) THIS WAIVER IS IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS NOTE, ANY RELATED DOCUMENTS, OR
TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED
TRANSACTION. IN THE EVENT OF LITIGATION, THIS NOTE MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.
This Note and any Security Agreement constitute the entire agreement of the
Maker and Payee with respect to the subject matter hereof and supercedes all
prior understandings, agreements and representations, express or implied.
No variation or modification of this Note, or any waiver of any of its
provisions or conditions, shall be valid unless in writing and signed by an
authorized representative of Maker and Payee. Any such waiver, consent,
modification or change shall be effective only in the specific instance and for
the specific purpose given.
Any provision in this Note or any Security Agreement which is in conflict with
any statute, law or applicable rule shall be deemed omitted, modified or altered
to conform thereto.
Meadow Valley Contractors, Inc.
/s/ Nicole Smith By: Gary W. Burnell
- ------------------------------ ------------------------------(L.S.)
(Witness) (Signature)
Nicole Smith Gary W. Burnell
- ------------------------------ ---------------------------------
(Print name) Print name (and title, if applicable)
3926 E. Kimberly Way 880171959
- ------------------------------ ---------
(Address) Phoenix AZ, 85050 (Federal tax identification number)
<PAGE>
COLLATERAL SCHEDULE NO. 4
THIS COLLATERAL SCHEDULE NO. 4 is annexed to and made a part of that certain
Master Security Agreement dated as of November 17, 1997 between General Electric
Capital Corporation, together with its successors and assigns, if any, as
Secured Party and Meadow Valley Contractors, Inc. as Debtor and describes
collateral in which Debtor has granted Secured Party a security interest in
connection with the Indebtedness (as defined in the Security Agreement)
including without limitation that certain Promissory Note dated 2/14/99 in
the original principal amount of $278,250.00.
Quantity Manufacturer Serial Number Year/Model and Type of Equipment
- -------- ------------ ------------- --------------------------------
1 CMI 505106 ER-1000 Excavator/Reclaimer
and including all additions, attachments, accessories and accessions thereto,
and any and all substitutions, replacements or exchanges therefor, and all
insurance and/or other proceeds thereof.
Equipment immediately listed above is located at: 1206 Mechem Drive, Ruidoso,
Lincoln County, NM 88355
SECURED PARTY: DEBTOR:
General Electric Capital Corporation Meadow Valley Contractors, Inc.
By: /s/ [ILLEGIBLE]^^ By: /s/ Gary W. Burnell
--------------------------------- -------------------------
Title: Senior Risk Analyst Title: VP/CFO
------------------------------ ----------------------
Date: 2/19/99 Date: 2-11-99
------------------------------- ------------------------
<PAGE>
EXHIBIT 10.96
PROMISSORY NOTE
6/4/99
------------
(Date)
4411 South 40th Street, Suite D-11, Phoenix, Maricopa County, AZ 85040
- -----------------------------------------------------------------------------
(Address of Maker)
FOR VALUE RECEIVED, Meadow Valley Contractors, Inc. ("Maker") promises, jointly
and severally if more than one, to pay to the order of General Electric Capital
Corporation or any subsequent holder hereof (each, a "Payee") at its office
located at One Lincoln Centre, 5400 LBJ Freeway Suite 1280, L.B. 3, Dallas, TX
75240 or at such other place as Payee or the holder hereof may designate, the
principal sum of Three hundred thirty-eight thousand eight hundred forty-five
and no/100 Dollars ($338,845.00), with interest on the unpaid principal balance,
from the date hereof through and including the dates of payment, at a fixed,
simple interest rate of Seven and 81/100 percent (7.81%) per annum, to be paid
in lawful money of the United States, in Sixty (60) consecutive monthly
installments of principal and interest as follows:
Periodic
Installment Amount
----------------------------
1 thru 59 $ 6,839.78
each ("Periodic Installment") and a final installment which shall be in the
amount of the total outstanding principal and interest. The first Periodic
Installment shall be due and payable on July 4, 1999 and the following Periodic
Installments and the final installment shall be due and payable on the same day
of each succeeding period (each, a "Payment Date"). All payments shall be
applied first to interest and then to principal. The acceptance by Payee of any
payment which is less than payment in full of all amounts due and owing at such
time shall not constitute a waiver of Payee's right to receive payment in full
at such time or at any prior or subsequent time. Interest shall be calculated on
the basis of a 365 day year (366 day leap year). The payment of any Periodic
Installment after its due date shall result in a corresponding decrease in the
portion of the Periodic Installment credited to the remaining unpaid principal
balance. The payment of any Periodic Installment prior to its due date shall
result in a corresponding increase in the portion of the Periodic Installment
credited to the remaining unpaid principal balance.
The Maker hereby expressly authorizes the Payee to insert the date value is
actually given in the blank space on the face hereof and on all related
documents pertaining hereto.
This Note may be secured by a security agreement, chattel mortgage, pledge
agreement or like instrument (each of which is hereinafter called a "Security
Agreement").
Time is of the essence hereof. If any installment or any other sum due under
this Note or any Security Agreement is not received within ten (10) days after
its due date, the Maker agrees to pay, in addition to the amount of each such
installment or other sum, a late payment charge of five percent (5%) of the
amount of said installment or other sum, but not exceeding any lawful maximum.
If (i) Maker fails to make payment of any amount due hereunder within ten (10)
days after the same becomes due and payable; or (ii) Maker is in default under,
or fails to perform under any term or condition contained in any Security
Agreement, then the entire principal sum remaining unpaid, together with all
accrued interest thereon and any other sum payable under this Note or any
Security Agreement, at the election of Payee, shall immediately become due and
payable, with interest thereon at the lesser of eighteen percent (18%) per annum
or the highest rate not prohibited by applicable law from the date of such
accelerated maturity until paid (both before and after any judgment).
The Maker may prepay in full, but not in part, its entire indebtedness hereunder
upon payment of the entire indebtedness plus an additional sum as a premium
equal to the following percentages of the original principal balance for the
indicated period:
Prior to the first annual anniversary date of this Note: One percent (1%)
and zero percent (0%) thereafter, plus all other sums due hereunder or under any
Security Agreement.
It is the intention of the parties hereto to comply with the applicable usury
laws; accordingly, it is agreed that, notwithstanding any provision to the
contrary in this Note or any Security Agreement, in no event shall this Note or
any Security Agreement require the payment or permit the collection of interest
in excess of the maximum amount permitted by applicable law. If any such excess
interest is contracted for, charged or received under this Note or any Security
Agreement, or if all of the principal balance shall be prepaid, so that under
any of such circumstances the amount of interest contracted for, charged or
received under this Note or any Security Agreement on the principal balance
shall exceed the maximum amount of interest permitted by applicable law, then in
such event (a) the provisions of this paragraph shall govern and control, (b)
neither Maker nor any other person or entity now or hereafter liable for the
payment hereof shall be obligated to pay the amount of such interest to the
extent that it is in excess of the maximum amount of interest permitted by
applicable law, (c) any such excess which may have been
<PAGE>
collected shall be either applied as a credit against the then unpaid principal
balance or refunded to Maker, at the option of the Payee, and (d) the effective
rate of interest shall be automatically reduced to the maximum lawful contract
rate allowed under applicable law as now or hereafter construed by the courts
having jurisdiction thereof. It is further agreed that without limitation of the
foregoing, all calculations of the rate of interest contracted for, charged or
received under this Note or any Security Agreement which are made for the
purpose of determining whether such rate exceeds the maximum lawful contract
rate, shall be made, to the extent permitted by applicable law, by amortizing,
prorating, allocating and spreading in equal parts during the period of the full
stated term of the indebtedness evidenced hereby, all interest at any time
contracted for, charged or received from Maker or otherwise by Payee in
connection with such indebtedness; provided, however, that if any applicable
state law is amended or the law of the United States of America preempts any
applicable state law, so that it becomes lawful for the Payee to receive a
greater interest per annum rate than is presently allowed, the Maker agrees
that, on the effective date of such amendment or preemption, as the case may be,
the lawful maximum hereunder shall be increased to the maximum interest per
annum rate allowed by the amended state law or the law of the United States of
America.
The Maker and all sureties, endorsers, guarantors or any others (each such
person, other than the Maker, an "Obligor") who may at any time become liable
for the payment hereof jointly and severally consent hereby to any and all
extensions of time, renewals, waivers or modifications of, and all substitutions
or releases of, security or of any party primarily or secondarily liable on this
Note or any Security Agreement or any term and provision of either, which may be
made, granted or consented to by Payee, and agree that suit may be brought and
maintained against any one or more of them, at the election of Payee without
joinder of any other as a party thereto, and that Payee shall not be required
first to foreclose, proceed against, or exhaust any security hereof in order to
enforce payment of this Note. The Maker and each Obligor hereby waives
presentment, demand for payment, notice of nonpayment, protest, notice of
protest, notice of dishonor, and all other notices in connection herewith, as
well as filing of suit (if permitted by law) and diligence in collecting this
Note or enforcing any of the security hereof, and agrees to pay (if permitted by
law) all expenses incurred in collection, including Payee's reasonable
attorneys' fees
THE MAKER HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS
NOTE, ANY OF THE RELATED DOCUMENTS, ANY DEALINGS BETWEEN MAKER AND PAYEE
RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS,
AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN MAKER AND PAYEE. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS,
TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS.) THIS WAIVER IS IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS NOTE, ANY RELATED DOCUMENTS, OR
TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED
TRANSACTION. IN THE EVENT OF LITIGATION, THIS NOTE MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.
This Note and any Security Agreement constitute the entire agreement of the
Maker and Payee with respect to the subject matter hereof and supercedes all
prior understandings, agreements and representations, express or implied.
No variation or modification of this Note, or any waiver of any of its
provisions or conditions, shall be valid unless in writing and signed by an
authorized representative of Maker and Payee. Any such waiver, consent,
modification or change shall be effective only in the specific instance and for
the specific purpose given.
Any provision in this Note or any Security Agreement which is in conflict with
any statute, law or applicable rule shall be deemed omitted, modified or altered
to conform thereto.
Meadow Valley Contractors, Inc.
/s/ Nicole Smith By: /s/ Gary W. Burnell (L.S.)
- ---------------------- -----------------------------
(Witness) (Signature)
Nicole Smith GARY W. BURNELL, VP/CFO
- ---------------------- ---------------------------------
(Print name) Print name (and title, if applicable)
3926 E. Kimberly Way 880171959
- ---------------------- ----------
(Address) Phoenix AZ 85050 (Federal tax identification number)
<PAGE>
COLLATERAL SCHEDULE NO. 5
THIS COLLATERAL SCHEDULE NO. 5 is annexed to and made a part of that certain
Master Security Agreement dated as of November 17, 1997 between General Electric
Capital Corporation, together with its successors and assigns, if any, as
Secured Party and Meadow Valley Contractors, Inc. as Debtor and describes
collateral in which Debtor has granted Secured Party a security interest in
connection with the Indebtedness (as defined in the Security Agreement)
including without limitation that certain Promissory Note dated 6/4/99 in the
original principal amount of $338,845.00.
<TABLE>
<CAPTION>
Quantity Manufacturer Serial Number Year/Model and Type of Equipment
- -------- ------------ ------------- --------------------------------
<S> <C> <C> <C>
1 Linkbelt 18HA738 1979 HC218A Lattice Boom
Truck Crane, 22Oft boom, 70ft
jib, 70 ton hook block & headache ball
</TABLE>
and including all additions, attachments, accessories and accessions thereto,
and any and all substitutions, replacements or exchanges therefor, and all
insurance and/or other proceeds thereof.
Equipment immediately listed above is located at: 4411 South 40th Street,
Phoenix, Maricopa County, AZ 85040
SECURED PARTY: DEBTOR:
General Electric Capital Corporation Meadow Valley Contractors, Inc.
By: /s/ [ILLEGIBLE]^^ By: /s/ Gary W. Burnell
- --------------------------------- -------------------------------
Title: SENIOR RISK ANALYST Title: VP/CFO
--------------------------- ----------------------------
Date: 6/4/99 Date: 6/2/99
---------------------------- -----------------------------
<PAGE>
EXHIBIT 10.97
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
SETTLED FOR?
New Used For Office
Yes No X X J 908 801 262-7441 14May99 Use Only P01 880171959
- ------------------------------------------------------------------------------------------------------------------------------------
SELLER'S NAME & ADDRESS
SCOTT MACHINERY COMPANY 4055 SOUTH 500 WEST SALT LAKE CIT UT 84123
- ------------------------------------------------------------------------------------------------------------------------------------
BORROWER'S (DEBTOR'S) NAME (Last Name First) BORROWER'S (DEBTOR'S) NAME (Last Name First)
& MAILING ADDRESS (including County & Zip) & MAILING ADDRESS (including Zip)
- ------------------------------------------------------------------------------------------------------------------------------------
MEADOW VALLEY CONTRACTORS, INC.
- ------------------------------------------------------------------------------------------------------------------------------------
P.O. BOX 60726
- ------------------------------------------------------------------------------------------------------------------------------------
PHOENIX MARIC AZ 85082
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
BORROWER'S (DEBTOR'S) PHONE NO. BORROWER (DEBTOR) RESIDES BORROWER (DEBTOR) AGREES TO PLACE OF FILING
IN (Country, State) KEEP GOODS IN (Co./St.) (Town & State)
602 437-5400 MARIC AZ WEAVER UT SEC. OF STATE
- ------------------------------------------------------------------------------------------------------------------------------------
BORROWER'S SOC. SEC. NO. (First Signer) or TYPE OF BUSINESS NAME & TITLE OF SIGNING OFFICER (If Corporation or LLC)
------------------------------
FED. TAX ID. NO. Prop. Partner Corp. LLC
###-##-#### X BRADLEY E. LARSON, * PRESIDENT
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
I hereby apply to John Deere Construction Equipment Company (the "Lender") for a
loan of the Amount Financed shown below, and on the following terms and
conditions. The amount of the Unpaid Balance of Cash Price shown below on Line 3
is to be used to finance the Balance Due on the Purchase Order executed in
connection with the purchase from the Lender of the Equipment described below
(the "Goods"). I agree that I have received the Goods.
PARTIES: In this agreement, the words "I", "me", and "my" mean the persons,
whether one or more, who sign it as "Borrower(s)" (who is also known as
"Debtor(s)").
PROMISSORY NOTE: If this Loan Contract is accepted by Lender, I promise to pay
to Lender or its order the TOTAL OF PAYMENTS as in line 9 below, in monthly
installments and/or installments other than monthly as shown below. If more than
one person signs this agreement as "Borrower", we will be jointly and severally
liable for all amounts due under this agreement. I represent that the Goods are
being purchased for a business or commercial purpose.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Qty New MFR. MODEL GOODS (Equipment) PRODUCT IDENTIFICATION NO. DELIVERED CASH PRICE
Used
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 N JD 160L 160LC EXCAVATOR P00160X040482 128500 00
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
128500 00
- ------------------------------------------------------------------------------------------------------------------------------------
OTY. MFR. MODEL DESCRIPTION OF TRADE-IN (From Purchase Order) PRODUCT IDENTIFICATION NO. AMOUNT
---------------------------------------------------------------------------------------------------------------------------
TRADE-IN
DATA ---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
CASH DOWN PAYMENT: 26,180.00 TOTAL TRADE-IN 00
- ------------------------------------------------------------------------------------------------------------------------------------
INSTALLMENTS OTHER THAN MONTHLY MONTHLY INSTALLMENTS
- -------------------------------------------------------------------------------------
Amount No. Of When Payments Amount No. Of Amount Of First Payment
Financed Mos. Are Due Of Payments Payments Each Payment Due Date
- -------------------------------------------------------------------------------------
48 2499 05 01-Aug-99
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
ITEMIZATION OF AMOUNT FINANCED
- ------------------------------------------------------------------------------------------------------------------------------------
SALES TAX 8159 75
- ------------------------------------------------------------------------------------------------------------------------------------
01-Jul-03 CASH PRICE (Including Tax) 1 136659 75
- -------------------------------------------------------------------------------------
TOTAL DOWN PAYMENT (Sum of
- -------------------------------------------------------------------------------------
Payments are due each successive month on the same day Trade-In & Cash Down Payment) 2 26180 00
of the month as the first payment except as follows:
- ------------------------------------------------------------------------------------------------------------------------------------
JUN 99 UNPAID BALANCE 3 110479 75
- ------------------------------------------------------------------------------------------------------------------------------------
DOCUMENTATION FEES 4 400 00
- ------------------------------------------------------------------------------------------------------------------------------------
OFFICIAL FEES 5 20 00
- ------------------------------------------------------------------------------------------------------------------------------------
TOTALS DATE FINANCE CHARGE BEGINS: 01-Jul-99 INSURANCE-Credit Life
and/or Physical Damage 6 00
- ------------------------------------------------------------------------------------------------------------------------------------
SECURITY AGREEMENT: To secure the indebtedness evidenced by this contract, I hereby PRINCIPAL BALANCE 7 110899 75
grant to Lender (Secured Party) a Security Interest in the Goods described above -----------------------------------------------
(which term includes items, if any, listed as "security" or "additional security") FINANCE CHARGE 8 9054 65
and all parts and accessories now or hereafter incorporated in or on such Goods by -----------------------------------------------
way of addition, accession or replacement, together with all proceeds, including, TOTAL
without limitation, insurance proceeds. (Principal Balance plus 9 119954 40
finance Charge)
EARLY PAYMENT: I may prepay my obligation in full at any time prior to the original -----------------------------------------------
or any extended maturity and will be charged only for earned Finance Charges. No ANNUAL INTEREST RATE
penalties will be imposed for early payment. The cost of the Borrower(s)
credit as a yearly rate. 3.90%
ADDITIONAL CONTRACT INFORMATION: See the front and back of this agreement for -----------------------------------------------
additional information and terms regarding non-payment, default, the right to demand
immediate payment, and prepayment refunds. -----------------------------------------------
LATE PAYMENTS: In addition to promising to pay the installments set forth above, I
promise to pay past due penalty on each installment in default more than 10 days
(15 days in North Carolina) not to exceed the highest penalty permitted by
applicable state law.
</TABLE>
RETURNED CHECK FEE: If payment is made by a check, draft, or order which is
dishonored, I agree to pay you a fee of $20 or such lesser amount specified by
applicable law.
STATE LAW APPLYING: EXCEPT AS PROHIBITED BY THE LAW OF THE STATE WHERE I LIVE,
THE CONSTRUCTION AND VALIDITY OF THIS AGREEMENT SHALL BE CONTROLLED BY THE LAW
OF IOWA, WHERE THIS AGREEMENT IS ACCEPTED AND ENTERED INTO, AND THE VALIDITY OF
THE SECURITY INTEREST SHALL BE CONTROLLED BY THE LAW OF THE STATE WHERE THE
GOODS ARE TO BE KEPT AND USED.
PHYSICAL DAMAGE INSURANCE REQUIRED (See Provisions on Reverse Side)
Liability insurance coverage for bodily injury and property damage caused to
others not included. If you desire Liability coverage, you should obtain such
coverage from an agent of your choice.
- --------------------------------------------------------------------------------
ADDITIONAL PROVISIONS CONCERNING RIGHTS OF THE PARTIES ON REVERSE SIDE
ARE A PART OF THIS CONTRACT
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
INSURANCE DISCLOSURES: I may obtain Physical Damage Insurance from NO. MOS. PREMIUM I want Physical Damage Insurance
anyone I want that is acceptable to Lender. If I get this insurance (Sign in this box)
through Seller, I will pay the Premium shown at right. No insurance
will be provided unless I sign at the right, the premium is shown
and Lender accepts this contract. X
- ------------------------------------------------------------------------------------------------------------------------------------
Credit Life Insurance is not required to obtain credit and will not NO. MOS. PREMIUM I want Credit Life Insurance
be provided unless I sign at the right, the premium is shown and (Sign in this box)
Lender accepts this contract. X Age:
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTICE TO BORROWER(S): 1. Do not sign this contract before you read it or if it
contains blank spaces. 2. You are entitled to an exact and completely filled in
copy of this contract when you sign it. Keep it to protect your legal rights. 3.
Under the law, you have the following rights, among others: a. to pay off in
advance the full amount due and to obtain a partial refund of the finance
charge; b. to redeem the property if repossessed for a default within the time
provided by law; c. to require, under certain conditions, a resale of the
property if repossessed.
CAUTION: IT IS IMPORTANT THAT YOU THOROUGHLY READ THE CONTRACT BEFORE YOU SIGN
IT.
I acknowledge receipt of a true copy hereof.
<TABLE>
<S> <C> <C>
MEADOW VALLEY CONTRACTORS, INC. DO NOT WRITE IN SHADED AREA. - FOR DEERE CREDIT
SERVICES, INC. USE ONLY.
---------------------------------------------------
/s/ Bradley E. Larson - Pres. Date 6/29/99 Accepted By: JOHN DEERE CONSTRUCTION EQUIPMENT
- -------------------------------------------------------------- ---------- COMPANY (Lender/Secured Party)
Borrower's (Debtor's) Signature BRADLEY E. LARSON, President
AT 1415 28th Street, P.O. Box 65090, West Des
------------------------------------------
______________________________________________________________ Date __________ Moines, IA 50265-0090
Borrower's (Debtor's) Signature -------------------------------------------
(Address)
______________________________________________________________ Date __________ BY /s/ Margaret Thomas Date 7/9/99
Borrower's (Debtor's) Signature ----------------------------- -------------
(Authorized Signature)
---------------------------------------------------
</TABLE>
<PAGE>
EXHIBIT 10.98
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
GOODS PREVIOUSLY CONSTRUCTION DEALER ACCOUNT DEALER PHONE NO. APPLICATION DATE ACCEPTED CONTRACT NO.
SETTLED FOR? NUMBER DATE BY J.D. CONS. EQMT. CO
New Used For Office
Yes X No JX 908 801 262-7441 14 MAY 99 Use Only P02 880171959 17
- ------------------------------------------------------------------------------------------------------------------------------------
SELLER'S NAME & ADDRESS
SCOTT MACHINERY COMPANY 4055 SOUTH 500 WEST SALT LAKE CIT UT 84123
- ------------------------------------------------------------------------------------------------------------------------------------
BORROWER'S (DEBTOR'S) NAME (Last Name First) BORROWER'S (DEBTOR'S) NAME (Last Name First)
& MAILING ADDRESS (including County & Zip) & MAILING ADDRESS (including Zip)
- ------------------------------------------------------------------------------------------------------------------------------------
MEADOW VALLEY CONTRACTORS, INC.
- ------------------------------------------------------------------------------------------------------------------------------------
P.O. BOX 60726
- ------------------------------------------------------------------------------------------------------------------------------------
PHOENIX MARIC AZ 85082
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
BORROWER'S (DEBTOR'S) PHONE NO. BORROWER (DEBTOR) RESIDES BORROWER (DEBTOR) AGREES TO PLACE OF FILING
IN (Country, State) KEEP GOODS IN (Co./St.) (Town & State)
602 437-5400 MARIC AZ WEAVER UT SEC. OF STATE
- ------------------------------------------------------------------------------------------------------------------------------------
BORROWER'S SOC. SEC. NO. (First Signer) or TYPE OF BUSINESS NAME & TITLE OF SIGNING OFFICER (If Corporation or LLC)
------------------------------
FED. TAX ID. NO. Prop. Partner Corp. LLC
###-##-#### X BRADLEY E. LARSON * PRESIDENT
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
I hereby apply to John Deere Construction Equipment Company (the "Lender") for a
loan of the Amount Financed shown below, and on the following terms and
conditions. The amount of the Unpaid Balance of Cash Price shown below on Line 3
is to be used to finance the Balance Due on the Purchase Order executed in
connection with the purchase from the Lender of the Equipment described below
(the "Goods"). I agree that I have received the Goods.
PARTIES: In this agreement, the words "I", "me", and "my" mean the persons,
whether one or more, who sign it as "Borrower(s)" (who is also known as
"Debtor(s)").
PROMISSORY NOTE: If this Loan Contract is accepted by Lender, I promise to pay
to Lender or its order the TOTAL OF PAYMENTS as in line 9 below, in monthly
installments and/or installments other than monthly as shown below. If more than
one person signs this agreement as "Borrower", we will be jointly and severally
liable for all amounts due under this agreement. I represent that the Goods are
being purchased for a business or commercial purpose.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Qty. New MFR. MODEL GOODS (Equipment) PRODUCT IDENTIFICATION NO. DELIVERED CASH PRICE
Used
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 U JD 310E WHEEL LOADER BACKHOE T0310EX839952 55800 00
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
55800 00
- ------------------------------------------------------------------------------------------------------------------------------------
QTY. MFR. MODEL DESCRIPTION OF TRADE-IN (From Purchase Order) PRODUCT IDENTIFICATION NO. AMOUNT
---------------------------------------------------------------------------------------------------------------------------
TRADE-IN
DATA ---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------------
CASH DOWN PAYMENT: 3,500.00 TOTAL TRADE-IN 00
- ------------------------------------------------------------------------------------------------------------------------------------
INSTALLMENTS OTHER THAN MONTHLY MONTHLY INSTALLMENTS
- -------------------------------------------------------------------------------------
Amount No. Of When Payments Amount No. Of Amount Of First Payment
Financed Mos. Are Due Of Payments Payments Each Payment Due Date
- -------------------------------------------------------------------------------------
48 1366 95 01-Aug-99
- -------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
ITEMIZATION OF AMOUNT FINANCED
- ------------------------------------------------------------------------------------------------------------------------------------
RECEIVED SALES TAX 3543 30
- ------------------------------------------------------------------------------------------------------------------------------------
JUL 06 1999 01-JUL-03 CASH PRICE (Including Tax) 1 59343 30
- ------------------------------------------------------------------------------------------------------------------------------------
DEERE CREDIT SERVICE TOTAL DOWN PAYMENT (Sum of
- -------------------------------------------------------------------------------------
Payments are due each successive month on the same day Trade-In & Cash Down Payment) 2 3500 00
of the month as the first payment except as follows:
- ------------------------------------------------------------------------------------------------------------------------------------
JUN 99 UNPAID BALANCE 3 55843 30
- ------------------------------------------------------------------------------------------------------------------------------------
DOCUMENTATION FEES 4 400 00
- ------------------------------------------------------------------------------------------------------------------------------------
OFFICIAL FEES 5 20 00
- ------------------------------------------------------------------------------------------------------------------------------------
TOTALS DATE FINANCE CHARGE BEGINS: 01-JUL-99 INSURANCE Credit Life
and/or Physical Damage 6 00
- ------------------------------------------------------------------------------------------------------------------------------------
SECURITY AGREEMENT: To secure the indebtedness evidenced by this contract, I hereby PRINCIPAL BALANCE 7 56263 30
grant to Lender (Secured Party) a Security Interest in the Goods described above -----------------------------------------------
(which term includes items, if any, listed as "security" or "additional security") FINANCE CHARGE 8 9350 30
and all parts and accessories now or hereafter incorporated in or on such Goods ------------------------------------------------
by way of addition, accession or replacement, together with all proceeds, TOTAL
including, without limitation, insurance proceeds. (Principal Balance plus 9 65613 60
finance Charge)
EARLY PAYMENT: I may prepay my obligation in full at any time prior to the original -----------------------------------------------
or any extended maturity and will be charged only for earned Finance Charges. No ANNUAL INTEREST RATE
penalties will be imposed for early payment. The cost of the Borrower(s)
credit as a yearly rate. 7.75%
ADDITIONAL CONTRACT INFORMATION: See the front and back of this agreement for -----------------------------------------------
additional information and terms regarding non-payment, default, the right to demand
immediate payment, and prepayment refunds. -----------------------------------------------
LATE PAYMENTS: In addition to promising to pay the installments set forth above, I
promise to pay past due penalty on each installment in default more than 10 days
(15 days in North Carolina) not to exceed the highest penalty permitted by
applicable state law.
</TABLE>
RETURN CHECK FEE: If payment is made by a check, draft, or order which is
dishonored, I agree to pay you a fee of $20 or such lesser amount specified by
applicable law.
STATE LAW APPLYING: EXCEPT AS PROHIBITED BY THE LAW OF THE STATE WHERE I LIVE,
THE CONSTRUCTION AND VALIDITY OF THIS AGREEMENT SHALL BE CONTROLLED BY THE LAW
OF IOWA, WHERE THIS AGREEMENT IS ACCEPTED AND ENTERED INTO, AND THE VALIDITY OF
THE SECURITY INTEREST SHALL BE CONTROLLED BY THE LAW OF THE STATE WHERE THE
GOODS ARE TO BE KEPT AND USED.
PHYSICAL DAMAGE INSURANCE REQUIRED (See Provisions on Reverse Side)
Liability insurance coverage for bodily injury and property damage caused to
others not included. If you desire Liability coverage, you should obtain such
coverage from an agent of your choice.
- --------------------------------------------------------------------------------
ADDITIONAL PROVISIONS CONCERNING RIGHTS OF THE PARTIES ON REVERSE SIDE
ARE A PART OF THIS CONTRACT
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
INSURANCE DISCLOSURES: I may obtain Physical Damage Insurance from NO. MOS. PREMIUM I want Physical Damage Insurance
anyone I want that is acceptable to Lender. If I get this insurance (Sign in this box)
through Seller, I will pay the Premium shown at right. No insurance
will be provided unless I sign at the right, the premium is shown
and Lender accepts this contract. X
- ------------------------------------------------------------------------------------------------------------------------------------
Credit Life Insurance is not required to obtain credit and will not NO. MOS. PREMIUM I want Credit Life Insurance
be provided unless I sign at the right, the premium is shown and (Sign in this box)
Lender accepts this contract. X Age:
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
NOTICE TO BORROWER(S): 1. Do not sign this contract before you read it or if it
contains blank spaces. 2. You are entitled to an exact and completely filled in
copy of this contract when you sign it. Keep it to protect your legal rights. 3.
Under the law, you have the following rights, among others: a. to pay off in
advance the full amount due and to obtain a partial refund of the finance
charge; b. to redeem the property if repossessed for a default within the time
provided by law; c. to require, under certain conditions, a resale of the
property if repossessed.
CAUTION: IT IS IMPORTANT THAT YOU THOROUGHLY READ THE CONTRACT BEFORE YOU SIGN
IT.
I acknowledge receipt of a true copy hereof.
<TABLE>
<S> <C> <C>
MEADOW VALLEY CONTRACTORS, INC. DO NOT WRITE IN SHADED AREA. - FOR DEERE CREDIT
SERVICES, INC. USE ONLY.
---------------------------------------------------
/s/ Bradley E. Larson - Pres. Date 6/29/99 Accepted By: JOHN DEERE CONSTRUCTION EQUIPMENT
- -------------------------------------------------------------- ---------- COMPANY (Lender/Secured Party)
Borrower's (Debtor's) Signature BRADLEY E. LARSON, President
AT 1415 28th Street, P.O. Box 65090, West Des
______________________________________________________________ Date __________ Moines, IA 50265-0090
Borrower's (Debtor's) Signature -------------------------------------------
(Address)
______________________________________________________________ Date __________ BY /s/ Margaret Thomas Date 7/9/99
Borrower's (Debtor's) Signature ----------------------------- -------------
(Authorized Signature)
---------------------------------------------------
</TABLE>
<PAGE>
EXHIBIT 10.99
TRANSFER AND ASSUMPTION 1001-2051
AGREEMENT ................
Account Number
[LOGO](R) This transfer and Assumption Agreement dated July 23, 1999 is entered
into by and between the undersigned transferor ("Transferor"), the undersigned
transferee ("Transferee"), Associates Leasing, Inc. ("Associates") and any
guarantor or endorser signing below.
On January 28, 1998, Transfer leased from Associates the following
described property (herein, with all present and future attachments,
accessories, replacement parts, repairs, additions, and all proceeds thereof,
referred to as "Property"):
One (1) Sky Trak Model 10042 Telescopic Handler, SN: 5197, with 10,000 lbs.
reach forklift, 72 inch carriage, 60 inch forks
and on that date executed a Lease (herein, with all amendments thereto, referred
to as the "Contract") evidencing the leasing of the Property for the aggregate
rent set forth therein, of which there now remains unpaid the sum of $62,522.10
("Unpaid Rentals") which is payable in 30 remaining installments as follows:
$62,522.10
For equal successive (a) $2,084.07 on August 1, 1999 and a like sum on the
monthly installments like date of each month thereafter until fully
paid, provided, however, that the final installment
of rent shall be in the amount of the remaining
Unpaid Rentals.
For other than equal (b)
successive monthly
installments:
The Contract and any guarantees and other documents executed in connection
with the Contract are herein collectively called the "Documents". Transferor has
advised Associates that Transferor desires to transfer to Transferee and that
Transferee desires to acquire Transferor's interest, as lessee, in the Property,
but Transferor is prohibited from doing so without first obtaining the written
consent of Associates to such transfer. Transferor has requested Associates to
consent to the transfer of Transferor's interest as lessee in the Property by
Transferor to Transferee. Associates has expressed its willingness to give its
written consent to such transfer provided that: (i) this Agreement is executed
by Transferor and Transferee and delivered to Associates; (ii) any guarantors
and/or endorsers of Transferor's obligations under the Contract (individually
and collectively called the "Guarantor") execute this Agreement or such other
consent and acknowledgment of the continuance of their obligations and
liabilities under the Documents as Associates may require; and (iii) the
ownership rights of Associates in the Property is and continues to be valid,
first, prior to all others and effective against all persons whether such
persons are claiming by, through or under Transferor, Transferee or any other
person.
NOW, THEREFORE, Transferor, for and in consideration of One Dollar and other
valuable consideration paid to Transferor by Transferee, hereby assigns to
Transferee, all of Transferor's interest as lessee in and to the Property,
subject to the terms, conditions and agreements hereof and of the Contract.
<TABLE>
<S> <C> <C>
The Property will be kept at: 4411 S. 40th Street, D-11, Phoenix, Maricopa, AZ 84040
------------------------------------------------------------------------
(Street Address & City) (County) (State/Province & Zip Code)
Present location of the Property
1501 State Highway #168, Moapa, Clark, NV 89025
if different from the foregoing: -------------------------------------------------------------------
(Street Address & City) (County) (State/Province & Zip Code)
</TABLE>
No oral Agreement, Guaranty, Promise, Representation or Warranty shall be
binding on Associates.
Each of the parties executing this Agreement acknowledges receipt of a copy
hereof.
The additional terms and conditions on the reverse side are a part of this
agreement.
IN WITNESS WHEREOF, we have hereunto set our hands and seals as of the day and
year first above written.
<TABLE>
<S> <C>
TRANSFEROR Prestressed Products Incorporated TRANSFEREE Meadow Valley Contractors, Inc.
-------------------------------------------------- -------------------------------------------------
(Name of individual(s), corporation or partnership. (Name of individual(s), corporation or partnership.
Give trade style, if any, after name.) Give trade style, if any, after name.)
By: /s/ Kenneth D. Nelson Title Vice President By /s/ Kenneth D. Nelson Title Vice President
--------------------- -------------------- ---------------------------- --------------------
(If corporation, authorized officer must sign and (If corporation, authorized officer, must sign and show
show corporate title. corporate title.
If partnership, a general partner must sign. If owner(s) If partnership, a general partner must sign. If owner(s) or
or partner, show which.) partner, show which.)
4411 S. 40th Street, D-11
--------------------------------------------------------
(Street Address of Transferee)
Phoenix, MARICOPA, AZ 84040
--------------------------------------------------------
(City, COUNTY, State/Province and Zip Code)
Witnesses to
Transferee's
signature /s/ [ILLEGIBLE]^^ /s/ [ILLEGIBLE]^^
------------------------------------------- --------------------------------------------------------
(Witness) (Witness)
GUARANTOR GUARANTOR
or ENDORSER Meadow Valley Corporation or ENDORSER_____________________________________________
-----------------------------------------------
(Name of individual, corporation or partnership) (Name of individual, corporation or partnership.)
By /s/ Kenneth D. Nelson, V.P. By______________________________________________________
-------------------------------------------------------
(Individual guarantors must sign without titles. (Individual guarantors must sign without titles.
Sign simply "John Smith," not "John Smith, President.") Sign simply "John Smith," not "John Smith, President.")
</TABLE>
Associates hereby consents to the above transfer and assumption pursuant to the
terms and conditions of the above agreement.
ASSOCIATES LEASING, Inc. By_________________________________
-----------------
(Authorized Representative)
<PAGE>
(Additional terms and conditions of transfer and assumption agreement)
In consideration of the written consent of Associates, Transferee hereby:
promises to pay the Unpaid Rentals to Associates in accordance with the
schedule set forth on the face hereof; assumes all of the obligations and
liabilities of Transferor contained in the Contract as though Transferee was the
original lessee of the Property.
Transferor agrees that, notwithstanding the transfer referred to herein,
Transferor is in no way released from its obligations set forth in the Contract,
but is and shall continue to be firmly bound thereby.
Transferor and Transferee jointly and severally agree to pay the Unpaid
Rentals and to pay and perform all other obligations and liabilities under the
Contract.
Transferee agrees that no warranties have been made as to the Property by
Associates, that ASSOCIATES MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR
IMPLIED, AS TO THE QUALITY, WORKMANSHIP, DESIGN, MERCHANTABILITY, SUITABILITY OR
FITNESS OF THE PROPERTY FOR ANY PARTICULAR PURPOSE, OR ANY OTHER REPRESENTATION
OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED and that Associates shall not under
any circumstances be liable for any loss or damage whatsoever including, without
limitation, loss of anticipatory profits or for consequential damages.
Transferor and Transferee agree to promptly cause such actions or
procedures to be taken as are required or permitted by statute or regulation to
accomplish such transfer and to protect Associates ownership of the Property,
including, without limitation, filing financing statements, recording documents,
and obtaining Certificates of Title (to the extent permitted by law), Associates
assuming no responsibility therefor.
Guarantor consents to the above transfer, and agrees that such transfer
shall not affect its obligations and liabilities under the Documents, which
obligations and liabilities shall remain in full force and effect. Transferor
and Guarantor each consents that Associates may, without notice to any of them
and without affecting any of their obligations and liabilities hereunder and/or
under the Documents, elect any remedy, and compound or release any rights
against Transferee or any other persons obligated under the Documents, and
release all or any part of the Property, on terms satisfactory to Associates, by
operation of law or otherwise, and settle, compromise or adjust any and all
rights against and grant extensions of time or payment to Transferee or any
other persons obligated under the Documents.
<PAGE>
EXHIBIT 10.100
[LOGO]
LEASE SCHEDULE NO. 1000098533 FINANCING LEASE
---------- (Per Diem Interim Rent)
Master Lease Agreement dated 04/24/98
--------------
Lessor: BANC ONE LEASING CORPORATION
----------------------------
Lessee: MEADOW VALLEY CONTRACTORS, INC.
------------------------------
1. GENERAL. This Lease Schedule is signed and delivered under the Master Lease
Agreement identified above, as amended from time to time ("Master Lease"),
between Lessee and Lessor. Capitalized terms defined in the Master Lease will
have the same meanings when used in this Schedule.
2. FINANCING. Lessor finances for Lessee, and Lessee finances with Lessor, all
of the property ("Equipment") described in Schedule A-1 attached hereto (and
Lessee represents that all Equipment is new unless specifically identified as
used):
3. AMOUNT FINANCED: Equipment Cost: $ 164,836.22
Set-up/Filing Fee: N/A
Miscellaneous: N/A
Sales Tax: N/A
Total: $ 164,836.22
----------
4. FINANCING TERM. The Base Term of this Schedule shall be 84 months and the
--
Base Term shall commence on the Acceptance Date ("Commencement Date"). The total
---------- ----
Lease Term consists of the Interim Term plus the Base Term. The Interim Term
begins on the date that Lessor accepts this Schedule as stated below Lessor's
signature ("Acceptance Date") and continues up to the Commencement Date.
5. INSTALLMENT PAYMENTS/FEES. As financing for the Equipment, Lessee shall pay
to Lessor all amounts stated below on the due dates stated below. There shall be
added to each installment payment all applicable Taxes as in effect from time to
time.
(a) For the Interim Term, Lessee shall pay to Lessor on the Commencement Date
an amount equal to one-thirtieth (1/30th) of the Installment Payment multiplied
by the number of days in the Interim Term. "Installment Payment" means the total
of all installment payments due and payable during the Base Term divided by the
number of months in the Base Term.
(b) During the Base Term, Lessee shall pay to Lessor installment payments in
the amounts and according to the timing set forth below, provided however, that
notwithstanding the following, the final installment payment due hereunder shall
be equal to the remaining principal balance hereunder together with all accrued
interest and fees.
(1) Amount of each installment payment during the Base Term (including
principal and interest):
84 MONTHLY PAYMENTS AT $2,588.71
(2) Frequency of installment payments during the Base Term: MONTHLY
(3) Timing of installment payments during the Base Term: ARREARS
Page 1 of 4
<PAGE>
[LOGO OF BANK ONE]
(c) Lessee shall pay Lessor a Set-Up/Filing Fee as follows:
(1) $N/A shall be paid on the Acceptance Date, or
---
(2) $N/A has been included in the above Amount Financed of the Equipment.
---
(d) Security Deposit: $N/A. On the Acceptance Date, Lessee shall pay Lessor
---
said Security Deposit which shall be held in accordance with paragraph 6 below.
6. SECURITY INTEREST. This Schedule is intended to be a secured debt financing
transaction, not a true lease. See Paragraph 7 below regarding Lessee's
---
ownership of the Equipment. As collateral security for payment and performance
of all Secured Obligations (defined in Paragraph 8 below) and to induce Lessor
to extend credit from time to time to Lessee (under the Lease or otherwise),
Lessee hereby grants to Lessor a first priority security interest in all of
Lessee's right, title and interest in the Equipment, whether now existing or
hereafter acquired, any sums specified in this Schedule as a "Security Deposit",
and in all Proceeds (defined in Paragraph 8 below). At its option, Lessor may
apply all or any part of any Security Deposit to cure any default of Lessee
under the Lease. If upon final termination of this Schedule, Lessee has
fulfilled all of the terms and conditions hereof, then Lessor shall pay to
Lessee upon Lessee's written request any remaining balance of the Security
Deposit for this Schedule, without interest.
7. TITLE TO EQUIPMENT; FIRST PRIORITY LIEN. Lessee represents, warrants and
agrees: that Lessee currently is the lawful owner of the Equipment; that good
and marketable title to the Equipment shall remain with Lessee at all times;
that Lessee has granted to Lessor a first priority security interest in the
Equipment and all Proceeds; and that the Equipment and all Proceeds are, and at
all times shall be, free and clear of any Liens other than Lessor's security
interest therein. Lessee at its sole expense will protect and defend Lessor's
first priority security interest in the Equipment against all claims and demands
whatsoever.
8. CERTAIN DEFINITIONS. "Secured Obligations" means (a) all payments and other
obligations of Lessee under or in connection with this Schedule, and (b) all
payments and other obligations of Lessee (whether now existing or hereafter
incurred) under or in connection with the Master Lease and all present and
future Lease Schedules thereto, and (c) all other leases, indebtedness,
liabilities and/or obligations of any kind (whether now existing or hereafter
incurred, absolute or contingent, direct or indirect) of Lessee to Lessor or to
any affiliate of either Lessor or BANK ONE CORPORATION. "Proceeds" means all
cash and non-cash proceeds of the Equipment including, without limitation,
proceeds of insurance, indemnities and/or warranties.
9. AMENDMENTS TO MASTER LEASE. For purposes of this Schedule only, Lessee and
Lessor agree to amend the Master Lease as follows: (a) public liability or
property insurance as described in the second sentence of Section 8 will not be
required; (b) the definition of "Stipulated Loss Value" in clause (b) of Section
9 is deleted and replaced by Paragraph 10 below; (c) the text of Section 10 is
deleted in its entirety; (d) Subsections 23(a) and 23(c) are deleted; (e)
subsection 23(b) and the last sentence of section 4 will apply only if an event
of default occurs; and (f) all references in the Lease as it relates to this
Schedule to "Lessee" and "Lessor" shall be changed to "Borrower" and "Lender"
respectively.
10. STIPULATED LOSS VALUE. For purposes of this Schedule only, the "Stipulated
Loss Value" of any item of Equipment during its Lease Term equals the aggregate
of the following as of the date specified by Lessor: (a) all accrued and unpaid
interest, late charges and other amounts due under this Schedule and the Master
Lease to the extent it relates to this Schedule as of such specified date, plus
(b) the remaining principal balance due and payable by Lessee under this
Schedule as of such specified date, plus (c) interest on the amount described in
the foregoing clauses (a) and
(b) at the Overdue Rate commencing with the specified date; provided, that the
foregoing calculation shall not exceed the maximum amount which may be collected
by Lessor from Lessee under applicable law in connection with enforcement of
Lessor's rights under this Schedule and the Master Lease to the extent it
relates to this Schedule.
Page 2 of 4
<PAGE>
[LOGO OF BANK ONE]
11. LESSEE TO PAY ALL TAXES. For purposes of this Schedule and its Equipment
only: Lessee shall pay any and all Taxes relating to this Schedule and its
Equipment directly to the applicable taxing authority; Lessee shall prepare and
file all reports or returns concerning any such Taxes as may be required by
applicable law or regulation (provided, that Lessor shall not be identified as
the owner of the Equipment in such reports or returns); and Lessee shall, upon
Lessor's request, send Lessor evidence of payment of such Taxes and copies of
any such reports or returns.
12. LESSEE'S ASSURANCES. Lessee irrevocably and unconditionally: (a) reaffirms
all of the terms and conditions of the Master Lease and agrees that the Master
Lease remains in full force and effect; (b) agrees that the Equipment is and
will be used at all times solely for commercial purposes, and not for personal,
family or household purposes; and (c) incorporates all of the terms and
conditions of the Master Lease as if fully set forth in this Schedule.
13. REPRESENTATIONS AND WARRANTIES: Lessee represents and warrants that: (a)
Lessee is a corporation, partnership or proprietorship duly organized, validly
existing and in good standing under the laws of the state of its organization
and is qualified to do business and is in good standing under the laws of each
other state in which the Equipment is or will be located; (b) Lessee has full
power, authority and legal right to sign, deliver and perform the Master Lease,
this Schedule and all related documents and such actions have been duly
authorized by all necessary corporate/partnership/proprietorship action; and
(c) the Master Lease, this Schedule and each related document has been duly
signed and delivered by Lessee and each such document constitutes a legal, valid
and binding obligation of Lessee enforceable in accordance with its terms.
14. CONDITIONS. No lease of Equipment under this Schedule shall be binding on
Lessor, and Lessor shall have no obligation to purchase the Equipment covered
hereby, unless: (a) Lessor has received evidence of all required insurance; (b)
in Lessor's sole judgment, there has been no material adverse change in the
financial condition or business of Lessee or any guarantor; (c) Lessee has
signed and delivered to Lessor this Schedule, which must be satisfactory to
Lessor, and Lessor has signed and accepted this Schedule; (d) no change in the
Code or any regulation thereunder, which in Lessor's sole judgment would
adversely affect the economics to Lessor of the lease transaction, shall have
occurred or shall appear to be imminent; (e) Lessor has received, in form and
substance satisfactory to Lessor, such other documents and information as Lessor
shall reasonably request; and (f) Lessee has satisfied all other reasonable
conditions established by Lessor.
15. OTHER DOCUMENTS: EXPENSES: Lessee agrees to sign and deliver to Lessor any
additional documents deemed desirable by Lessor to effect the terms of the
Master Lease or this Schedule including, without limitation, Uniform Commercial
Code financing statements which Lessor is authorized to file with the
appropriate filing officers. Lessee hereby irrevocably appoints Lessor and any
designee of Lessor as Lessee's attorney-in-fact with full power and authority in
the place of Lessee and in the name of Lessee to prepare, sign, amend, file or
record any Uniform Commercial Code financing statements or other documents
deemed desirable by Lessor to perfect, establish or give notice of Lessor's
interests in the Equipment or in any collateral as to which Lessee has granted
Lessor a security interest. Lessee shall pay upon Lessor's written request any
actual out-of-pocket costs and expenses paid or incurred by Lessor in connection
with the above terms of this section or the funding and closing of this
Schedule.
16. PURCHASE ORDERS AND ACCEPTANCE OF EQUIPMENT. Lessee agrees that (i) Lessor
has not selected, manufactured, sold or supplied any of the Equipment, (ii)
Lessee has selected all of the Equipment and its suppliers, and (iii) Lessee has
received a copy of, and approved, the purchase orders or purchase contracts for
the Equipment. AS BETWEEN LESSEE AND LESSOR, LESSEE AGREES THAT: (a) LESSEE HAS
RECEIVED, INSPECTED AND APPROVED ALL OF THE EQUIPMENT; (b) ALL EQUIPMENT IS IN
GOOD WORKING ORDER AND COMPLIES WITH ALL PURCHASE ORDERS OR CONTRACTS AND
Page 3 of 4
<PAGE>
LOGO
ALL APPLICABLE SPECIFICATIONS; (c) LESSEE IRREVOCABLY ACCEPTS ALL EQUIPMENT FOR
PURPOSES OF THE LEASE "AS-IS, WHERE-IS" WITH ALL FAULTS; AND (d) LESSEE
UNCONDITIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO REVOKE ITS ACCEPTANCE OF
THE EQUIPMENT.
LESSEE HAS READ AND UNDERSTOOD ALL OF THE TERMS OF THIS SCHEDULE. LESSEE AGREES
THAT THERE ARE NO ORAL OR UNWRITTEN AGREEMENTS WITH LESSOR REGARDING THE
EQUIPMENT OR THIS SCHEDULE.
BANC ONE LEASING CORPORATION MEADOW VALLEY CONTRACTORS, INC.
- ---------------------------- -------------------------------
(Lessor) (Lessee)
By: /s/ [ILLEGIBLE] By: /s/ Bradley E Larson
------------------------- ----------------------------
Title: Funding Authority Title: President
---------------------- -------------------------
Acceptance Date: 9-10-99 Witness: /s/ Julie L. Bergo
------------ -----------------------
Page 4 of 4
<PAGE>
CORPORATE GUARANTY
Master Lease Agreement Date: 04/24/98
--------
Lessee Name: MEADOW VALLEY CONTRACTORS, INC
------------------------------
Equipment Cost: $164,836.22
-----------
1. For valuable consideration, the receipt of which is hereby
acknowledged, the undersigned jointly and severally unconditionally guarantee to
BANC ONE LEASING CORPORATION (hereinafter called "Lessor") the full and prompt
performance by the lessee identified above (hereinafter called "Lessee"), of all
obligations which Lessee now has or may hereafter have to Lessor, including but
not limited to obligations under equipment leases and promissory notes executed
in connection with anticipated equipment leases (including but not limited to
all present and future lease schedules and promissory notes under the Master
Lease identified above, with a total original equipment cost to the Lessor of no
more than the amount of the Equipment Cost set forth above), and unconditionally
guarantee the prompt payment when due (whether at scheduled maturity, upon
acceleration or otherwise) of any and all sums, indebtedness and liabilities of
whatsoever nature, due or to become due, direct or indirect, absolute or
contingent, now or hereafter at any time owed or contracted by Lessee to Lessor,
and all costs and expenses of and incidental to collection of any of the
foregoing, including reasonable attorneys' fees (all of the foregoing
hereinafter called "Obligations"). It is the undersigned's express intention
that this guaranty in addition to covering all present Obligations of Lessee to
Lessor, shall extend to all future Obligations of Lessee to Lessor, whether or
not such Obligations are reduced or entirely extinguished and thereafter
increased or are reincurred, whether or not such Obligations are related to the
Master Lease identified above, whether or not such Obligations exceed the
Equipment Cost identified above, and whether or not such Obligations are
specifically contemplated by the undersigned, Lessee, and Lessor as of the date
hereof.
2. This is an absolute and unconditional guarantee of payment and not of
collection. Lessor shall not be required, as a condition of the liability of the
undersigned, to resort to, enforce or exhaust any of its remedies against the
Lessee or any other party who may be liable for payment on any Obligation or to
resort to, marshall, enforce or exhaust any of its remedies against any leased
property or any property given or held as security for this Guaranty or any
Obligation.
3. The undersigned hereby waive and grant to Lessor, without notice to
the undersigned and without in any way affecting the liability of the
undersigned, the right at any time and from time to time, to extend other and
additional credit, leases, loans or financial accommodations to Lessee apart
from the Obligations, to deal in any manner as it shall see fit with any
Obligation of Lessee to Lessor and with any leased property or security for such
Obligation, including, but not limited to, (i) accepting partial payments on
account of any Obligation, (ii) granting extensions or renewals of all or any
part of any Obligation, (iii) releasing, surrendering, exchanging, dealing with,
abstaining from taking, taking, abstaining from perfecting, perfecting, or
accepting substitutes for any or all leased property or security which it holds
or may hold for any Obligation, (iv) modifying, waiving, supplementing or
otherwise changing any of the terms, conditions or provisions contained in any
Obligation and (v) the addition or release of any other party or person liable
hereon, liable on the Obligations or liable on any other guaranty executed to
guarantee any of Lessee's Obligations. The undersigned jointly and severally
hereby agree that any and all settlements, compromises, compositions, accounts
stated and agreed balances made in good faith between Lessor and Lessee shall be
binding upon the undersigned.
4. Every right, power and discretion herein granted to Lessor shall be
for the benefit of the successors or assigns of Lessor and of any transferee or
assignee of any Obligation covered by this Guaranty, and in the event any such
Obligation shall be transferred or assigned, every reference herein to Lessor
shall be construed to mean, as to such Obligation, the transferee or assignee
thereof. This Guaranty shall be binding upon each of the undersigned's
executors, administrators, heirs, successors and assigns.
5. This Guaranty shall continue in force for so long as Lessee shall be
obligated to Lessor, and thereafter until Lessor shall have actually received
written notice of the termination hereof from the undersigned, it being
contemplated that Lessee may borrow, lease, repay and subsequently borrow money
from or lease property from, or become obligated to, Lessor from time to time,
and the undersigned, not having given notice of the termination hereof as herein
provided for, shall be deemed to have permitted this Guaranty to remain in full
force and effect for the purpose of inducing Lessor to make further leases or
loans to Lessee; provided, however, no notice of termination of this Guaranty
shall affect in any manner the rights of Lessor arising under this Guaranty with
respect to the following: (a) any Obligation incurred by Lessee in connection
with the Master Lease identified above with a total equipment cost of no more
than the amount of the Total Equipment Cost set forth above, whether such
obligation is in the form of a lease or a promissory note; or (b) any Obligation
incurred by Lessee prior to receipt by Lessor of written notice of termination
or any Obligation incurred after receipt of such written notice pursuant to a
written agreement entered into by Lessor prior to receipt of such notice.
<PAGE>
The undersigned expressly waive notice of the incurring by Lessee of any
Obligation to Lessor. The undersigned also waive presentment, demand of payment,
protest, notice of dishonor or nonpayment of or nonperformance of any
Obligation.
6. The undersigned hereby waive any claims or rights which they might now
have or hereafter acquire against Lessee or any other person primarily or
contingently liable on any Obligation of Lessee, which claims or rights arise
from the existence or performance of the undersigned's obligations under this
Guaranty or any other guaranty or under any instrument or agreement with respect
to any leased property or any property constituting collateral or security for
this Guaranty or any other guaranty, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution, indemnification, or any
right to participate in any claim or remedy of Lessor or any other creditor
which the undersigned now has or hereafter acquires, whether such claim or right
arises in equity, under contract or statute, at common law, or otherwise.
7. Lessor's rights hereunder shall be reinstated and revived, and this
Guaranty shall be fully enforceable, with respect to any amount at any time paid
on account of the Obligations which thereafter shall be required to be restored
or returned by Lessor upon the bankruptcy, insolvency or reorganization of the
Lessee, the undersigned, or any other person, or as a result of any other fact
or circumstance, all as though such amount had not been paid.
8. The undersigned jointly and severally agree to pay to Lessor all costs
and expenses, including reasonable attorneys' fees, incurred by Lessor in the
enforcement or attempted enforcement of this Guaranty, whether or not suit is
filed in connection therewith, or in the exercise by Lessor of any right,
privilege, power or remedy conferred by this Guaranty.
9. The undersigned represent and warrant that they have relied
exclusively on their own independent investigation of Lessee, the leased
property and the collateral for their decision to guarantee Lessee's Obligations
now existing or thereafter arising. The undersigned agree that they have
sufficient knowledge of the Lessee, the leased property, and the collateral to
make an informed decision about this Guaranty, and that Lessor has no duty or
obligation to disclose any information in its possession or control about
Lessee, the leased property, and the collateral to the undersigned. The
undersigned warrant to Lessor that they have adequate means to obtain from the
Lessee on a continuing basis information concerning the financial condition of
the Lessee and that they are not relying on Lessor to provide such information
either now or in the future.
10. As long as any indebtedness under any of the Obligations remains
unpaid or any credit is available to Lessee under any of the Obligations, the
undersigned agree to furnish to Lessor: (a) annual financial statements setting
forth the financial condition and results of operation of the undersigned
(financial statements shall include balance sheet, income statement, changes in
financial position and all notes thereto) within 120 days of the end of each
fiscal year of the undersigned; (b) quarterly financial statements setting forth
the financial condition and results of operation of the undersigned within 60
days of the end of each of the first three fiscal quarters of the undersigned;
and (c) such other financial information as Lessor may from time to time request
including, without limitation, financial reports filed by the undersigned with
federal or state regulatory agencies.
11. No postponement or delay on the part of Lessor in the enforcement of
any right hereunder shall constitute a waiver of such right. The failure of any
person or entity to sign this Guaranty shall not discharge the liability of any
of the undersigned.
12. This Guaranty remains fully enforceable irrespective of any claim,
defense or counterclaim which the Lessee may or could assert on any of the
Obligations including but not limited to failure of consideration, breach of
warranty, payment, statute of frauds, statute of limitations, fraud, bankruptcy,
accord and satisfaction, and usury, same of which the undersigned hereby waive
along with any standing by the undersigned to assert any said claim, defense or
counterclaim.
13. This Guaranty contains the entire agreement of the parties and
supersedes all prior agreements and understandings, oral or written, with
respect to the subject matter hereof. This Guaranty is not intended to replace
or supersede any other guaranty which the undersigned have entered into or may
enter into in the future. The undersigned may enter into additional guaranties
in the future which may or may not refer to the Master Lease identified above
and such guaranties are not intended to replace or supersede this Guaranty
unless specifically provided in that additional guaranty. The interpretation,
construction and validity of this guaranty shall be governed by the laws of the
State of Ohio. With respect to any action brought by Lessor against Guarantor to
enforce any term of this guaranty, Guarantor hereby irrevocably consents to the
jurisdiction and venue of any state or federal court in Franklin County, Ohio,
where Lessor has its principal place of business and where payments are to be
made by Lessee and Guarantor.
ALL PARTIES TO THIS GUARANTY, INCLUDING GUARANTOR AND LESSOR, WAIVE ALL RIGHTS
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY
PARTY AGAINST ANY OTHER PARTY ON ANY MATTER WHATSOEVER ARISING OUT OF, IN
CONNECTION WITH OR IN ANY WAY RELATED TO THIS GUARANTY.
<PAGE>
Guarantor:
MEADOW VALLEY CORPORATION
- -------------------------
By: /s/ Bradley E Larson
---------------------------------
Title: President
------------------------------
Witness: /s/ Julie L. Bergo
----------------------------
Date: 9-8-99
-------------------------------
<PAGE>
Bane One Leasing Corporation
SCHEDULE A-1 EQUIPMENT LEASED HEREUNDER
QUANTITY DESCRIPTION PAGE 1
================================================================================
EQUIPMENT LOCATION: 4411 S. 40TH ST., SUITE D-11
PHOENIX, AZ 85082
COUNTY: MARICOPA
COST: $164,836.22
1 WALTON TRAILER MODEL 6OKTP VIN NUMBER - 1W9TE3039X1284407
1 1998 KENWORTH T800 DUMP TRUCK
WITH BOMAX TRAILER VIN NUMBER - 1NKDLB0X0WR759476
TOGETHER WITH ALL ATTACHMENTS, ADDITIONS, ACCESSIONS, PARTS, REPAIRS,
IMPROVEMENTS, REPLACEMENTS AND SUBSTITUTIONS THERETO.
This Schedule A-1 is attached to and made a part of Lease Number 1000098533 and
constitutes a true and accurate description of the equipment.
Lessee:
MEADOW VALLEY CONTRACTORS, INC.
- ------------------------------
By: /s/ Bradley E Larson
----------------------------
Date: 9-8-99
--------------------------
<PAGE>
EXHIBIT 10.101
CATERPILLAR FINANCIAL SERVICES CORPORATION FINANCE LEASE
Dated as of SEP 3 1999
LESSEE: MEADOW VALLEY LESSOR: CATERPILLAR FINANCIAL SERVICES
CONTRACTORS, INC. CORPORATION
ADDRESS: P.O.BOX 60726 ADDRESS: 4965 Preston Park Blvd. Suite
PHOENIX, AZ 85040 400 Plano, TX 75093
Lessor, in reliance on Lessee's selection of the equipment described below
("Unit" or "Units"), agrees to acquire and lease the Units to Lessee, and Lessee
agrees to lease the Units from Lessor, subject to the terms and conditions below
and on the reverse side:
<TABLE>
<CAPTION>
Description of Unit(s) Serial# Monthly Rent Final Payment
- ---------------------- ------- ------------ --------------
<S> <C> <C> <C> <C> <C>
(1) 972G CaterpiLLar WHEEL LOADER 7Ls00253 # 1-12 @ 4,496.30 148,707.33 *
#13-24 @ 4,496.30 101,874.93 *
#25-36 @ 4,496.30 52,357.12 *
#37-48 @ 4,496.30 1.00
</TABLE>
Rent to be paid: in arrears (starts one month after Delivery Date) and every
month thereafter.
Lease Term: 48 Months Utilization Date: NOVEMBER 30, 1999
The [_] Mandatory Final Payment (Section 13) [X] Optional Final Payment (Section
14) is applicable to this Lease (check one) Location of Unit(s): HWY 54 & 70
ALAMAGORDO, NM 88310 OTERO
ADDITIONAL PROVISIONS: RIDERS:
FLEX OPTION AMENDMENT
TERMS AND CONDITIONS
1. LEASE TERM: The lease term for each Unit shall start on its Delivery Data
(the date (a) Lessor executes this Lease, (b) Lessor takes title to the Unit, or
(c) Lessee or its agent takes control of physical possession of the Unit,
whichever is latest), provided the Delivery Date is on or before the utilization
date stated above, and shall continue for the number of months stated above. If
the Delivery Date is not on or before the utilization date, Lessee shall, at the
option of Lessor, assume Lessor's obligations to purchase and pay for the Unit.
Lessee shell execute and send Lessor's delivery supplement to Lessor promptly
after delivery of a Unit.
2. RENT: Lessee shall pay to Lessor, at P.O. BOX 730681, DALLAS TX 75373-0681
or such other location Lessor designates in writing, rent for each Unit as
stated above starting (a) on its Delivery Date if the rent is to be paid in
advance, or (b) one month (or other period as stated above) after its Delivery
Date if the rent is to be paid in arrears.
An amount equal to the first rent payment for each Unit must accompany this
document when it is submitted to Lessor. If Lessor executes this document, the
amount shall be the first rent payment. If Lessor does not execute this
document, the amount shall be returned to Lessee. If Lessor does not receive a
rent payment on the date it is due, Lessee shall pay to Lessor, on demand, a
late payment charge equal to five percent (5%) of the rent payment not paid when
due or the highest charge allowed by law, whichever is less.
3. NO ABATEMENT: Lessee shall not be entitled to abatement or reduction of
rent or setoff against rent for any reason whatsoever. Except as otherwise
provided, this Lease shall not terminate because of, nor shall the obligations
of Lessor or Lessee be affected by damage to, any defect in, destruction of, or
loss of possession or use of a Unit; the attachment of any lien, security
interest or other claim to a Unit; any Interference with Lessee's use of a Unit;
Lessee's insolvency or the commencement of any bankruptcy or similar proceeding
by or against Lessee, or any other cause whatsoever.
4. DISCLAIMER OF WARRANTIES: Lessee acknowledges and agrees that Lessor is not
the manufacturer of the Unit(s) and that Lessee has selected each Unit based on
Lessee's own judgment without any reliance whatsoever on any statements or
representations made by Lessor. AS BETWEEN LESSOR AND LESSEE, THE UNIT(S) ARE
PROVIDED "AS IS" WITHOUT ANY WARRANTIES OF ANY KIND. LESSOR HEREBY EXPRESSLY
DISCLAIMS a) ALL WARRANTIES OF MERCHANTABILITY, b) ALL WARRANTIES OF FITNESS FOR
A PARTICULAR PURPOSE, AND c) ALL WARRANTIES AGAINST INFRINGEMENT OR THE LIKE.
Lessor assigns to Lessee its interest in any of the manufacturer's warranties on
the Unit(s).
5. POSSESSION,USE AND MAINTENANCE: Lessee shall not (a) use, operate, maintain
or store a Unit improperly, carelessly, unsafely or in violation of any
applicable law or regulation or for any purpose other than in the conduct of
Lessee's business; (b) abandon a Unit; (c) sublease a Unit, permit the use of a
Unit by anyone other than Lessee, change the use of unit from that specified in
the Application Survey/Usage Rider attached hereto, or change the location of a
Unit from that specified above, without the prior written consent of Lessor; or
(d) create or allow to exist any lien, claim, security interest or encumbrance
on any of its rights hereunder or a Unit. A Unit is and shall remain personal
property regardless of its use or manner of attachment to realty. Lessor and its
agent shall have the right (but not the obligation) to inspect a Unit and
maintenance records relating to it and observe its use. Lessee, at its expense,
shall maintain each Unit in good operating order, repair and condition and shall
perform maintenance at least as frequently as stated in any applicable
operator's guide, service manual, or lubrication and maintenance guide. Lessee
shall not alter any Unit or affix any accessory or equipment to it if doing so
will impair its originally intended function or use or reduce its value. Any
alteration or addition to a Unit shall be the responsibility of and at the sole
risk of Lessee. All Parts, accessories and equipment affixed to a Unit shall be
subject to the security interest of Lessor.
SEE REVERSE SIDE FOR ADDITIONAL TERMS AND CONDITIONS
<TABLE>
<S> <C>
Lessee: MEADOW VALLEY CONTRACTORS, INC. Lessor: CATERPILLAR FINANCIAL SERVICES CORPORATION
By /s/ Bradley E Larson By /s/ Dicki Sizemore
------------------------------ -----------------------------------
Name (PRINT) BRADLEY E LARSON NAME (PRINT) DICKI SIZEMORE
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Title PRESIDENT Title CREDIT ANALYST
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Date 8-19-99 Date SEP 3 1999
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6. TAXES: Lessee shall promptly pay or reimburse Lessor for all fees, charges
and taxes of any nature, including, without limitation, personal property taxes,
together with any penalties, fines or additions to tax and interest thereon
(collectively, "Taxes") levied on or assessed against Lessor in connection with
the ownership, leasing, rental, sale, possession, purchase, or use of a Unit;
excluding however, all charges or taxes on or measured by Lessor's net income,
or charges or taxes levied on or assessed against Lessor in connection with a
Unit after the Unit is returned to Lessor in accordance with the terms of this
Lease. If the reimbursement to Lessor of Taxes constitutes income for federal,
state or local tax purposes and if the Lessor is not entitled to a deduction for
the full amount of the reimbursement, the Lessee shall pay the Lessor an
additional amount such that the net amount received by Lessor after payment of
all related Taxes equals the amount which Lessor would have received if no such
Taxes were payable. Lessee shall prepare and timely file, in a manner
satisfactory to Lessor, any reports or returns which may be required with
respect to a Unit, including, without limitation, personal property tax returns.
For purposes of this section, in computing Lessor's Taxes attributable to a
reimbursement, it shall be assumed that the Lessor is in the highest marginal
tax rate applicable to corporations at the time the reimbursement is made, and
that the term "Lessor" shall include any affiliated group, within the meaning of
Section 1504 of the Internal Revenue Code of 1986, of which Lessor is a member
for any year in which a consolidated or combined income tax return is filed for
the affiliated group.
7. LOSS OR DAMAGE: Lessee shall bear the risk, of any Casualty Occurrence
(the Unit is worn out, lost, stolen, destroyed, taken by government action or,
in Lessor's opinion, irreparably damaged) or other damage from the time it is
purchased by Lessor until it is returned to Lessor. Lessee shall give Lessor
prompt notice of a Casualty Occurrence or other damage. If, in Lessor opinion,
the damage is not a Casualty Occurrence, Lessee shall, at its expense, promptly
restore the Unit to the condition required by Section 5. If a Casualty
Occurrence, Lessee shall pay to Lessor on the first rent payment date following
the Casualty Occurrence (thirty (30) days after the Casualty Occurrence if there
is no rent payment date remaining) the lesser of (a) the sum of (i) all amounts
then due under this Lease with respect to the Unit, (ii) the present value of
all unpaid rent for the Unit, and (iii) the present value of the Purchase Price
of the Unit as stated on the front hereof; or (b) the maximum amount permitted
by law. Present values will be determined by discounting at the implicit
interest rate of this Lease. Upon making this payment, the lease term with
respect to the Unit shall terminate and Lessee shall be entitled to possession
of the Unit and to any recovery in respect to it (subject to the rights of any
Insurer).
8. WAIVER AND INDEMNITY: LESSEE HEREBY AGREES TO RELEASE, DEFEND, INDEMNIFY
AND HOLD HARMLESS LESSOR, ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND ASSIGNS
FROM AND AGAINST ANY CLAIMS OF LESSEE OR THIRD PARTIES, INCLUDING CLAIMS BASED
UPON BREACH OF CONTRACT, BREACH OF WARRANTY, PERSONAL INJURY, PROPERTY DAMAGE,
STRICT LIABILITY OR NEGLIGENCE, FOR ANY LOSS, DAMAGE OR INJURY CAUSED BY OR
RELATING TO THE DESIGN, MANUFACTURE, SELECTION, DELIVERY, CONDITION, OPERATION,
USE, OWNERSHIP, MAINTENANCE OR REPAIR OF ANY UNIT. FURTHER, LESSEE AGREES TO BE
RESPONSIBLE FOR ALL COSTS AND EXPENSES, INCLUDING REASONABLE ATTORNEYS' FEES,
INCURRED BY LESSOR OR IT'S DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND ASSIGNS IN
DEFENDING SUCH CLAIMS OR IN ENFORCING THIS PROVISION. UNDER NO CONDITION OR
CAUSE OF ACTION SHALL LESSOR BE LIABLE FOR ANY LOSS OF ACTUAL OR ANTICIPATED
BUSINESS OR PROFITS OR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES.
9. INSURANCE: Lessee, at its expense, shall keep each Unit Insured for the
benefit of Lessor against all risks for not less than the amount described in
Section 7 and shall maintain comprehensive public liability insurance (including
product and broad form contractual liability) covering the Unit for not less
than $1,000,000 combined coverage for bodily injury and property damage. All
insurance shall be in a form and with companies as Lessor shall approve, shall
specify Lessor and Lessee as name insured, shall be primary, without the right
of contribution from any other insurance carried by Lessor, and shall provide
that the insurance may not be canceled or altered so as to affect the interest
of Lessor without at least to (10) days' prior written notice to Lessor. All
Insurance covering loss or damage to a Unit shall name Lessor as loss payee.
Lessee shall not make adjustments with insurers except with Lessor's prior
written consent end hereby irrevocably appoints Lessor as Lessee's attorney-in-
fact to receive payment of and to endorse all checks, drafts and other documents
and to take any other actions necessary to pursue Insurance claims and recover
payments if Lessee fails to do so. Lessee shall promptly notify Lessor of any
occurrence which may become the basis of a claim and shall provide Lessor with
all requested pertinent date, Lessee shall promptly deliver to Lessor evidence
of such insurance coverage.
10. EVENTS OF DEFAULT: Each of the following constitutes an event of default
("Event of Default"): (a) Lessee fails to make any payment when due; (b) any
representation or warranty to Lessor which is incorrect or misleading; (c)
Lessee fails to observe or perform any covenant, agreement or warranty made by
Lessee and the failure continues for ten (10) days after written notice to
Lessee; (d) any default occurs under any other agreement between Lessee and
Lessor or any affiliate of Lessor; (e) Lessee or any guarantor of this Lease
ceases to do business, becomes insolvent, makes an assignment for the benefit of
creditors or files any petition or action under any bankruptcy, reorganization,
insolvency or moratorium law, or any other law or laws for the relief of, or
relating to, debtors; (f) filing of any involuntary petition under any
bankruptcy statute against Lessee or any guarantor of this Lease, or appointment
of a receiver, trustee, custodian or similar official to take possession of the
properties of Lessee or any guarantor of this Lease, unless the petition or
appointment ceases to be in effect within thirty (30) days after filing or
appointment; and (g) breach or repudiation of a guaranty obtained by Lessor in
connection with this Lease.
11. REMEDIES: If an Event of Default occurs, Lessor may (a) proceed by court
action to enforce performance by Lessee of the covenants of this Lease or to
recover damages for their breach or (b) by notice in writing to Lessee terminate
this Lease, in which event Lessee shall remain liable as provided herein and
Lessor may do any one or more of the following: (i) declare the balance due (or
the maximum amount permitted by law if recovery of the entire balance due is
prohibited) with respect to each Unit (immediately due and payable and recover
any additional damages and expenses sustained by Lessor due to breach of any
covenant, representation or warranty in this Lease other than for the payment of
rent; (ii) enforce the security interest granted herein; (iii) require Lessee to
return each Unit and additional security pursuant to Section 12; and (iv) enter
the premises where any Unit or additional security may be and take possession of
it without notice, liability or legal process. Lessee agrees to pay all charges,
costs, expenses and reasonable attorney's fees incurred by Lessor in enforcing
this Lease. Lessor has all rights given to a secured party by law. Lessor may
undertake commercially reasonable efforts to sell or release a Unit and
additional security, and the proceeds of any sale or, release shall be applied
in the following order: (i) to reimburse Lessor for all expenses of retaking,
holding, preparing for sale or re-lease and selling or re-leasing the Unit and
additional security, including any taxes, charges, costs, expenses and
reasonable attorney's fees incurred by Lessor; (ii) to pay Lessor all amounts
which under the terms of this Lease are due or have accrued as of the date of
Lessor's receipt of the proceeds; and (iii) to pay Lessor the balance due (or
the maximum amount permitted by law if recovery of the entire balance due is
prohibited) with respect to the Unit and additional security. Any surplus shall
be paid to the person entitled to it. Lessee shall promptly pay any deficiency
to Lessor, Lessee acknowledges that sales for cash or credit to a wholesaler,
retailer or user of a Unit or additional security are all commercially
reasonable. The remedies provided to Lessor shall be cumulative and shall be in
addition to all other remedies existing at law or in equity. If Lessee fails to
perform, any of its obligations under this Lease, Lessor may perform the
obligations, and the expenses incurred by Lessor as a result shall be payable by
Lessee upon demand.
12. RETURN OF UNIT: If Lessor shall rightfully demand possession of a Unit,
Lessee, at its expense, shall promptly deliver possession of the Unit to Lessor,
properly protected and in the condition required by Section 5, at the option of
Lessor, (a) to the premises of the nearest Caterpillar dealer selling equipment
of the same type as the Unit, or (b) on board a carrier named by Lessor and
shipping it, freight collect, to the destination designated by Lessor. If the
Unit is not in the condition required by Section 5, Lessee shall pay to Lessor,
on demand, all coats and expenses incurred by Lessor to bring the Unit into the
required condition.
13. MANDATORY FINAL PAYMENT: If the Mandatory Final Payment box is checked,
at the end of lease term with respect to a Unit, provided this Lease has not
been terminated with respect to it, Lessee shall pay the Final Payment stated on
the front hereof. Upon receipt of the Final Payment, and all other amounts due
under this Lease, plus an amount equal to any taxes due in connection with the
transfer of the Unit or the delivery of the bill of sale, Lessor shall deliver
to Lessee, upon request, a bill of sale without warranties except that the Unit
is free of all encumbrances of any person claiming through Lessor, Lessee shall
purchase the Unit "AS IS, WHERE IS, WITH ALL FAULTS."
14. OPTIONAL FINAL PAYMENT: If the Optional Final Payment box is checked and
If no Event of Default shall have occurred and be continuing, Lessee may, by
notice delivered to Lessor not less than sixty (60) days prior to the end of the
lease term with respect to a Unit, elect to pay the Final Payment stated on the
front. Payment of the Final Payment shall be due at the end of the lease term.
Upon payment of the Final Payment and all other amounts due under this Lease,
plus an amount equal to any taxes due in connection with the transfer of the
Unit or the delivery of the bill of sale, Lessor shall deliver to Lessee, upon
request, a bill of sale without warranties except that the Unit is free of all
encumbrances of any person claiming through Lessor. Lessee shall purchase the
Unit "AS IS, WHERE IS, WITH ALL FAULTS". If Lessee does not elect to pay the
Final Payment, Lessee, upon expiration of the lease term, shall return the Unit
to Lessor as provided in Section 12 and furnish Lessor with documentation, as
Lessor may reasonably request, conveying to Lessor all of Lessee's right, title
and Interest in the Unit, free and clear of all liens, claims, security
interests and encumbrances other than those of Lessor.
15. SECURITY INTEREST: LESSEE REPRESENTATIONS: Unless applicable law provides
otherwise, title to a Unit shall remain in Lessor as security for the
obligations of Lessee hereunder until Lessee has fulfilled all of its
obligations. Lessee hereby grants to Lessor a continuing security interest in
the Unit, including all attachments, accessories and optional features therefor
(whether or not installed thereon) and all substitutions, replacements,
additions, and accessions thereto, and proceeds of all the foregoing, to secure
the payment of all sums due hereunder. Lessee will, at its expense, do any act
and execute, acknowledge, deliver, file, register and record any documents which
Lessor deems desirable in its discretion to protect Lessor's security interest
in the Unit and Lessor's rights and benefits under this Lease. Lessee hereby
irrevocably appoints Lessor as Lessee's Attorney-In-Fact for the signing and
filing of such documents and authorizes Lessor to delegate these limited powers.
Lessee represents and warrants to Lessor that (a) Lessee has the power to make,
delver and perform under this Lease, (b) the person executing and delivering
this Lease is authorized to do so on behalf of Lessee, and (c) this Lease
constitutes a valid obligation of Lessee, legally binding upon it and
enforceable in accordance with its terms. Lessee shall, during the lease term,
display in a prominent place on the Unit labels supplied by Lessor stating that
the Unit is leased from Lessor.
16. ASSIGNMENT; COUNTERPARTS: The rights of Lessor under this Lease and title
to the Unit may be assigned by Lessor at any time. If notified by Lessor, Lessee
shall make all payments due under this Lease to the party designated in the
notice, without offset or deduction. No assignment of this Lease or any right or
obligation under it may be made by Lessee without the prior written consent
of Lessor. This Lease shall be binding upon and benefit Lessor and Lessee and
their respective successors and assigns. If this Lease is assigned by Lessor to
a partnership or trust, the term "Lessor" shall thenceforth mean and include
the partnership or trust and shall also include, for purposes of Sections
4,5,6,7, 8 and 9, each partner in or beneficiary of the partnership or trust.
Although multiple counterparts of this document may be signed, only the
counterpart accepted, acknowledged and certified by Caterpillar Financial
Services Corporation on the signature page thereof as the original will
constitute original chattel paper.
17. EFFECT OF WAIVER; ENTIRE AGREEMENT; MODIFICATION OF LEASE; NOTICES: A
delay or omission by Lessor to exercise any right or remedy shall not impair any
right or remedy and shall not be construed as waiver of any breach or default.
Any waiver or consent by Lessor must be in writing. This Lease completely states
the rights of Lessor and Lessee and supersedes all prior agreements with respect
to the Unit. No variation or modification of this lease, shall be valid unless
in writing. All notices shall be in writing, addressed to the other party at the
address stated on the front or at such other address as may hereafter be
furnished in writing.
18. APPLICABLE LAW, JURISDICTION AND JURY TRIAL WAIVER PROVISIONS: This
Agreement shall be governed by and construed under the laws of the State of
Tennessee, without giving effect to the conflict-of-laws principles thereof, and
Lessee hereby consents to the jurisdiction of any state or federal court located
within the State of Tennessee. THE PARTIES HERETO HEREBY WAIVE THE RIGHT TO
TRIAL BY JURY IN ANY ACTION ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE
OBLIGATIONS OR THE COLLATERAL.
19. SEVERABILITY; SURVIVAL OF COVENANTS: If any provision of this Lease shall
be invalid under any law, it shall be deemed omitted but the remaining
provisions hereof shall be given effect. All obligations of Lessee under this
Lease shall survive the expiration or termination of this Lease to the extent
required for their full observance and performance.
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GUARANTY OF PAYMENT
THIS GUARANTY ("Guaranty") is made and entered into as of SEP 3 1999 by MEADOW
VALLEY CORPORATION, (hereinafter, referred to as "Guarantor"), in favor of
Caterpillar Financial Services Corporation, 3322 West End Avenue, Nashville,
Tennessee 37203-0983 (hereinafter referred to as "Caterpillar Financial"),
guaranteeing the Indebtedness (as hereinafter defined) of MEADOW VALLEY
CONTRACTORS, INC. (hereinafter referred to as "Obligor").
WITNESSETH:
FOR VALUE RECEIVED, and/or as an inducement to Caterpillar Financial to now or
hereafter enter into, purchase or otherwise acquire the agreements, accounts
and/or other obligations evidencing and/or securing Obligor's Indebtedness and
in consideration of and for credit and financial accommodations now or hereafter
extended to or for the account of the Obligor (which includes Caterpillar
Financial's consent to an assignment and/or assumption of the Indebtedness),
which is in the best interest of Guarantor and which would not have been
extended but for this Guaranty, the Guarantor agrees as follows:
SECTION 1. Guaranty of Obligor's Indebtedness. Guarantor hereby absolutely,
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irrevocably and unconditionally agrees to, and by these presents does hereby:
(a) guarantee the prompt and punctual payment, performance and satisfaction of
all present and future indebtedness and obligations of Obligor to Caterpillar
Financial which Obligor now owes Caterpillar Financial or which Obligor shall at
any time or from time to time hereafter owe Caterpillar Financial when the same,
shall become due in connection with or arising out of that certain FINANCE LEASE
by and between Obligor and Caterpillar Financial dated SEP 3 1999, including any
and all existing and future additional schedules, amendments and/or related
agreements thereto (the "Contract"), whether direct or contingent, due or to
become due, joint or several, primary or secondary, liquidated or unliquidated,
secured or unsecured, original or renewed or extended, or by open account or
otherwise, and whether representing rentals, principal, interest and/or late
charges or other charges of an original balance, an accelerated balance, a
balance reduced by part payment or a deficiency after sale of collateral or
otherwise and (b) undertake and guarantee to pay on demand and indemnify
Caterpillar Financial against all liabilities, losses, costs, attorney's fees,
and expenses which may be suffered by Caterpillar Financial by reason of
Obligor's default or default of the Guarantor (with all of Obligor's
indebtedness and/or obligations as stated above (including all costs, fees and
expenses) being hereinafter individually and collectively referred to under
this Guaranty as Obligor's "Indebtedness", which indebtedness shall be
conclusively presumed to have been created in reliance upon this Guaranty).
SECTION 2. Joint, Several and Solidary Liability. Guarantor further agrees that
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its obligations and liabilities for the prompt and punctual payment, performance
and satisfaction of Obligor's indebtedness are independent of any agreement or
transaction with any third parties and shall be on a "joint and several" and
"solidary" basis along with Obligor to the same degree and extent as if
Guarantor had been and/or will be a co-borrower, co-principal obligor and/or
co-maker of Obligor's Indebtedness. In the event that there is more than one
guarantor under this Guaranty, or in the event that there are other guarantors,
endorsers, sureties or any other party who may at any time become liable for all
or any portion of Obligor's Indebtedness (each, an "Other Obligor"), the
provisions hereof shall be read with all grammatical changes thereby rendered
necessary and each reference to the Guarantor shall include each and every one
of those parties liable for all or any portion of Obligor's Indebtedness and
each Guarantor's obligations and liabilities hereunder shall be on a "joint and
several" and "solidary" basis along with such Other Obligors.
SECTION 3. Duration; Cancellation of Guaranty. This Guaranty and Guarantor's
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obligations and liabilities hereunder shall remain in full force and effect
until such time as Obligor's Indebtedness shall be fully and finally paid,
performed and/or satisfied, until such time as this Guaranty may be cancelled by
Caterpillar Financial under a written cancellation instrument in favor of
Guarantor or otherwise as stated herein.
SECTION 4. Default by Obligor. Immediately upon Obligor's default under any of
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its Indebtedness in favor of Caterpillar Financial, Caterpillar Financial may
make demand upon Guarantor and Guarantor unconditionally and absolutely agrees
to pay the full then unpaid amount of all of Obligor's Indebtedness (whether at
stated maturity, by required prepayment, declaration, acceleration or otherwise)
and/or perform any covenant or agreement hereunder guaranteed. Such payment or
payments shall be made immediately following demand by Caterpillar Financial at
Caterpillar Financial's offices indicated above.
SECTION 5. Additional Covenants. Guarantor further agrees that Caterpillar
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Financial may, at its sole option, at any time, and from time to time, without
the consent of or notice to Guarantor, or to any other party, and without
incurring any responsibility to Guarantor or to any other party, and without
affecting, impairing or releasing the obligations of Guarantor under this
Guaranty: (a) discharge or release any party (including, but not limited to,
Obligor, secondary obligors of Obligor's Indebtedness or any co-guarantor under
this Guaranty) who is or may be liable to Caterpillar Financial for Obligor's
Indebtedness; (b) sell at public or private sale, exchange, release, impair,
surrender, substitute, realize upon or otherwise deal with, in any manner and in
any order and upon such terms and conditions as Caterpillar Financial deems best
at its uncontrolled discretion, any leased equipment and/or any collateral
listed in the Contract or now or hereafter otherwise directly or indirectly
securing repayment of Obligor's Indebtedness (all such leased equipment and/or
all such collateral shall hereinafter be referred to as the "Equipment"),
including without limitation, the purchase of all or any part of such collateral
for Caterpillar Financial's own account; (c) change the manner, place or terms
of payment and/or available credit (including without limitation increase or
decrease in the amount of such payments, available credit or any interest rate
adjustments), or change or extend the time of payment of or renew, as often and
for such periods as Caterpillar Financial may determine, or alter Obligor's
Indebtedness or grant any other indulgence to Obligor and/or any secondary
obligors of Obligor's Indebtedness or any co-guarantor under this Guaranty; (d)
settle or compromise Obligor's Indebtedness with Obligor and/or any third party
or refuse any offer of performance with respect to, or substitutions for, the
Indebtedness; (e) take or accept any other security or guaranty for any or all
of Obligor's Indebtedness; and/or (f) enter into, deliver, modify, amend or
waive compliance with, any instrument, agreement or arrangement evidencing,
securing or otherwise affecting, all or any part of Obligor's Indebtedness.
SECTION 6. No Release of Guarantor. Guarantor's obligations and liabilities
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under this Guaranty shall not be released, impaired, reduced or otherwise
affected by, and shall continue in full force and effect, notwithstanding the
occurrence of any event, including without limitation any one or more of the
following events: (a) death, insolvency, bankruptcy, arrangement, adjustment,
composition, liquidation, disability, dissolution or lack of authority (whether
corporate, partnership or trust) of Obligor (or any person acting on Obligor's
behalf) or any Other Obligor or any other defense based on or arising out of the
lack of validity or unenforceability of the Indebtedness or any agreement or
instrument relating thereto or any provisions thereof and/or Obligor's absence
or cessation of liability thereunder for any reason, including without
limitation, Caterpillar Financial's failure to preserve any right or remedy
against Obligor; (b) any change in Obligor's financial condition; (c) partial
payment or payments of any amount due and/or outstanding under Obligor's
Indebtedness; (d) any change in Obligor's management, ownership, identity or
business or organizational structure; (e) any payment by Obligor or any other
party to Caterpillar Financial that is held to constitute a preferential
transfer or a fraudulent conveyance under any applicable law, or for any reason,
Caterpillar Financial is required to fund such payment or pay such amount to
Obligor or
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<PAGE>
to any other person; (f) any sale, lease or transfer, whether or not
commercially reasonable, of all or any part of Obligor's assets and/or any
assignment, transfer or delegation of Obligor's Indebtedness to any third party
(whereby this Guaranty shall continue to extend to all sums due from or for the
account or Obligor and/or the new or substituted legal entity); (g) any failure
to perfect any lien or security interest securing the Indebtedness or preserve
any right, priority or remedy against any Equipment; (h) any interruption,
change or cessation of relations between Guarantor and Obligor; (i) any defect
in, damage to, destruction of or loss of or interference with possession or use
of any Equipment for any reason by Obligor or any other person; (j) any act or
omission by Caterpillar Financial which increases the scope of Guarantor's risk,
including without limitation, negligent administration of transactions with
Obligor; and/or (k) any other occurrence or circumstance whatsoever, whether
similar or dissimilar to the foregoing, which might otherwise constitute a legal
or equitable discharge, release or defense of a guarantor or surety or which
might otherwise limit recourse against Guarantor.
SECTION 7. Waivers by Guarantor. Guarantor waives, for the benefit of
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Caterpillar Financial (which waivers shall survive until this Guaranty is
released or terminated in writing by Caterpillar Financial): (a) notice of the
acceptance of this Guaranty; (b) notice of the existence, creation or incurrence
of new and/or additional debt owing from Obligor to Caterpillar Financial; (c)
presentment, protest and demand, and notice of protest, demand, nonpayment,
nonperformance and dishonor of any and all agreements, notes or other
obligations signed, accepted, endorsed or assigned to or by Caterpillar
Financial or agreed to between Obligor and Caterpillar Financial; (d) notice of
adverse change in Obligor's financial condition or any other fact which might
materially increase the risk of Guarantor; (e) any and all rights in and notices
or demands relating to any Equipment, including without limitation, all rights,
notices, advertisements or demands relating, whether directly or indirectly, to
the foreclosure, sale or other disposition of any or all such Equipment or the
manner of such sale or other disposition; (f) any claim, right or remedy which
Guarantor may now have or hereafter acquire against the Obligor that arises
hereunder and/or from the performance by any Other Obligor including, without
limitation, any claim, remedy or right of subrogation, reimbursement,
exoneration, contribution, indemnification, or participation in any claim, right
or remedy of Caterpillar Financial against the Obligor or any security which
Caterpillar Financial now has or hereafter acquires with respect to the Obligor,
whether or not such claim, right or remedy arises in equity, under contract
(express or implied), by statute, under common law or otherwise; (g) notice of
any default by Obligor or any other person obligated in any manner for all or
any portion of Obligor's Indebtedness and notice of any legal proceedings
against such parties; (h) any right of contribution from any Other Obligors; (i)
notice and hearing as to any prejudgment remedies; (j) any defense which is
premised on an alleged lack of consideration of the obligation undertaken by
Guarantor, including without limitation, any defense to the enforcement of this
Guaranty based upon the timing of execution of this Guaranty and/or that the
Guaranty had been executed after the execution date of any agreements evidencing
the Indebtedness; (k) all exemptions and homestead laws; (l) any other demands
and notices required by law; (m) all setoffs and counterclaims against
Caterpillar Financial and/or Obligor; (n) any defense based on the claim that
Guarantor's liabilities and obligations exceed or are more burdensome than those
of Obligor; (o) any defense which the Obligor may assert or be able to assert on
the underlying Indebtedness or which may be asserted by Guarantor, including but
not limited to (i) breach of warranty, (ii) fraud, (iii) statute of frauds, (iv)
infancy, (v) statute of limitations, (vi) lender liability, (vii) accord and
satisfaction, (viii) payment and/or (ix) usury.
SECTION 8. Enforcement of Guarantor's Obligations and Liabilities. Guarantor
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agrees that, should Caterpillar Financial deem it necessary to file an
appropriate collection action to enforce Guarantor's obligations and liabilities
under this Guaranty, Caterpillar Financial may commence such a civil action
against Guarantor without the necessity of first (i) attempting to collect
Obligor's Indebtedness from Obligor or from any Other Obligor, whether through
filing of suit or otherwise, (ii) attempting to exercise any rights Caterpillar
Financial may have against any Equipment, whether through re-lease, the filing
of an appropriate foreclosure action or otherwise, (iii) including Obligor or
any Other Obligor as an additional party defendant in such a collection action
against Guarantor, or (iv) pursuing any other remedy in Caterpillar Financial's
power or to mitigate damages. If there is more than one guarantor under this
Guaranty, each Guarantor additionally agrees that Caterpillar Financial may file
an appropriate collection and/or enforcement action against any one or more of
them, without impairing the rights of Caterpillar Financial against any other
guarantor under this Guaranty.
SECTION 9. Construction. This writing is intended as a final expression of this
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Guaranty agreement and is a complete and exclusive statement of the terms of
that agreement, provided however, that the provisions of this Guaranty shall be
in addition to and cumulative of, and not in substitution, novation or discharge
of, any and all prior or contemporaneous written guaranties or other written
agreements by Guarantor (or any one or more of them), in favor of Caterpillar
Financial or assigned to Caterpillar Financial by others, all of which shall be
construed as complementing each other. Nothing herein contained shall prevent
Caterpillar Financial from enforcing any and all such other guaranties or
agreements in accordance with their respective terms.
SECTION 10. Successors and Assigns Bound. Guarantor's obligations and
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liabilities under this Guaranty shall be binding upon Guarantor's successors,
heirs, legatees, devisees, administrators, executors and assigns. Caterpillar
Financial may assign this Guaranty and any and all rights and interests included
herein in Caterpillar Financial's sole discretion without notice to Guarantor
and the rights and remedies granted to Caterpillar Financial under this Guaranty
shall also inure to the benefit of Caterpillar Financial's successors and
assigns, as well as to any and all subsequent holder or holders of any of
Obligor's Indebtedness subject to this Guaranty, without setoff, counterclaim,
reduction, recoupment, abatement, deduction or defense based on any claim
Guarantor may have against Caterpillar Financial, such successors and assigns or
subsequent holders of Obligor's Indebtedness. Guarantor shall not assign this
Guaranty without the prior written consent of Caterpillar Financial.
SECTION 11. Termination. This Guaranty is irrevocable and may be terminated only
- ------------------------
as to Indebtedness created sixty (60) days after actual receipt by Caterpillar
Financial of written notice of termination hereof, provided however, that all
Indebtedness incurred, created or arising pursuant to a commitment of
Caterpillar Financial made prior to the effective date of such termination (the
"Termination Date") and any extensions, renewals or modifications of such
Indebtedness (including without limitation loan and/or other commitments) agreed
to or instituted by Caterpillar Financial prior to the Termination Date shall
not be effected by such termination and shall be deemed to have been incurred
prior to termination (irrespective of whether indebtedness arising thereunder
occurs after the Termination Date) and shall be fully covered by this Guaranty.
Any termination of this Guaranty shall be ineffective unless upon the
Termination Date Guarantor deposits with Caterpillar Financial collateral in the
form of cash in an amount not less than the amount of the Indebtedness
outstanding on the Termination Date. Such cash shall be held by Caterpillar
Financial in a separate account and shall be returned to Guarantor upon the full
and indefeasible payment of all of the Indebtedness.
SECTION 12. Governing Law; Waiver of Jury. This Guaranty shall be construed
- ------------------------------------------
liberally in favor of Caterpillar Financial and shall be governed and
construed in accordance with the substantive laws of the State of Tennessee
without regard to the conflicts of laws principles thereof. ANY ACTION, SUIT OR
PROCEEDING RELATING DIRECTLY OR INDIRECTLY TO THIS GUARANTY OR THE RELATIONSHIP
BETWEEN GUARANTOR AND CATERPILLAR FINANCIAL, WILL BE TRIED IN A COURT OF
COMPETENT JURISDICTION BY A JUDGE W1THOUT A JURY. AS SUCH, GUARANTOR HEREBY
WAIVES ANY RIGHT TO A JURY TRIAL IN ANY SUCH ACTION, SUIT OR PROCEEDING. IN THE
EVENT OF LITIGATION, THIS GUARANTY MAY BE FILED AS A WRITTEN CONSENT TO TRIAL BY
THE COURT.
SECTION 13. Severability. If any provision of this Guaranty is held to be
- -------------------------
illegal, invalid or unenforceable under present or future laws effective during
the term hereof, such provision shall be fully severable, this Guaranty shall be
construed and enforceable as if the illegal, invalid or unenforceable provision
had never comprised a part of it, and the remaining provisions of this Guaranty
shall remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance herefrom.
IN WITNESS WHEREOF, Guarantor has executed this Guaranty in favor of Caterpillar
Financial on the day, month and year first written above.
GUARANTOR HAS READ AND FULLY UNDERSTANDS ALL OF THE PROVISIONS OF THIS
GUARANTY.
(Complete Address, Phone, SSN if
Guarantor is an individual)
Guarantor: MEADOW VALLEY CORPORATION Address: _____________________________
Signature: /s/ Bradley E Larson
------------------------- ______________________________________
Name (PRINT): BRADLEY E LARSON Phone: _______________________________
----------------------
Title: President SSN: _________________________________
-----------------------------
Page 2 of 2
<PAGE>
EXHIBIT 10.102
Trinity Capital Corporation COMMERCIAL LEASE AGREEMENT NO.: 0025150-001
475 Sansome Street, 19th Floor, -----------
San Francisco, Ca1ifornia 94111 Page 1 of 2
(415) 956-3095 Fax: (415) 956-5187
LESSEE: MEADOW VALLEY CONTRACTORS, INC.
PO Box 60726
PHOENIX, AZ 85082 PHONE: (602) 437-5400
EQUIPMENT: Per Exhibit A attached hereto and made a part hereof.
SUPPLIER DONOHUE, INC.
PO BOX 40
MESILLA PARK, NM 88047
<TABLE>
<S> <C>
LEASE TERMS:
Commencement Date of Lease: 7/15/99 (To be filled in per Paragraph 1 below)
-------
Lease Term (number of months): 36, plus any extension and renewal periods
--
Number of Monthly Rentals paid in advance: 1 (First and Last ____)
-
End of Term: Purchase Option: $1.00
Monthly Rental Amount: $2,132.42, plus applicable taxes, if any
---------
Security Deposit, If any: $2,266.76, tax included
---------
</TABLE>
- ------------------------------------------------------------------------------
TERMS AND CONDITIONS
This commercial lease agreement (the "Agreement") has been written in plain
English. The words "you" and "your" herein refer to the Lessee listed above. The
words "we", "us" and "our" refer to the Lessor, Trinity Capital Corporation.
1. Term and Rent. We agree to lease to you and you agree to lease from us the
personal property listed in any attached exhibit, plus any replacements,
additions and accessories attached to the property (the "Equipment") for the
full number of consecutive months stated above (the "Lease Term"). You agree to
pay to us the Monthly Rental payment ("Rental") for the full Lease Term and any
renewals and extensions. This Equipment and the supplier referenced above have
been selected by you and if you have entered into any purchase or supply
contracts for the Equipment, you assign to us your rights under such supply
contracts. By executing this Schedule, you request us to order the Equipment,
arrange for its delivery to you and pay for the Equipment upon your acceptance
of it. This Lease will begin on the date when the Equipment is accepted by you
and the Equipment will be deemed irrevocably accepted by you upon the earlier
of: a) the delivery to us of a signed Acceptance Certificate (if requested by
us); or b) 10 days after delivery of the Equipment to you if previously you have
not given written notice to us of your non-acceptance. Rentals are due monthly
beginning in advance of the date you accept the Equipment and on the first day
of each month thereafter for Equipment accepted on the 1st through the 14th day
of the month or on the fifteenth day of each month thereafter for Equipment
accepted on the 15th through the 24th day of the month or on the 25th of each
month thereafter for Equipment accepted from the 25th through the last day of
the month.
2. Disclaimer of Warranties. We are leasing the Equipment to you "AS IS". WE
MAKE NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING THE MERCHANTABILITY AND
PERFORMANCE OF THE EQUIPMENT OR THE EQUIPMENT'S FITNESS FOR A PARTICULAR
PURPOSE OR ITS COMPLIANCE WITH APPLICABLE LAW. WE MAKE NO WARRANTY OF TITLE
TO ANY PORTION OF THE EQUIPMENT WHICH CONSISTS OF SOFTWARE, SOFTWARE LICENSES
AND/OR THE RIGHT TO USE ANY SOFTWARE. You acknowledge that we do not
manufacture, deliver or install the Equipment, we do not represent the
supplier(s) of the Equipment and you have selected the Equipment and the
supplier(s) based on your own judgment. You agree not to make any claim for any
reason against us for consequential damages. You acknowledge you have been
advised that you may have rights against the supplier(s) of the Equipment and
that you should contact each supplier for a description of any such rights. So
long as this Agreement is not in default, we assign to you any warranties
received by us in connection with the Equipment.
3. Noncancellable Lease. This Agreement cannot be canceled and you agree that
all your obligations are unconditional. Upon your acceptance of the Equipment
and to the extent permitted by law, you agree to waive any rights to reject the
Equipment and repudiate this Agreement as per Sections 10401 through 10522 of
the California Commercial Code.
4. Governing Law. You agree that this Agreement shall be governed by the laws
of the State of California. You agree that we may bring any action to enforce
any provisions of this Agreement in the City and County of San Francisco,
California and you consent to personal jurisdiction in either state or federal
court.
- ------------------------------------------------------------------------------
THE UNDERSIGNED AGREE TO ALL OF THE TERMS AND CONDITIONS ABOVE AND ON PAGE 2 OF
THIS AGREEMENT AND ANY ATTACHED EXHIBITS AND SCHEDULES MADE A PART OF THIS
AGREEMENT. THIS IS A NON-CANCELABLE AGREEMENT.
LESSOR LESSEE
TRINITY CAPITAL CORPORATION MEADOW VALLEY CONTRACTORS, INC.
This Agreement shall not be binding The undersigned affirms that he/she is
on us until it has been accepted and a duly authorized corporate officer,
executed by an officer of the Lessor partner or proprietor of the above-
at its office. named Lessee.
Signature: /s/ [ILLEGIBLE]^^ Signature: /s/ Bradley E. Larson
-------------------------- ------------------------
Title: Credit Manager Title: President
------------------------------ ----------------------------
Date: 7/22/99 Date: 7/12/99
------------------------------ -----------------------------
The original of this lease has the Lessor's original signature. Any purchaser of
this paper is hereby notified that a security interest has been granted to the
party holding the copy of this lease with the original Lessor's signature.
<PAGE>
COMMERCIAL LEASE AGREEMENT NO: 0025150-001
-------------
Page 2 of 2
5. Agency. You agree that no salesperson or representative of any supplier is
acting on behalf of us and/or can bind us in any way.
6. Late Charges. Time is of the essence. If any Rental or other amount due
under this Agreement is not paid within 10 days after its due date, you agree to
promptly pay a late charge of 10% of the past due amount, subject to a $25
minimum, for those amounts under 30 days past due, plus interest on any amounts
over 30 days past due at the rate of 1.5% per month. However, in no event shall
these late charges exceed the maximum lawful charges.
7. Ownership and use of Equipment. Subject to Section 2 of this Agreement, we
are the owners of the Equipment and you have no rights to the Equipment except
as provided for in this Agreement. You agree to keep the Equipment clear of all
liens, claims and encumbrances. You agree that the Equipment will remain our
personal property regardless of its attachment to realty. You agree to use the
Equipment only for business purposes and in compliance with its intended use,
any applicable laws and any license agreement pertaining to the Equipment. You
agree to keep the Equipment at an appropriate and safe location, and you agree
to promptly inform us of such location in advance. Subject to Sections 13 and 14
of this Agreement, you agree, at your expense, to return the Equipment to us at
the end of the Lease Term (or any renewal term) to our address above, or to such
address as we may designate in writing, in the same condition as it was
delivered to you except for ordinary wear and tear. You agree that we are not
responsible for any losses or injuries caused in connection with the Equipment.
You agree to indemnify us for and at our option and your expense, defend us
against any claims, suits and actions including negligence and strict liability,
whenever made for losses or injuries related to the Equipment
8. Equipment Maintenance. You are responsible, at your expense, to maintain
the Equipment in good working order. Subject to Section 11 of this Agreement, if
any Equipment is damaged, missing or does not work satisfactorily for any
reason, you agree to continue to pay all Rentals and other amounts under this
Agreement when they become due. You shall not make any alterations to the
Equipment without our advance written consent. You agree that we may inspect the
Equipment at any reasonable time.
9. Taxes and Fees. You agree to pay when due, either directly or to us upon
our demand, all taxes, filing fees, license fees, interest and penalties
relating to this Agreement and the Equipment. If we pay any of these amounts you
agree to reimburse us upon demand and to pay to us a $25.00 service charge. You
agree to pay to us a documentation fee of $45.00 to cover our costs of preparing
this Agreement. You shall pay to us a fee of $20.00 for every check that is
returned to us as unpaid by your bank.
10. Risk of Loss and Insurance. You are responsible for any loss or damage to
the Equipment and/or caused by the Equipment until all of your obligations under
this Agreement have been fulfilled. You agree to immediately notify us of any
such losses or damages and of any insurance claims pertaining to the Equipment.
If the Equipment or any portion of the Equipment is missing, stolen or damaged,
you will, at our option and at your expense, promptly repair the Equipment to
our satisfaction, replace the Equipment with equipment of equal purpose and
value or pay to us any default remedies described under Section 13 of this
Agreement. At your expense you agree to keep the Equipment fully insured against
loss until your obligations under this Agreement are paid in full, with any loss
payable to us. You will maintain public liability coverage that is acceptable to
us and include us as an insured on that policy. You agree to provide us with
satisfactory evidence of the required insurance. You agree that we may sign,
endorse and/or negotiate on your behalf as attorney-in-fact for you any
instrument representing proceeds from any insurance policy covering the
Equipment. If we obtain any of the required insurance for you, you agree to pay
to us on demand the cost of that insurance. Nothing in this Agreement will
create an insurance relationship of any kind between us and any other party. You
acknowledge that we are not required to maintain any insurance and we will not
be liable to you if we terminate or modify any insurance coverage that we may
arrange.
11. Assignment. You may not sell, transfer, assign or subrent the Equipment or
this Agreement without our advance written consent and payment to us of an
assignment processing fee. You agree that we may sell or assign this
Agreement and any security interest without notice to you, and that our
assignee shall have all of our rights under this Agreement. You agree that the
rights of our assignee will not be subject to any claims, defenses or setoffs
that you may have against us.
12. Default and Remedies. You are in default if you a) fail to pay any Rental
when due; b) fail to comply with any requirement of this Agreement and/or any
other obligation to us and/or any license agreement, system support agreement,
mandatory maintenance agreement or installation agreement, pertaining to the
Equipment, c) any representation made to us by or on behalf of you and/or any
guarantor of your obligations hereunder is found to have been false when made.
Upon such default, we may, at our option, do one or more of the following: a)
require you to immediately pay the remaining amounts due under this Agreement
including but not limited to the balance of unpaid Rentals discounted to its
present value at a rate of 5% per year; b) terminate this Agreement and/or any
other agreements we have entered into with you, c) require you to immediately
pay us the value of the Equipment or promptly return the Equipment to us in good
condition; d) peacefully enter onto your premises and take possession of the
Equipment without liability to you for trespass or damages; e) deactivate the
Equipment; and f) use any other remedies available to us at law or in equity.
You agree that any delay or failure by us to enforce this Agreement does not
prevent us from enforcing our rights at a later time. You agree to pay all of
our costs to enforce this Agreement including reasonable attorney's fees and the
costs of repossessing, refurbishing, storing and selling the Equipment. If we
take possession of the Equipment, we may sell or otherwise dispose of it with or
without notice, at a public or private sale, and apply the proceeds (after
deducting our disposition costs) to the amounts that you owe us. Our acceptance
of any amount due hereunder which is less than payment in full of all amounts
due and owing at that time shall not constitute a waiver of our right to receive
payment in full.
13. Renewal. Unless you have returned the Equipment to us by the end of the
original Lease Term, this Agreement will be automatically renewed and the Lease
Term extended on a continuing month-to-month basis at the same Monthly Rental
amount as that of the final Rental of the original Lease Term. You can terminate
this automatic renewal by sending advance written notice to us. Such termination
shall be effective 30 days after our receipt of such notice, provided that you
have returned the Equipment to us in good condition or purchased the Equipment
from us by that termination date.
14. Purchase Option. If it is indicated above that you have been given an end
of term purchase option and if you are not in default under this Lease, you may
purchase the Equipment at the end of the Lease Term for the stated price plus
any applicable taxes and remaining amounts due hereunder. Such purchase of the
Equipment shall be "AS IS, WHERE IS, IF IS" and we make no warranties of any
kind. If the purchase price is "Fair Market Value" and we and you cannot agree
on such value, you may, at your expense, retain an independent appraiser
acceptable to us and such appraisal shall be binding.
15. Miscellaneous. You agree that this Agreement is the entire agreement you
have with us pertaining to this Equipment and it cannot be changed except as
agreed by you and us in writing. You agree, however, that we are authorized,
without notice to you, to supply missing information or correct obvious errors
in this Agreement. You agree that the Rental amount may be adjusted to reflect
any change in the Equipment cost as a result of any Equipment change orders,
add-ons, returns, errors or other similar events verbally agreed to by you. In
the event of any such adjustment, we will furnish you a written notice thereof.
You agree that a signed faxed version of this Agreement and Acceptance
Certificate shall be deemed to be of the same force and effect as an original of
a manually signed Agreement and Acceptance Certificate. You agree that we can
sign any applicable UCC financing statement as attorney-in-fact for you until
such time as all of your obligations to us have been fulfilled. You hereby
authorize any employee of yours to accept the Equipment and sign on your behalf
any Acceptance Certificate pertaining to this Agreement. This Agreement is
binding upon the successors and assigns of you and us. If there is more than one
Lessee, your obligations shall be joint and several.
<PAGE>
LESSEE: RE: COMMERCIAL LEASE AGREEMENT NO: 0025150-001
MEADOW VALLEY CONTRACTORS, INC.
PO Box 60726
PHOEN1X, AZ 85082
GUARANTY
This Guaranty ("Guaranty") has been written in plain English. The word
"Agreement" herein refers to the commercial lease agreement referenced above.
The word "Lessee" refers to the lessee referenced above. The words "you" and
"your" refer to the Guarantors listed below. The words "we", "us" and "our"
refer to the Lessor, Trinity Capital Corporation, located at 475 Sansome Street,
19/th/ Floor, San Francisco, CA 94111.
In consideration of us providing any present of future financing of any nature
to the Lessee, including but not limited to entering into this Agreement, you
unconditionally guaranty (jointly and severally if more than one) in favor of
us, our successors and assigns, any and all indebtedness of Lessee to us,
whether now existing or subsequently entered into, including but not limited to
Lessee's performance of all of its obligations under the Agreement and under all
other agreements previously or subsequently entered into between us and Lessee.
You promise to pay all of our expenses, including reasonable attorney's fees,
incurred by us in connection with enforcing this Guaranty.
You waive all notice of acceptance of this Guaranty and any demands and/or
notices of any kind, including those of any action or non-action of Lessee, us
or any other party. Without affecting your liability, you authorize us to renew,
compromise, waive and/or alter our rights against Lessee and/or any leased
property. You also agree that we have the right, at our option, to assign this
Guaranty and/or any financing transaction between us and Lessee, including the
Agreement, to any other party at any time. You waive all rights to seek
repayment from Lessee in the event you must pay us under this Guaranty.
You acknowledge that you have received a copy of the Agreement and understand
its terms and conditions. You agree that upon any default of Lessee, we may, at
our option, proceed directly and at once, without notice, against you to collect
and recover the full amount you have guaranteed, or any portion of that amount,
without proceeding against Lessee or any other person, or without exercising any
other remedy available to us. This Guaranty shall be binding upon your heirs,
executors, administrators, successors and assigns.
You agree that any and all payments due from you under this Guaranty shall be
payable to us in U.S. dollars at our offices in San Francisco, CA, or at some
other location that we may specify in writing.
You agree that this Guaranty shall be governed by the laws of the State of
California. You agree that we may bring any action to enforce any provisions of
this Guaranty in the City and County of San Francisco, California and you
consent to personal jurisdiction in either state or federal court. You agree
that this Guaranty is the entire agreement with us pertaining to your guaranty
of the obligations described herein and it cannot be changed in any way except
with our advance written consent. You agree that a signed faxed version of the
Agreement, Acceptance Certificate and this Guaranty shall be deemed to be of the
same force and effect as an original of a manually signed Agreement, Acceptance
Certificate and Guaranty, respectively. You agree that any failure or delay by
us to enforce our rights under this Guaranty does not prevent us from enforcing
any rights at a later time. You agree that we may reevaluate your
creditworthiness during the term of the Agreement and you authorize us or our
assignee to obtain any applicable credit ratings and credit reports. You agree
to provide us with your updated financial statements upon our request until all
of your obligations to us have been fulfilled.
<TABLE>
<S> <C> <C> <C>
7/12/99 /s/ Bradley E. Larson /s/ Bradley E. Larson President
- ------------------ ------------------------------ --------------------------------- ------------------------
Date Authorized Signature Name of Signor Title
Meadow Valley Corporation 4411 S. 40/th/ St., Ste.D-11, Phoenix, AZ 8????
- ----------------------------------------------------- ---------------------------------------------------------------
Guarantor Legal Name Address
602-437-5400 602-437-1681 88-0328443
- ----------------------------------------------------- --------------------------------------------------------------
Phone Number Fax Number Tax Id Number
</TABLE>
<PAGE>
EQUIPMENT EXHIBIT A TO COMMERCIAL LEASE AGREEMENT NO. 0025150-001
-----------
BETWEEN TRINITY CAPITAL CORPORATION (LESSOR) AND
MEADOW VALLEY CONTRACTORS, INC. (LESSEE)
Equipment Location:
300 U.S. HIGHWAY 70 WEST
ALAMOGORDO, NM 88310
QTY DESC $ AMOUNT
TOPCON APL1A W/ HUSKY FS3 DATA COLLECTOR
TDS SURVEY PRO SOFTWARE W/ HARDWARE LOCK
TRIPOD
PRECISE QUICK RELEASE PRISM POLE
$31,641.25
TOPCON 800 W/ HUSKY MP 2500 DATA COLLECTOR
ON BOARD TDS SURVEY PRO W/LOCK
TDS SURVEY PRO SOFTWARE W/LOCK
TRIPOD
PRECISE QUICK RELEASE PRISM POLE
20,332.00
TOPCON 212 W/ HUSKY FS/GS DATA COLLECTOR
TDS SURVEY PRO W/ LOCK
TRIPOD
PRECISE PRISM POLE
10,132.00
3 COPIES - FORESIGHT SOFTWARE W/HARDWARE LOCKS 1,164.00
CARD READER 195.50
TOTAL $63,464.75
<PAGE>
LEASE SCHEDULE NO. 1000099257 FINANCING LEASE
----------
(Per Diem Interim Rent)
Master Lease Agreement dated-JULY 01, 1999
-------------
Lessor: BANC ONE LEASING CORPORATION
----------------------------
Lessee: READY MIX, INC.
---------------
1. GENERAL. This Lease Schedule is signed and delivered under the Master Lease
Agreement identified above, as amended from time to time ("Master Lease"),
between Lessee and Lessor. Capitalized terms defined in the Master Lease will
have the same meanings when used in this Schedule.
2. FINANCING. Lessor finances for Lessee, and Lessee finances with Lessor, all
of the property ("Equipment") described in Schedule A-1 attached hereto (and
Lessee represents that all Equipment is new unless specifically identified as
used):
3. AMOUNT FINANCED: Equipment Cost: $2,499,758.58
Set-up/Filing Fee: 200.00
Miscellaneous: N/A
Sales Tax: N/A
Total: $2,499,958.58
------------
4. FINANCING TERM. The Base Term of this Schedule shall be 84 months and the
--
Base Term shall commence on the Acceptance Date ("Commencement Date"). The total
---------------
Lease Term consists of the Interim Term plus the Base Term. The Interim Term
begins on the date that Lessor accepts this Schedule as stated below Lessor's
signature ("Acceptance Date") and continues up to the Commencement Date.
5. INSTALLMENT PAYMENTS/FEES. As financing for the Equipment, Lessee shall pay
to Lessor all amounts stated below on the due dates stated below. There shall be
added to each installment payment all applicable Taxes as in effect from time to
time.
(a) For the Interim Term, Lessee shall pay to Lessor on the Commencement Date
an amount equal to one-thirtieth (1/30th) of the Installment Payment multiplied
by the number of days in the Interim Term. "Installment Payment" means the total
of all installment payments due and payable during the Base Term divided by the
number of months in the Base Term.
(b) During the Base Term, Lessee shall pay to Lessor installment payments in the
amounts and according to the timing set forth below, provided however, that
notwithstanding the following, the final installment payment due hereunder shall
be equal to the remaining principal balance hereunder together with all accrued
interest and fees.
(1) Amount of each installment payment during the Base Term
(including principal and interest):
84 Monthly payments of $38,831.28
(2) Frequency of installment payments during the Base Term: MONTHLY
(3) Timing of installment payments during the Base Term: ARREARS
(c) Lessee shall pay Lessor a Set-Up/Filing Fee as follows:
<PAGE>
(1) $ shall be paid on the Acceptance Date, or
(2) $375.00 has been included in the above Amount Financed of the
------
Equipment.
(d) Security Deposit:$. On the Acceptance Date, Lessee shall pay Lessor said
-
Security Deposit which shall be held in accordance with paragraph 6 below.
6. SECURITY INTEREST. This Schedule is intended to be a secured debt financing
transaction, not a true lease. See Paragraph 7 below regarding Lessee's
---
ownership of the Equipment. As collateral security for payment and performance
of all Secured Obligations (defined in Paragraph 8 below) and to induce Lessor
to extend credit from time to time to Lessee (under the Lease or otherwise),
Lessee hereby grants to Lessor a first priority security interest in all of
Lessee's right, title and interest in the Equipment, whether now existing or
hereafter acquired, any sums specified in this Schedule as a "Security Deposit",
and in all Proceeds (defined in Paragraph S below). At its option, Lessor may
apply all or any part of any Security Deposit to cure any default of Lessee
under the Lease. If upon final termination of this Schedule, Lessee has
fulfilled all of the terms and conditions hereof, then Lessor shall pay to
Lessee upon Lessee's written request any remaining balance of the Security
Deposit for this Schedule, without interest.
7. TITLE TO EQUIPMENT; FIRST PRIORITY LIEN. Lessee represents, warrants and
agrees: that Lessee currently is the lawful owner of the Equipment; that good
and marketable title to the Equipment shall remain with Lessee at all times;
that Lessee has granted to Lessor a first priority security interest in the
Equipment and all Proceeds; and that the Equipment and all Proceeds are, and at
all times shall be, free and clear of any Liens other than Lessor's security
interest therein. Lessee at its sole expense will protect and defend Lessor's
first priority security interest in the Equipment against all claims and demands
whatsoever.
8. CERTAIN DEFINITIONS. "Secured Obligations" means (a) all payments and other
obligations of Lessee under or in connection with this Schedule, and (b) all
payments and other obligations of Lessee (whether now existing or hereafter
incurred) under or in connection with the Master Lease and all present and
future Lease Schedules thereto, and (c) all other leases, indebtedness,
liabilities and/or obligations of any kind (whether now existing or hereafter
incurred, absolute or contingent, direct or indirect) of Lessee to Lessor or to
any affiliate of either Lessor or BANK ONE CORPORATION. "Proceeds" means all
cash and non-cash proceeds of the Equipment including, without limitation,
proceeds of insurance, indemnities and/or warranties.
9. AMENDMENTS TO MASTER LEASE. For purposes of this Schedule only, Lessee and
Lessor agree to amend the Master Lease as follows: (a) public liability or
property insurance as described in the second sentence of Section 8 will not be
required, (b) the definition of "Stipulated Loss Value" in clause (b) of Section
9 is deleted and replaced by Paragraph 10 below; (c) the text of Section 10 is
deleted in its entirety; (d) Subsections 23(a) and 23(c) are deleted; (e)
subsection 23(b) and the last sentence of section 4 will apply only if an event
of default occurs; and (f) all references in the Lease as it relates to this
Schedule to "Lessee" and "Lessor" shall be changed to "Borrower" and "Lender"
respectively.
10. STIPULATED LOSS VALUE. For purposes of this Schedule only, the "Stipulated
Loss Value" of any item of Equipment during its Lease Term equals the aggregate
of the following as of the date specified by Lessor: (a) all accrued and unpaid
interest, late charges and other amounts due under this Schedule and the Master
Lease to the extent it relates to this Schedule as of such specified date, plus
(b)the remaining principal balance due and payable by Lessee under this Schedule
as of such specified date, plus (c) interest on the amount described in the
foregoing clauses (a) and
(b) at the Overdue Rate commencing with the specified date; provided, that the
foregoing calculation shall not exceed the maximum amount which may be collected
by Lessor from Lessee under applicable law in connection with enforcement of
Lessor's rights under this Schedule and the Master Lease to the extent it
relates to this Schedule.
11. LESSEE TO PAY ALL TAXES. For purposes of this Schedule and its Equipment
only: Lessee shall pay any and all Taxes relating to this Schedule and its
Equipment directly to the applicable taxing authority; Lessee shall prepare and
file all reports or returns concerning any such Taxes as may be required by
applicable law or regulation (provided, that Lessor shall not be identified as
the owner of the Equipment in such reports or returns); and Lessee shall,
<PAGE>
upon Lessor's request, send Lessor evidence of payment of such Taxes and copies
of any such reports or returns.
12. LESSEE'S ASSURANCES. Lessee irrevocably and unconditionally (a)reaffirms
all of the terms and conditions of the Master Lease and agrees that the Master
Lease remains in full force and effect; (b) agrees that the Equipment is and
will be used at all times solely for commercial purposes, and not for personal,
family or household purposes; and (c) incorporates all of the terms and
conditions of the Master Lease as if fully set forth in this Schedule.
13. REPRESENTATIONS AND WARRANTIES: Lessee represents and warrants that: (a)
Lessee is a corporation, partnership or proprietorship duly organized, validly
existing and in good standing under the laws of the state of its organization
and is qualified to do business and is in good standing under the laws of each
other state in which the Equipment is or will be located; (b) Lessee has full
power, authority and legal right to sign, deliver and perform the Master Lease,
this Schedule and all related documents and such actions have been duly
authorized by all necessary corporate/partnership/proprietorship action, and (c)
the Master Lease, this Schedule and each related document has been duly signed
and delivered by Lessee and each such document constitutes a legal, valid and
binding obligation of Lessee enforceable in accordance with its terms.
14. CONDITIONS. No lease of Equipment under this Schedule shall be binding On
Lessor, and Lessor shall have no obligation to purchase the Equipment covered
hereby, unless: (a) Lessor has received evidence of all required insurance; (b)
in Lessor's sole judgment, there has been no material adverse change in the
financial condition or business of Lessee or any guarantor, (c) Lessee has
signed and delivered to Lessor this Schedule, which must be satisfactory to
Lessor, and Lessor has signed and accepted this Schedule; (d) no change in the
Code or any regulation thereunder, which in Lessor's sole judgment would
adversely affect the economics to Lessor of the lease transaction, shall have
occurred or shall appear to be imminent; (e) Lessor has received, in form and
substance satisfactory to Lessor, such other documents and information as Lessor
shall reasonably request; and (f) Lessee has satisfied all other reasonable
conditions established by Lessor.
15. OTHER DOCUMENTS: EXPENSES: Lessee agrees to sign and deliver to Lessor any
additional documents deemed desirable by Lessor to effect the terms of the
Master Lease or this Schedule including, without limitation, Uniform Commercial
Code financing statements which Lessor is authorized to file with the
appropriate filing officers. Lessee hereby irrevocably appoints Lessor and any
designee of Lessor as Lessee's attorney-in-fact with full power and authority in
the place of Lessee and in the name of Lessee to prepare, sign, amend, file or
record any Uniform Commercial Code financing statements or other documents
deemed desirable by Lessor to perfect, establish or give notice of Lessor's
interests in the Equipment or in any collateral as to which Lessee has granted
Lessor a security interest. Lessee shall pay upon Lessor's written request any
actual out-of-pocket costs and expenses paid or incurred by Lessor in connection
with the above terms of this section or the funding and closing of this
Schedule.
16. PURCHASE ORDERS AND ACCEPTANCE OF EQUIPMENT. Lessee agrees that (I) Lessor
has not selected, manufactured, sold or supplied any of the Equipment, (ii)
Lessee has selected all of the Equipment and its suppliers, and (iii) Lessee has
received a copy of, and approved, the purchase orders or purchase contracts for
the Equipment. AS BETWEEN LESSEE AND LESSOR, LESSEE AGREES THAT: (a) LESSEE HAS
RECEIVED, INSPECTED AND APPROVED ALL OF THE EQUIPMENT; (b) ALL EQUIPMENT IS IN
GOOD WORKING ORDER AND COMPLIES WITH ALL PURCHASE ORDERS OR CONTRACTS AND
<PAGE>
ALL APPLICABLE SPECIFICATIONS; (c) LESSEE IRREVOCABLY ACCEPTS ALL EQUIPMENT FOR
PURPOSES OF THE LEASE "AS-IS, "WHERE-IS" WITH ALL FAULTS; AND (d) LESSEE
UNCONDITIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO REVOKE ITS ACCEPTANCE OF
THE EQUIPMENT.
LESSEE HAS READ AND UNDERSTOOD ALL OF THE TERMS OF THIS SCHEDULE. LESSEE AGREES
THAT THERE ARE NO ORAL OR UNWRITTEN AGREEMENTS WITH LESSOR REGARDING THE
EQUIPMENT OR THIS SCHEDULE.
BANC ONE LEASING CORPORATION READY MIX, INC.
- ---------------------------- ---------------
(Lessor) (Lessee)
By: By: /s/ Kenneth D. Nelson
------------------------- -------------------------------
Title: Title: VICE PRESIDENT
---------------------- -----------------------------
Acceptance Date: Witness: /s/ Nicole Smith
------------- --------------------------
<PAGE>
Banc One Leasing Corporation
SCHEDULE A-1 EQUIPMENT LEASED HEREUNDER
QUANTITY DESCRIPTION PAGE 1
================================================================================
EQUIPMENT LOCATION: 1501 HIGHWAY 168
MOAPA, NV 89025
COUNTY : CLARK
COST : $2,499,758.58
"ALL PROPERTY DESCRIBED IN THE INVOICES AND EXHIBITS IDENTIFIED BELOW, WHICH
PROPERTY MAY BE GENERALLY DESCRIBED AS ROCK AND SAND CRUSHING EQUIPMENT."
<TABLE>
<CAPTION>
VENDOR INVOICE #
<S> <C>
CONSTRUCTION EQUIPMENT SALES 4466
AGGREGATE DESIGNS 9906-11
CONVEYOR SALES 19245
TK ELECTRIC 99431
TK ELECTRIC 99491
KIMBALL EQUIPMENT 150325
KIMBALL EQUIPMENT 150326
CRUSHER SERVICE 39331
CONSTRUCTION EQUIPMENT SALES 4470
CRUSHER SERVICE 39501
HAZEMAG USA 9282A
CONVEYOR SALES 19568
KIMBALL EQUIPMENT 150905
CONVEYOR SALES 19248
</TABLE>
TOGETHER WITH ALL ATTACHMENTS, ADDITIONS, ACCESSIONS, PARTS, REPAIRS,
IMPROVEMENTS, REPLACEMENTS AND SUBSTITUTIONS THERETO.
This Schedule A-1 is attached to and made a part of Lease Number 1000099257 and
constitutes a true and accurate description of the equipment.
Lessee:
READY MIX, INC.
- -----------------------------
By: /s/ Kenneth D. Nelson
--------------------------
Date: 9-24-99
------------------------
<PAGE>
Banc One Leasing Corporation
SCHEDULE A-1 EQUIPMENT LEASED HEREUNDER
<TABLE>
<CAPTION>
QUANTITY DESCRIPTION PAGE 2
================================================================================
<S> <C>
EXHIBIT A 45232.30
EXHIBIT B 98839.11
EXHIBIT C 62173.00
EXHIBIT D 56848.98
EXHIBIT E 94554.19
EXHIBIT F 19360.07
EXHIBIT G 91554.01
EXHIBIT H 98803.97
EXHIBIT I 176037.96
EXHIBIT J 60246.81
EXHIBIT K 29686.42
</TABLE>
TOGETHER WITH ALL ATTACHMENTS, ADDITIONS, ACCESSIONS, PARTS, REPAIRS,
IMPROVEMENTS, REPLACEMENTS AND SUBSTITUTIONS THERETO.
This Schedule A-1 is attached to and made a part of Lease Number 1000099257 and
constitutes a true and accurate description of the equipment.
Lessee:
READY MIX, INC.
- -----------------------------
By: /s/ Kenneth D. Nelson
--------------------------
Date: 9-24-99
------------------------
<PAGE>
MASTER LEASE AGREEMENT
This MASTER LEASE AGREEMENT is dated as of: 7-1-1999 and is made and
----------
entered into by and between BANC ONE LEASING CORPORATION ("Lessor"), an Ohio
corporation, with its principal place of business at 1111 Polaris Parkway, Suite
A3 (OH1-1085), Columbus, Ohio 43240 and the Lessee identified below:
LESSEE NAME: READY MIX, INC.
LESSEE ADDRESS: 4411 South 40th Street, Phoenix, Arizona
1. LEASE OF EQUIPMENT: Lessor leases to Lessee, and Lessee leases from
Lessor, all the property described in the Lease Schedules which are signed from
time to time by Lessor and Lessee.
2. CERTAIN DEFINITIONS: "Schedule" means each Lease Schedule signed by
Lessee and Lessor which incorporates the terms of this Master Lease Agreement,
together with all exhibits, riders, attachments and addenda thereto. "Equipment"
means the property described in each Schedule, together with all attachments,
additions, accessions, parts, repairs, improvements, replacements and
substitutions thereto. "Lease", "herein", "hereunder", "hereof" and similar
words mean this Master Lease Agreement and all Schedules, together with all
exhibits, riders, attachments and addenda to any of the foregoing, as the same
may from time to time be amended, modified or supplemented. "Prime Rate" means
the prime rate of interest announced from time to time as the prime rate by Bank
One, NA (or its successors or assigns); provided, that the parties acknowledge
that the Prime Rate is not intended to be the lowest rate of interest charged by
said bank in connection with extensions of credit. "Lien" means any security
interest, lien, mortgage, pledge, encumbrance, judgment, execution, attachment,
warrant, writ, levy, other judicial process or claim of any nature whatsoever by
or of any person. "Fair Market Value" means the amount which would be paid for
an item of Equipment by an informed and willing buyer (other than a used
equipment or scrap dealer) and an informed and willing seller neither under a
compulsion to buy or sell. "Lessor's Cost" means the invoiced price of any item
of Equipment plus any other cost to Lessor of acquiring an item of Equipment.
All terms defined in the Lease are equally applicable to both the singular and
plural form of such terms.
3. LEASE TERM AND RENT: The term of the lease of the Equipment
described in each Schedule ("Lease Term") commences on the date stated in the
Schedule and continues for the term stated therein. As rent for the Equipment
described in each Schedule, Lessee shall pay Lessor the rent payments and all
other amounts stated in such Schedule, payable on the dates specified therein.
All payments due under the Lease shall be made in United States dollars at
Lessor's office stated in the opening paragraph or as otherwise directed by
Lessor in writing.
4. ORDERING, DELIVERY, REMOVAL AND INSPECTION OF EQUIPMENT: If an
event of default occurs or if for any reason Lessee does not accept, or revokes
its acceptance of, equipment covered by a purchase order or purchase contract or
if any commitment or agreement of Lessor to lease equipment to Lessee expires,
terminates or is otherwise canceled, then automatically upon notice from Lessor,
any purchase order or purchase contract and all obligations thereunder shall be
assigned to Lessee and Lessee shall pay and perform all obligations thereunder.
Lessee agrees to pay, defend, indemnify and hold Lessor harmless from any
liabilities, obligations, claims, costs and expenses (including reasonable
attorney fees and expenses) of whatever kind imposed on or asserted against
Lessor in any way related to any purchase orders or purchase contracts. Lessee
shall make all arrangements for, and Lessee shall pay all costs of,
transportation, delivery, installation and testing of Equipment. Lessor has the
right upon reasonable notice to Lessee to inspect the Equipment wherever
located. Lessor may enter upon any premises where Equipment is located and
remove it immediately, without notice or liability to Lessee, upon the
expiration or other termination of the Lease Term.
5. MAINTENANCE AND USE: Lessee agrees it will, at its sole expense:
(a) repair and maintain the Equipment in good condition and working order and
supply and install all replacement parts or other devices when required to so
maintain the Equipment or when required by applicable law or regulation, which
parts or devices shall automatically become part of the Equipment; (b) use and
operate the Equipment in a careful manner in the normal course of its business
and only for the purposes for which it was designed in accordance with the
manufacturer's warranty requirements, and comply with all laws and regulations
relating to the Equipment, and obtain all permits or licenses necessary to
install, use or operate the Equipment; and (c) make no alterations, additions,
subtractions, upgrades or improvements to the Equipment without Lessor's prior
written consent, but any such alterations, additions, upgrades or improvements
shall automatically become part of the Equipment. The Equipment will not be used
or located outside of the United States.
6. NET LEASE; NO EARLY TERMINATION: The Lease is a net lease.
Lessee's obligation to pay all rent and all other amounts payable under the
Lease is absolute and unconditional under any and all circumstances and shall
not be affected by any circumstances of any character including, without
limitation, (a) any setoff, claim, counterclaim, defense or reduction which
Lessee may have at any time against Lessor or any other party for any reason, or
(b) any defect in the condition, design or operation of, any lack of fitness for
use of, any damage to or loss of, or any lack of maintenance or service for any
of the Equipment. Each Schedule is a noncancelable lease of the Equipment
described therein and Lessee's obligation to pay rent
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<PAGE>
and perform all other obligations thereunder and under the Lease are not subject
to cancellation or termination by Lessee for any reason.
7. NO WARRANTIES BY LESSOR: LESSOR LEASES THE EQUIPMENT AS-IS, WHERE-IS,
AND WITH ALL FAULTS. LESSOR MAKES NO WARRANTIES OR REPRESENTATIONS, EXPRESS OR
IMPLIED, OF ANY KIND AS TO THE EQUIPMENT INCLUDING, WITHOUT LIMITATION: ITS
MERCHANTABILITY; ITS FITNESS FOR ANY PARTICULAR PURPOSE; ITS DESIGN, CONDITION,
QUALITY, CAPACITY, DURABILITY, CAPABILITY, SUITABILITY OR WORKMANSHIP; ITS NON-
INTERFERENCE WITH OR NON-INFRINGEMENT OF ANY PATENT, TRADEMARK, COPYRIGHT OR
OTHER INTELLECTUAL PROPERTY RIGHT; OR ITS COMPLIANCE WITH ANY LAW, RULE,
SPECIFICATION, PURCHASE ORDER OR CONTRACT PERTAINING THERETO. Lessor hereby
assigns to Lessee the benefit of any assignable manufacturer's or supplier's
warranties, but Lessor, at Lessee's written request, will cooperate with Lessee
in pursuing any remedies Lessee may have under such warranties. Any action taken
with regard to warranty claims against any manufacturer or supplier by Lessee
will be at Lessee's sole expense. LESSOR MAKES NO REPRESENTATIONS OR WARRANTIES,
EXPRESS OR IMPLIED, OF ANY KIND AS TO THE FINANCIAL CONDITION OR FINANCIAL
STATEMENTS OF ANY PARTY OR AS TO THE TAX OR ACCOUNTING TREATMENT OR CONSEQUENCES
OF THE LEASE, THE EQUIPMENT OR THE RENTAL PAYMENTS.
8. INSURANCE: Lessee at its sole expense shall at all times keep each item
of Equipment insured against all risks of loss or damage from every cause
whatsoever for an amount not less than the greater of the full replacement value
or the Lessor's Cost of such item of Equipment. Lessee at its sole expense shall
at all times carry public liability and property damage insurance in amounts
satisfactory to Lessor protecting Lessee and Lessor from liabilities for
injuries to persons and damage to property of others relating in any way to the
Equipment. All insurers shall be reasonably satisfactory to Lessor. Lessee shall
deliver to Lessor satisfactory evidence of such coverage. Proceeds of any
insurance covering damage or loss of the Equipment shall be payable to Lessor as
loss payee and shall, at Lessor's option, be applied toward (a) the replacement,
restoration or repair of the Equipment, or (b) payment of the obligations of
Lessee under the Lease. If an event of default occurs and is continuing, or if
Lessee fails to make timely payments due under Section 9 hereof, then Lessee
automatically appoints Lessor as Lessee's attorney-in-fact with full power and
authority in the place of Lessee and in the name of Lessee or Lessor to make
claim for, receive payment of, and sign and endorse all documents, checks or
drafts for loss or damage under any such policy. Each insurance policy will
require that the insurer give Lessor at least 30 days prior written notice of
any cancellation of such policy and will require that Lessor's interests remain
insured regardless of any act, error, omission, neglect or misrepresentation of
Lessee. The insurance maintained by Lessee shall be primary without any right of
contribution from insurance which may be maintained by Lessor.
9. LOSS AND DAMAGE: (a) Lessee bears the entire risk of loss, theft,
damage or destruction of Equipment in whole or in part from any reason
whatsoever ("Casualty Loss"). No Casualty Loss to Equipment shall relieve Lessee
from the obligation to pay rent or from any other obligation under the Lease. In
the event of Casualty Loss to any item of Equipment, Lessee shall immediately
notify Lessor of the same and Lessee shall, if so directed by Lessor,
immediately repair the same. If Lessor determines that any item of Equipment has
suffered a Casualty Loss beyond repair ("Lost Equipment"), then Lessee, at the
option of Lessor, shall: (1) immediately replace the Lost Equipment with similar
equipment in good repair, condition and working order free and clear of any
Liens and deliver to Lessor a bill of sale covering the replacement equipment,
in which event such replacement equipment shall automatically be Equipment under
the Lease; or (2) On the rent payment date which is at least 30 but no more than
60 days after the date of the Casualty Loss, pay to Lessor all amounts then due
and payable by Lessee under the Lease for the Lost Equipment plus the Stipulated
Loss Value for such Lost Equipment as of the date of the Casualty Loss. Upon
payment by Lessee of all amounts due under the above clause (2), the lease of
the Lost Equipment will terminate and Lessor shall transfer to Lessee all of
Lessor's right, title and interest in such Equipment on an "as-is, where-is"
basis with all faults, without recourse and without representation or warranty
of any kind, express or implied.
(b) "Stipulated Loss Value" of any item of Equipment during its Lease Term
equals the present value discounted in arrears to the applicable date at the
applicable SLV Discount Rate of (1) the remaining rents and all other amounts
[including, without limitation, any balloon payment and, as to a terminal rental
adjustment clause ("TRAC") lease, the TRAC value stated in the Schedule, and any
other payments required to be paid by Lessee at the end of the applicable Lease
Term] payable under the Lease for such item on and after such date to the end of
the applicable Lease Term and (2) an amount equal to the Economic Value of the
Equipment. For any item of Equipment, "Economic Value" means the Fair Market
Value of the Equipment at the end of the applicable Lease Term as originally
anticipated by Lessor at the Commencement Date of the applicable Schedule;
provided, that Lessee agrees that such value shall be determined by the books of
Lessor as of the Commencement Date of the applicable Schedule. After the payment
of all rent due under the applicable Schedule and the expiration of the Lease
Term of any item of Equipment, the Stipulated Loss Value of such item equals the
Economic Value of such item. Stipulated Loss Value shall also include any Taxes
payable by Lessor in connection with its receipt thereof. For any item of
Equipment, "SLV Discount Rate" means an interest rate equal to the Prime Rate in
effect on the Commencement Date of the Schedule for such item minus two
percentage points.
10. TAX BENEFITS INDEMNITY. (a) The Lease has been entered into on the
basis that Lessor shall be entitled to such deductions, credits and other tax
benefits as are provided by federal, state and local income tax law to an owner
of the Equipment (the "Tax Benefits") including, without limitation: (1)
modified accelerated cost recovery deductions on each item
Page 2
<PAGE>
of Equipment under Section 168 of the Code (as defined below) in an amount
determined commencing with the taxable year in which the Commencement Date of
the applicable Schedule occurs, using the maximum allowable depreciation method
available under Section 168 of the Code, using a recovery period (as defined in
Section 168 or the Code) reasonably determined by Lessor, and using an initial
adjusted basis which is equal to the Lessor's Cost of such item; (2)
amortization of the expenses paid by Lessor in connection with the Lease on a
straight-line basis over the term of the applicable Schedule; and (3) Lessor's
federal taxable income will be subject to the maximum rate on corporations in
effect under the Code as of the Commencement Date of the applicable Schedule.
(b) If on any one or more occasions (1) Lessor shall lose, shall not have
or shall lose the right to claim all or any part of the Tax Benefits, (2) there
shall be reduced, disallowed, recalculated or recaptured all or any part of the
Tax Benefits, or (3) all or any part of the Tax Benefits is reduced by a change
in law or regulation (each of the events described in subparagraphs 1, 2 or 3 of
this paragraph (b) will be referred to as a "Tax Loss"), then, upon 30 days
written notice by Lessor to Lessee that a Tax Loss has occurred, Lessee shall
pay Lessor an amount which, in the reasonable opinion of Lessor and after the
deduction of all taxes required to be paid by Lessor with respect to the receipt
of such amount, will provide Lessor with the same after-tax net economic yield
which was originally anticipated by Lessor as of the Commencement Date of the
applicable Schedule.
(c) A Tax Loss shall occur upon the earliest of: (1) the happening of any
event (such as disposition or change in use of an item of Equipment) which may
cause such Tax Loss; (2) Lessor's payment to the applicable taxing authority of
the tax increase resulting from such Tax Loss; or (3) the adjustment of Lessor's
tax return to reflect such Tax Loss.
(d) Lessor shall not be entitled to payment under this section for any Tax
Loss caused solely by one or more of the following events: (1) a disqualifying
sale or disposition of an item of Equipment by Lessor prior to any default by
Lessee; (2) Lessor's failure to timely or properly claim the Tax Benefits in
Lessor's tax return; (3) a disqualifying change in the nature of Lessor's
business or liquidation thereof; (4) a foreclosure by any person holding through
Lessor a security interest on an item of Equipment which foreclosure results
solely from an act of Lessor; or (5) Lessor's failure to have sufficient taxable
income or tax liability to utilize the Tax Benefits.
(e) "Code" shall mean the Internal Revenue Code of 1986, as amended. For
the purposes of this section 10, the term "Lessor" shall include any affiliate
group (within the meaning of section 1504 of the Code) of which Lessor is a
member for any year in which a consolidated income tax return is filed for such
affiliated group. Lessee's obligations under this section shall survive the
expiration, cancellation or termination of the Lease.
11. GENERAL TAX INDEMNITY: Lessee will pay, and will defend, indemnify and
hold Lessor harmless on an after-tax basis from, any and all Taxes (as defined
below) and related audit and contest expenses on or relating to (a) any of the
Equipment, (b) the Lease, (c) purchase, acceptance, ownership, lease,
possession, use, operation, transportation, return or other disposition of any
of the Equipment, and (d) rentals or earnings relating to any of the Equipment
or the Lease. "Taxes" means present and future taxes or other governmental
charges that are not based on the net income of Lessor, whether they are
assessed to or payable by Lessee or Lessor, including, without limitation (i)
sales, use, excise, licensing, registration, titling, franchise, business and
occupation, gross receipts, stamp and personal property taxes, (ii) levies,
imposts, duties, assessments, charges and withholdings, (iii) penalties, fines,
and additions to tax and (iv) interest on any of the foregoing. Unless Lessor
elects otherwise, Lessor will prepare and file all reports and returns relating
to any Taxes and will pay all Taxes to the appropriate taxing authority. Lessee
will reimburse Lessor for all such payments promptly on request. On or after any
applicable assessment/levy/lien date for any personal property Taxes relating to
any Equipment, Lessee agrees that upon Lessor's request Lessee shall pay to
Lessor the personal property Taxes which Lessor reasonably anticipates will be
due, assessed, levied or otherwise imposed on any Equipment during its Lease
Term. If Lessor elects in writing, Lessee will itself prepare and file all such
reports and returns, pay all such Taxes directly to the taxing authority, and
send Lessor evidence thereof. Lessee's obligations under this section shall
survive the expiration, cancellation or termination of the Lease.
12. GENERAL INDEMNITY: Lessee assumes all risk and liability for, and
shall defend, indemnify and keep Lessor harmless on an after-tax basis from, any
and all liabilities, obligations, losses, damages, penalties, claims, actions,
suits, costs and expenses, including reasonable attorney fees and expenses, of
whatsoever kind and nature imposed on, incurred by or asserted against Lessor,
in any way relating to or arising out of the manufacture, purchase, acceptance,
rejection, ownership, possession, use, selection, delivery, lease, operation,
condition, sale, return or other disposition of the Equipment or any part
thereof (including, without limitation, any claim for latent or other defects,
whether or not discoverable by Lessee or any other person, any claim for
negligence, tort or strict liability, any claim under any environmental
protection or hazardous waste law and any claim for patent, trademark or
copyright infringement). Lessee will not indemnify Lessor under this section for
loss or liability arising from events which occur after the Equipment has been
returned to Lessor or for loss or liability caused directly and solely by the
gross negligence or willful misconduct of Lessor. In this section, "Lessor" also
includes any director, officer, employee, agent, successor or assign of Lessor.
Lessee's obligations under this section shall survive the expiration,
cancellation or termination of the Lease.
13. PERSONAL PROPERTY: Lessee represents and agrees that the Equipment is,
and shall at all times remain, separately identifiable personal property. Upon
Lessor's request, Lessee shall furnish Lessor a landlord's and/or mortgagee's
Page 3
<PAGE>
waiver and consent to remove all Equipment. Lessor may display notice of its
interest in the Equipment by any reasonable identification. Lessee shall not
alter or deface any such indicia of Lessor's interest.
14. DEFAULT: Each of the following events shall constitute an event of
default under the Lease: (a) Lessee fails to pay any rent or other amount due
under the Lease within ten days of its due date; or (b) Lessee fails to perform
or observe any of its obligations in Sections 8, 18, or 22 hereof; or (c)
Lessee fails to perform or observe any of its other obligations in the Lease for
more than 30 days after Lessor notifies Lessee of such failure; or (d) Lessee or
any Lessee affiliate defaults in the payment, performance or observance of any
obligation under any loan, credit agreement or other lease in which Lessor or
any subsidiary (direct or indirect) of Bank One Corporation (or its successors
or assigns) is the creditor or lessor; or (e) any statement, representation or
warranty made by Lessee in the Lease, in any Schedule or in any document,
certificate or financial statement in connection with the Lease proves at any
time to have been untrue or misleading in any material respect as of the time
when made; or (f) Lessee becomes insolvent or bankrupt, or Lessee admits its
inability to pay its debts as they mature, or Lessee makes an assignment for the
benefit of creditors, or Lessee applies for, institutes or consents to the
appointment of a receiver, trustee or similar official for Lessee or any
substantial part of its property or any such official is appointed without
Lessee's consent, or Lessee applies for, institutes or consents to any
bankruptcy, insolvency, reorganization, debt moratorium, liquidation or similar
proceeding relating to Lessee or any substantial part of its property under the
laws of any jurisdiction or any such proceeding is instituted against Lessee
without stay or dismissal for more than 30 days, or Lessee commences any act
amounting to a business failure or a winding up of its affairs, or Lessee ceases
to do business as a going concern; or (g) with respect to any guaranty, letter
of credit, pledge agreement, security agreement, mortgage, deed of trust, debt
subordination agreement or other credit enhancement or credit support agreement
(whether now existing or hereafter arising) signed or issued by any party in
connection with all or any part of Lessee's obligations under the Lease, the
party signing or issuing any such agreement defaults in its obligations
thereunder or any such agreement shall cease to be in full force and effect or
shall be declared to be null, void, invalid or unenforceable by the party
signing or issuing it; or (h) there shall occur in Lessor's reasonable opinion
any material adverse change in the financial condition, business or operations
of Lessee.
As used in this section 14, the term "Lessee" also includes any
guarantor (whether now existing or hereafter arising) of all or any part of
Lessee's obligations under the Lease and/or any issuer of a letter of credit
(whether now existing or hereafter arising) relating to all or any part of
Lessee's obligations under the Lease, and the term "Lease" also includes any
guaranty or letter of credit (whether now existing or hereafter arising)
relating to all or any part of Lessee's obligations under the Lease.
15. REMEDIES. If any event of default exists, Lessor may exercise in any
order one or more of the remedies described in the lettered subparagraphs of
this section, and Lessee shall perform its obligations imposed thereby:
(a) Lessor may require Lessee to return any or all Equipment as provided in
the Lease.
(b) Lessor or its agent may repossess any or all Equipment wherever found,
may enter the premises where the Equipment is located and disconnect, render
unusable and remove it, and may use such premises without charge to store or
show the Equipment for sale.
(c) Lessor may sell any or all Equipment at public or private sale, with or
without advertisement or publication, may release or otherwise dispose of it or
may use, hold or keep it.
(d) Lessor may require Lessee to pay to Lessor on a date specified by
Lessor, with respect to any or all Equipment (i) all accrued and unpaid rent,
late charges and other amounts due under the Lease on or before such date, plus
(ii) as liquidated damages for loss of a bargain and not as a penalty, and in
lieu of any further payments of rent, the Stipulated Loss Value of the Equipment
on such date, plus (iii) interest at the Overdue Rate on the total of the
foregoing ("Overdue Rate" means an interest rate per annum equal to the higher
of 18% or 2% over the Prime Rate, but not to exceed the highest rate permitted
by applicable law). The parties acknowledge that the foregoing money damage
calculation reasonably reflects Lessor's anticipated loss with respect to the
Equipment and the related Lease resulting from the event of default. If an event
of default under section 14(f) of this Master Lease Agreement exists, then
Lessee will be automatically liable to pay Lessor the foregoing amounts as of
the next rent payment date unless Lessor otherwise elects in writing.
(e) Lessee shall pay all costs, expenses and damages incurred by Lessor
because of the event of default or its actions under this section, including,
without limitation any collection agency and/or attorney fees and expenses, any
costs related to the repossession, safekeeping, storage, repair, reconditioning
or disposition of the Equipment and any incidental and consequential damages.
(f) Lessor may terminate the Lease and/or any or all Schedules, may sue to
enforce Lessee's performance of its obligations under the Lease and/or may
exercise any other right or remedy then available to Lessor at law or in equity.
Lessor is not required to take any legal process or give Lessee any notice
before exercising any of the above remedies. None of the above remedies is
exclusive, but each is cumulative and in addition to any other remedy available
to Lessor. Lessor's exercise of one or more remedies shall not preclude its
exercise of any other remedy. No action taken by Lessor shall release Lessee
from any of its obligations to Lessor. No delay or failure on the part of Lessor
to exercise any right hereunder
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<PAGE>
shall operate as a waiver thereof, nor as an acquiescence in any default, nor
shall any single or partial exercise of any right preclude any other exercise
thereof or the exercise of any other right. After any default, Lessor's
acceptance of any payment by Lessee under the Lease shall not constitute a
waiver by Lessor of such default, regardless of Lessor's knowledge or lack of
knowledge at the time of such payment, and shall not constitute a reinstatement
of the Lease if the Lease has been declared in default by Lessor, unless Lessor
has agreed in writing to reinstate the Lease and to waive the default.
If Lessor actually repossesses any Equipment, then it will use commercially
reasonable efforts under the then current circumstances to attempt to mitigate
its damages; provided, that Lessor shall not be required to sell, re-lease or
otherwise dispose of any Equipment prior to Lessor enforcing any of the remedies
described above. Lessor may sell or re-lease the Equipment in any manner it
chooses, free and clear of any claims or rights of Lessee and without any duty
to account to Lessee with respect thereto except as provided below, If Lessor
actually sells or re-leases the Equipment, it will credit the net proceeds of
any sale of the Equipment, or the net present value (discounted at the then
current Prime Rate) of the rents payable under any new lease of the Equipment,
against and up to (but not exceeding) the Stipulated Loss Value of the Equipment
and any other amounts Lessee owes Lessor, or will reimburse Lessee for and up to
(but not exceeding) Lessee's payment thereof. The term "net" as used above shall
mean such amount after deducting the costs and expenses described in clause (e)
above of this section. If Lessor elects in writing not to sell or re-lease any
Equipment, it will similarly credit or reimburse Lessee for Lessor's reasonable
estimate of such Equipment's Fair Market Value.
16. LESSOR'S RIGHT TO PERFORM: If Lessee fails to make any payment under
the Lease or fails to perform any of its other agreements in the Lease
(including, without limitation, its agreement to provide insurance coverage as
stated in the Lease), Lessor may itself make such payment or perform such
agreement, and the amount of such payment and the amount of the expenses of
Lessor incurred in connection with such payment or performance shall be deemed
to be additional rent, payable by Lessee on demand.
17. FINANCIAL REPORTS: Lessee agrees to furnish to Lessor: (a) annual
financial statements setting forth the financial condition and results of
operation of Lessee (financial statements shall include balance sheet, income
statement and changes in financial position and all notes thereto) within 120
days of the end of each fiscal year of Lessee; (b) upon Lessor's request,
quarterly financial statements setting forth the financial condition and results
of operation of Lessee within 60 days of the end of each of the first three
fiscal quarters of Lessee; and (C) such other financial information as Lessor
may from time to time reasonably request including, without limitation,
financial reports filed by Lessee with federal or state regulatory agencies. All
such financial information shall be prepared in accordance with generally
accepted accounting principles.
18. NO CHANGES IN LESSEE: Lessee shall not: (a) liquidate, dissolve or
suspend business; (b) sell, transfer or otherwise dispose of all or a majority
of its assets, except that Lessee may sell its inventory in the ordinary course
of its business; (c) enter into any merger, consolidation or similar
reorganization unless it is the surviving corporation; (d) transfer all or any
substantial part of its operations or assets outside of the United States of
America; or (e) without 30 days advance written notice to Lessor, change its
name or chief place of business.
19. LATE CHARGES: If any rent or other amount payable under the Lease is
not paid when due, then as compensation for the administration and enforcement
of Lessee's obligation to make timely payments, Lessee shall pay with respect to
each overdue payment on demand an amount equal to the greater of fifteen dollars
($15.00) or five percent (5%) of the each overdue payment (but not to exceed the
highest late charge permitted by applicable law) plus any collection agency fees
and expenses.
20. NOTICES; POWER OF ATTORNEY: (a) Service of all notices under the Lease
shall be sufficient if given personally or couriered or mailed to the party
involved at its respective address set forth herein or at such other address as
such party may provide in writing from time to time. Any such notice mailed to
such address shall be effective three days after deposit in the United States
mail with postage prepaid. (b) With respect to any power of attorney covered by
the Lease, the powers conferred on Lessor thereby: are powers coupled with an
interest; are irrevocable; are solely to protect Lessor's interests under the
Lease; and do not impose any duty on Lessor to exercise such powers. Lessor
shall be accountable solely for amounts it actually receives as a result of its
exercise of such powers.
21. ASSIGNMENT BY LESSOR: Lessor and any assignee of Lessor, with or
without notice to or consent of Lessee, may sell, assign, transfer or grant a
security interest in all or any part of Lessor's rights, obligations, title or
interest in the Equipment, the Lease, any Schedule or the amounts payable under
the Lease or any Schedule to any entity ("transferee"). The transferee shall
succeed to all of Lessor's rights in respect to the Lease (including, without
limitation, all rights to insurance and indemnity protection described in the
Lease). Lessee agrees to sign any acknowledgement and other documents reasonably
requested by Lessor or the transferee in connection with any such transfer
transaction. Lessee, upon receiving notice of any such transfer transaction,
shall comply with the terms and conditions thereof. Lessee agrees that it shall
not assert against any transferee any claim, defense, setoff, deduction or
counterclaim which Lessee may now or hereafter be entitled to assert against
Lessor. Unless otherwise agreed in writing, the transfer transaction shall not
relieve Lessor of any of its obligations to Lessee under the Lease and Lessee
agrees that the transfer transaction shall not be construed as being an
assumption of such obligations by the transferee.
Page 5
<PAGE>
22. NO ASSIGNMENT, SUBLEASE OR LIEN BY LESSEE: LESSEE SHALL NOT, DIRECTLY
OR INDIRECTLY, (a) MORTGAGE, ASSIGN, SELL, TRANSFER, OR OTHERWISE DISPOSE OF THE
LEASE OR ANY INTEREST THEREIN OR THE EQUIPMENT OR ANY PART THEREOF, OR (b)
SUBLEASE, RENT, LEND OR TRANSFER POSSESSION OR USE OF THE EQUIPMENT OR ANY PART
THEREOF TO ANY PARTY, OR (c) CREATE, INCUR, GRANT, ASSUME OR ALLOW TO EXIST ANY
LIEN ON THE LEASE, ANY SCHEDULE, THE EQUIPMENT OR ANY PART THEREOF.
23. EXPIRATION OF LEASE TERM: (a) At least 90 days (or earlier if otherwise
specified), but no more than 270 days prior to expiration of the Lease Term of
each Schedule, Lessee shall give Lessor written notice of its electing one of
the following options for all (but not less than all) of the Equipment covered
by such Schedule: return the Equipment under clause (b) below; or purchase the
Equipment under clause (c) below. The election of an option shall be
irrevocable. If Lessee fails to give timely notice of its election, it shall be
deemed to have elected to return the Equipment.
(b) If Lessee elects or is deemed to have elected to return the Equipment
at the expiration of the Lease Term of a Schedule or if Lessee is obligated at
any time to return the Equipment, then Lessee shall, at its sole expense and
risk, deinstall, disassemble, pack, crate, insure and return the Equipment to
Lessor (all in accordance with applicable industry standards) at any location in
the continental United States of America selected by Lessor. The Equipment shall
be in the same condition as when received by Lessee, reasonable wear, tear and
depreciation resulting from normal and proper use excepted (or, if applicable,
in the condition set forth in the Lease or the Schedule), shall be in good
operating order and maintenance as required by the Lease, shall be certified as
being eligible for any available manufacturer's maintenance program, shall be
free and clear of any Liens as required by the Lease, shall comply with all
applicable laws and regulations and shall include all manuals, specifications,
repair and maintenance records and similar documents. Until Equipment is
returned as required above, all terms of the Lease shall remain in full force
and effect including, without limitation, obligations to pay rent and insure the
Equipment; provided, that after the expiration of any Schedule and before Lessee
has completed its return of the Equipment or its purchase option (if elected),
the term of the lease of the Equipment covered by such Schedule shall be month-
to-month or such shorter period as may be specified by Lessor.
(c) If Lessee gives Lessor timely notice of its election to purchase
Equipment, then on the expiration date of the applicable Schedule Lessee shall
purchase all (but not less than all) of the Equipment and shall pay to Lessor
the Fair Market Value of the Equipment plus all Taxes (other than income taxes
on Lessor's gains on such sale), costs and expenses incurred or paid by Lessor
in connection with such sale plus all accrued but unpaid amounts due with
respect to the Equipment and/or the Schedule. The Stipulated Loss Value or
Economic Value of any item of Equipment shall have no bearing or influence on
the determination of Fair Market Value under this clause (c). Upon payment in
full of the above amounts, and if no default has occurred and is continuing
under the Lease, Lessor shall transfer title to such Equipment to Lessee "as-is,
where-is" with all faults and without recourse to Lessor and without any
representation or warranty of any kind whatsoever by Lessor, express or implied.
(d) For purposes of the purchase option of the Lease, the determination of
the Fair Market Value of any Equipment shall be determined (1) without deducting
any costs of dismantling or removal from the location of use, (2) on the
assumption that the Equipment is in the condition required by the applicable
return and maintenance provisions of the Lease and is free and clear of any
Liens as required by the Lease, and (3) shall be determined by mutual agreement
of Lessee and Lessor or, if Lessor and Lessee are not able to agree on such
value, by the Appraisal Procedure. "Appraisal Procedure" means the determination
of Fair Market Value by an independent appraiser acceptable to Lessor and
Lessee, or, if the parties are unable to agree on an acceptable appraiser, by
averaging the valuation (disregarding the one which differs the most from the
other two) of three independent appraisers, the first appointed by Lessor, the
second appointed by Lessee and the third appointed by the first two appraisers.
For purposes of the "Remedies" section of the Lease, the Fair Market Value shall
be determined by Lessor in good faith and any such valuation shall be on an "as-
is, where is" basis without regard to the first sentence of clause (d). Lessee,
at its sole expense, shall pay all fees, costs and expenses of the above
described appraisers.
24. GOVERNING LAW: THE INTERPRETATION, CONSTRUCTION AND VALIDITY OF THE
LEASE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF OHIO. WITH RESPECT TO ANY
ACTION BROUGHT BY LESSOR AGAINST LESSEE TO ENFORCE ANY TERM OF THE LEASE, LESSEE
HEREBY IRREVOCABLY CONSENTS TO THE JURISDICTION AND VENUE OF ANY STATE OR
FEDERAL COURT IN THE FRANKLIN COUNTY, OHIO, WHERE LESSOR HAS ITS PRINCIPAL PLACE
OF BUSINESS AND WHERE PAYMENTS ARE TO BE MADE BY LESSEE.
25. MISCELLANEOUS: (a) Subject to the limitations herein, the Lease shall
be binding upon and inure to the benefit of the parties hereto and their
respective heirs, administrators, successors and assigns. (b) This Master Lease
Agreement and each Schedule may be executed in any number of counterparts, which
together shall constitute a single instrument. Only one counterpart of each
Schedule shall be marked "Lessor's Original" and all other counterparts shall be
marked "Duplicate". A security interest in any Schedule may be created through
transfer and possession only of the counterpart marked "Lessor's Original". (c)
Section and paragraph headings in this Master Lease Agreement and the Schedules
are for convenience only and have no independent meaning. (d) The terms of the
Lease shall be severable and if any term thereof is declared unconscionable,
invalid, illegal or void, in whole or in part, the decision so holding shall not
be construed as impairing the other
Page 6
<PAGE>
terms of the Lease and the Lease shall continue in full force and effect as if
such invalid, illegal, void or unconscionable term were not originally included
herein. (e) All indemnity obligations of Lessee under the Lease and all rights,
benefits and protections provided to Lessor by warranty disclaimers shall
survive the cancellation, expiration or termination of the Lease. (f) Lessor
shall not be liable to Lessee for any indirect, consequential or special damages
for any reason whatsoever. (g) Each payment made by Lessee shall be applied by
Lessor in such manner as Lessor determines in its discretion which may include,
without limitation, application as follows: first, to accrued late charges;
second, to accrued rent; and third, the balance to any other amounts then due
and payable by Lessee under the Lease. (h) If the Lease is signed by more than
one Lessee, each of such Lessees shall be jointly and severally liable for
payment and performance of all of Lessee's obligations under the Lease.
26. ENTIRE AGREEMENT: THE LEASE REPRESENTS THE FINAL, COMPLETE AND ENTIRE
AGREEMENT BETWEEN THE PARTIES HERETO. THERE ARE NO ORAL OR UNWRITTEN AGREEMENTS
OR UNDERSTANDINGS AFFECTING THE LEASE OR THE EQUIPMENT. Lessee agrees that
Lessor is not the agent of any manufacturer or supplier, that no manufacturer or
supplier is an agent of Lessor, and that any representation, warranty or
agreement made by manufacturer, supplier or by their employees, sales
representatives or agents shall not be binding on Lessor.
27. JURY WAIVER: ALL PARTIES TO THIS MASTER LEASE AGREEMENT WAIVE ALL
RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY
PARTY AGAINST ANY OTHER PARTY ON ANY MATTER WHATSOEVER ARISING OUT OF, IN
CONNECTION WITH OR IN ANY WAY RELATED TO THIS MASTER LEASE AGREEMENT.
IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Master Lease Agreement as of the date first written above.
READY MIX, INC. BANC ONE LEASING CORPORATION
(Lessee) (Lessor)
By: /s/ Kenneth D. Nelson By: /s/ [ILLEGIBLE]
---------------------------- -------------------------------
Title: VICE PRESIDENT Title: /s/ [ILLEGIBLE]
-------------------------- ----------------------------
Lessee's Witness: /s/ Julie L. Bergo
------------------
Regardless of any prior, present or future oral agreement or course of
dealing, no term or condition of the Lease may be amended, modified, waived,
discharged, cancelled or terminated except by a written instrument signed by the
party to be bound; except Lessee authorizes Lessor to complete the Acceptance
Date of each Schedule and the serial numbers of any Equipment.
READY MIX, INC. BANC ONE LEASING CORPORATION
(Lessee) (Lessor)
By: /s/ Kenneth D. Nelson By: /s/ [ILLEGIBLE]
------------------------------- --------------------------------
Title: VICE PRESIDENT Title: /s/ [ILLEGIBLE]
--------------------------- -----------------------------
Page 7
<PAGE>
EXHIBIT 10.103
[LOGO OF BANK ONE]
LEASE SCHEDULE NO.:1000100319 FINANCING LEASE
----------
(Per Diem Interim Rent)
Master Lease Agreement dated 07/01/99
--------
Lessor: BANC ONE LEASING CORPORATION
Lessee: READY MIX, INC.
--------------
1. GENERAL. This Lease Schedule is signed and delivered under the Master Lease
Agreement identified above, as amended from time to time ("Master Lease"),
between Lessee and Lessor. Capitalized terms defined in the Master Lease will
have the same meanings when used in this Schedule.
2. FINANCING. Lessor finances for Lessee, and Lessee finances with Lessor, all
of the property ("Equipment") described in Schedule A-1 attached hereto (and
Lessee represents that all Equipment is new unless specifically identified as
used):
3. AMOUNT FINANCED:
Equipment Cost: $ 721,894.88
Set-Up/filing Fee: $ 375.00
Miscellaneous:
Sales Tax: $ 0.00
Total: $ 722.269.88
------------
4. FINANCING TERM. The Base Term of this Schedule shall be 60 months and the
--
Base Term shall commence on Acceptance Date ("Commencement Date"). The total
---------------
Lease Tenn consists of the Interim Term plus the Base Term. The Interim Term
begins on the date that Lessor accepts this Schedule as stated below Lessor's
signature ("Acceptance Date") and continues up to the Commencement Date.
5. INSTALLMENT PAYMENTS/FEES. As financing for the Equipment, Lessee shall pay
to Lessor all amounts stated below on the due dates stated below: There shall be
added to each installment payment all applicable Taxes as in effect from time to
time.
(a) For the Interim Term, Lessee shall pay to Lessor on the Commencement Date
an amount equal to one-thirtieth (1/30th) of the Installment Payment multiplied
by the number of days in the Interim Term. "Installment Payment" means the total
of all installment payments due and payable during the Base Term divided by the
number of months in the Base Term.
(b) During the Base Term, Lessee shall pay to Lessor installment payments in
the amounts and according to the timing set forth below, provided however, that
notwithstanding the following, the final installment payment due hereunder shall
be equal to the remaining principal balance hereunder together with all accrued
interest and fees.
(1) Amount of each installment payment during the Base Term (including
principal and interest):
60 MON $14,752.42
(2) Frequency of installments payments during the Base Term: Monthly
-------
Page 1 of 4
<PAGE>
[LOGO OF BANK ONE]
(3) Timing of installment payments during the Base Term: arrears
-------
(c) Lessee shall pay Lessor a Set-Up/Filing Fee as follows:
(1) $0.00 shall be paid on the Acceptance Date, or
-----
(2) $375.00 has been included in the above Amount Financed of the
-------
Equipment.
(d) Security Deposit: $0.00. On the Acceptance Date, Lessee shall pay Lessor
-----
said Security Deposit which shall be held in accordance with paragraph 6 below.
6. SECURITY INTEREST. This Schedule is intended to be a secured debt financing
transaction, not a true lease. See Paragraph 7 below regarding Lessee's
---
ownership of the Equipment. As collateral security for payment and performance
of all Secured Obligations (defined in Paragraph 8 below) and to induce Lessor
to extend credit from time to time to Lessee (under the Lease or otherwise),
Lessee hereby grants to Lessor a first priority security interest in all of
Lessee's right, title and interest in the Equipment, whether now existing or
hereafter acquired, any sums specified in this Schedule as a "Security Deposit",
and in all Proceeds (defined in Paragraph 8 below). At its option, Lessor may
apply all or any part of any Security Deposit to cure any default of Lessee
under the Lease. If upon final termination of this Schedule, Lessee has
fulfilled all of the terms and conditions hereof, then Lessor shall pay to
Lessee upon Lessee's written request any remaining balance of the Security
Deposit for this Schedule, without interest.
7. TITLE TO EQUIPMENT; FIRST PRIORITY LIEN. Lessee represents, warrants and
agrees: that Lessee currently is the lawful owner of the Equipment; that good
and marketable title to the Equipment shall remain with Lessee at all times;
that Lessee has granted to Lessor a first priority security interest in the
Equipment and all Proceeds; and that the Equipment and all Proceeds are, and at
all times shall be, free and clear of any Liens other than Lessor's security
interest therein. Lessee at its sole expense will protect and defend Lessor's
first priority security interest in the Equipment against all claims and demands
whatsoever.
8. CERTAIN DEFINITIONS. "Secured Obligations" means (a) all payments and other
obligations of Lessee under or in connection with this Schedule, and (b) all
payments and other obligations of Lessee (whether now existing or hereafter
incurred) under or in connection with the Master Lease and all present and
future Lease Schedules thereto, and (c) all other leases, indebtedness,
liabilities and/or obligations of any kind (whether now existing or hereafter
incurred, absolute or contingent, direct or indirect) of Lessee to Lessor or to
any affiliate of either Lessor or BANK ONE CORPORATION. "Proceeds" means all
cash and non-cash proceeds of the Equipment including, without limitation,
proceeds of insurance, indemnities and/or warranties.
9. AMENDMENTS TO MASTER LEASE. For purposes of this Schedule only, Lessee
and Lessor agree to amend the Master Lease as follows: (a) public liability or
property insurance as described in the second sentence of Section 8 will not be
required; (b) the definition of "Stipulated Loss Value" in clause (b) of
Section 9 is deleted and replaced by Paragraph 10 below; (c) the text of Section
10 is deleted in its entirety; (d) Subsections 23(a) and 23(c) are deleted; (e)
subsection 23(b) and the last sentence of section 4 will apply only if an event
of default occurs; and (f) all references in the Lease as it relates to this
Schedule to "Lessee" and "Lessor" shall be changed to "Borrower" and "Lender"
respectively.
10. STIPULATED LOSS VALUE. For purposes of this Schedule only, the "Stipulated
Loss Value" of any item of Equipment during its Lease Term equals the aggregate
of the following as of the date specified by Lessor: (a) all accrued and unpaid
interest, late charges and other amounts due under this Schedule and the Master
Lease to the extent it relates to this Schedule as of such specified date, plus
(b) the remaining principal balance due and payable by Lessee under this
Schedule as of such specified date, plus (c) interest on the amount described in
the foregoing clauses (a) and (b) at the Overdue Rate commencing with the
specified date; provided, that the foregoing calculation shall not exceed
Page 2 of 4
<PAGE>
[LOGO]
the maximum amount which may be collected by Lessor from Lessee under applicable
law in connection with enforcement of Lessor's rights under this Schedule and
the Master Lease to the extent it relates to this Schedule.
11. LESSEE TO PAY ALL TAXES. For purposes of this Schedule and its Equipment
only: Lessee shall pay any and all Taxes relating to this Schedule and its
Equipment directly to the applicable taxing authority; Lessee shall prepare and
file all reports or returns concerning any such Taxes as may be required by
applicable law or regulation (provided, that Lessor shall not be identified as
the owner of the Equipment in such reports or returns); and Lessee shall, upon
Lessor's request, send Lessor evidence of payment of such Taxes and copies of
any such reports or returns.
12. LESSEE'S ASSURANCES. Lessee irrevocably and unconditionally: (a) reaffirms
all of the terms and conditions of the Master Lease and agrees that the Master
Lease remains in full force and effect; (b) agrees that the Equipment is and
will be used at all times solely for commercial purposes, and not for personal,
family or household purposes; and (c) incorporates all of the terms and
conditions of the Master Lease as if fully set forth in this Schedule.
13. REPRESENTATIONS AND WARRANTIES: Lessee represents and warrants that: (a)
Lessee is a corporation, partnership or proprietorship duly organized, validly
existing and in good standing under the laws of the state of its organization
and is qualified to do business and is in good standing under the laws of each
other state in which the Equipment is or will be located; (b) Lessee has full
power, authority and legal right to sign, deliver and perform the Master Lease,
this Schedule and all related documents and such actions have been duly
authorized by all necessary corporate/partnership/proprietorship action; and
(c) the Master Lease, this Schedule and each related document has been duly
signed and delivered by Lessee and each such document constitutes a legal, valid
and binding obligation of Lessee enforceable in accordance with its terms.
14. CONDITIONS. No lease of Equipment under this Schedule shall be binding on
Lessor, and Lessor shall have no obligation to purchase the Equipment covered
hereby, unless: (a) Lessor has received evidence of all required insurance; (b)
in Lessor's sole judgment, there has been no material adverse change in the
financial condition or business of Lessee or any guarantor; (c) Lessee has
signed and delivered to Lessor this Schedule, which must be satisfactory to
Lessor, and Lessor has signed and accepted this Schedule; (d) no change in the
Code or any regulation thereunder, which in Lessor's sole judgment would
adversely affect the economics to Lessor of the lease transaction, shall have
occurred or shall appear to be imminent; (e) Lessor has received, in form and
substance satisfactory to Lessor, such other documents and information as Lessor
shall reasonably request; and (f) Lessee has satisfied all other reasonable
conditions established by Lessor.
15. OTHER DOCUMENTS: EXPENSES: Lessee agrees to sign and deliver to Lessor any
additional documents deemed desirable by Lessor to effect the terms of the
Master Lease or this Schedule including, without limitation, Uniform Commercial
Code financing statements which Lessor is authorized to file with the
appropriate filing officers. Lessee hereby irrevocably appoints Lessor and any
designee of Lessor as Lessee's attorney-in-fact with full power and authority in
the place of Lessee and in the name of Lessee to prepare, sign, amend, file or
record any Uniform Commercial Code financing statements or other documents
deemed desirable by Lessor to perfect, establish or give notice of Lessor's
interests in the Equipment or in any collateral as to which Lessee has granted
Lessor a security interest. Lessee shall pay upon Lessor's written request any
actual out-of-pocket costs and expenses paid or incurred by Lessor in connection
with the above terms of this section or the funding and closing of this
Schedule.
Page 3 of 4
<PAGE>
[LOGO]
16. PURCHASE ORDERS AND ACCEPTANCE OF EQUIPMENT. Lessee agrees that (I) Lessor
has not selected, manufactured, sold or supplied any of the Equipment, (ii)
Lessee has selected all of the Equipment and its suppliers, and (iii) Lessee has
received a copy of, and approved, the purchase orders or purchase contracts for
the Equipment. AS BETWEEN LESSEE AND LESSOR, LESSEE AGREES THAT: (a) LESSEE HAS
RECEIVED, INSPECTED AND APPROVED ALL OF THE EQUIPMENT; (b) ALL EQUIPMENT IS IN
GOOD WORKING ORDER AND COMPLIES WITH ALL PURCHASE ORDERS OR CONTRACTS AND ALL
APPLICABLE SPECIFICATIONS; (c) LESSEE IRREVOCABLY ACCEPTS ALL EQUIPMENT FOR
PURPOSES OF THE LEASE "AS-IS, WHERE-IS" WITH ALL FAULTS; AND (d) LESSEE
UNCONDITIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO REVOKE ITS ACCEPTANCE OF
THE EQUIPMENT.
LESSEE HAS READ AND UNDERSTOOD ALL OF THE TERMS OF THIS SCHEDULE. LESSEE
AGREES THAT THERE ARE NO ORAL OR UNWRITTEN AGREEMENTS WITH LESSOR REGARDING
THE EQUIPMENT OR THIS SCHEDULE.
BANC ONE LEASING CORPORATION READY MIX, INC.
- ---------------------------- ---------------
(Lessor) (Lessee)
By: /s/ [ILLEGIBLE] By: /s/ Kenneth D. Nelson
------------------------------- ---------------------------------
Title: [ILLEGIBLE] Title: VICE PRESIDENT
----------------------------- ------------------------------
Acceptance Date: 11/24/99 Witness: /s/ Tortina M. Bunton
------------------ ----------------------------
Page 4 of 4
<PAGE>
Banc One Leasing Corporation
SCHEDULE A-1 EQUIPMENT LEASED HEREUNDER
QUANTITY DESCRIPTION PAGE 1
=======================================================================
LOCATION: 4411 SOUTH 40TH ST. D-11
PHOENIX, AZ 85040
COUNTY: MARICOPA
COST: $722,269.88
1 MULTISHANK RIPPER/DOZER MODEL D9N S/N-6XJ01019
1 8R5597 BUCKET MODEL#990 S/N-7HK00107
TOGETHER WITH ALL ATTACHMENTS, ADDITIONS, ACCESSIONS, PARTS, REPAIRS,
IMPROVEMENTS, REPLACEMENTS AND SUBSTITUTIONS THERETO.
This Schedule A-1 is attached to and made a part of Lease Number 1000100319 and
----------
constitutes a true and accurate description of the equipment.
Lessee: READY MIX, INC.
---------------------
By: /s/ Kenneth D. Nelson
---------------------------
Date: 11-23-99
-------------------------
<PAGE>
EXHIBIT 10.104
INSTALLMENT SALE CONTRACT (SECURITY AGREEMENT)
PURCHASER(S): SELLER (DEALER):
MEADOW VALLEY WHEELER MACHINERY CO.
CONTRACTORS, INC.
P.O. BOX 60726 4901 WEST 2100 SOUTH
PHOENIX, AZ 85082 SALT LAKE CITY UT 84120-1227
County: MARICOPA
- --------------------------------------------------------------------------------
Subject to the terms and conditions set forth below and on the reverse side
hereof, Seller hereby sells the equipment described below (the "Unit" or
"Units") to Purchaser, and Purchaser (if more than one, jointly and severally),
having been offered both a cash sale price and a time sale price, hereby buys
the Units from Seller on a time sale basis.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
NEW (IF USED) DELIVERED
OR FIRST MODEL DESCRIPTION OF UNIT(S) SERIAL# CASH SALE
USED USED PRICE
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
(1) NEW 416C CATERPILLAR BACKHOE LOADER 5YN06745 64,000.00
- --------------------------------------------------------------------------------------------------------------------------------
FIRST DESCRIPTION OF ADDITIONAL SECURITY
USED (MAKE, MODEL & SERIAL NUMBER) Sub-Total.................................... $ 64,000.00
- -------------------------------------------------------
NONE Sales Tax.................................... $ 3,352.80
1. Total Cash Sale Price........................ $ 67,352.80
Cash Down Pay 11,200.00
Net Trade-in Allow 0.00
2. Total Down Payment........................... $ 11,200.00
- -------------------------------------------------------
FIRST DESCRIPTION OF TRADE-IN EQUIPMENT 3. Unpaid Balance of Cash Price (1 - 2)......... $ 56,152.80
USED (MAKE, MODEL & SERIAL NUMBER) 4. Official Fees (Specify)...................... $ 150.00
- -------------------------------------------------------
NONE DOCUMENTATION FEE 150.00
5. Physical Damage Insurance.................... $
6. Principal Balance
(Amount Financed) (3 + 4 + 5)................ $ 56,302.80
- --------------------------------------------------------
7. Finance Charge
Trade-in Value 0.00 (Time Price Differential).................... $ 6,858.96
Less Owing to (___n/a___) 0.00 8. Time Balance
Net Trade-in Allowance 0.00 (Total of Payments) (6 + 7).................. $ 63,161.76
9. Time Sale Balance
Location of Units: VICINITY OF (Total of Payment Price) (2 + 8)............. $ 74,361.76
SALT LAKE CITY, UTAH 10. Annual Percentage Rate 6.28%
11. Date FINANCE CHARGE begins to accrue. January 25, 2000
</TABLE>
Purchaser hereby sells and conveys to Seller the above described Trade-in
Equipment and warrants it to be free and clear of all claims, liens, security
interests and encumbrances except to the extent shown above.
1. PAYMENT: Purchaser shall pay to Seller, at P.O. BOX 100647, PASADENA CA
91189-0647 or such other location Seller designates in writing, the Time Balance
(Item 8 above) as follows [check (a) or (b)]:
X (a) in 48 equal monthly installments of $1,315.87 each, with the first
- ---
installment due on December 25, 1999, and the balance of the installments due
on the like day of each month thereafter, (except no payments shall be due
during the month(s) of (N/A)), until the entire indebtedness has been paid; or
___ (b) in accordance with the Payment Schedule attached to this Contract.
(Provisions of section 1 continued on reverse.)
SEE REVERSE SIDE FOR ADDITIONAL TERMS AND CONDITIONS WHICH ARE
A PART OF THIS CONTRACT.
LIABILITY INSURANCE COVERAGE FOR BODILY INJURY AND PROPERTY DAMAGE CAUSED TO
OTHERS IS NOT INCLUDED IN THIS CONTRACT.
NOTICE TO PURCHASER: (1) DO NOT SIGN THIS CONTRACT BEFORE YOU READ IT OR IF IT
CONTAINS ANY BLANK SPACES; (2) YOU ARE ENTITLED TO AN EXACT COPY OF THE CONTRACT
YOU SIGN; (3) UNDER THE LAW YOU MAY HAVE THE RIGHT TO PAY OFF IN ADVANCE THE
FULL AMOUNT DUE AND TO OBTAIN A PARTIAL REFUND OF THE FINANCE CHARGE.
PURCHASER ACKNOWLEDGES RECEIPT OF A FULLY COMPLETED COPY OF THIS CONTRACT
EXECUTED BY BOTH PURCHASER AND SELLER.
Purchaser(s) and Seller have duly executed this Contract as of 11/25, 1999.
Purchaser(s): Seller:
MEADOW VALLEY WHEELER MACHINERY CO.
CONTRACTORS, INC.
By /s/ Kenneth D. Nelson By /s/ [ILLEGIBLE]^^
--------------------------------- -----------------------------------
Name (PRINT) KENNETH D. NELSON Name (PRINT)__________________________
----------------------
Title VICE PRESIDENT Title Vice President
------------------------------ --------------------------------
<PAGE>
ADDITIONAL TERMS AND CONDITIONS
1. PAYMENT (continued): Purchaser shall pay to Seller a late payment
charge equal to the lesser of (a) the highest charge allowed by law or (b) 5% of
the amount of any payment (including any accelerated payment) not made when due
under this Contract (or such later date as may be required by applicable law).
Upon prepayment in full or acceleration of the total unpaid Time Balance,
Purchaser shall receive a rebate of the unearned portion of the Finance Charge
computed on an actuarial basis. Except as otherwise expressly provided herein,
the obligations of Purchaser hereunder shall not be affected by any defect in,
damage to, loss of or interference with possession or use of any Unit, by the
attachment of any lien or claim to any Unit, or for any other cause.
2. DISCLAIMER OF WARRANTIES: Purchaser acknowledges and agrees that Seller
is not the manufacturer of the Unit(s) and that Purchaser has selected each Unit
based on Purchaser's own judgment without any reliance whatsoever on any
statements or representations made by Seller. AS BETWEEN SELLER AND PURCHASER,
THE UNIT(S) ARE PROVIDED "AS IS" WITHOUT ANY WARRANTIES OF ANY KIND. PURCHASER
HEREBY EXPRESSLY DISCLAIMS a) ALL WARRANTIES OF MERCHANTABILITY, b) ALL
WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE, AND c) ALL WARRANTIES AGAINST
INFRINGEMENT OR THE LIKE. Seller assigns to Purchaser its interest in any of the
manufacturer's warranties on the Unit(s).
3. POSSESSION, USE AND MAINTENANCE: Purchaser shall not (a) use any Unit
improperly, carelessly, unsafely or in violation of any law or regulation or for
personal, family, or household purposes or for any purpose other than in
Purchaser's business (including agricultural business); (b) permit the use of
any Unit by anyone other than Purchaser or change the permanent location of any
Unit from the county and state specified above without the prior written consent
of Seller; or (c) sell, lease, assign or transfer, or create or suffer to exist
any lien, claim, security interest or encumbrance on any of its rights hereunder
or in any Unit. The Units are and shall remain personal property irrespective of
their use or manner of attachment to realty. Upon prior notice to Purchaser,
Seller or its agent shall have the right (but not the obligation) at all
reasonable times to inspect any Unit. Purchaser shall at its expense maintain
the Units in good operating order, repair and condition. Purchaser shall not
alter any Unit or affix any equipment to any Unit if such alteration or addition
would impair the originally intended function or reduce the value of such Unit.
Any alteration or addition to any Unit shall be at the sole risk of Purchaser.
4. TAXES: Purchaser shall promptly pay all taxes, assessments, fees and
other charges when levied or assessed against any Unit or the ownership or use
thereof, or this Contract or any payments made or to be made to Seller.
5. WAIVER AND INDEMNITY: PURCHASER HEREBY AGREES TO RELEASE, DEFEND,
INDEMNIFY AND HOLD HARMLESS SELLER, ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS
AND ASSIGNS FROM AND AGAINST ANY CLAIMS OF PURCHASER OR THIRD PARTIES, INCLUDING
CLAIMS BASED UPON BREACH OF CONTRACT, BREACH OF WARRANTY, PERSONAL INJURY,
PROPERTY DAMAGE, STRICT LIABILITY OR NEGLIGENCE, FOR ANY LOSS, DAMAGE OR INJURY
CAUSED BY OR RELATING TO THE DESIGN, MANUFACTURE, SELECTION, DELIVERY,
CONDITION, OPERATION, USE, OWNERSHIP, MAINTENANCE OR REPAIR OF ANY UNIT.
FURTHER, PURCHASER AGREES TO BE RESPONSIBLE FOR ALL COSTS AND EXPENSES,
INCLUDING REASONABLE ATTORNEYS' FEES, INCURRED BY SELLER OR ITS DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS AND ASSIGNS IN DEFENDING SUCH CLAIMS OR IN ENFORCING
THIS PROVISION. UNDER NO CONDITION OR CAUSE OF ACTION SHALL SELLER BE LIABLE FOR
ANY LOSS OF ACTUAL OR ANTICIPATED BUSINESS OR PROFITS OR ANY SPECIAL, INDIRECT
OR CONSEQUENTIAL DAMAGES.
6. INSURANCE: Purchaser, at its expense, shall keep each Unit and all
equipment listed as Additional Security insured against all risks for their full
insurable value and shall maintain comprehensive public liability insurance in
an amount reasonably acceptable to Seller. All such insurance shall be in such
form and with such companies as Seller shall reasonably approve, shall be
primary, without right of contribution from any insurance carried by Seller, and
shall provide that such insurance may not be cancelled or altered so as to
affect the interest of Seller without at least 30 days' prior written notice to
Seller. All insurance covering loss or damage to the Units and Additional
Security shall name Seller (or its designee) as loss payee and be payable to
Seller as its interest may appear. Purchaser agrees to notify Seller of any
occurrence which may become the basis of an insurance claim hereunder and not to
make any adjustments with insurers without Seller's prior written consent. Prior
to the first delivery of any Unit to Purchaser, Purchaser shall deliver to
Seller satisfactory evidence of such insurance coverage.
7. EVENTS OF DEFAULT: Each of the following shall constitute an "Event of
Default" hereunder: (a) Purchaser shall fail to make any payment to Seller when
due hereunder or fail to observe or perform any other covenant, agreement or
warranty made by Purchaser hereunder; (b) any representation or warranty of
Purchaser contained herein or in any document furnished to Seller in connection
herewith shall be incorrect or misleading when made; (c) any Unit or additional
security shall become lost, stolen, destroyed, irreparably damaged or subject to
any sale, lien, claim, security interest or encumbrance (other than in favor of
Seller or its assignee); (d) any default shall occur under any other agreement
between Purchaser and Seller; (e) Purchaser or any guarantor of this Contract
shall cease to do business, become insolvent, make an assignment for the benefit
of creditors or file any petition under any bankruptcy, reorganization,
insolvency or moratorium law, or any other law for the relief of debtors; (f)
any involuntary petition shall be filed under any bankruptcy statute against
Purchaser or any guarantor of this Contract or any receiver, trustee, or similar
official shall be appointed to take possession of the properties of Purchaser or
any guarantor of this Contract unless such petition or appointment ceases to be
in effect within 30 days of said filing or appointment; (g) Seller shall
reasonably deem itself to be insecure; or (h) any breach or repudiation by any
guarantor shall occur under any guaranty obtained by Seller in connection with
this Contract.
8. REMEDIES: If any Event of Default shall occur, Seller may, at its
option, do any one or more of the following: (a) Declare all amounts due or to
become due under this Contract, excluding any unearned portion of the Finance
Charge, immediately due and payable; (b) recover any additional damages and
expenses sustained by Seller by reason of the breach of any covenant,
representation or warranty contained in this Contract; (c) enforce the security
interest granted hereunder; (d) without notice, liability or legal process,
enter upon the premises where any of the Units or additional security may be and
take possession thereof, and (e) require Purchaser to assemble the Units and
additional security and make them available to Seller at a place designated by
Seller which is reasonably convenient to both parties. Time is of the essence of
this Contract. Seller shall have all rights given to a secured party by law and
may retain all monies theretofore paid by Purchaser hereunder as compensation
for the reasonable use of the Units by Purchaser. Seller may, at its option,
undertake commercially reasonable efforts to sell the Units and additional
security, and the proceeds of any such sale shall be applied: First, to
reimburse Seller for all reasonable expenses of retaking, holding, preparing for
sale, and selling the Units and additional security, including all taxes and
reasonable attorneys' fees, and second, to the extent not previously paid by
Purchaser, to pay Seller all amounts then due or accrued under this Contract,
including any accelerated payments and late payment charges. Any surplus shall
be paid to the person entitled thereto. Purchaser shall promptly pay any
deficiency to Seller. Purchaser acknowledges that sales for cash or on credit to
a wholesaler, retailer or user of the Units or additional security, and with or
without the Units or additional security being present at such sale, are all
commercially reasonable. Purchaser agrees to pay all reasonable attorneys' fees
(to the extent permitted by applicable law) and all costs and expenses incurred
by Seller in enforcing this Contract. The remedies provided herein shall be
cumulative and in addition to all other remedies at law or in equity. If
Purchaser fails to perform any of its obligations under this Contract, Seller
may (but need not) at any time thereafter perform such obligation, and the
expenses incurred in connection therewith shall be payable by Purchaser upon
demand.
9. SECURITY INTEREST; PURCHASER ASSURANCES AND REPRESENTATIONS: To secure
payment of Purchaser's indebtedness to Seller hereunder and the performance of
all obligations of Purchaser hereunder, Purchaser hereby grants to Seller a
continuing security interest in the Units, and in the equipment, if any,
described as Additional Security on the front of this Contract, including all
attachments, accessories and optional features for such Units and Additional
Security (whether or not installed thereon) and all substitutions, replacements,
additions and accessions thereto, and proceeds of all the foregoing. Purchaser
will, at its expense, do any act and execute, acknowledge, deliver, file,
register and record any Documents which Seller deems desirable in its discretion
to protect Seller's security interest and Seller's rights and benefits under
this Contract. Purchaser hereby irrevocably appoints Seller as Purchaser's
Attorney-in-Fact for the signing and filing of such documents and authorizes
Seller to delegate these limited powers. Purchaser acknowledges the signature of
Seller or said delegatee upon such documents to be the same as Purchaser's own
for all purposes and with the present intent to authenticate the document.
Purchaser represents and warrants to Seller that (a) Purchaser has the power to
make, deliver and perform under this Contract; (b) the person executing and
delivering this Contract is authorized to do so on behalf of Purchaser; (c) this
Contract constitutes a valid obligation of Purchaser, legally binding upon it
and enforceable in accordance with its terms; and (d) all credit, financial and
other information submitted to Seller in connection with this Contract is and
shall be true, correct and complete.
10. ASSIGNMENT; COUNTERPARTS: The rights and remedies of Seller under this
Contract may be assigned by Seller at any time. If this Contract is assigned by
Seller, the term "Seller" shall thenceforth mean Seller's assignee, and if
assigned to a partnership, shall thenceforth mean such partnership and, for
purposes of Sections 2, 4, 5 and 6, each partner in such partnership. If
notified by Seller, Purchaser shall make all payments due hereunder directly to
the party designated in such notice, without any offset or deduction whatsoever.
Purchaser waives, as to Seller's assignee, all claims and defenses Purchaser may
have or assert against Seller and agrees that no such claim or defense will be
asserted against Seller's assignee. No assignment of this Contract by Seller
shall release any claim Purchaser may have against Seller hereunder. No
assignment of this Contract or any right or obligation hereunder may be made by
Purchaser without the prior written consent of Seller. This Contract shall be
binding upon and inure to the benefit of Seller and Purchaser and their
respective successors and assigns. Although multiple counterparts of this
document may be signed, only the counterpart accepted, acknowledged and
certified by Caterpillar Financial Services Corporation on the signature page
thereof as the original will constitute original chattel paper.
11. EFFECT OF WAIVER; ENTIRE AGREEMENT; MODIFICATION OF CONTRACT; NOTICES:
No delay or omission to exercise any right or remedy accruing to Seller
hereunder shall impair any such right or remedy nor shall it be construed to be
a waiver of any breach or default of Purchaser. Any waiver or consent by Seller
under this Contract must be in writing specifically set forth. This Contract
completely states the rights of Seller and Purchaser with respect to the Units
and supersedes all prior agreements with respect thereto. No variation or
modification of this Contract shall be valid unless in writing. All notices
hereunder shall be in writing, addressed to each party at the address set forth
on the front of this Contract or at such other address as may hereafter be
furnished in writing.
12. APPLICABLE LAW, JURISDICTION AND JURY TRIAL WAIVER PROVISIONS: This
Agreement shall be governed by and construed under the laws of the State of
Tennessee, without giving effect to the conflict-of-laws principles thereof, and
Purchaser hereby consents to the jurisdiction of any state or federal court
located within the State of Tennessee. THE PARTIES HERETO HEREBY WAIVE THE RIGHT
TO TRIAL BY JURY IN ANY ACTION ARISING OUT OF OR RELATED TO THIS AGREEMENT; THE
OBLIGATIONS OR THE COLLATERAL.
13. SEVERABILITY; SURVIVAL OF COVENANTS: If any provision of this Contract
shall be invalid under any applicable law, such provision shall be deemed
omitted but the remaining provisions hereof shall be given effect. All
obligations of Purchaser under this Contract shall survive the expiration or
termination of this Contract to the extent required for their full observance
and performance.
<PAGE>
GUARANTY OF PAYMENT - INSTALLMENT SALE CONTRACT (SECURITY AGREEMENT)
THIS GUARANTY ("Guaranty") is made and entered into as of 11/25/99 by
MEADOW VALLEY CORPORATION, (hereinafter, referred to as "Guarantor"), in favor
of WHEELER MACHINERY CO. 4901 WEST 2100 SOUTH SALT LAKE CITY UT 8412O-1227
(hereinafter referred to as "Seller"), guaranteeing the Indebtedness (as
hereinafter defined) of MEADOW VALLEY CONTRACTORS, INC. (hereinafter referred to
as "Obligor").
WITNESSETH:
FOR VALUE RECEIVED, and/or as an inducement to Seller to now or hereafter enter
into, purchase or otherwise acquire the agreements, accounts and/or other
obligations evidencing and/or securing Obligor's Indebtedness and in
consideration of and for credit and financial accommodations now or hereafter
extended to or for the account of the Obligor (which includes Seller's consent
to an assignment and/or assumption of the Indebtedness), which is in the best
interest of Guarantor and which would not have been extended but for this
Guaranty, the Guarantor agrees as follows:
SECTION 1. Guaranty of Obligor's Indebtedness. Guarantor hereby absolutely,
- ----------------------------------------------
irrevocably and unconditionally agrees to, and by these presents does hereby:
(a) guarantee the prompt and punctual payment, performance and satisfaction of
all present and future indebtedness and obligations of Obligor to Seller which
Obligor now owes Seller or which Obligor shall at any time or from time to time
hereafter owe Seller when the same shall become due in connection with or
arising out of that certain INSTALLMENT SALES CONTRACT by and between Obligor
and Seller dated 11/25/99, including any and all existing and future additional
schedules, amendments and/or related agreements thereto (the "Contract"),
whether direct or contingent, due or to become due, joint or several, primary or
secondary, liquidated or unliquidated, secured or unsecured, original or renewed
or extended, or by open account or otherwise, and whether representing rentals,
principal, interest and/or late charges or other charges of an original balance,
an accelerated balance, a balance reduced by part payment or a deficiency after
sale of collateral or otherwise and (b) undertake and guarantee to pay on demand
and indemnify Seller against all liabilities, losses, costs, attorney's fees,
and expenses which may be suffered by Seller by reason of Obligor's default or
default of the Guarantor (with all of Obligor's indebtedness and/or obligations
as stated above (including all costs, fees and expenses) being hereinafter
individually and collectively referred to under this Guaranty as Obligor's
"Indebtedness", which Indebtedness shall be conclusively presumed to have been
created in reliance upon this Guaranty).
SECTION 2. Joint, Several and Solidary Liability. Guarantor further agrees that
- ------------------------------------------------
its obligations and liabilities for the prompt and punctual payment, performance
and satisfaction of Obligor's Indebtedness are independent of any agreement or
transaction with any third parties and shall be on a "joint and several" and
"solidary" basis along with Obligor to the same degree and extent as if
Guarantor had been and/or will be a co-borrower, co-principal obligor and/or co-
maker of Obligor's Indebtedness. In the event that there is more than one
guarantor under this Guaranty, or in the event that there are other guarantors,
endorsers, sureties or any other party who may at any time become liable for all
or any portion of Obligor's Indebtedness (each, an "Other Obligor"), the
provisions hereof shall be read with all grammatical changes thereby rendered
necessary and each reference to the Guarantor shall include each and every one
of those parties liable for all or any portion of Obligor's Indebtedness and
each Guarantor's obligations and liabilities hereunder shall be on a "joint and
several" and "solidary" basis along with such Other Obligors.
SECTION 3. Duration; Cancellation of Guaranty. This Guaranty and Guarantor's
- ---------------------------------------------
obligations and liabilities hereunder shall remain in full force and effect
until such time as Obligor's Indebtedness shall be fully and finally paid,
performed and/or satisfied, until such time as this Guaranty may be cancelled by
Seller under a written cancellation instrument in favor of Guarantor or
otherwise as stated herein.
SECTION 4. Default by Obligor. Immediately upon Obligor's default under any of
- -----------------------------
its Indebtedness in favor of Seller, Seller may make demand upon Guarantor and
Guarantor unconditionally and absolutely agrees to pay the full then unpaid
amount of all of Obligor's Indebtedness (whether at stated maturity, by required
prepayment, declaration, acceleration or otherwise) and/or perform any covenant
or agreement hereunder guaranteed. Such payment or payments shall be made
immediately following demand by Seller at Seller's offices indicated above.
SECTION 5. Additional Covenants. Guarantor further agrees that Seller may, at
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its sole option, at any time, and from time to time, without the consent of or
notice to Guarantor, or to any other party, and without incurring any
responsibility to Guarantor or to any other party, and without affecting,
impairing or releasing the obligations of Guarantor under this Guaranty: (a)
discharge or release any party (including, but not limited to, Obligor,
secondary obligors of Obligor's indebtedness or any co-guarantor under this
Guaranty) who is or may be liable to Seller for Obligor's Indebtedness; (b) sell
at public or private sale, exchange, release, impair, surrender, substitute,
realize upon or otherwise deal with, in any manner and in any order and upon
such terms and conditions as Seller deems best at its uncontrolled discretion,
any leased equipment and/or any collateral listed in the Contract or now or
hereafter otherwise directly or indirectly securing repayment of Obligor's
Indebtedness (all such leased equipment and/or all such collateral shall
hereinafter be referred to as the "Equipment"), including without limitation,
the purchase of all or any part of such collateral for Seller's own account; (c)
change the manner, place or terms of payment and/or available credit (including
without limitation increase or decrease in the amount of such payments,
available credit or any interest rate adjustments), or change or extend the time
of payment of or renew, as often and for such periods as Seller may determine,
or alter Obligor's Indebtedness or grant any other indulgence to Obligor and/or
any secondary obligors of Obligor's Indebtedness or any co-guarantor under this
Guaranty; (d) settle or compromise Obligor's Indebtedness with Obligor and/or
any third party or refuse any offer of performance with respect to, or
substitutions for, the Indebtedness; (e) take or accept any other security or
guaranty for any or all of Obligor's Indebtedness; and/or (f) enter into,
deliver, modify, amend or waive compliance with, any instrument, agreement or
arrangement evidencing, securing or otherwise affecting, all or any part of
Obligor's Indebtedness.
SECTION 6. No Release of Guarantor. Guarantor's obligations and liabilities
- ----------------------------------
under this Guaranty shall not be released, impaired, reduced or otherwise
affected by, and shall continue in full force and effect, notwithstanding the
occurrence of any event, including without limitation any one or more of the
following events: (a) death, insolvency, bankruptcy, arrangement, adjustment,
composition, liquidation, disability, dissolution or lack of authority (whether
corporate, partnership or trust) of Obligor (or any person acting on Obligor's
behalf) or any Other Obligor or any other defense based on or arising out of the
lack of validity or unenforceability of the Indebtedness or any agreement or
instrument relating thereto or any provisions thereof and/or Obligor's absence
or cessation of liability thereunder for any reason, including without
limitation, Seller's failure to preserve any right or remedy against Obligor;
(b) any change in Obligor financial condition; (c) partial payment or payments
of any amount due and/or outstanding under Obligor's Indebtedness; (d) any
change in Obligor's management, ownership, identity or business or
organizational structure; (e) any payment by Obligor or any other party to
Seller that is held to constitute a preferential transfer or a fraudulent
conveyance under any applicable law, or for any reason, Seller is required to
fund such payment or pay such amount to Obligor or to any other person; (f) any
sale, lease or transfer, whether or not commercially reasonable, of all or any
part of Obligor's assets and/or any assignment, transfer or delegation of
Obligor's Indebtedness to any third party (whereby this Guaranty shall continue
to extend to all sums due from or for the account of Obligor and/or the new or
substituted legal entity); (g) any failure to perfect any lien or security
interest securing the Indebtedness or preserve any right, priority or remedy
against any Equipment; (h) any interruption, change or cessation of relations
between Guarantor and Obligor; (i) any defect in, damage to, destruction of or
loss of or interference with possession or use of any Equipment for any reason
by Obligor or any other person; (j) any act or omission by Seller which
Page 1 of 2
<PAGE>
increases the scope of Guarantor's risk, including without limitation, negligent
administration of transactions with Obligor; and/or (k) any other occurrence or
circumstance whatsoever, whether similar or dissimilar to the foregoing, which
might otherwise constitute a legal or equitable discharge, release or defense of
a guarantor or surety or which might otherwise limit recourse against Guarantor.
SECTION 7. Waivers by Guarantor. Guarantor waives, for the benefit of Seller
- -------------------------------
(which waivers shall survive until this Guaranty is released or terminated in
writing by Seller): (a) notice of the acceptance of this Guaranty; (b) notice of
the existence, creation or incurrence of new and/or additional debt owing from
Obligor to Seller; (c) presentment, protest and demand, and notice of protest,
demand, nonpayment, nonperformance and dishonor of any and all agreements, notes
or other obligations signed, accepted, endorsed or assigned to or by Seller or
agreed to between Obligor and Seller; (d) notice of adverse change in Obligor's
financial condition or any other fact which might materially increase the risk
of Guarantor; (e) any and all rights in and notices or demands relating to any
Equipment, including without limitation, all rights, notices, advertisements or
demands relating, whether directly or indirectly, to the foreclosure, sale or
other disposition of any or all such Equipment or the manner of such sale or
other disposition; (f) any claim, right or remedy which Guarantor may now have
or hereafter acquire against the Obligor that arises hereunder and/or from the
performance by any Other Obligor including, without limitation, any claim,
remedy or right of subrogation, reimbursement, exoneration, contribution,
indemnification, or participation in any claim, right or remedy of Seller
against the Obligor or any security which Seller now has or hereafter acquires
with respect to the Obligor, whether or not such claim, right or remedy arises
in equity, under contract (express or implied), by statute, under common law or
otherwise; (g) notice of any default by Obligor or any other person obligated in
any manner for all or any portion of Obligor's Indebtedness and notice of any
legal proceedings against such parties; (h) any right of contribution from any
Other Obligors; (i) notice and hearing as to any prejudgment remedies; (j) any
defense which is premised on an alleged lack of consideration of the obligation
undertaken by Guarantor, including without limitation, any defense to the
enforcement of this Guaranty based upon the timing of execution of this Guaranty
and/or that the Guaranty had been executed after the execution date of any
agreements evidencing the Indebtedness; (k) all exemptions and homestead laws;
(l) any other demands and notices required by law; (m) all setoffs and
counterclaims against Seller and/or Obligor; (n) any defense based on the claim
that Guarantor's liabilities and obligations exceed or are more burdensome than
those of Obligor; (o) any defense which the Obligor may assert or be able to
assert on the underlying Indebtedness or which may be asserted by Guarantor,
including but not limited to (i) breach of warranty, (ii) fraud, (iii) statute
of frauds, (iv) infancy, (v) statute of limitations, (vi) lender liability,
(vii) accord and satisfaction, (viii) payment and/or (ix) usury.
SECTION 8. Enforcement of Guarantor's Obligations and Liabilities. Guarantor
- -----------------------------------------------------------------
agrees that, should Seller deem it necessary to file an appropriate collection
action to enforce Guarantor's obligations and liabilities under this Guaranty,
Seller may commence such a civil action against Guarantor without the necessity
of first (i) attempting to collect Obligor's Indebtedness from Obligor or from
any Other Obligor, whether through filing of suit or otherwise, (ii) attempting
to exercise any rights Seller may have against any Equipment, whether through
re-lease, the filing of an appropriate foreclosure action or otherwise, (iii)
including Obligor or any Other Obligor as an additional party defendant in such
a collection action against Guarantor, or (iv) pursuing any other remedy in
Seller's power or to mitigate damages. If there is more than one guarantor under
this Guaranty, each Guarantor additionally agrees that Seller may file an
appropriate collection and/or enforcement action against any one or more of
them, without impairing the rights of Seller against any other guarantor under
this Guaranty.
SECTION 9. Construction. This writing is intended as a final expression of this
- -----------------------
Guaranty agreement and is a complete and exclusive statement of the terms of
that agreement, provided however, that the provisions of this Guaranty shall be
in addition to and cumulative of, and not in substitution, novation or discharge
of, any and all prior or contemporaneous written guaranties or other written
agreements by Guarantor (or any one or more of them), in favor of Seller or
assigned to Seller by others, all of which shall be construed as complementing
each other. Nothing herein contained shall prevent Seller from enforcing any and
all such other guaranties or agreements in accordance with their respective
terms.
SECTION 10. Successors and Assigns Bound. Guarantor's obligations and
- ----------------------------------------
liabilities under this Guaranty shall be binding upon Guarantor's successors,
heirs, legatees, devisees, administrators, executors and assigns. Seller may
assign this Guaranty and any and all rights and interests included herein in
Seller's sole discretion without notice to Guarantor and the rights and remedies
granted to Seller under this Guaranty shall also inure to the benefit of
Seller's successors and assigns, as well as to any and all subsequent holder or
holders of any of Obligor's Indebtedness subject to this Guaranty, without
setoff, counterclaim, reduction, recoupment, abatement, deduction or defense
based on any claim Guarantor may have against Seller, such successors and
assigns or subsequent holders of Obligor's Indebtedness. Guarantor shall not
assign this Guaranty without the prior written consent of Seller.
SECTION 11. Termination. This Guaranty is irrevocable and may be terminated
- -----------------------
only as to indebtedness created sixty (60) days after actual receipt by Seller
of written notice of termination hereof, provided however, that all Indebtedness
incurred, created or arising pursuant to a commitment of Seller made prior to
the effective date of such termination (the "Termination Date") and any
extensions, renewals or modifications of such Indebtedness (including without
limitation loan and/or other commitments) agreed to or instituted by Seller
prior to the Termination Date shall not be effected by such revocation and shall
be deemed to have been incurred prior to termination (irrespective of whether
Indebtedness arising thereunder occurs after the Termination Date) and shall be
fully covered by this Guaranty. Any termination of this Guaranty shall be
ineffective unless upon the Termination Date Guarantor deposits with Seller
collateral in the form of cash in an amount not less than the amount of the
Indebtedness outstanding on the Termination Date. Such cash shall be held by
Seller in a separate account and shall be returned to Guarantor upon the full
and indefeasible payment of all of the Indebtedness.
SECTION 12. Governing Law; Waiver of Jury. This Guaranty shall be construed
- -----------------------------------------
liberally in favor of Seller and shall be governed and construed in accordance
with the substantive laws of the state of Seller's office specified above or the
state of Seller's successors and assigns principal place of business without
regard to the conflicts of laws principles thereof. ANY ACTION, SUIT OR
PROCEEDING RELATING DIRECTLY OR INDIRECTLY TO THIS GUARANTY OR THE RELATIONSHIP
BETWEEN GUARANTOR AND SELLER OR SELLER'S SUCCESSORS AND ASSIGNS, WILL BE TRIED
IN A COURT OF COMPETENT JURISDICTION BY A JUDGE WITHOUT A JURY. AS SUCH,
GUARANTOR HEREBY WAIVES ANY RIGHT TO A JURY TRIAL IN ANY SUCH ACTION, SUIT OR
PROCEEDING. IN THE EVENT OF LITIGATION, THIS GUARANTY MAY BE FILED AS A WRITTEN
CONSENT TO TRIAL BY THE COURT. This Agreement shall be governed by and construed
under the laws of the State of Tennessee, without giving effect to the conflict-
of-laws principles thereof, and Guarantor hereby consents to the jurisdiction of
any state or federal court located within the State of Tennessee.
SECTION 13. Severability. If any provision of this Guaranty is held to be
- ------------------------
illegal, invalid or unenforceable under present or future laws effective during
the term hereof, such provision shall be fully severable, this Guaranty shall be
construed and enforceable as if the illegal, invalid or unenforceable provision
had never comprised a part of it, and the remaining provisions of this Guaranty
shall remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance herefrom.
IN WITNESS WHEREOF, Guarantor has executed this Guaranty in favor of Seller on
the day, month and year first written above.
GUARANTOR HAS READ AND FULLY UNDERSTANDS ALL OF THE PROVISIONS OF THIS GUARANTY.
<TABLE>
<S> <C>
(Complete Address, Phone, SSN if Guarantor is an Individual.)
Guarantor: MEADOW VALLEY CORPORATION Address: __________________________________________
Signature: /s/ Kenneth D. Nelson ___________________________________________________
-------------------------------
Name (PRINT): KENNETH D. NELSON Phone: ____________________________________________
----------------------------
Title: Vice President SSN: ______________________________________________
-----------------------------------
</TABLE>
<PAGE>
EXHIBIT 10.105
INSTALLMENT SALE CONTRACT (SECURITY AGREEMENT)
PURCHASER(S): SELLER (DEALER):
READY MIX, INC. WHEELER MACHINERY CO.
P.O. BOX 60726 4901 WEST 2100 SOUTH
PHOENIX, AZ 85082 SALT LAKE CITY UT 84120-1227
County: MARICOPA
- --------------------------------------------------------------------------------
Subject to the terms and conditions set forth below and on the reverse side
hereof, Seller hereby sells the equipment described below (the "Unit" or
"Units") to Purchaser, and Purchaser (if more than one, jointly and severally),
having been offered both a cash sale price and a time sale price, hereby buys
the Units from Seller on a time sale basis.
- --------------------------------------------------------------------------------
NEW (IF USED) DELIVERED
OR FIRST MODEL DESCRIPTION OF UNIT(S) SERIAL# CASH SALE
USED USED PRICE
- --------------------------------------------------------------------------------
(1) IT24F CATERPILLAR INTEGRATED
TOOLCARRIER 4NN01022 104,330.57
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
FIRST DESCRIPTION OF ADDITIONAL SECURITY
USED (MAKE MODEL & SERIAL NUMBER) Sub-Total............................ $ 104,330.57
- --------------------------------------------------------
NONE Sales Tax............................ $ 4,912.86
1. Total Cash Sale Price................ $ 109,243.43
Cash Down Pay 26,962.72
Net Trade-in Allow 0.00
- --------------------------------------------------------
FIRST DESCRIPTION OF TRADE-IN EQUIPMENT 2. Total Down Payment................... $ 26,962.72
USED (MAKE MODEL & SERIAL NUMBER) 3. Unpaid Balance of Cash Price (1-2)... $ 82,280.71
- --------------------------------------------------------
4. Official Fees (Specify).............. $ 150.00
NONE DOCUMENTATION FEE 150.00
5. Physical Damage Insurance............ $ 0.00
6. Principal Balance
- -------------------------------------------------------- (Amount Financed) (3 + 4 + 5)........ $ 84,430.71
7. Finance Charge
Trade-in Value 0.00 (Time Price Differential)............ $ 11,000.81
Less Owing to (___n/a___) 0.00 8. Time Balance
Net Trade-in Allowance 0.00 (Total of Payments) (6 + 7).......... $ 93,431.52
9. Time Sale Balance
Location of Units: 3430 E. FLAMINGO RD. #100 (Total of Payment Price) (2 + 8)..... $ 120,394.24
LAS VEGAS, NV 89121 CLARK 10. Annual Percentage Rate 6.28%
11. Date FINANCE CHARGE begins to accrue. 12/1/99
</TABLE>
Purchaser hereby sells and conveys to Seller the above described Trade-in
Equipment and warrants it to be free and clear of all claims, liens, security
interests and encumbrances except to the extent shown above.
1. PAYMENT: Purchaser shall pay to Seller, at P.O. BOX 100647, PASADENA CA
91189-0647 or such other location Seller designates in writing, the Time Balance
(item 8 above) as follows (check (a) of (b)):
X (a) in 48 equal monthly installments of $1,946.49 each, with the first
- -
installment due on 1/1/00, and the balance of the installments due on the like
day of each month thereafter, (except no payments shall be due during the
month(s) of (___n/a___)), until the entire indebtedness has been paid; or
__ (b) in accordance with the Payment Schedule attached to this Contract.
(Provisions of section 1 continued on reverse.)
SEE REVERSE SIDE FOR ADDITIONAL TERMS AND CONDITIONS WHICH ARE A PART OF
THIS CONTRACT.
LIABILITY INSURANCE COVERAGE FOR BODILY INJURY AND PROPERTY DAMAGE CAUSED TO
OTHERS IS NOT INCLUDED IN THIS CONTRACT.
NOTICE TO PURCHASER: (1) DO NOT SIGN THIS CONTRACT BEFORE YOU READ IT OR IF IT
CONTAINS ANY BLANK SPACES; (2) YOU ARE ENTITLED TO AN EXACT COPY OF THE CONTRACT
YOU SIGN; (3) UNDER THE LAW YOU MAY HAVE THE RIGHT TO PAY OFF IN ADVANCE THE
FULL AMOUNT DUE AND TO OBTAIN A PARTIAL REFUND OF THE FINANCE CHARGE.
PURCHASER ACKNOWLEDGES RECEIPT OF A FULLY COMPLETED COPY OF THIS CONTRACT
EXECUTED BY BOTH PURCHASER AND SELLER.
Purchaser(s) and Seller have duly executed this Contract as of 12/1, 1999.
Purchaser(s): Seller:
READY MIX, INC. WHEELER MACHINERY CO.
By /s/ Kenneth D. Nelson By /s/ [ILLEGIBLE]^^
----------------------------- -----------------------------
Name (PRINT) KENNETH D. NELSON Name (PRINT)
------------------ ___________________
Title Vice President Title Vice President
-------------------------- --------------------------
<PAGE>
ADDITIONAL TERMS AND CONDITIONS
1. PAYMENT (continued): Purchaser shall pay to Seller a late payment charge
equal to the lesser of (a) the highest charge allowed by law or (b) 5% of the
amount of any payment (including any accelerated payment) not made when due
under this Contract (or such later date as may be required by applicable law).
Upon prepayment in full or acceleration of the total unpaid Time Balance,
Purchaser shall receive a rebate of the unearned portion of the Finance Charge
computed on an actuarial basis. Except as otherwise expressly provided herein,
the obligations of Purchaser hereunder shall not be affected by any defect in,
damage to, loss of or interference with possession or use of any Unit, by the
attachment of any lien or claim to any Unit, or for any other cause.
2. DISCLAIMER OF WARRANTIES: Purchaser acknowledges and agrees that Seller is
not the manufacturer of the Unit(s) and that Purchaser has selected each Unit
based on Purchaser's own judgment without any reliance whatsoever on any
statements or representations made by Seller. AS BETWEEN SELLER AND PURCHASER,
THE UNIT(S) ARE PROVIDED "AS IS" WITHOUT ANY WARRANTIES OF ANY KIND. PURCHASER
HEREBY EXPRESSLY DISCLAIMS a) ALL WARRANTIES OF MERCHANTABILITY, b) ALL
WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE, AND c) ALL WARRANTIES AGAINST
INFRINGEMENT OR THE LIKE. Seller assigns to Purchaser its interest in any of the
manufacturer's warranties on the Unit(s).
3. POSSESSION, USE AND MAINTENANCE: Purchaser shall not (a) use any Unit
improperly, carelessly, unsafely or in violation of any law or regulation or for
personal, family, or household purposes or for any purpose other than in
Purchaser's business (including agricultural business); (b) permit the use of
any Unit by anyone other than Purchaser or change the permanent location of any
Unit from the county and state specified above without the prior written
consent of Seller; or (c) sell, lease, assign or transfer, or create or suffer
to exist any lien, claim, security interest or encumbrance on any of its rights
hereunder or in any Unit. The Units are and shall remain personal property
irrespective of their use or manner of attachment to realty. Upon prior notice
to Purchaser, Seller or its agent shall have the right (but not the obligation)
at all reasonable times to inspect any Unit. Purchaser shall at its expense
maintain the Units in good operating order, repair and condition. Purchaser
shall not alter any Unit or affix any equipment to any Unit if such alteration
or addition would impair the originally intended function or reduce the value of
such Unit. Any alteration or addition to any Unit shall be at the sole risk of
Purchaser.
4. TAXES: Purchaser shall promptly pay all taxes, assessments, fees and other
charges when levied or assessed against any Unit or the ownership or use
thereof, or this Contract or any payments made or to be made to Seller.
5. WAIVER AND INDEMNITY: PURCHASER HEREBY AGREES TO RELEASE, DEFEND, INDEMNIFY
AND HOLD HARMLESS SELLER, ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND
ASSIGNS FROM AND AGAINST ANY CLAIMS OF PURCHASER OR THIRD PARTIES, INCLUDING
CLAIMS BASED UPON BREACH OF CONTRACT, BREACH OF WARRANTY, PERSONAL INJURY,
PROPERTY DAMAGE, STRICT LIABILITY OR NEGLIGENCE, FOR ANY LOSS, DAMAGE OR INJURY
CAUSED BY OR RELATING TO THE DESIGN, MANUFACTURE, SELECTION, DELIVERY,
CONDITION, OPERATION, USE, OWNERSHIP, MAINTENANCE OR REPAIR OF ANY UNIT.
FURTHER, PURCHASER AGREES TO BE RESPONSIBLE FOR ALL COSTS AND EXPENSES,
INCLUDING REASONABLE ATTORNEYS' FEES, INCURRED BY SELLER OR ITS DIRECTORS,
OFFICERS, EMPLOYEES, AGENTS AND ASSIGNS IN DEFENDING SUCH CLAIMS OR IN ENFORCING
THIS PROVISION. UNDER NO CONDITION OR CAUSE OF ACTION SHALL SELLER BE LIABLE FOR
ANY LOSS OF ACTUAL OR ANTICIPATED BUSINESS OR PROFITS OR ANY SPECIAL, INDIRECT
OR CONSEQUENTIAL DAMAGES.
6. INSURANCE: Purchaser, at its expense, shall keep each Unit and all
equipment listed as Additional Security insured against all risks for their full
insurable value and shall maintain comprehensive public liability insurance in
an amount reasonably acceptable to Seller. All such insurance shall be in such
form and with such companies as Seller shall reasonably approve, shall be
primary, without right of contribution from any insurance carried by Seller, and
shall provide that such insurance may not be cancelled or altered so as to
affect the interest of Seller without at least 30 days' prior written notice to
Seller. All insurance covering loss or damage to the Units and Additional
Security shall name Seller (or its designee) as loss payee and be payable to
Seller as its interest may appear. Purchaser agrees to notify Seller of any
occurrence which may become the basis of an insurance claim hereunder and not to
make any adjustments with insurers without Seller's prior written consent. Prior
to the first delivery of any Unit to Purchaser, Purchaser shall deliver to
Seller satisfactory evidence of such insurance coverage.
7. EVENTS OF DEFAULT: Each of the following shall constitute an "Event of
Default" hereunder: (a) Purchaser shall fail to make any payment to Seller when
due hereunder or fail to observe or perform any other covenant, agreement or
warranty made by Purchaser hereunder; (b) any representation or warranty of
Purchaser contained herein or in any document furnished to Seller in connection
herewith shall be incorrect or misleading when made; (c) any Unit or additional
security shall become lost, stolen, destroyed, irreparably damaged or subject to
any sale, lien, claim, security interest or encumbrance (other than in favor
of Seller or its assignee); (d) any default shall occur under any other
agreement between Purchaser and Seller; (e) Purchaser or any guarantor of this
Contract shall cease to do business, become insolvent, make an assignment for
the benefit of creditors or file any petition under any bankruptcy,
reorganization, insolvency or moratorium law, or any other law for the relief of
debtors; (f) any involuntary petition shall be filed under any bankruptcy
statute against Purchaser or any guarantor of this Contract or any receiver,
trustee, or similar official shall be appointed to take possession of the
properties of Purchaser or any guarantor of this Contract unless such petition
or appointment ceases to be in effect within 30 days of said filing or
appointment; (g) Seller shall reasonably deem itself to be insecure; or (h) any
breach or repudiation by any guarantor shall occur under any guaranty obtained
by Seller in connection with this Contract.
8. REMEDIES: If any Event of Default shall occur, Seller may, at its option,
do any one or more of the following: (a) Declare all amounts due or to become
due under this Contract, excluding any unearned portion of the Finance Charge,
immediately due and payable; (b) recover any additional damages and expenses
sustained by Seller by reason of the breach of any covenant, representation or
warranty contained in this Contract; (c) enforce the security interest granted
hereunder; (d) without notice, liability or legal process, enter upon the
premises where any of the Units or additional security may be and take
possession thereof, and (e) require Purchaser to assemble the Units and
additional security and make them available to Seller at a place designated by
Seller which is reasonably convenient to both parties. Time is of the essence of
this Contract. Seller shall have all rights given to a secured party by law and
may retain all monies theretofore paid by Purchaser hereunder as compensation
for the reasonable use of the Units by Purchaser. Seller may, at its option,
undertake commercially reasonable efforts to sell the Units and additional
security, and the proceeds of any such sale shall be applied: First, to
reimburse Seller for all reasonable expenses of retaking, holding, preparing for
sale, and selling the Units and additional security, including all taxes and
reasonable attorneys' fees and second, to the extent not previously paid by
Purchaser, to pay Seller all amounts then due or accrued under this Contract,
including any accelerated payments and late payment charges. Any surplus shall
be paid to the person entitled thereto. Purchaser shall promptly pay any
deficiency to Seller. Purchaser acknowledges that sales for cash or on credit to
a wholesaler, retailer or user of the Units or additional security, and with or
without the Units or additional security being present at such sale, are all
commercially reasonable. Purchaser agrees to pay all reasonable attorneys' fees
(to the extent permitted by applicable law) and all costs and expenses incurred
by Seller in enforcing this Contract. The remedies provided herein shall be
cumulative and in addition to all other remedies at law or in equity. If
Purchaser fails to perform any of its obligations under this Contract, Seller
may (but need not) at any time thereafter perform such obligation, and the
expenses incurred in connection therewith shall be payable by Purchaser upon
demand.
9. SECURITY INTEREST; PURCHASER ASSURANCES AND REPRESENTATIONS: To secure
payment of Purchaser's indebtedness to Seller hereunder and the performance of
all obligations of Purchaser hereunder, Purchaser hereby grants to Seller a
continuing security interest in the Units, and in the equipment, if any,
described as Additional Security on the front of this Contract, including all
attachments, accessories and optional features for such Units and Additional
Security (whether or not installed thereon) and all substitutions, replacements,
additions and accessions thereto, and proceeds of all the foregoing. Purchaser
will, at its expense, do any act and execute, acknowledge, deliver, file,
register and record any Documents which Seller deems desirable in its discretion
to protect Seller's security interest and Seller's rights and benefits under
this Contract. Purchaser hereby irrevocably appoints Seller as Purchaser's
Attorney-in-Fact for the signing and filing of such documents and authorizes
Seller to delegate these limited powers. Purchaser acknowledges the signature of
Seller or said delegatee upon such documents to be the same as Purchaser's own
for all purposes and with the present intent to authenticate the document.
Purchaser represents and warrants to Seller that (a) Purchaser has the power to
make, deliver and perform under this Contract; (b) the person executing and
delivering this Contract is authorized to do so on behalf of Purchaser; (c) this
Contract constitutes a valid obligation of Purchaser, legally binding upon it
and enforceable in accordance with its terms; and (d) all credit, financial and
other information submitted to Seller in connection with this Contract is and
shall be true, correct and complete.
10. ASSIGNMENT; COUNTERPARTS: The rights and remedies of Seller under this
Contract may be assigned by Seller at any time. If this Contract is assigned by
Seller, the term "Seller" shall thenceforth mean Seller's assignee, and if
assigned to a partnership, shall thenceforth mean such partnership and, for
purposes of Sections 2, 4, 5 and 6, each partner in such partnership. If
notified by Seller, Purchaser shall make all payments due hereunder directly to
the party designated in such notice, without any offset or deduction whatsoever.
Purchaser waives, as to Seller's assignee, all claims and defenses Purchaser may
have or assert against Seller and agrees that no such claim or defense will be
asserted against Seller's assignee. No assignment of this Contract by Seller
shall release any claim Purchaser may have against Seller hereunder. No
assignment of this Contract or any right or obligation hereunder may be made by
Purchaser without the prior written consent of Seller. This Contract shall be
binding upon and inure to the benefit of Seller and Purchaser and their
respective successors and assigns. Although multiple counterparts of this
document may be signed, only the counterpart accepted, acknowledged and
certified by Caterpillar Financial Services Corporation on the signature page
thereof as the original will constitute original chattel paper.
11. EFFECT OF WAIVER; ENTIRE AGREEMENT; MODIFICATION OF CONTRACT; NOTICES: No
delay or omission to exercise any right or remedy accruing to Seller hereunder
shall impair any such right or remedy nor shall it be construed to be a waiver
of any breach or default of Purchaser. Any waiver or consent by Seller under
this Contract must be in writing specifically set forth. This Contract
completely states the rights of Seller and Purchaser with respect to the Units
and supersedes all prior agreements with respect thereto. No variation or
modification of this Contract shall be valid unless in writing. All notices
hereunder shall be in writing, addressed to each party at the address set forth
on the front of this Contract or at such other address as may hereafter be
furnished in writing.
12. APPLICABLE LAW, JURISDICTION AND JURY TRIAL WAIVER PROVISIONS: This
Agreement shall be governed by and construed under the laws of the State of
Tennessee, without giving effect to the conflict-of-laws principles thereof, and
Purchaser hereby consents to the jurisdiction of any state or federal court
located within the State of Tennessee. THE PARTIES HERETO HEREBY WAIVE THE RIGHT
TO TRIAL BY JURY IN ANY ACTION ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE
OBLIGATIONS OR THE COLLATERAL.
13. SEVERABILITY; SURVIVAL OF COVENANTS: If any provision of this Contract shall
be invalid under any applicable law, such provision shall be deemed omitted but
the remaining provisions hereof shall be given effect. All obligations of
Purchaser under this Contract shall survive the expiration or termination of
this Contract to the extent required for their full observance and performance.
<PAGE>
GUARANTY OF PAYMENT - INSTALLMENT SALE CONTRACT (SECURITY AGREEMENT)
THIS GUARANTY ("Guaranty") is made and entered into as of 12/1/99 by MEADOW
VALLEY CORPORATION, (hereinafter, referred to as "Guarantor"), in favor of
WHEELER MACHINERY CO. 4901 WEST 2100 SOUTH SALT LAKE CITY UT 84120-1227
(hereinafter referred to as "Seller"), guaranteeing the Indebtedness (as
hereinafter defined) of READY MIX, INC. (hereinafter referred to as "Obligor").
WITNESSETH:
FOR VALUE RECEIVED, and/or as an inducement to Seller to now or hereafter enter
into, purchase or otherwise acquire the agreements, accounts and/or other
obligations evidencing and/or securing Obligor's Indebtedness and in
consideration of and for credit and financial accommodations now or hereafter
extended to or for the account of the Obligor (which includes Seller's consent
to an assignment and/or assumption of the Indebtedness), which is in the best
interest of Guarantor and which would not have been extended but for this
Guaranty, the Guarantor agrees as follows:
SECTION 1. Guaranty of Obligor's Indebtedness. Guarantor hereby absolutely,
- ---------------------------------------------
irrevocably and unconditionally agrees to, and by these presents does hereby:
(a) guarantee the prompt and punctual payment, performance and satisfaction of
all present and future indebtedness and obligations of Obligor to Seller which
Obligor now owes Seller or which Obligor shall at any time or from time to time
hereafter owe Seller when the same shall become due in connection with or
arising out of that certain INSTALLMENT SALES CONTRACT by and between Obligor
and Seller dated 12/1/99, including any and all existing and future additional
schedules, amendments and/or related agreements thereto (the "Contract"),
whether direct or contingent, due or to become due, joint or several, primary or
secondary, liquidated or unliquidated, secured or unsecured, original or renewed
or extended, or by open account or otherwise, and whether representing rentals,
principal, interest and/or late charges or other charges of an original balance,
an accelerated balance, a balance reduced by part payment or a deficiency after
sale of collateral or otherwise and (b) undertake and guarantee to pay on demand
and indemnify Seller against all liabilities, losses, costs, attorney's fees,
and expenses which may be suffered by Seller by reason of Obligor's default or
default of the Guarantor (with all of Obligor's indebtedness and/or obligations
as stated above (including all costs, fees and expenses) being hereinafter
individually and collectively referred to under this Guaranty as Obligor's
"Indebtedness", which Indebtedness shall be conclusively presumed to have been
created in reliance upon this Guaranty).
SECTION 2. Joint, Several and Solidary Liability. Guarantor further agrees that
- ------------------------------------------------
its obligations and liabilities for the prompt and punctual payment, performance
and satisfaction of Obligor's Indebtedness are independent of any agreement or
transaction with any third parties and shall be on a "joint and several" and
"solidary" basis along with Obligor to the same degree and extent as if
Guarantor had been and/or will be a co-borrower, co-principal obligor and/or co-
maker of Obligor's Indebtedness. In the event that there is more than one
guarantor under this Guaranty, or in the event that there are other guarantors,
endorsers, sureties or any other party who may at any time become liable for all
or any portion of Obligor's Indebtedness (each, an "Other Obligor"), the
provisions hereof shall be read with all grammatical changes thereby rendered
necessary and each reference to the Guarantor shall include each and every one
of those parties liable for all or any portion of Obligor's Indebtedness and
each Guarantor's obligations and liabilities hereunder shall be on a "joint and
several" and "solidary" basis along with such Other Obligors.
SECTION 3. Duration; Cancellation of Guaranty. This Guaranty and Guarantor's
- ---------------------------------------------
obligations and liabilities hereunder shall remain in full force and effect
until such time as Obligor's Indebtedness shall be fully and finally paid,
performed and/or satisfied, until such time as this Guaranty may be cancelled by
Seller under a written cancellation instrument in favor of Guarantor or
otherwise as stated herein.
SECTION 4. Default by Obligor. Immediately upon Obligor's default under any of
- -----------------------------
its Indebtedness in favor of Seller, Seller may make demand upon Guarantor and
Guarantor unconditionally and absolutely agrees to pay the full then unpaid
amount of all of Obligor's Indebtedness (whether at stated maturity, by required
prepayment, declaration, acceleration or otherwise) and/or perform any covenant
or agreement hereunder guaranteed. Such payment or payments shall be made
immediately following demand by Seller at Seller's offices indicated above.
SECTION 5. Additional Covenants. Guarantor further agrees that Seller may, at
- -------------------------------
its sole option, at any time, and from time to time, without the consent of or
notice to Guarantor, or to any other party, and without incurring any
responsibility to Guarantor or to any other party, and without affecting,
impairing or releasing the obligations of Guarantor under this Guaranty: (a)
discharge or release any party (including, but not limited to, Obligor,
secondary obligors of Obligor's indebtedness or any co-guarantor under this
Guaranty) who is or may be liable to Seller for Obligor's Indebtedness; (b) sell
at public or private sale, exchange, release, impair, surrender, substitute,
realize upon or otherwise deal with, in any manner and in any order and upon
such terms and conditions as Seller deems best at its uncontrolled discretion,
any leased equipment and/or any collateral listed in the Contract or now or
hereafter otherwise directly or indirectly securing repayment of Obligor's
Indebtedness (all such leased equipment and/or all such collateral shall
hereinafter be referred to as the "Equipment"), including without limitation
the purchase of all or any part of such collateral for Seller's own account; (c)
change the manner, place or terms of payment and/or available credit (including
without limitation increase or decrease in the amount of such payments,
available credit or any interest rate adjustments), or change or extend the time
of payment of or renew, as often and for such periods as Seller may determine,
or alter Obligor's Indebtedness or grant any other indulgence to Obligor and/or
any secondary obligors of Obligor's Indebtedness or any co-guarantor under this
Guaranty; (d) settle or compromise Obligor's Indebtedness with Obligor and/or
any third party or refuse any offer of performance with respect to, or
substitutions for, the Indebtedness; (e) take or accept any other security or
guaranty for any or all of Obligor's Indebtedness; and/or (f) enter into,
deliver, modify, amend or waive compliance with, any instrument, agreement or
arrangement evidencing, securing or otherwise affecting, all or any part of
Obligor's Indebtedness.
SECTION 6. No Release of Guarantor. Guarantor's obligations and liabilities
- ----------------------------------
under this Guaranty shall not be released, impaired, reduced or otherwise
affected by, and shall continue in full force and effect, notwithstanding the
occurrence of any event, including without limitation any one or more of the
following events: (a) death, insolvency, bankruptcy, arrangement, adjustment,
composition, liquidation, disability, dissolution or lack of authority (whether
corporate, partnership or trust) of Obligor (or any person acting on Obligor's
behalf) or any Other Obligor or any other defense based on or arising out of the
lack of validity or unenforceability of the Indebtedness or any agreement or
instrument relating thereto or any provisions thereof and/or Obligor's absence
or cessation of liability thereunder for any reason, including without
limitation, Seller's failure to preserve any right or remedy against Obligor;
(b) any change in Obligor's financial condition; (c) partial payment or payments
of any amount due and/or outstanding under Obligor's Indebtedness; (d) any
change in Obligor's financial condition; (c) partial payment or payments of any
amount due and/or outstanding under Obligor's Indebtedness; (d) any change in
Obligor's management, ownership, identity or business or organizational
structure; (e) any payment by Obligor or any other party to Seller that is held
to constitute a preferential transfer or a fraudulent conveyance under any
applicable law, or for any reason, Seller is required to fund such payment or
pay such amount to Obligor or to any other person; (f) any sale, lease or
transfer, whether or not commercially reasonable, of all or any part of
Obligor's assets and/or any assignment, transfer or delegation of Obligor's
Indebtedness to any third party (whereby this Guaranty shall continue to extend
to all sums due from or for the account of Obligor and/or the new or substituted
legal entity); (g) any failure to perfect any lien or security interest securing
the Indebtedness or preserve any right, priority or remedy against any
Equipment; (h) any interruption, change or cessation of relations between
Guarantor and Obligor; (i) any defect in, damage to, destruction of or loss of
or interference with possession or use of any Equipment for any reason by
Obligor or any other person; (j) any act or omission by Seller which
Page 1 of 2
<PAGE>
increases the scope of Guarantor's risk, including without limitation, negligent
administration of transactions with Obligor; and/or (k) any other occurrence
or circumstance whatsoever, whether similar or dissimilar to the foregoing,
which might otherwise constitute a legal or equitable discharge, release or
defense of a guarantor or surety or which might otherwise limit recourse against
Guarantor.
SECTION 7. Waivers by Guarantor. Guarantor waives, for the benefit of Seller
- -------------------------------
(which waivers shall survive until this Guaranty is released or terminated in
writing by Seller): (a) notice of the acceptance of this Guaranty; (b) notice of
the existence, creation or incurrence of new and/or additional debt owing from
Obligor to Seller; (c) presentment, protest and demand, and notice of protest,
demand, nonpayment, nonperformance and dishonor of any and all agreements, notes
or other obligations signed, accepted, endorsed or assigned to or by Seller or
agreed to between Obligor and Seller; (d) notice of adverse change in Obligor's
financial condition or any other fact which might materially increase the risk
of Guarantor; (e) any and all rights in and notices or demands relating to any
Equipment, including without limitation, all rights, notices, advertisements or
demands relating, whether directly or indirectly, to the foreclosure, sale or
other disposition of any or all such Equipment or the manner of such sale or
other disposition; (f) any claim, right or remedy which Guarantor may now have
or hereafter acquire against the Obligor that arises hereunder and/or from the
performance by any Other Obligor including, without limitation, any claim,
remedy or right of subrogation, reimbursement, exoneration, contribution,
indemnification, or participation in any claim, right or remedy of Seller
against the Obligor or any security which Seller now has or hereafter acquires
with respect to the Obligor, whether or not such claim, right or remedy arises
in equity, under contract (express or implied), by statute, under common law or
otherwise; (g) notice of any default by Obligor or any other person obligated in
any manner for all or any portion of Obligor's Indebtedness and notice of any
legal proceedings against such parties; (h) any right of contribution from any
Other Obligors; (i) notice and hearing as to any prejudgment remedies; (j) any
defense which is premised on an alleged lack of consideration of the obligation
undertaken by Guarantor, including without limitation, any defense to the
enforcement of this Guaranty based upon the timing of execution of this Guaranty
and/or that the Guaranty had been executed after the execution date of any
agreements evidencing the Indebtedness; (k) all exemptions and homestead laws;
(l) any other demands and notices required by law; (m) all setoffs and
counterclaims against Seller and/or Obligor; (n) any defense based on the claim
that Guarantor's liabilities and obligations exceed or are more burdensome than
those of Obligor; (o) any defense which the Obligor may assert or be able to
assert on the underlying Indebtedness or which may be asserted by Guarantor,
including but not limited to (i) breach of warranty, (ii) fraud, (iii) statute
of frauds, (iv) infancy, (v) statute of limitations, (vi) lender liability,
(vii) accord and satisfaction, (viii) payment and/or (ix) usury.
SECTION 8. Enforcement of Guarantor's Obligations and Liabilities. Guarantor
- -----------------------------------------------------------------
agrees that, should Seller deem it necessary to file an appropriate collection
action to enforce Guarantor's obligations and liabilities under this Guaranty,
Seller may commence such a civil action against Guarantor without the necessity
of first (i) attempting to collect Obligor's Indebtedness from Obligor or from
any Other Obligor, whether through filing of suit or otherwise, (ii) attempting
to exercise any rights Seller may have against any Equipment, whether through
re-lease, the filing of an appropriate foreclosure action or otherwise, (iii)
including Obligor or any Other Obligor as an additional party defendant in such
a collection action against Guarantor, or (iv) pursuing any other remedy in
Seller's power or to mitigate damages. If there is more than one guarantor under
this Guaranty, each Guarantor additionally agrees that Seller may file an
appropriate collection and/or enforcement action against any one or more of
them, without impairing the rights of Seller against any other guarantor under
this Guaranty.
SECTION 9. Construction. This writing is intended as a final expression of this
- -----------------------
Guaranty agreement and is a complete and exclusive statement of the terms of
that agreement, provided however, that the provisions of this Guaranty shall be
in addition to and cumulative of, and not in substitution, novation or discharge
of, any and all prior or contemporaneous written guaranties or other written
agreements by Guarantor (or any one or more of them), in favor of Seller or
assigned to Seller by others, all of which shall be construed as complementing
each other. Nothing herein contained shall prevent Seller from enforcing any and
all such other guaranties or agreements in accordance with their respective
terms.
SECTION 10. Successors and Assigns Bound. Guarantor's obligations and
- ----------------------------------------
liabilities under this Guaranty shall be binding upon Guarantor's successors,
heirs, legatees, devisees, administrators, executors and assigns. Seller may
assign this Guaranty and any and all rights and interests included herein in
Seller's sole discretion without notice to Guarantor and the rights and remedies
granted to Seller under this Guaranty shall also inure to the benefit of
Seller's successors and assigns, as well as to any and all subsequent holder or
holders of any of Obligor's Indebtedness subject to this Guaranty, without
setoff, counterclaim, reduction, recoupment, abatement, deduction or defense
based on any claim Guarantor may have against Seller, such successors and
assigns or subsequent holders of Obligor's Indebtedness. Guarantor shall not
assign this Guaranty without the prior written consent of Seller.
SECTION 11. Termination. This Guaranty is irrevocable and may be terminated only
- -----------------------
as to indebtedness created sixty (60) days after actual receipt by Seller of
written notice of termination hereof, provided however, that all Indebtedness
incurred, created or arising pursuant to a commitment of Seller made prior to
the effective date of such termination (the "Termination Date") and any
extensions, renewals or modifications of such Indebtedness (including without
limitation loan and/or other commitments) agreed to or instituted by Seller
prior to the Termination Date shall not be effected by such revocation and shall
be deemed to have been incurred prior to termination (irrespective of whether
Indebtedness arising thereunder occurs after the Termination Date) and shall be
fully covered by this Guaranty. Any termination of this Guaranty shall be
ineffective unless upon the Termination Date Guarantor deposits with Seller
collateral in the form of cash in an amount not less than the amount of the
Indebtedness outstanding on the Termination Date. Such cash shall be held by
Seller in a separate account and shall be returned to Guarantor upon the full
and indefeasible payment of all of the Indebtedness.
SECTION 12. Governing Law; Waiver of Jury. This Guaranty shall be construed
- -----------------------------------------
liberally in favor of Seller and shall be governed and construed in accordance
with the substantive laws of the state of Seller's office specified above or the
state of Seller's successors and assigns principal place of business without
regard to the conflicts of laws principles thereof. ANY ACTION, SUIT OR
PROCEEDING RELATING DIRECTLY OR INDIRECTLY TO THIS GUARANTY OR THE RELATIONSHIP
BETWEEN GUARANTOR AND SELLER OR SELLER'S SUCCESSORS AND ASSIGNS, WILL BE TRIED
IN A COURT OF COMPETENT JURISDICTION BY A JUDGE WITHOUT A JURY. AS SUCH,
GUARANTOR HEREBY WAIVES ANY RIGHT TO A JURY TRIAL IN ANY SUCH ACTION, SUIT OR
PROCEEDING. IN THE EVENT OF LITIGATION, THIS GUARANTY MAY BE FILED AS A WRITTEN
CONSENT TO TRIAL BY THE COURT. This Agreement shall be governed by and construed
under the laws of the State of Tennessee, without giving effect to the
conflict-of-laws principles thereof, and Guarantor hereby consents to the
jurisdiction of any state or federal court located within the State of
Tennessee.
SECTION 13. Severability. If any provision of this Guaranty is held to be
- ------------------------
illegal, invalid or unenforceable under present or future laws effective during
the term hereof, such provision shall be fully severable, this Guaranty shall be
construed and enforceable as if the illegal, invalid or unenforceable provision
had never comprised a part of it, and the remaining provisions of this Guaranty
shall remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance herefrom.
IN WITNESS WHEREOF, Guarantor has executed this Guaranty in favor of Seller on
the day, month and year first written above.
GUARANTOR HAS READ AND FULLY UNDERSTANDS ALL OF THE PROVISIONS
OF THIS GUARANTY.
<TABLE>
<S> <C>
(Complete Address, Phone, SSN if Guarantor is an Individual.)
Guarantor: MEADOW VALLEY CORPORATION Address: ________________________________________________________________
Signature: /s/ Kenneth D. Nelson _________________________________________________________________________
------------------------------------
Name (PRINT): KENNETH D. NELSON Phone: __________________________________________________________________
---------------------------------
Title: VICE PRESIDENT SSN: ____________________________________________________________________
----------------------------------------
</TABLE>
<PAGE>
EXHIBIT 10.106
<TABLE>
- ----------------------------------------------------------------------------------------------------------------------------
APPROVED BY:
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C>
Officer Name Officer No. Dept./Branch Name
Hope Berman Levin 706564 COMMERCIAL BANKING CENTER
- ----------------------------------------------------------------------------------------------------------------------------
Dept./Branch No. Account No. Commitment No. Note No. Class
01781 5905359723 34 42
- -----------------------------------------------------------------------------------------------------------------------------
Loan $ Name
$2,000,000.00 MEADOW VALLEY CORPORATION, a Nevada corporation, MEADOW VALLEY CONTRACTORS, INC., a
Nevada corporation and READY-MIX, INC., a Nevada corporation
- -----------------------------------------------------------------------------------------------------------------------------
Rate Interest From Renewal of Note
BANK ONE, ARIZONA, NA PRIME RATE PLUS .50% TO MOVE WITH
PRIME
- -----------------------------------------------------------------------------------------------------------------------------
Collateral
S/A - A/R, INV., & RTP, DATED 8/8/96 & S/A - EQUIP., DATED 8/8/96
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
Bank One, Arizona, NA
RESTATED REVOLVING LINE OF CREDIT NOTE
VARIABLE RATE
PHOENIX, Arizona September 15, 1999
- ------- ------------------
FOR VALUE RECEIVED, the undersigned ("Borrower"), promises to pay on or
before September 15, 2000 to BANK ONE, ARIZONA, NA, a national banking
------------------
association, ("Bank"), or order, the aggregate principal amount outstanding on
Borrower's revolving line of credit as shown on Bank's records which shall at
all times be conclusive and govern, with interest payable MONTHLY on the unpaid
-------
balance outstanding from time to time at an annual rate equal to ONE HALF
--------
percent (0.50%) more than the rate of interest publicly announced by BANK ONE,
---- ---------
ARIZONA, NA as its "prime rate", as such rate shall change from time to time
- -----------
during the term hereof. Interest is to be charged on a daily basis for the
actual number of days the principal is outstanding from the date of disbursement
to date of maturity. The rate of interest agreed to shall include the interest
rate as shown above, in accordance with the terms of this note, plus any
compensating balance requirement and any additional charges, costs and fees
incident to this loan to the extent they are deemed to be interest under
applicable Arizona law. It is expressly agreed by Borrower that the maximum
outstanding principal at any one time on this note shall not exceed the amount
of TWO MILLION AND 00/100 DOLLARS ($2,000,000.00), and the amount outstanding on
---------------------- -------------
this note at any specific time shall be the total amount advanced hereunder by
Bank less the amount of principal payments made hereon from time to time by
Borrower. All amounts payable hereunder shall be paid in lawful money of the
United States. Should the rate of interest as calculated under this note exceed
that allowed by law, the applicable rate of interest will be the maximum rate of
interest allowed by applicable law.
Principal and interest shall be payable at the Commercial Banking Center
-------------------------
office of Bank One, Arizona, NA in Phoenix, Arizona, or at such other place as
-------
the holder hereof may designate. At Bank's option, any payments may be applied
first to accrued interest and then to principal. Interest on the Note is
computed 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. If payment is 10 days or
more late, Borrower will be charged 5.0% of the regularly scheduled payment or
$25.00, whichever is greater, up to the maximum amount of $1500.00 per late
charge.
Upon default, including failure to pay upon final maturity, Bank, at its
option, may also, if permitted under applicable law, do one or both of the
following: (a) increase the applicable interest rate on this Note 3.00
percentage points, and (b) add any unpaid accrued interest to principal and such
sum will bear interest therefrom until paid at the rate provided in this Note
(including any increased rate). The interest rate will not exceed the maximum
rate permitted by applicable law.
This note shall become immediately due and payable at the option of the
holder hereof without presentment or demand or any notice to Borrower or any
other person obligated hereon, upon default in the payment of any of the
principal hereof or any interest thereon when due, or in payment under any other
agreement between Borrower and Bank, or if any event occurs or condition exists
which authorized the acceleration of the maturity hereof under any security
agreement, mortgage, deed of trust or other agreement made by Borrower in favor
of Bank. Failure to exercise this option shall not constitute a waiver of the
right to exercise the same in the event of any subsequent default.
In the event any holder hereof utilizes the services of an attorney in
attempting to collect the amounts due hereunder or to enforce the terms hereof
or of any agreements related to this indebtedness, or if any holder hereof
becomes party plaintiff or defendant in any legal proceeding in relation to the
property described in any instrument securing this note or for the recovery or
protection of the indebtedness evidenced hereby, Borrower, its successors and
assigns, shall repay to such holder hereof, on demand, all costs and expenses so
incurred, including reasonable attorneys' fees, including those costs, expenses
and attorneys' fees incurred after the filing by or against the Borrower of any
proceeding under any chapter of the Bankruptcy Act, or similar federal or state
statute, and whether incurred in connection with the involvement of any holder
hereof as creditor in such proceedings or otherwise.
This note is issued pursuant to that Revolving Line of Credit Loan
Agreement (Accounts Receivable and Inventory) of even date herewith ("Loan
Agreement") between Borrower and Bank. The capitalized terms used herein and not
otherwise defined shall have the same meanings set forth in the Loan Agreement.
Borrower and all sureties, guarantors and/or endorsers hereof (or of any
obligation hereunder) and accommodation parties hereon (all of which, including
Borrower, are severally each hereinafter called a "Surety") each; (a) agree that
the liability under this note of all parties hereto is joint and several; (b)
severally waive any homestead or exemption laws and right thereunder affecting
the full collection of this note; (c) severally waive any and all formalities in
connection with this note to the maximum extent allowed by law, including (but
not limited to) presentment, demand, diligence, presentment for payment, protest
and demand, and notice of extension, dishonor, protest, demand and nonpayment of
this note; and (d) consent that Bank may extend the time of payment or otherwise
modify the terms of
1
<PAGE>
payment of any part or the whole of the debt evidenced by this note, at the
request of any other person liable hereon, and such consent shall not alter nor
diminish the liability of any person hereon. Each Surety consents to and waives
notice of: (i) the granting of indulgences or extensions of time of payment,
(ii) the taking or releasing of security, and (iii) the addition or release of
persons who may be or become primarily or secondarily liable for the Loan or any
other indebtedness arising in connection with the Loan, or any part thereof,
and all in such manner and at such time as Bank may deem advisable.
In addition, each Surety waives and agrees not to assert: (a) any right to
require Bank to proceed against Borrower or any other Surety, to proceed against
or exhaust any security for the note, to pursue any other remedy available to
Bank, or to pursue any remedy in any particular order or manner; (b) the benefit
of any statute of limitations affecting its liability hereunder or the
enforcement hereof; (c) the benefits of any legal or equitable doctrine or
principle of marshalling; (d) notice of the existence, creation or incurring of
new or additional indebtedness of Borrower to Bank; (e) the benefits of any
statutory provision limiting the liability of a surety, including without
limitation the provisions of Section 12-1641, et seq., of the Arizona Revised
------
Statutes; (f) any defense arising by reason of any disability or other defense
of Borrower or by reason of the cessation from any cause whatsoever (other than
payment in full) of the liability of Borrower for payment of this note; and (g)
the benefits of any statutory provision limiting the right of Bank to recover a
deficiency judgment, or to otherwise proceed against any person or entity
obligated for payment of this note, after any foreclosure or trustee's sale of
any security for this note, including without limitation the benefits, if any,
to a Surety of Arizona Revised Statutes Section 33-814. Until payment in full of
this note and Bank has no obligation to make further advances of the proceeds
hereof, no Surety shall have any right of subrogation and each hereby waives any
right to enforce any remedy which Bank now has, or may hereafter have, against
Borrower or any other Surety, and waives any benefit of, and any right to
participate in, any security now or hereafter held by Bank.
Borrower agrees that to the extent Borrower or any other Surety makes any
payment to Bank in connection with the indebtedness evidenced by this note, and
all or any part of such payment is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid by Bank or paid
over to a trustee, receiver or any other entity, whether under any bankruptcy
act or otherwise (any such payment is hereinafter referred to as a "Preferential
Payment"), then the indebtedness of Borrower under this note shall continue or
shall be reinstated, as the case may be, and, to the extent of such payment or
repayment by Bank, the indebtedness evidenced by this note or part thereof
intended to be satisfied by such Preferential Payment shall be revived and
continued in full force and effect as if said Preferential Payment had not been
made.
Without limiting the right of Bank to bring any action or proceeding
against Borrower or any other Surety or against any property of Borrower or any
other Surety (an "Action") arising out of or relating to this note or any
indebtedness evidenced hereby in the courts of other jurisdictions, Borrower and
each other Surety hereby irrevocably submit to the jurisdiction, process and
venue of any Arizona State or Federal court sitting in Phoenix, Arizona, and
hereby irrevocably agree that any Action may be heard and determined in such
Arizona State court or in such Federal court. Borrower and all other Sureties
each hereby irrevocably waives, to the fullest extent it may effectively do so,
the defenses of lack of jurisdiction over any person, inconvenient forum or
improper venue, to the maintenance of any Action in any jurisdiction.
This note shall be binding upon Borrower and their respective successors
and assigns and shall inure to the benefit of Bank, and any subsequent holders
of this note, and their successors and assigns.
This note shall be governed by and construed according to the laws of the
State of Arizona, without giving effect to conflict of laws principles.
Bank and Borrower will establish specific instructions and procedures by
which draws against said credit will be presented for disbursement, but nothing
contained herein shall create a duty on the part of Bank to make said
disbursement if Borrower is in default.
MEADOW VALLEY CORPORATION, a Nevada corporation, MEADOW VALLEY CONTRACTORS,
INC., a Nevada corporation and READY-MIX, INC., a Nevada corporation
4411 SOUTH 40TH STREET, STE. D11
PHOENIX, AZ 85040-2950
MEADOW VALLEY CORPORATION,
a Nevada corporation
By: /s/ Bradley E Larson
-------------------------------
Name: Bradley Larson
Title: President/CEO
MEADOW VALLEY CONTRACTORS, INC.,
a Nevada corporation
By: /s/ Bradley E Larson
-------------------------------
Name: Bradley Larson
Title: President/CEO
READY-MIX, INC.,
A Nevada corporation
By: /s/ Kenneth D Nelson
-------------------------------
Name: Kenneth Nelson
Title: VP/Treasurer
Borrower's Signature
2
<PAGE>
EXHIBIT 10.107
PROMISSORY NOTE
January 13, 1999
====================
(Date)
3430 E. Flamingo, Suite 100, Las Vegas, Clark County, NV 89121
- --------------------------------------------------------------------------------
(Address of Maker)
FOR VALUE RECEIVED, Ready Mix, Inc. ("Maker") promises, jointly and severally if
more than one, to pay to the order of General Electric Capital Corporation or
any subsequent holder hereof (each, a "Payee") at its office located at 8480
Orchard Road Suite 5000, Englewood, CO 80111 or at such other place as Payee or
the holder hereof may designate, the principal sum of Three Hundred Sixty Five
Thousand Nine Hundred Forty and No/100 Dollars ($365,940.00), with interest on
the unpaid principal balance, from the date hereof through and including the
dates of payment, at a fixed, simple interest rate of Six and 96/100 percent
(6.96%) per annum, to be paid in lawful money of the United States, in Sixty
(60) consecutive monthly installments of principal and interest as follows:
Periodic
Installment Amount
----------- ------
59 $7,239.15
each ("Periodic Installment") and a final installment which shall be in the
amount of the total outstanding principal and interest. The first Periodic
Installment shall be due and payable on 2/13/99 and the following Periodic
------------
Installments and the final installment shall be due and payable on the same day
of each succeeding period (each, a "Payment Date"). All payments shall be
applied first to interest and then to principal. The acceptance by Payee of any
payment which is less than payment in full of all amounts due and owing at such
time shall not constitute a waiver of Payee's right to receive payment in full
at such time or at any prior or subsequent time. Interest shall be calculated on
the basis of a 365 day year (366 day leap year). The payment of any Periodic
Installment after its due date shall result in a corresponding decrease in the
portion of the Periodic Installment credited to the remaining unpaid principal
balance. The payment of any Periodic Installment prior to its due date shall
result in a corresponding increase in the portion of the Periodic Installment
credited to the remaining unpaid principal balance.
The Maker hereby expressly authorizes the Payee to insert the date value is
actually given in the blank space on the face hereof and on all related
documents pertaining hereto.
This Note may be secured by a security agreement, chattel mortgage, pledge
agreement or like instrument (each of which is hereinafter called a "Security
Agreement").
Time is of the essence hereof. If any installment or any other sum due under
this Note or any Security Agreement is not received within ten (10) days after
its due date, the Maker agrees to pay, in addition to the amount of each such
installment or other sum, a late payment charge of five percent (5%) of the
amount of said installment or other sum, but not exceeding any lawful maximum.
If (i) Maker fails to make payment of any amount due hereunder within ten (10)
days after the same becomes due and payable; or (ii) Maker is in default under,
or fails to perform under any term or condition contained in any Security
Agreement, then the entire principal sum remaining unpaid, together with all
accrued interest thereon and any other sum payable under this Note or any
Security Agreement, at the election of Payee, shall immediately become due and
payable, with interest thereon at the lesser of eighteen percent (18%) per annum
or the highest rate not prohibited by applicable law from the date of such
accelerated maturity until paid (both before and after any judgment).
The Maker may prepay in full, but not in part, its entire indebtedness hereunder
upon payment of the entire indebtedness plus an additional sum as a premium
equal to the following percentages of the original principal balance for the
indicated period:
Prior to the first annual anniversary date of this Note: one percent (1%)
and zero percent (0%) thereafter, plus all other sums due hereunder or under any
Security Agreement.
It is the intention of the parties hereto to comply with the applicable usury
laws; accordingly, it is agreed that, notwithstanding any provision to the
contrary in this Note or any Security Agreement, in no event shall this Note or
any Security Agreement require the payment or permit the collection of interest
in excess of the maximum amount permitted by applicable law. If any such excess
interest is contracted for, charged or received under this Note or any Security
Agreement, or if all of the principal balance shall be prepaid, so that under
any of such circumstances the amount of interest contracted for, charged or
received under this Note or any Security Agreement on the principal balance
shall exceed the maximum amount of interest permitted by applicable law, then in
such event (a) the provisions of this paragraph shall govern and control, (b)
neither Maker nor any other person or entity now or hereafter liable for the
payment hereof shall be obligated to pay the amount of such interest to the
extent that it is in excess of the maximum amount of interest permitted by
applicable law, (c) any such excess which may have been collected shall be
either applied as a credit against the then unpaid principal balance or refunded
to Maker, at the option of the Payee, and (d) the effective rate of interest
shall be automatically reduced to the maximum lawful contract rate allowed under
applicable law as now or hereafter construed by the courts having jurisdiction
thereof. It is further agreed that without limitation of the foregoing, all
calculations of the rate of interest contracted for, charged or received under
this Note or any Security Agreement which are made for the purpose of
determining whether such rate exceeds the maximum lawful contract rate, shall be
made, to the extent permitted by applicable law, by amortizing, prorating,
allocating and spreading in equal parts during the period of the full stated
term of the indebtedness evidenced hereby, all interest at any time contracted
for, charged or received from Maker or otherwise by Payee in connection with
such indebtedness; provided, however, that if any applicable state law is
amended or the law of the United States of America preempts any applicable state
law, so that it becomes lawful for the Payee to receive a greater interest per
annum rate than is presently allowed, the Maker agrees that, on the effective
date of such amendment or preemption, as the case may be, the lawful maximum
hereunder shall be increased to the maximum interest per annum rate allowed by
the amended state law or the law of the United States of America.
The Maker and all sureties, endorsers, guarantors or any others (each such
person, other than the Maker, an "Obligor") who may at any time become liable
for the payment hereof jointly and severally consent hereby to any and all
extensions of time, renewals, waivers or modifications of, and all substitutions
or releases of, security or of any party primarily or secondarily liable on this
Note or any Security Agreement or any term and provision of either, which may be
made, granted or consented to by Payee, and agree that suit may be brought and
maintained against any one or more of them, at the election of Payee
<PAGE>
THE MAKER HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS
NOTE, ANY OF THE RELATED DOCUMENTS, ANY DEALINGS BETWEEN MAKER AND PAYEE
RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS,
AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED BETWEEN MAKER AND PAYEE. THE
SCOPE OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES
THAT MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS,
TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS.) THIS WAIVER IS IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS NOTE, ANY RELATED DOCUMENTS, OR
TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED
TRANSACTION. IN THE EVENT OF LITIGATION, THIS NOTE MAY BE FILED AS A WRITTEN
CONSENT TO A TRIAL BY THE COURT.
This Note and any Security Agreement constitute the entire agreement of the
Maker and Payee with respect to the subject matter hereof and supercedes all
prior understandings, agreements and representations, express or implied.
No variation or modification of this Note, or any waiver of any of its
provisions or conditions, shall be valid unless in writing and signed by an
authorized representative of Maker and Payee. Any such waiver, consent,
modification or change shall be effective only in the specific instance and for
the specific purpose given.
Any provision in this Note or any Security Agreement which is in conflict with
any statute, law or applicable rule shall be deemed omitted, modified or altered
to conform thereto.
Ready Mix, Inc.
/s/ Julie L. Bergo By: /s/ Gary W. Burnell (L.S.)
- ------------------------------ ----------------------------
(Witness) (Signature)
Julie L. Bergo Gary W. Burnell, Vice President
- ------------------------------ -------------------------------
(Print name) Print name (and title, if applicable)
4411 S. 40th St. Ste D.11 860830443
- ------------------------------ -------------------------------
Phoenix AZ 85040 (Federal tax identification number)
- ------------------------------
(Address)
<PAGE>
COLLATERAL SCHEDULE NO. 2
THIS COLLATERAL SCHEDULE NO. 2 is annexed to and made a part of that certain
Master Security Agreement dated as of December 4, 1997 between General Electric
Capital Corporation as Secured Party and Ready Mix, Inc. as Debtor and describes
collateral in which Debtor has granted Secured Party a security interest in
connection with the Indebtedness (as defined in the Security Agreement)
including without limitation that certain Promissory Note dated ______________in
the original principal amount of $365,940.00.
Quantity Manufacturer Serial Number Year/Model and Type of Equipment
- -------- ------------ ------------- --------------------------------
One (1) Caterpillar 2ZR00221 1996 988F Wheel Loader
and including all attachments,
accessions and accessories
Equipment immediately listed above is located at: 3430 E. Flamingo, Suite 100,
Las Vegas, Clark County, NV 89121
SECURED PARTY: DEBTOR:
General Electric Capital Corporation Ready Mix, Inc.
By: /s/ [ILLEGIBLE]^^ By: /s/ Gary W. Burnell
------------------------------- -------------------------------
Title: Risk Analyst Title: Vice President
---------------------------- ----------------------------
Date: January 13, 1999 Date: 1-12-99
----------------------------- -----------------------------
<PAGE>
EXHIBIT 10.108
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into as of the 1/st/ day of March
1999, by and between Meadow Valley Corporation, a Nevada corporation (the
"Employer"), and Bradley E. Larson (the "Employee").
The Employer hereby employs the Employee on a full-time basis, and the
Employee hereby accepts such full-time employment on the terms and conditions
hereinafter set forth.
1. EMPLOYMENT. Employee is employed as the President and Chief Executive
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Officer for the Employer. Employee shall perform all duties as outlined herein
and as may be assigned by the Employer and shall devote full time, attention and
loyalty to the affairs of the Employer. The duties of the Employee shall
specifically be:
A) To serve as a member of the Board of Directors, report directly
to the Board, communicate with the board regarding current operational and
financial status of Employer and strategic plans.
B) To present to the board, for board approval, annual operating
plans, capital improvement programs, budgets and annual updates of
strategic plans.
C) To assist the Chief Operating Officer in organizing operations
personnel to maximize productivity and synergy between various area
managers. Delegate responsibilities and oversee activities in the areas of
finance/accounting, operations, estimating/marketing, safety and human
resources.
D) To actively represent the Employer in industry organizations
where the membership is deemed to be beneficial to the Employer; and serve
as board member and/or officer in said organizations when elected to do so.
E) To seek out, and present to the board, any opportunities for
acquisition and/or investment for growth of the Employer, and to negotiate
or assist in the negotiations of acquisitions or investment expenditures.
F) To represent the Employer in contract negotiations with owners of
work, subcontractors and suppliers.
G) To establish, foster and maintain relationships with important
vendors and suppliers of strategic resources.
H) Any other area specifically assigned by the Board of Directors.
2. TERM. Subject to the provisions of termination provided in paragraph
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12, the initial term of this Agreement shall commence on day and year first
written above and terminate on March 1, 2004. This Agreement may be extended by
the mutual written agreement of the Employee and the Employer.
3. COMPENSATION. Employee shall receive a base salary of One Hundred
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Sixty-two Thousand Seven Hundred Fifty Dollars ($162,750.00) per year, payable
in accordance with the regular payroll practices of Employer, and subject to
applicable deductions of withholding taxes and other customary employment taxes.
The Board Compensation Committee of Employer shall review Employee's salary at a
<PAGE>
minimum annually and may adjust Employee's salary upward to recognize
improvement, achievement or expansion of Employee's responsibilities.
Employee shall participate as a member of senior management in cash
incentive plans as currently existing or as amended or adopted in the future by
the Compensation Committee of Employer's Board of Directors. Cash bonus plans
are subject to annual review and/or change as recommended by the Compensation
Committee and approved by the Board of Directors.
4. OPTIONS TO ACQUIRE COMMON STOCK. Employee is eligible to participate
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in the Meadow Valley Corporation 1994 Stock Option Plan. Future grants of stock
options shall be subject to the discretion of Meadow Valley Corporation's board
of directors.
5. EMPLOYEE BENEFITS. Employer shall provide to Employee, and to the
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Employee's dependents, a comprehensive major medical, health, and dental
insurance program comparable to the programs normally provided by other
employers in the same industry and marketplace, and the Employer shall pay the
cost of the Employee's portion of the premium. Should, at any time, the Employee
opt to maintain a personal major medical and health insurance policy for himself
and for his dependents and not participate in the Employer's group plan, then
Employer shall reimburse Employee the lesser of the amount Employee pays for
said personal policy, as evidenced by adequate documentation, or what Employer
would otherwise be paying were Employee participating in the Employer's group
plan. Should the Employee opt to maintain his own coverage, neither he nor his
dependents shall be precluded from later participating in the Employer's group
plan so long as they otherwise qualify for enrollment.
At Employer's cost, Employer will maintain a life insurance policy covering
Employee, with at least $250,000 of death benefits being payable, in a manner
that is free of income tax, to Employee's estate or other beneficiaries
designated by Employee.
Employer agrees to provide Employee with an automobile for business-related
use. In addition to the cost of the vehicle itself, Employer shall pay, directly
or by reimbursement to Employee, for all maintenance, fuel, repairs, insurance,
operating and other costs incidental thereto.
Employer shall pay for, or reimburse Employee for, dues for his membership
in industry related associations perceived as beneficial to Employer and as
approved by the Employer's Executive Committee.
So long as it is within the guidelines of the respective plan, Employee
shall be given the opportunity to participate in Employer's 401(k) and any
other plans made available to other members of executive management.
Employee shall be entitled to receive all other employee benefits for
senior management personnel upon the terms and conditions then in effect.
6. MOVING EXPENSES AND SUBSISTENCE. In the event the Employer requires
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the Employee to relocate, the Employer shall pay for all moving costs of
reasonable and normal household effects, including up to six months storage of
such household effects while Employee obtains a permanent residence in the
relocation area.
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<PAGE>
Employee shall obtain a minimum of two moving and storage quotes from reputable
movers and Employer shall pay the most competitive rate.
Employer shall provide Employee a subsistence allowance of Two Thousand
Dollars ($2,000.00) per month for the lesser of nine months from the date of
reassignment in a new location or until such time as the relocation of Employee
and his/her spouse to the relocation area is complete. In addition, costs for
one round-trip airline ticket per week between the Employee's previous location
and the relocation area will be reimbursed by Employer to Employee during the
same nine-month period, or less if relocation is completed earlier. Such tickets
may be used either by Employee or by his/her spouse.
7. HOLIDAYS AND VACATION.
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A) Employee shall be paid for the following seven (7) holidays: New
Year's Day, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
the day after Thanksgiving, and Christmas Day and all other holidays for
Employees of the Company as approved by the Chief Executive Officer or
Board of Directors.
B) Employee is entitled to four weeks vacation during the first year
of employment and for each year thereafter. Unused vacation in any given
year shall accrue to following years up to a maximum of eight weeks in any
one year.
8. RESPONSIBILITIES OF EMPLOYEE. The Employee shall devote such
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reasonable time as is necessary or is deemed reasonably necessary by the
Employer to carry out all required duties and will devote full time to the
Employer during normal business hours. The Employee shall at all times
faithfully, with diligence and to the Employee's best good faith ability,
experience and talents, perform all the duties that may be required pursuant to
the express terms hereof to the reasonable satisfaction of the Employer, in
accordance with customary professional standards.
9. WORKING FACILITIES. The Employee shall be furnished with all
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facilities and services suitable to Employee's position and adequate for the
performance of Employee's duties.
10. EXPENSES. The Employee is authorized to incur reasonable expenses for
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promoting business of the Employer, including expenses for entertainment, travel
and similar items. The Employer shall reimburse the Employee for all such
expenses on the presentation by the Employee of itemized and adequately
documented accounts of such expenditures.
11. DISABILITY. If unable to perform duties under the terms of this
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Agreement by reason of illness or incapacity for a period of four weeks,
Employee shall, commencing at the end of such four week period, be entitled to
receive Employee's compensation hereunder for a period of up to and including a
maximum of one year or until he is no longer disabled, whichever occurs first.
After one year of disability at full salary, the Employee, or his designated
beneficiary, shall be provided with a disability
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<PAGE>
insurance policy, if available, at no cost to Employee. The disability income
policy would provide for monthly income benefits at the rate of sixty percent
(60%) of the Employee's base salary at the time the disability occurred. The
Company will attempt to procure a disability income policy that would provide
monthly benefits until the Employee reaches 65 years of age or is no longer
disabled whichever occurs first. If such a policy is unavailable, the Company
will attempt to provide the best policy available. If no policy is available, no
other disability income benefits will be provided.
12. TERMINATION. This Employment Agreement may be terminated under the
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following circumstances:
A) WITHOUT CAUSE. Employer may terminate this Agreement at any time
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upon thirty (30) days written notice to Employee, but Employer shall be
obligated to pay to Employee compensation in a lump sum for the balance of
the term of this Agreement within 30 days of termination, unless Employee
agrees to other payment terms.
B) VOLUNTARY TERMINATION BY EMPLOYEE WITHOUT CAUSE. Employee may
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terminate this Agreement at any time upon thirty (30) days written notice
to Employer and Employer shall be obligated, in that event, to pay Employee
compensation up to the date of the termination only. All accrued but unpaid
compensation and Employee benefits shall be paid in cash within 30 days of
termination, unless Employee agrees to other payment terms.
C) TERMINATION BY EMPLOYER FOR REASONABLE CAUSE.
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The Employer may terminate this Agreement for reasonable cause upon the
unanimous vote of the Board of Directors and by thirty (30) days written
notice to the Employee and Employer shall be obligated, in that event, to
pay Employee compensation up to the date of termination only. For purposes
hereof, "cause" shall be defined as meaning (i) such conduct by the
Employee which constitutes material breach of this Agreement which is not
cured within ninety (90) days of written notice to the Employee of said
alleged breach or (ii) a material failure to competently perform Employee's
duties as stated in paragraph 1 in accordance with applicable professional
standards as stated in paragraphs 1 and 8 hereof provided that Employer has
previously given Employee written notice and a reasonable opportunity to
remedy such failure and such failure has a materially adverse effect on the
business or financial condition of Employer or (iii) material breach of
Employee's fiduciary duty and such breach has a material adverse effect on
the business or financial condition of Employer or (iv) egregiously
improper or illegal conduct of the Employee which, based upon a unanimous
good faith determination of the Board of Directors of the Employer, has a
material adverse affect on Employer.
D) TERMINATION BY EMPLOYEE FOR REASONABLE CAUSE.
---------------------------------------------
Employee may terminate this Agreement for cause. In such event, Employer
shall be obligated to pay Employee compensation in lump sum for the balance
of the term of this Agreement within 30 days of termination or as Employee
shall agree, plus damages suffered and expenses incurred by reason
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<PAGE>
thereof. For this purpose "cause" shall mean (i) a material breach of this
Agreement by Employer or (ii) failure of Employer to pay any amount owed
Employee hereunder at the time and in the amount due or (iii) failure of
Employer to follow applicable law, especially with respect to SEC filings
and compliance over the objection of Employee or contrary to the reasonable
advice of Employee or (iv) egregiously improper conduct with respect to
dealing with Employee or in a manner which brings discredit to Employee.
13. CONFIDENTIALITY. Employee agrees not to disclose any confidential,
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proprietary competitively sensitive information to persons who are not
employees, directors, lenders, bonding agents, insurance companies or advisors
of the Employer, except as required by law, without prior consent of the
Employer; provided however, any disclosure involving this paragraph shall not
result in a breach of this Agreement unless the disclosure has a materially
adverse effect on the Employer.
14. INDEMNIFICATION. Employer and Meadow Valley Contractors, Inc. shall
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provide Employee with an Officer Indemnification Agreement in the form attached
hereto.
15. NOTICES. All notices, demands, and communications given under this
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Agreement ("Notice") shall be in writing and delivered personally or sent by
registered or certified mail, return receipt requested, in the United States
mail, postage prepaid, addressed as follows:
If to Employer:
Meadow Valley Corporation
P.O. Box 60726
Phoenix, AZ 85082-0726
If to Employee:
Bradley E. Larson
671 E. Encinas Ave.
Gilbert, AZ 85234
or at such other address as a party may from time to time designate by Notice
hereunder. Notice shall be effective upon delivery in person, or if mailed, at
midnight on the third business day after the date of mailing.
16. ASSIGNMENT OF AGREEMENT. Neither party may assign or otherwise
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transfer this Agreement or any of its rights or obligations hereunder without
the prior written consent to such assignment or transfer by the other party
hereto; and all the provisions of this Agreement shall be binding upon the
respective employees, successors, heirs and assigns of the parties; provided,
however, the benefits payable to Employee hereunder in the event of disability
or death or incapacity are payable to Employee's spouse or personal
representative.
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<PAGE>
17. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS. This Agreement
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and the representations, warranties, covenants and other agreements (however
characterized or described) by both parties and contained herein or made
pursuant to the provisions hereof shall survive the execution and delivery of
this Agreement.
18. FURTHER INSTRUMENTS. The parties shall execute and deliver any and all
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such other instruments in reasonable mutually acceptable form and substance and
shall take any and all such other actions as may be reasonably necessary to
carry the intent of the Agreement into full force and effect.
19. SEVERABILITY. If any provision of this Agreement shall be held,
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declared or pronounced void, voidable, invalid, unenforceable or inoperative for
any reason by any court of competent jurisdiction, governmental authority or
otherwise, such holding, declaration or pronouncement shall not affect adversely
any other provision of this Agreement, which shall otherwise remain in full
force and effect and be enforced in accordance with its terms, and the effect of
such holding, declaration or pronouncement shall be limited to the territory of
jurisdiction in which made.
20. WAIVER. All the rights and remedies of either party under this
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Agreement are cumulative and not exclusive of any other rights and remedies
provided by law. No delay or failure on the part of either party in the exercise
of any right or remedy arising from a breach of this Agreement shall operate as
a waiver of any subsequent right or remedy arising from a subsequent breach of
this Agreement. The consent of any party where required hereunder to any act or
occurrence shall not be deemed to be a consent to any other act or occurrence.
21. GENERAL PROVISIONS. This Agreement shall be construed and enforced in
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accordance with, and governed by, the laws of the state of Arizona. Except as
otherwise expressly stated herein, time is of the essence in performing under
this Agreement. This Agreement embodies the entire agreement and understanding
between the parties and supersedes all prior agreements and understandings
relating to the subject matter of this Agreement as it relates to the parties'
duties and obligations from and after March 1, 1999, and this Agreement may not
be modified or amended or any term or provision hereof waived or discharged
except in writing signed by the party against whom such amendment, modification,
waiver or discharge is sought to be enforced. The headings of this Agreement are
for convenience in reference only and shall not limit or otherwise affect the
meaning thereof. This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original but all of which taken together shall
constitute one and the same instrument.
22. SPECIAL RIGHT OF EMPLOYEE UNDER CERTAIN CIRCUMSTANCES. During the term
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of this Agreement, if (i) Employer is involved in a merger, consolidation or
other business combination in which Employer is not the
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<PAGE>
principal subsidiary are sold; or (iii) in the event Employee is required to
relocate outside the Phoenix, Arizona area in a manner not mutually acceptable
to Employee and Employer, then Employee shall have the following rights:
A) To terminate this Agreement with 30 days prior notice, in which
event Employer shall pay Employee as if there were a termination without
cause by the Employer; and
B) All options granted shall, to the extent not specifically
prohibited by the stock option plan then in effect, vest immediately and be
exercisable within one year of the occurring of one of the events set forth
in (i), (ii) or (iii) above.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year
first above written.
Meadow Valley Corporation
/s/ Bradley E. Larson By /s/ Gary A. Agron
- --------------------------- -------------------------------------
Employee Temp. Chairman - Compensation Committee
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<PAGE>
EXHIBIT 10.109
LEASE SCHEDULE NO. 1000099257 FINANCING LEASE
---------- (Per Diem Interim Rent)
Master Lease Agreement dated-JULY 01, 1999
-------------
Lessor: BANC ONE LEASING CORPORATION
----------------------------
Lessee: READY MIX, INC.
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1. GENERAL. This Lease Schedule is signed and delivered under the Master Lease
Agreement identified above, as amended from time to time ("Master Lease"),
between Lessee and Lessor. Capitalized terms defined in the Master Lease will
have the same meanings when used in this Schedule.
2. FINANCING. Lessor finances for Lessee, and Lessee finances with Lessor, all
of the property ("Equipment") described in Schedule A-1 attached hereto (and
Lessee represents that all Equipment is new unless specifically identified as
used):
3. AMOUNT FINANCED: Equipment Cost: $2,499,758.58
Set-up/Filing Fee: 200.00
Miscellaneous: N/A
Sales Tax: N/A
Total: $2,499,958.58
------------
4. FINANCING TERM. The Base Term of this Schedule shall be 84 months and the
--
Base Term shall commence on the Acceptance Date ("Commencement Date"). The total
---------------
Lease Term consists of the Interim Term plus the Base Term. The Interim Term
begins on the date that Lessor accepts this Schedule as stated below Lessor's
signature ("Acceptance Date") and continues up to the Commencement Date.
5. INSTALLMENT PAYMENTS/FEES. As financing for the Equipment, Lessee shall pay
to Lessor all amounts stated below on the due dates stated below. There shall be
added to each installment payment all applicable Taxes as in effect from time to
time.
(a) For the Interim Term, Lessee shall pay to Lessor on the Commencement Date an
amount equal to one-thirtieth (1/30th) of the Installment Payment multiplied by
the number of days in the Interim Term. "Installment Payment" means the total of
all installment payments due and payable during the Base Term divided by the
number of months in the Base Term.
(b) During the Base Term, Lessee shall pay to Lessor installment payments in the
amounts and according to the timing set forth below, provided however, that
notwithstanding the following, the final installment payment due hereunder shall
be equal to the remaining principal balance hereunder together with all accrued
interest and fees.
(1) Amount of each installment payment during the Base Term
(including principal and interest):
84 Monthly payments of $38,831.28
(2) Frequency of installment payments during the Base Term: MONTHLY
(3) Timing of installment payments during the Base Term: ARREARS
(c) Lessee shall pay Lessor a Set-Up/Filing Fee as follows:
<PAGE>
(1) $ shall be paid on the Acceptance Date, or
(2) $375.00 has been included in the above Amount Financed of the
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Equipment.
(d) Security Deposit:$ On the Acceptance Date, Lessee shall pay Lessor said
-
Security Deposit which shall be held in accordance with paragraph 6 below.
6. SECURITY INTEREST. This Schedule is intended to be a secured debt financing
transaction, not a true lease. See Paragraph 7 below regarding Lessee's
---
ownership of the Equipment. As collateral security for payment and performance
of all Secured Obligations (defined in Paragraph 8 below) and to induce Lessor
to extend credit from time to time to Lessee (under the Lease or otherwise),
Lessee hereby grants to Lessor a first priority security interest in all of
Lessee's right, title and interest in the Equipment, whether now existing or
hereafter acquired, any sums specified in this Schedule as a "Security Deposit",
and in all Proceeds (defined in Paragraph 8 below). At its option, Lessor may
apply all or any part of any Security Deposit to cure any default of Lessee
under the Lease. If upon final termination of this Schedule, Lessee has
fulfilled all of the terms and conditions hereof, then Lessor shall pay to
Lessee upon Lessee's written request any remaining balance of the Security
Deposit for this Schedule, without interest.
7. TITLE TO EQUIPMENT; FIRST PRIORITY LIEN. Lessee represents, warrants and
agrees: that Lessee currently is the lawful owner of the Equipment; that good
and marketable title to the Equipment shall remain with Lessee at all times;
that Lessee has granted to Lessor a first priority security interest in the
Equipment and all Proceeds; and that the Equipment and all Proceeds are, and at
all times shall be, free and clear of any Liens other than Lessor's security
interest therein. Lessee at its sole expense will protect and defend Lessor's
first priority security interest in the Equipment against all claims and demands
whatsoever.
8. CERTAIN DEFINITIONS. "Secured Obligations" means (a) all payments and other
obligations of Lessee under or in connection with this Schedule, and (b) all
payments and other obligations of Lessee (whether now existing or hereafter
incurred) under or in connection with the Master Lease and all present and
future Lease Schedules thereto, and (c) all other leases, indebtedness,
liabilities and/or obligations of any kind (whether now existing or hereafter
incurred, absolute or contingent, direct or indirect) of Lessee to Lessor or to
any affiliate of either Lessor or BANK ONE CORPORATION. "Proceeds" means all
cash and non-cash proceeds of the Equipment including, without limitation,
proceeds of insurance, indemnities and/or warranties.
9. AMENDMENTS TO MASTER LEASE. For purposes of this Schedule only, Lessee and
Lessor agree to amend the Master Lease as follows: (a) public liability or
property insurance as described in the second sentence of Section 8 will not be
required; (b) the definition of "Stipulated Loss Value" in clause (b) of Section
9 is deleted and replaced by Paragraph 10 below; (c) the text of Section 10 is
deleted in its entirely; (d) Subsections 23(a) and 23(c) are deleted; (e)
subsection 23(b) and the last sentence of section 4 will apply only if an event
of default occurs; and (f) all references in the Lease as it relates to this
Schedule to "Lessee" and "Lessor" shall be changed to "Borrower" and "Lender"
respectively.
10. STIPULATED LOSS VALUE. For purposes of this Schedule only, the "Stipulated
Loss Value" of any item of Equipment during its Lease Term equals the aggregate
of the following as of the date specified by Lessor: (a) all accrued and unpaid
interest, late charges and other amounts due under this Schedule and the Master
Lease to the extent it relates to this Schedule as of such specified date, plus
(b) the remaining principal balance due and payable by Lessee under this
Schedule as of such specified date, plus (c) interest on the amount described in
the foregoing clauses (a) and
(b) at the Overdue Rate commencing with the specified date; provided, that the
foregoing calculation shall not exceed the maximum amount which may be collected
by Lessor from Lessee under applicable law in connection with enforcement of
Lessor's rights under this Schedule and the Master Lease to the extent it
relates to this Schedule.
11. LESSEE TO PAY ALL TAXES. For purposes of this Schedule and its Equipment
only: Lessee shall pay any and all Taxes relating to this Schedule and its
Equipment directly to the applicable taxing authority, Lessee shall prepare and
file all reports or returns concerning any such Taxes as may be required by
applicable law or regulation (provided, that Lessor shall not be identified as
the owner of the Equipment in such reports or returns); and Lessee shall,
<PAGE>
upon Lessor's request, send Lessor evidence of payment of such Taxes and copies
of any such reports or returns.
12. LESSEE'S ASSURANCES. Lessee irrevocably and unconditionally: (a) reaffirms
all of the terms and conditions of the Master Lease and agrees that the Master
Lease remains in full force and effect; (b) agrees that the Equipment is and
will be used at all times solely for commercial purposes, and not for personal,
family or household purposes; and (c) incorporates all of the terms and
conditions of the Master Lease as if fully set forth in this Schedule.
13. REPRESENTATIONS AND WARRANTIES: Lessee represents and warrants that: (a)
Lessee is a corporation, partnership or proprietorship duly organized, validly
existing and in good standing under the laws of the state of its organization
and is qualified to do business and is in good standing under the laws of each
other state in which the Equipment is or will be located; (b) Lessee has full
power, authority and legal right to sign, deliver and perform the Master Lease,
this Schedule and all related documents and such actions have been duly
authorized by all necessary corporate/partnership/proprietorship action; and (c)
the Master Lease, this Schedule and each related document has been duly signed
and delivered by Lessee and each such document constitutes a legal, valid and
binding obligation of Lessee enforceable in accordance with its terms.
14. CONDITIONS. No lease of Equipment under this Schedule shall be binding on
Lessor, and Lessor shall have no obligation to purchase the Equipment covered
hereby, unless: (a) Lessor has received evidence of all required insurance;
(b) in Lessor's sole judgment, there has been no material adverse change in the
financial condition or business of Lessee or any guarantor; (c) Lessee has
signed and delivered to Lessor this Schedule, which must be satisfactory to
Lessor, and Lessor has signed and accepted this Schedule; (d) no change in the
Code or any regulation thereunder, which in Lessor's sole judgment would
adversely affect the economics to Lessor of the lease transaction, shall have
occurred or shall appear to be imminent; (e) Lessor has received, in form and
substance satisfactory to Lessor, such other documents and information as Lessor
shall reasonably request; and (f) Lessee has satisfied all other reasonable
conditions established by Lessor.
15. OTHER DOCUMENTS: EXPENSES: Lessee agrees to sign and deliver to Lessor any
additional documents deemed desirable by Lessor to effect the terms of the
Master Lease or this Schedule including, without limitation, Uniform Commercial
Code financing statements which Lessor is authorized to file with the
appropriate filing officers. Lessee hereby irrevocably appoints Lessor and any
designee of Lessor as Lessee's attorney-in-fact with full power and authority in
the place of Lessee and in the name of Lessee to prepare, sign, amend, file or
record any Uniform Commercial Code financing statements or other documents
deemed desirable by Lessor to perfect, establish or give notice of Lessor's
interests in the Equipment or in any collateral as to which Lessee has granted
Lessor a security interest. Lessee shall pay upon Lessor's written request any
actual out-of-pocket costs and expenses paid or incurred by Lessor in connection
with the above terms of this section or the funding and closing of this
Schedule.
16. PURCHASE ORDERS AND ACCEPTANCE OF EQUIPMENT. Lessee agrees that (I) Lessor
has not selected, manufactured, sold or supplied any of the Equipment, (ii)
Lessee has selected all of the Equipment and its suppliers, and (iii) Lessee has
received a copy of, and approved, the purchase orders or purchase contracts for
the Equipment. AS BETWEEN LESSEE AND LESSOR, LESSEE AGREES THAT: (a) LESSEE HAS
RECEIVED, INSPECTED AND APPROVED ALL OF TEE EQUIPMENT; (b) ALL EQUIPMENT IS IN
GOOD WORKING ORDER AND COMPLIES WITH ALL PURCHASE ORDERS OR CONTRACTS AND
<PAGE>
ALL APPLICABLE SPECIFICATIONS; (c) LESSEE IRREVOCABLY ACCEPTS ALL EQUIPMENT FOR
PURPOSES OF THE LEASE "AS-IS, WHERE-IS" WITH ALL FAULTS; AND (d) LESSEE
UNCONDITIONALLY WAIVES ANY RIGHT THAT IT MAY HAVE TO REVOKE ITS ACCEPTANCE OF
THE EQUIPMENT.
LESSEE HAS READ AND UNDERSTOOD ALL OF THE TERMS OF THIS SCHEDULE. LESSEE AGREES
THAT THERE ARE NO ORAL OR UNWRITTEN AGREEMENTS WITH LESSOR REGARDING THE
EQUIPMENT OR THIS SCHEDULE.
BANC ONE LEASING CORPORATION READY MIX, INC.
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(Lessor) (Lessee)
By:_________________________ By:/s/ Kenneth D. Nelson
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Title: _____________________ Title: Vice President
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Acceptance Date: ___________ Witness:/s/ Nicole Smith
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<PAGE>
Banc One Leasing Corporation
SCHEDULE A-1 EQUIPMENT LEASED HEREUNDER
QUANTITY DESCRIPTION PAGE 1
================================================================================
EQUIPMENT LOCATION: 1501 HIGHWAY 168
MOAPA, NV 89025
COUNTY : CLARK
COST : $2,499,758.58
"ALL PROPERTY DESCRIBED IN THE INVOICES AND EXHIBITS IDENTIFIED BELOW, WHICH
PROPERTY MAY BE GENERALLY DESCRIBED AS ROCK AND SAND CRUSHING EQUIPMENT."
<TABLE>
<CAPTION>
VENDOR INVOICE #
<S> <C>
CONSTRUCTION EQUIPMENT SALES 4466
AGGREGATE DESIGNS 9906-11
CONVEYOR SALES 19245
TK ELECTRIC 99431
TK ELECTRIC 99491
KIMBALL EQUIPMENT 150325
KIMBALL EQUIPMENT 150326
CRUSHER SERVICE 39331
CONSTRUCTION EQUIPMENT SALES 4470
CRUSHER SERVICE 39501
HAZEMAG USA 9282A
CONVEYOR SALES 19568
KIMBALL EQUIPMENT 150905
CONVEYOR SALES 19248
</TABLE>
TOGETHER WITH ALL ATTACHMENTS, ADDITIONS, ACCESSIONS, PARTS, REPAIRS,
IMPROVEMENTS, REPLACEMENTS AND SUBSTITUTIONS THERETO.
This Schedule A-1 is attached to and made a part of Lease Number 1000099257 and
constitutes a true and accurate description of the equipment.
Lessee:
READY MIX, INC.
- --------------------------------------
By: /s/ Kenneth D. Nelson
----------------------------------
Date: 9-24-99
---------------------------------
<PAGE>
Banc One Leasing Corporation
SCHEDULE A-1 EQUIPMENT LEASED HEREUNDER
QUANTITY DESCRIPTION PAGE 2
================================================================================
EXHIBIT A 45232.30
EXHIBIT B 98839.11
EXHIBIT C 62173.00
EXHIBIT D 56848.98
EXHIBIT E 94554.19
EXHIBIT F 19360.07
EXHIBIT G 91554.01
EXHIBIT H 98803.97
EXHIBIT I 176037.96
EXHIBIT J 60246.81
EXHIBIT K 29686.42
TOGETHER WITH ALL ATTACHMENTS, ADDITIONS, ACCESSIONS, PARTS, REPAIRS,
IMPROVEMENTS, REPLACEMENTS AND SUBSTITUTIONS THERETO.
This Schedule A-1 is attached to and made a part of Lease Number 1000099257 and
constitutes a true and accurate description of the equipment.
Lessee:
READY MIX, INC.
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By: /s/ Kenneth D. Nelson
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Date: 9-24-99
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EXHIBIT 10.110
MASTER LEASE AGREEMENT
This MASTER LEASE AGREEMENT is dated as of: 7-1-99, and is made and entered
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into by and between BANC ONE LEASING CORPORATION ("Lessor"), an Ohio
corporation, with its principal place of business at 1111 Polaris Parkway, Suite
A3 (OH1-1085), Columbus, Ohio 43240 and the Lessee identified below:
LESSEE NAME: READY MIX, INC.
LESSEE ADDRESS: 4411 South 40th Street, Phoenix, Arizona
1. LEASE OF EQUIPMENT: Lessor leases to Lessee, and Lessee leases from
Lessor, all the property described in the Lease Schedules which are signed from
time to time by Lessor and Lessee.
2. CERTAIN DEFINITIONS: "Schedule" means each Lease Schedule signed by
Lessee and Lessor which incorporates the terms of this Master Lease Agreement,
together with all exhibits, riders, attachments and addenda thereto. "Equipment"
means the property described in each Schedule, together with all attachments,
additions, accessions, parts, repairs, improvements, replacements and
substitutions thereto. "Lease", "herein", "hereunder", "hereof" and similar
words mean this Master Lease Agreement and all Schedules, together with all
exhibits, riders, attachments and addenda to any of the foregoing, as the same
may from time to time be amended, modified or supplemented. "Prime Rate" means
the prime rate of interest announced from time to time as the prime rate by Bank
One, NA (or its successors or assigns); provided, that the parties acknowledge
that the Prime Rate is not intended to be the lowest rate of interest charged by
said bank in connection with extensions of credit. "Lien" means any security
interest, lien, mortgage, pledge, encumbrance, judgment, execution, attachment,
warrant, writ, levy, other judicial process or claim of any nature whatsoever by
or of any person. "Fair Market Value" means the amount which would be paid for
an item of Equipment by an informed and willing buyer (other than a used
equipment or scrap dealer) and an informed and willing seller neither under a
compulsion to buy or sell. "Lessor's Cost" means the invoiced price of any item
of Equipment plus any other cost to Lessor of acquiring an item of Equipment.
All terms defined in the Lease are equally applicable to both the singular and
plural form of such terms.
3. LEASE TERM AND RENT: The term of the lease of the Equipment described
in each Schedule ("Lease Term") commences on the date stated in the Schedule and
continues for the term stated therein. As rent for the Equipment described in
each Schedule, Lessee shall pay Lessor the rent payments and all other amounts
stated in such Schedule, payable on the dates specified therein. All payments
due under the Lease shall be made in United States dollars at Lessor's office
stated in the opening paragraph or as otherwise directed by Lessor in writing.
4. ORDERING, DELIVERY, REMOVAL AND INSPECTION OF EQUIPMENT: If an event of
default occurs or if for any reason Lessee does not accept, or revokes its
acceptance of, equipment covered by a purchase order or purchase contract or if
any commitment or agreement of Lessor to lease equipment to Lessee expires,
terminates or is otherwise canceled, then automatically upon notice from Lessor,
any purchase order or purchase contract and all obligations thereunder shall be
assigned to Lessee and Lessee shall pay and perform all obligations thereunder.
Lessee agrees to pay, defend, indemnify and hold Lessor harmless from any
liabilities, obligations, claims, costs and expenses (including reasonable
attorney fees and expenses) of whatever kind imposed on or asserted against
Lessor in any way related to any purchase orders or purchase contracts. Lessee
shall make all arrangements for, and Lessee shall pay all costs of,
transportation, delivery, installation and testing of Equipment. Lessor has the
right upon reasonable notice to Lessee to inspect the Equipment wherever
located. Lessor may enter upon any premises where Equipment is located and
remove it immediately, without notice or liability to Lessee, upon the
expiration or other termination of the Lease Term.
5. MAINTENANCE AND USE: Lessee agrees it will, at its sole expense: (a)
repair and maintain the Equipment in good condition and working order and supply
and install all replacement parts or other devices when required to so maintain
the Equipment or when required by applicable law or regulation, which parts or
devices shall automatically become part of the Equipment; (b) use and operate
the Equipment in a careful manner in the course of its business and only for the
purposes for which it was designed in accordance with the manufacturer's
warranty requirements, and comply with all laws and regulations relating to the
Equipment, and obtain all permits or licenses necessary to install, use or
operate the Equipment; and (c) make no alterations, additions, subtractions,
upgrades or improvements to the Equipment without Lessor's prior written
consent, but any such alterations, additions, upgrades or improvements shall
automatically become part of the Equipment. The Equipment will not be used or
located outside of the United States.
6. NET LEASE; NO EARLY TERMINATION: The Lease is a net lease. Lessee's
obligation to pay all rent and all other amounts payable under the Lease is
absolute and unconditional under any and all circumstances and shall not be
affected by any circumstances of any character including, without limitation,
(a) any setoff, claim, counterclaim, defense or reduction which Lessee may have
at any time against Lessor or any other party for any reason, or (b) any defect
in the condition, design or operation of, any lack of fitness for use of, any
damage to or loss of, or any lack of maintenance or service for any of the
Equipment. Each Schedule is a noncancelable lease of the Equipment described
therein and Lessee's obligation to pay rent
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and perform all other obligations thereunder and under the Lease are not subject
to cancellation or termination by Lessee for any reason.
7. NO WARRANTIES BY LESSOR: LESSOR LEASES THE EQUIPMENT AS-IS, WHERE-IS,
AND WITH ALL FAULTS. LESSOR MAKES NO WARRANTIES OR REPRESENTATIONS, EXPRESS OR
IMPLIED, OF ANY KIND AS TO THE EQUIPMENT INCLUDING, WITHOUT LIMITATION: ITS
MERCHANTABILITY; ITS FITNESS FOR ANY PARTICULAR PURPOSE; ITS DESIGN, CONDITION,
QUALITY, CAPACITY, DURABILITY, CAPABILITY, SUITABILITY OR WORKMANSHIP; ITS NON-
INTERFERENCE WITH OR NON-INFRINGEMENT OF ANY PATENT, TRADEMARK, COPYRIGHT OR
OTHER INTELLECTUAL PROPERTY RIGHT; OR ITS COMPLIANCE WITH ANY LAW, RULE,
SPECIFICATION, PURCHASE ORDER OR CONTRACT PERTAINING THERETO. Lessor hereby
assigns to Lessee the benefit of any assignable manufacturer's or supplier's
warranties, but Lessor, at Lessee's written request, will cooperate with Lessee
in pursuing any remedies Lessee may have under such warranties. Any action taken
with regard to warranty claims against any manufacturer or supplier by Lessee
will be at Lessee's sole expense. LESSOR MAKES NO REPRESENTATIONS OR WARRANTIES,
EXPRESS OR IMPLIED, OF ANY KIND AS TO THE FINANCIAL CONDITION OR FINANCIAL
STATEMENTS OF ANY PARTY OR AS TO THE TAX OR ACCOUNTING TREATMENT OR CONSEQUENCES
OF THE LEASE, THE EQUIPMENT OR THE RENTAL PAYMENTS.
8. INSURANCE: Lessee at its sole expense shall at all times keep each item
of Equipment insured against all risks of loss or damage from every cause
whatsoever for an amount not less than the greater of the full replacement value
or the Lessor's Cost of such item of Equipment. Lessee at its sole expense shall
at all times carry public liability and property damage insurance in amounts
satisfactory to Lessor protecting Lessee and Lessor from liabilities for
injuries to persons and damage to property of others relating in any way to the
Equipment. All insurers shall be reasonably satisfactory to Lessor. Lessee shall
deliver to Lessor satisfactory evidence of such coverage. Proceeds of any
insurance covering damage or loss of the Equipment shall be payable to Lessor as
loss payee and shall, at Lessor's option, be applied toward (a) the replacement,
restoration or repair of the Equipment, or (b) payment of the obligations of
Lessee under the Lease. If an event of default occurs and is continuing, or if
Lessee fails to make timely payments due under Section 9 hereof, then Lessee
automatically appoints Lessor as Lessee's attorney-in-fact with full power and
authority in the place of Lessee and in the name of Lessee or Lessor to make
claim for, receive payment of, and sign and endorse all documents, checks or
drafts for loss or damage under any such policy. Each insurance policy will
require that the insurer give Lessor at least 30 days prior written notice of
any cancellation of such policy and will require that Lessor's interests remain
insured regardless of any act, error, omission, neglect or misrepresentation of
Lessee. The insurance maintained by Lessee shall be primary without any right of
contribution from insurance which may be maintained by Lessor.
9. LOSS AND DAMAGE: (a) Lessee bears the entire risk of loss, theft,
damage or destruction of Equipment in whole or in part from any reason
whatsoever ("Casualty Loss"). No Casualty Loss to Equipment shall relieve Lessee
from the obligation to pay rent or from any other obligation under the Lease. In
the event of Casualty Loss to any item of Equipment, Lessee shall immediately
notify Lessor of the same and Lessee shall, if so directed by Lessor,
immediately repair the same. If Lessor determines that any item of Equipment has
suffered a Casualty Loss beyond repair ("Lost Equipment"), then Lessee, at the
option of Lessor, shall: (1) immediately replace the Lost Equipment with similar
equipment in good repair, condition and working order free and clear of any
Liens and deliver to Lessor a bill of sale covering the replacement equipment,
in which event such replacement equipment shall automatically be Equipment under
the Lease; or (2) On the rent payment date which is at least 30 but no more than
60 days after the date of the Casualty Loss, pay to Lessor all amounts then due
and payable by Lessee under the Lease for the Lost Equipment plus the Stipulated
Loss Value for such Lost Equipment as of the date of the Casualty Loss. Upon
payment by Lessee of all amounts due under the above clause (2), the lease of
the Lost Equipment will terminate and Lessor shall transfer to Lessee all of
Lessor's right, title and interest in such Equipment on an "as-is, where-is"
basis with all faults, without recourse and without representation or warranty
of any kind, express or implied.
(b) "Stipulated Loss Value" of any item of Equipment during its Lease Term
equals the present value discounted in arrears to the applicable date at the
applicable SLV Discount Rate of (1) the remaining rents and all other amounts
[including, without limitation, any balloon payment and, as to a terminal rental
adjustment clause ("TRAC") lease, the TRAC value stated in the Schedule, and any
other payments required to be paid by Lessee at the end of the applicable Lease
Term] payable under the Lease for such item on and after such date to the end of
the applicable Lease Term and (2) an amount equal to the Economic Value of the
Equipment. For any item of Equipment, "Economic Value" means the Fair Market
Value of the Equipment at the end of the applicable Lease Term as originally
anticipated by Lessor at the Commencement Date of the applicable Schedule;
provided, that Lessee agrees that such value shall be determined by the books of
Lessor as of the Commencement Date of the applicable Schedule. After the payment
of all rent due under the applicable Schedule and the expiration of the Lease
Term of any item of Equipment, the Stipulated Loss Value of such item equals the
Economic Value of such item. Stipulated Loss Value shall also include any Taxes
payable by Lessor in connection with its receipt thereof. For any item of
Equipment, "SLV Discount Rate" means an interest rate equal to the Prime Rate in
effect on the Commencement Date of the Schedule for such item minus two
percentage points.
10. TAX BENEFITS INDEMNITY. (a) The Lease has been entered into on the
basis that Lessor shall be entitled to such deductions, credits and other tax
benefits as are provided by federal, state and local income tax law to an owner
of the Equipment (the "Tax Benefits") including, without limitation: (1)
modified accelerated cost recovery deductions on each item
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of Equipment under Section 168 of the Code (as defined below) in an amount
determined commencing with the taxable year in which the Commencement Date of
the applicable Schedule occurs, using the maximum allowable depreciation method
available under Section 168 of the Code, using a recovery period (as defined in
Section 168 of the Code) reasonably determined by Lessor, and using an initial
adjusted basis which is equal to the Lessor's Cost of such item; (2)
amortization of the expenses paid by Lessor in connection with the Lease on a
straight-line basis over the term of the applicable Schedule; and (3) Lessor's
federal taxable income will be subject to the maximum rate on corporations in
effect under the Code as of the Commencement Date of the applicable Schedule.
(b) If on any one or more occasions (1) Lessor shall lose, shall not have
or shall lose the right to claim all or any part of the Tax Benefits, (2) there
shall be reduced, disallowed, recalculated or recaptured all or any part of the
Tax Benefits, or (3) all or any part of the Tax Benefits is reduced by a change
in law or regulation (each of the events described in subparagraphs 1, 2 or 3 of
this paragraph (b) will be referred to as a "Tax Loss"), then, upon 30 days
written notice by Lessor to Lessee that a Tax Loss has occurred, Lessee shall
pay Lessor an amount which, in the reasonable opinion of Lessor and after the
deduction of all taxes required to be paid by Lessor with respect to the receipt
of such amount, will provide Lessor with the same after-tax net economic yield
which was originally anticipated by Lessor as of the Commencement Date of the
applicable Schedule.
(c) A Tax Loss shall occur upon the earliest of: (1) the happening of any
event (such as disposition or change in use of an item of Equipment) which may
cause such Tax Loss; (2) Lessor's payment to the applicable taxing authority of
the tax increase resulting from such Tax Loss; or (3) the adjustment of Lessor's
tax return to reflect such Tax Loss.
(d) Lessor shall not be entitled to payment under this section for any Tax
Loss caused solely by one or more of the following events: (1) a disqualifying
sale or disposition of an item of Equipment by Lessor prior to any default by
Lessee; (2) Lessor's failure to timely or properly claim the Tax Benefits in
Lessor's tax return; (3) a disqualifying change in the nature of Lessor's
business or liquidation thereof; (4) a foreclosure by any person holding through
Lessor a security interest on an item of Equipment which foreclosure results
solely from an act of Lessor; or (5) Lessor's failure to have sufficient taxable
income or tax liability to utilize the Tax Benefits.
(e) "Code" shall mean the Internal Revenue Code of 1986, as amended. For
the purposes of this section 10, the term "Lessor" shall include any affiliate
group (within the meaning of section 1504 of the Code) of which Lessor is a
member for any year in which a consolidated income tax return is filed for such
affiliated group. Lessee's obligations under this section shall survive the
expiration, cancellation or termination of the Lease.
11. GENERAL TAX INDEMNITY: Lessee will pay, and will defend, indemnify and
hold Lessor harmless on an after-tax basis from, any and all Taxes (as defined
below) and related audit and contest expenses on or relating to (a) any of the
Equipment, (b) the Lease, (c) purchase, acceptance, ownership, lease,
possession, use, operation, transportation, return or other disposition of any
of the Equipment, and (d) rentals or earnings relating to any of the Equipment
or the Lease. "Taxes" means present and future taxes or other governmental
charges that are not based on the net income of Lessor, whether they are
assessed to or payable by Lessee or Lessor, including, without limitation (i)
sales, use, excise, licensing, registration, titling, franchise, business and
occupation, gross receipts, stamp and personal property taxes, (ii) levies,
imposts, duties, assessments, charges and withholdings, (iii) penalties, fines,
and additions to tax and (iv) interest on any of the foregoing. Unless Lessor
elects otherwise, Lessor will prepare and file all reports and returns relating
to any Taxes and will pay all Taxes to the appropriate taxing authority. Lessee
will reimburse Lessor for all such payments promptly on request. On or after any
applicable assessment/levy/lien date for any personal property Taxes relating to
any Equipment, Lessee agrees that upon Lessor's request Lessee shall pay to
Lessor the personal property Taxes which Lessor reasonably anticipates will be
due, assessed, levied or otherwise imposed on any Equipment during its Lease
Term. If Lessor elects in writing, Lessee will itself prepare and file all such
reports and returns, pay all such Taxes directly to the taxing authority, and
send Lessor evidence thereof. Lessee's obligations under this section shall
survive the expiration, cancellation or termination of the Lease.
12. GENERAL INDEMNITY: Lessee assumes all risk and liability for, and shall
defend, indemnify and keep Lessor harmless on an after-tax basis from, any and
all liabilities, obligations, losses, damages, penalties, claims, actions,
suits, costs and expenses, including reasonable attorney fees and expenses, of
whatsoever kind and nature imposed on, incurred by or asserted against Lessor,
in any way relating to or arising out of the manufacture, purchase, acceptance,
rejection, ownership, possession, use, selection, delivery, lease, operation,
condition, sale, return or other disposition of the Equipment or any part
thereof (including, without limitation, any claim for latent or other defects,
whether or not discoverable by Lessee or any other person, any claim for
negligence, tort or strict liability, any claim under any environmental
protection or hazardous waste law and any claim for patent, trademark or
copyright infringement). Lessee will not indemnify Lessor under this section for
loss or liability arising from events which occur after the Equipment has been
returned to Lessor or for loss or liability caused directly and solely by the
gross negligence or willful misconduct of Lessor. In this section, "Lessor" also
includes any director, officer, employee, agent, successor or assign of Lessor.
Lessee's obligations under this section shall survive the expiration,
cancellation or termination of the Lease.
13. PERSONAL PROPERTY: Lessee represents and agrees that the Equipment is,
and shall at all times remain, separately identifiable personal property. Upon
Lessor's request, Lessee shall furnish Lessor a landlord's and/or mortgagee's
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waiver and consent to remove all Equipment. Lessor may display notice of its
interest in the Equipment by any reasonable identification. Lessee shall not
alter or deface any such indicia of Lessor's interest.
14. DEFAULT: Each of the following events shall constitute an event of
default under the Lease: (a) Lessee fails to pay any rent or other amount due
under the Lease within ten days of its due date; or (b) Lessee fails to perform
or observe any of its obligations in Sections 8, 18, or 22 hereof; or (c) Lessee
fails to perform or observe any of its other obligations in the Lease for more
than 30 days after Lessor notifies Lessee of such failure; or (d) Lessee or any
Lessee affiliate defaults in the payment, performance or observance of any
obligation under any loan, credit agreement or other lease in which Lessor or
any subsidiary (direct or indirect) of Bank One Corporation (or its successors
or assigns) is the creditor or lessor; or (e) any statement, representation or
warranty made by Lessee in the Lease, in any Schedule or in any document,
certificate or financial statement in connection with the Lease proves at any
time to have been untrue or misleading in any material respect as of the time
when made; or (f) Lessee becomes insolvent or bankrupt, or Lessee admits its
inability to pay its debts as they mature, or Lessee makes an assignment for the
benefit of creditors, or Lessee applies for, institutes or consents to the
appointment of a receiver, trustee or similar official for Lessee or any
substantial part of its property or any such official is appointed without
Lessee's consent, or Lessee applies for, institutes or consents to any
bankruptcy, insolvency, reorganization, debt moratorium, liquidation or similar
proceeding relating to Lessee or any substantial part of its property under the
laws of any jurisdiction or any such proceeding is instituted against Lessee
without stay or dismissal for more than 30 days, or Lessee commences any act
amounting to a business failure or a winding up of its affairs, or Lessee ceases
to do business as a going concern; or (g) with respect to any guaranty, letter
of credit, pledge agreement, security agreement, mortgage, deed of trust, debt
subordination agreement or other credit enhancement or credit support agreement
(whether now existing or hereafter arising) signed or issued by any party in
connection with all or any part of Lessee's obligations under the Lease, the
party signing or issuing any such agreement defaults in its obligations
thereunder or any such agreement shall cease to be in full force and effect or
shall be declared to be null, void, invalid or unenforceable by the party
signing or issuing it; or (h) there shall occur in Lessor's reasonable opinion
any material adverse change in the financial condition, business or operations
of Lessee.
As used in this section 14, the term "Lessee" also includes any guarantor
(whether now existing or hereafter arising) of all or any part of Lessee's
obligations under the Lease and/or any issuer of a letter of credit (whether now
existing or hereafter arising) relating to all or any part of Lessee's
obligations under the Lease, and the term "Lease" also includes any guaranty or
letter of credit (whether now existing or hereafter arising) relating to all or
any part of Lessee's obligations under the Lease.
15. REMEDIES. If any event of default exists, Lessor may exercise in any
order one or more of the remedies described in the lettered subparagraphs of
this section, and Lessee shall perform its obligations imposed thereby:
(a) Lessor may require Lessee to return any or all Equipment as provided in
the Lease.
(b) Lessor or its agent may repossess any or all Equipment wherever found,
may enter the premises where the Equipment is located and disconnect, render
unusable and remove it, and may use such premises without charge to store or
show the Equipment for sale.
(c) Lessor may sell any or all Equipment at public or private sale, with or
without advertisement or publication, may release or otherwise dispose of it or
may use, hold or keep it.
(d) Lessor may require Lessee to pay to Lessor on a date specified by
Lessor, with respect to any or all Equipment (i) all accrued and unpaid rent,
late charges and other amounts due under the Lease on or before such date, plus
(ii) as liquidated damages for loss of a bargain and not as a penalty, and in
lieu of any further payments of rent, the Stipulated Loss Value of the Equipment
on such date, plus (iii) interest at the Overdue Rate on the total of the
foregoing ("Overdue Rate" means an interest rate per annum equal to the higher
of 18% or 2% over the Prime Rate, but not to exceed the highest rate permitted
by applicable law). The parties acknowledge that the foregoing money damage
calculation reasonably reflects Lessor's anticipated loss with respect to the
Equipment and the related Lease resulting from the event of default. If an event
of default under section 14(f) of this Master Lease Agreement exists, then
Lessee will be automatically liable to pay Lessor the foregoing amounts as of
the next rent payment date unless Lessor otherwise elects in writing.
(e) Lessee shall pay all costs, expenses and damages incurred by Lessor
because of the event of default or its actions under this section, including,
without limitation any collection agency and/or attorney fees and expenses, any
costs related to the repossession, safekeeping, storage, repair, reconditioning
or disposition of the Equipment and any incidental and consequential damages.
(f) Lessor may terminate the Lease and/or any or all Schedules, may sue to
enforce Lessee's performance of its obligations under the Lease and/or may
exercise any other right or remedy then available to Lessor at law or in equity.
Lessor is not required to take any legal process or give Lessee any notice
before exercising any of the above remedies. None of the above remedies is
exclusive, but each is cumulative and in addition to any other remedy available
to Lessor. Lessor's exercise of one or more remedies shall not preclude its
exercise of any other remedy. No action taken by Lessor shall release Lessee
from any of its obligations to Lessor. No delay or failure on the part of Lessor
to exercise any right hereunder
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shall operate as a waiver thereof, nor as an acquiescence in any default, nor
shall any single or partial exercise of any right preclude any other exercise
thereof or the exercise of any other right. After any default, Lessor's
acceptance of any payment by Lessee under the Lease shall not constitute a
waiver by Lessor of such default, regardless of Lessor's knowledge or lack of
knowledge at the time of such payment, and shall not constitute a reinstatement
of the Lease if the Lease has been declared in default by Lessor, unless Lessor
has agreed in writing to reinstate the Lease and to waive the default.
If Lessor actually repossesses any Equipment, then it will use commercially
reasonable efforts under the then current circumstances to attempt to mitigate
its damages; provided, that Lessor shall not be required to sell, re-lease or
otherwise dispose of any Equipment prior to Lessor enforcing any of the remedies
described above. Lessor may sell or re-lease the Equipment in any manner it
chooses, free and clear of any claims or rights of Lessee and without any duty
to account to Lessee with respect thereto except as provided below. If Lessor
actually sells or re-leases the Equipment, it will credit the net proceeds of
any sale of the Equipment, or the net present value (discounted at the then
current Prime Rate) of the rents payable under any new lease of the Equipment,
against and up to (but not exceeding) the Stipulated Loss Value of the Equipment
and any other amounts Lessee owes Lessor, or will reimburse Lessee for and up to
(but not exceeding) Lessee's payment thereof. The term "net" as used above shall
mean such amount after deducting the costs and expenses described in clause (e)
above of this section. If Lessor elects in writing not to sell or re-lease any
Equipment, it will similarly credit or reimburse Lessee for Lessor's reasonable
estimate of such Equipment's Fair Market Value.
16. LESSOR'S RIGHT TO PERFORM: If Lessee fails to make any payment under
the Lease or fails to perform any of its other agreements in the Lease
(including, without limitation, its agreement to provide insurance coverage as
stated in the Lease), Lessor may itself make such payment or perform such
agreement, and the amount of such payment and the amount of the expenses of
Lessor incurred in connection with such payment or performance shall be deemed
to be additional rent, payable by Lessee on demand.
17. FINANCIAL REPORTS: Lessee agrees to furnish to Lessor: (a) annual
financial statements setting forth the financial condition and results of
operation of Lessee (financial statements shall include balance sheet, income
statement and changes in financial position and all notes thereto) within 120
days of the end of each fiscal year of Lessee; (b) upon Lessor's request,
quarterly financial statements setting forth the financial condition and results
of operation of Lessee within 60 days of the end of each of the first three
fiscal quarters of Lessee; and (c) such other financial information as Lessor
may from time to time reasonably request including, without limitation,
financial reports filed by Lessee with federal or state regulatory agencies. All
such financial information shall be prepared in accordance with generally
accepted accounting principles.
18. NO CHANGES IN LESSEE: Lessee shall not: (a) liquidate, dissolve or
suspend business; (b) sell, transfer or otherwise dispose of all or a majority
of its assets, except that Lessee may sell its inventory in the ordinary course
of its business; (c) enter into any merger, consolidation or similar
reorganization unless it is the surviving corporation; (d) transfer all or any
substantial part of its operations or assets outside of the United States of
America; or (e) without 30 days advance written notice to Lessor, change its
name or chief place of business.
19. LATE CHARGES: If any rent or other amount payable under the Lease is
not paid when due, then as compensation for the administration and enforcement
of Lessee's obligation to make timely payments, Lessee shall pay with respect to
each overdue payment on demand an amount equal to the greater of fifteen dollars
($15.00) or five percent (5%) of the each overdue payment (but not to exceed the
highest late charge permitted by applicable law) plus any collection agency fees
and expenses.
20. NOTICES; POWER OF ATTORNEY: (a) Service of all notices under the Lease
shall be sufficient if given personally or couriered or mailed to the party
involved at its respective address set forth herein or at such other address as
such party may provide in writing from time to time. Any such notice mailed to
such address shall be effective three days after deposit in the United States
mail with postage prepaid. (b) With respect to any power of attorney covered by
the Lease, the powers conferred on Lessor thereby: are powers coupled with an
interest; are irrevocable; are solely to protect Lessor's interests under the
Lease; and do not impose any duty on Lessor to exercise such powers. Lessor
shall be accountable solely for amounts it actually receives as a result of its
exercise of such powers.
21. ASSIGNMENT BY LESSOR: Lessor and any assignee of Lessor, with or
without notice to or consent of Lessee, may sell, assign, transfer or grant a
security interest in all or any part of Lessor's rights, obligations, title or
interest in the Equipment, the Lease, any Schedule or the amounts payable under
the Lease or any Schedule to any entity ("transferee"). The transferee shall
succeed to all of Lessor's rights in respect to the Lease (including, without
limitation, all rights to insurance and indemnity protection described in the
Lease). Lessee agrees to sign any acknowledgement and other documents reasonably
requested by Lessor or the transferee in connection with any such transfer
transaction. Lessee, upon receiving notice of any such transfer transaction,
shall comply with the terms and conditions thereof. Lessee agrees that it shall
not assert against any transferee any claim, defense, setoff, deduction or
counterclaim which Lessee may now or hereafter be entitled to assert against
Lessor. Unless otherwise agreed in writing, the transfer transaction shall not
relieve Lessor of any of its obligations to Lessee under the Lease and Lessee
agrees that the transfer transaction shall not be construed as being an
assumption of such obligations by the transferee.
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22. NO ASSIGNMENT, SUBLEASE OR LIEN BY LESSEE: LESSEE SHALL NOT, DIRECTLY
OR INDIRECTLY (a) MORTGAGE, ASSIGN, SELL, TRANSFER, OR OTHERWISE DISPOSE OF THE
LEASE OR ANY INTEREST THEREIN OR THE EQUIPMENT OR ANY PART THEREOF, OR (b)
SUBLEASE, RENT, LEND OR TRANSFER POSSESSION OR USE OF THE EQUIPMENT OR ANY PART
THEREOF TO ANY PARTY, OR (c) CREATE, INCUR, GRANT, ASSUME OR ALLOW TO EXIST ANY
LIEN ON THE LEASE, ANY SCHEDULE, THE EQUIPMENT OR ANY PART THEREOF.
23. EXPIRATION OF LEASE TERM: (a) At least 90 days (or earlier if
otherwise specified), but no more than 270 days prior to expiration of the Lease
Term of each Schedule, Lessee shall give Lessor written notice of its electing
one of the following options for all (but not less than all) of the Equipment
covered by such Schedule: return the Equipment under clause (b) below; or
purchase the Equipment under clause (c) below. The election of an option shall
be irrevocable. If Lessee fails to give timely notice of its election, it shall
be deemed to have elected to return the Equipment.
(b) If Lessee elects or is deemed to have elected to return the Equipment
at the expiration of the Lease Term of a Schedule or if Lessee is obligated at
any time to return the Equipment, then Lessee shall, at its sole expense and
risk, deinstall, disassemble, pack, crate, insure and return the Equipment to
Lessor (all in accordance with applicable industry standards) at any location in
the continental United States of America selected by Lessor. The Equipment shall
be in the same condition as when received by Lessee, reasonable wear, tear and
depreciation resulting from normal and proper use excepted (or, if applicable,
in the condition set forth in the Lease or the Schedule), shall be in good
operating order and maintenance as required by the Lease, shall be certified as
being eligible for any available manufacturer's maintenance program, shall be
free and clear of any Liens as required by the Lease, shall comply with all
applicable laws and regulations and shall include all manuals, specifications,
repair and maintenance records and similar documents. Until Equipment is
returned as required above, all terms of the Lease shall remain in full force
and effect including, without limitation, obligations to pay rent and insure the
Equipment; provided, that after the expiration of any Schedule and before Lessee
has completed its return of the Equipment or its purchase option (if elected),
the term of the lease of the Equipment covered by such Schedule shall be month-
to-month or such shorter period as may be specified by Lessor.
(c) If Lessee gives Lessor timely notice of its election to purchase
Equipment, then on the expiration date of the applicable Schedule Lessee shall
purchase all (but not less than all) of the Equipment and shall pay to Lessor
the Fair Market Value of the Equipment plus all Taxes (other than income taxes
on Lessor's gains on such sale), costs and expenses incurred or paid by Lessor
in connection with such sale plus all accrued but unpaid amounts due with
respect to the Equipment and/or the Schedule. The Stipulated Loss Value or
Economic Value of any item of Equipment shall have no bearing or influence on
the determination of Fair Market Value under this clause (c). Upon payment in
full of the above amounts, and if no default has occurred and is continuing
under the Lease, Lessor shall transfer title to such Equipment to Lessee "as-is,
where-is" with all faults and without recourse to Lessor and without any
representation or warranty of any kind whatsoever by Lessor, express or implied.
(d) For purposes of the purchase option of the Lease, the determination of
the Fair Market Value of any Equipment shall be determined (1) without deducting
any costs of dismantling or removal from the location of use, (2) on the
assumption that the Equipment is in the condition required by the applicable
return and maintenance provisions of the Lease and is free and clear of any
Liens as required by the Lease, and (3) shall be determined by mutual agreement
of Lessee and Lessor or, if Lessor and Lessee are not able to agree on such
value, by the Appraisal Procedure. "Appraisal Procedure" means the determination
of Fair Market Value by an independent appraiser acceptable to Lessor and
Lessee, or, if the parties are unable to agree on an acceptable appraiser, by
averaging the valuation (disregarding the one which differs the most from the
other two) of three independent appraisers, the first appointed by Lessor, the
second appointed by Lessee and the third appointed by the first two appraisers.
For purposes of the "Remedies" section of the Lease, the Fair Market Value shall
be determined by Lessor in good faith and any such valuation shall be on an "as-
is, where is" basis without regard to the first sentence of clause (d). Lessee,
at its sole expense, shall pay all fees, costs and expenses of the above
described appraisers.
24. GOVERNING LAW: THE INTERPRETATION, CONSTRUCTION AND VALIDITY OF THE
LEASE SHALL BE GOVERNED BY THE LAWS OF THE STATE OF OHIO. WITH RESPECT TO ANY
ACTION BROUGHT BY LESSOR AGAINST LESSEE TO ENFORCE ANY TERM OF THE LEASE, LESSEE
HEREBY IRREVOCABLY CONSENTS TO THE JURISDICTION AND VENUE OF ANY STATE OR
FEDERAL COURT IN THE FRANKLIN COUNTY, OHIO, WHERE LESSOR HAS ITS PRINCIPAL PLACE
OF BUSINESS AND WHERE PAYMENTS ARE TO BE MADE BY LESSEE.
25. MISCELLANEOUS: (a) Subject to the limitations herein, the Lease shall
be binding upon and inure to the benefit of the parties hereto and their
respective heirs, administrators, successors and assigns. (b) This Master Lease
Agreement and each Schedule may be executed in any number of counterparts, which
together shall constitute a single instrument. Only one counterpart of each
Schedule shall be marked "Lessor's Original" and all other counterparts shall be
marked "Duplicate". A security interest in any Schedule may be created through
transfer and possession only of the counterpart marked "Lessor's Original". (c)
Section and paragraph headings in this Master Lease Agreement and the Schedules
are for convenience only and have no independent meaning. (d) The terms of the
Lease shall be severable and if any term thereof is declared unconscionable,
invalid, illegal or void, in whole or in part, the decision so holding shall not
be construed as impairing the other
Page 6
<PAGE>
terms of the Lease and the Lease shall continue in full force and effect as if
such invalid, illegal, void or unconscionable term were not originally included
herein. (e) All indemnity obligations of Lessee under the Lease and all rights,
benefits and protections provided to Lessor by warranty disclaimers shall
survive the cancellation, expiration or termination of the Lease. (f) Lessor
shall not be liable to Lessee for any indirect, consequential or special damages
for any reason whatsoever. (g) Each payment made by Lessee shall be applied by
Lessor in such manner as Lessor determines in its discretion which may include,
without limitation, application as follows: first, to accrued late charges;
second, to accrued rent; and third, the balance to any other amounts then due
and payable by Lessee under the Lease. (h) If the Lease is signed by more than
one Lessee, each of such Lessees shall be jointly and severally liable for
payment and performance of all of Lessee's obligations under the Lease.
26. ENTIRE AGREEMENT: THE LEASE REPRESENTS THE FINAL, COMPLETE AND ENTIRE
AGREEMENT BETWEEN THE PARTIES HERETO. THERE ARE NO ORAL OR UNWRITTEN AGREEMENTS
OR UNDERSTANDINGS AFFECTING THE LEASE OR THE EQUIPMENT. Lessee agrees that
Lessor is not the agent of any manufacturer or supplier, that no manufacturer or
supplier is an agent of Lessor, and that any representation, warranty or
agreement made by manufacturer, supplier or by their employees, sales
representatives or agents shall not be binding on Lessor.
27. JURY WAIVER: ALL PARTIES TO THIS MASTER LEASE AGREEMENT WAIVE ALL
RIGHTS TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY ANY
PARTY AGAINST ANY OTHER PARTY ON ANY MATTER WHATSOEVER ARISING OUT OF, IN
CONNECTION WITH OR IN ANY WAY RELATED TO THIS MASTER LEASE AGREEMENT.
IN WITNESS WHEREOF, the undersigned have duly executed and delivered this
Master Lease Agreement as of the date first written above.
READY MIX, INC. BANC ONE LEASING CORPORATION
(Lessee) (Lessor)
By: /s/ Kenneth D. Nelson By: /s/ [SIGNATURE ILLEGIBLE]
---------------------------- ----------------------------------
Title: Vice President Title: [ILLEGIBLE]
------------------------- -------------------------------
Lessee's Witness: /s/ Julie L. Bergo
-----------------------------
Regardless of any prior, present or future oral agreement or course of
dealing, no term or condition of the Lease may be amended, modified, waived,
discharged, cancelled or terminated except by a written instrument signed by the
party to be bound; except Lessee authorizes Lessor to complete the Acceptance
Date of each Schedule and the serial numbers of any Equipment.
READY MIX, INC. BANC ONE LEASING CORPORATION
(Lessee) (Lessor)
By: /s/ Kenneth D. Nelson By: /s/ [SIGNATURE ILLEGIBLE]
---------------------------- ------------------------------
Title: Vice President Title: [ILLEGIBLE]
------------------------ ---------------------------
Page 7
<PAGE>
EXHIBIT 10.111
CONTRACT AGREEMENT
THIS AGREEMENT, made and entered into this 24TH day of AUGUST, 1999. by and
between the STATE OF ARIZONA, acting by and through its State Engineer duly
authorized by the 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.
089A YV 355 H274101C STP-366(19)P
PRESCOTT-FLAGSTAFF HIGHWAY
(Cottonwood-Cornville Road)
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 am 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 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 unacceptable materials in constructing the work; or because of any act or
omission, neglect or misconduct of said contractor; or because of any claims or
amounts recovered from any infringements of patent, trademark or copyright; or
from any claims or amounts arising or recovered under the Workmen's Compensation
Act or any other law, ordinance, order or decree, except the contractor is not
required to indemnify or save harmless the State from liability arising from the
negligence of the State.
The contractor shall indemnify and save harmless any county or incorporated
city, its officers and employees, within the limits of which county or
incorporated city work is being performed, all in the same manner and to the
same extent as provided in the above paragraph.
IT IS FURTHER UNDERSTOOD AND AGREED that all work required to be done under
this contract in excess of the funds now appropriated and budgeted for this
project shall not be done nor any obligation incurred therefor until such time
as the Legislature appropriates the additional funds and the same are budgeted
for this project by the Arizona Department of Transportation and in that event
the parties hereto are bound to continue performance of this contract to the
extent permitted by the funds so appropriated and budgeted.
In the event that no funds are appropriated or budgeted for this project
for the succeeding fiscal year, then this contract shall be null and void,
except as to that portion for which funds have now been appropriated and
budgeted, therefore, and no right of action or damages shall accrue to the
benefit of the parties hereto as to that portion of the contract that may so
become null and void.
All parties are hereby put on notice that this contract (agreement) is
subject to cancellation by the Governor pursuant to Arizona Revised Statutes
Section 38-511.
IT IS ALSO UNDERSTOOD AND AGREED that this contract is subject to A.R.S.
28-1824, 28-1825, 28-1826, together with all other limitations pursuant to the
applicable laws of the State of Arizona relating to public contracts and
expenditures.
089A YV 355 H274101C STP-366(19)P
PRESCOTT-FLAGSTAFF HIGHWAY
(Cottonwood-Cornville Road)
Witness our hands and seals this 24TH day of AUGUST 19 99
---- ----------- ----
STATE OF ARIZONA
By: /s/ [ILLEGIBLE]
--------------------------------------
Department of Transportation
EVIDENCE OF AUTHORITY TO SIGN
THE CONTRACT MUST BE ON FILE
WITH THE DEPARTMENT, OTHERWISE
IT MUST BE FURNISHED WITH THE
PROPOSAL.
PARTY OF THE FIRST PART
____________________________________________
By: /s/ Bradley E. Larson President
----------------------------------------
Contractor
Meadow Valley Contractors, Inc.
Attest: /s/ Robert W. Bottcher PARTY OF THE SECOND PART
-----------------------
Seal
Article IX
Revised 6/15/98
Contract Agreement
Sheet 2 of 2
<PAGE>
Page 15 of 16
BID SCHEDULE
089A YV 355 H274101C
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Item No. Item Description Unit Quantity Unit Price Extended Amount
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
CONCRETE BOX CULVERT, STA 236+57.90
- -------------------------------------------------------------------------------------------------------------------------------
2030401 D DRAINAGE EXCAVATION CU.YD 70 5.00 350.00
- -------------------------------------------------------------------------------------------------------------------------------
2030501 D STRUCTURAL EXCAVATION CU.YD 755 10.00 7,550.00
- -------------------------------------------------------------------------------------------------------------------------------
2030506 D STRUCTURE BACKFILL CU.YD 463 20.00 9,260.00
- -------------------------------------------------------------------------------------------------------------------------------
6010002 D STRUCTURAL CONCRETE (CLASS S) (F'C = 3,000) CU.YD 279 275.00 76,725.00
- -------------------------------------------------------------------------------------------------------------------------------
6050002 D REINFORCING STEEL LB 46,236 0.40 18,494.40
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
"A" Amount
----------------------
CONSTRUCTION COST BID: 4,494,190.12
----------------------
<PAGE>
EXHIBIT 10.112
CONTRACT AGREEMENT
THIS AGREEMENT, made and entered into this 27TH day of SEPTEMBER , 1999
-------- ----------- ----
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.
040 AP 320 H443301C AC-IM-40-5(103)P
HOLBROOK - LUPTON HWY
(Pinta T.I. - McCarrell T.I.)
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 unacceptable materials in constructing the work; or because of any act or
omission, neglect or misconduct of said contractor; or because of any claims or
amounts recovered from any infringements of patent, trademark or copyright; or
from any claims or amounts arising or recovered under the Workmen's Compensation
Act or any other law, ordinance, order or decree, except the contractor is not
required to indemnify or save harmless the State from liability arising from
the negligence of the State.
The contractor shall indemnify and save harmless any county or incorporated
city, its officers and employees, within the limits of which county or
incorporated city work is being performed, all in the same manner and to the
same extent as provided in the above paragraph.
IT IS FURTHER UNDERSTOOD AND AGREED that all work required to be done under
this contract in excess of the funds now appropriated and budgeted for this
project shall not be done nor any obligation incurred therefor until such time
as the Legislature appropriates the additional funds and the same are budgeted
for this project by the Arizona Department of Transportation and in that event
the parties hereto are bound to continue performance of this contract to the
extent permitted by the funds so appropriated and budgeted.
In the event that no funds are appropriated or budgeted for this project
for the succeeding fiscal year, then this contract shall be null and void,
except as to that portion for which funds have now been appropriated and
budgeted, therefore, and no right of action or damages shall accrue to the
benefit of the parties hereto as to that portion of the contract that may so
become null and void.
All parties are hereby put on notice that this contract (agreement) is
subject to cancellation by the Governor pursuant to Arizona Revised Statutes
Section 38-511.
IT IS ALSO UNDERSTOOD AND AGREED that this contract is subject to A.R.S.
28-1824, 28-1825, 28-1826, together with all other limitations pursuant to the
applicable laws of the State of Arizona relating to public contracts and
expenditures.
040 AP 320 H443301C AC-IM-40-5(103)P
HOLBROOK - LUPTON HWY
(Pinta T.I. - McCarrell T.I.)
Witness our hands and seals this 27TH day of SEPTEMBER 1999
------ ----------- ----
STATE OF ARIZONA
By: /s/ [ILLEGIBLE]^^
----------------------------------
Department of Transportation
EVIDENCE OF AUTHORITY TO SIGN
THE CONTRACT MUST BE ON FILE
WITH THE DEPARTMENT, OTHERWISE
IT MUST BE FURNISHED WITH THE
PROPOSAL.
PARTY OF THE FIRST PART
Meadow Valley Contractors, Inc.
-------------------------------------
By: /s/ Bradley E. Larson
----------------------------------
Contractor
Attest: /s/ [ILLEGIBLE]^^ PARTY OF THE SECOND PART
-------------------------
Seal
Sheet 2 of 2
<PAGE>
Page 11 of 11
BID SCHEDULE
040 AP 318 H443301C
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Item No. Item Description Unit Quantity Unit Price Extended Amount
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
McCARRELL T.I.: BRIDGE NO. 710
- ------------------------------------------------------------------------------------------------------------------------------------
9240142 C MISCELLANEOUS WORK (MICROSILICA MODIFIED
CONCRETE FOR OVERLAY AND DECK REPAIR) CU.YD. 33 3,150.00 103,950.00
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
--------------------------------
BID TOTAL: 9,047,700.00
--------------------------------
<PAGE>
\<PAGE>
EXHIBIT 10.113
CONTRACT
THIS AGREEMENT, made and executed in Four (3) original counterparts this
26/th/ day of July ___________________ A.D. 1999 between the Utah Department of
Transportation, hereinafter called "Department," first party, and Meadow Valley
Contractor's, 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 Cherry Hill Interchange in Davis County, State of Utah, a
State Funded project, the same being identified as *HDP-9124(003) for the
approximate sum of Seventeen Million Five Hundred Twenty One Thousand and 00/100
Dollars ($17,521,000.00).
The Contractor further covenants and agrees that all of said work and labor
shall be done and performed in the best and most workmanlike manner and in
strict conformity with the plans, and specifications. The said plans and
specifications and the notice to contractors, instruction to bidders, the
proposal, special provisions and contract bond are hereby made a part of this
agreement as fully and to the same effect as if the same had been set forth at
length herein.
In consideration of the foregoing premises, the Department agrees to pay to
Contractor in the manner and in the amount provided in the said specification
and proposal.
IN WITNESS WHEREOF, the parties hereto have subscribed their names through
their proper officers thereunto duly authorized as of the day and year first
above written.
Attest: UTAH DEPARTMENT OF TRANSPORTATION
/s/ [ILLEGIBLE]^^
- ------------------------------ /s/ [ILLEGIBLE]^^
Secretary -----------------------------------------
Director of Transportation - First Party
Witnesses:
/s/ [ILLEGIBLE]^^
- ------------------------------
Meadow Valley Contractor's Inc.
______________________________ -----------------------------------------
Second Party
Approved as to form: by /s/ [ILLEGIBLE]^^
---------------------------------------
/s/ [ILLEGIBLE]^^ UTAH AREA MANAGER
- ------------------------------ ---------------------------------------
Assistant Attorney General Title
APPROVED _____________________ _______________________________________
Director of Finance Utah Contractor License Number
FUNDS AVAILABLE________________________
/s/ Janet Steadman 8/03/99
------------------------ -------------
Budget Officer Date
<PAGE>
EXHIBIT 10.114
CONTRACT AGREEMENT
THIS AGREEMENT, made and entered into this 30th day of December, 1999 by and
---- --------------
between the FLOOD CONTROL DISTRICT OF MARICOPA COUNTY, hereinafter called the
Owner, acting by and through its BOARD OF DIRECTORS, and Meadow Valley
-------------
Contractors, Inc., hereinafter called the Contractor.
- -----------------
WITNESSETH: That the said Contractor, for and in the consideration of the sum
of thirteen million, thirty-seven thousand, seven hundred forty-one dollars
- ---------------------------------------------------------------------------
($13,037,741.00) to be paid to him by the Owner, in the manner and at the times
- ---------------
hereinafter provided, and of the other covenants and agreements herein
contained, hereby agrees for himself, heirs, executors, administrators,
successors, and assigns as follows:
ARTICLE I - SCOPE OF WORK: THE Contractor shall construct, and complete in
a workmanlike and substantial manner and to the satisfaction of the Chief
-----
Engineer and General Manager, a project for the Flood Control District of
- ---------------------------- -------------------------
Maricopa County, designated as Contract FCD 99-05 - Phase 3 of the Santa
- --------------- -----------------------------------------
Collector Channel Project, and furnish at its own cost and expense all
- -------------------------
necessary machinery, equipment, tools, apparatus, materials, and labor to
complete the work in the most substantial and workmanlike manner according to
the Plans and Construction Specifications on file with the Flood Control
-------------
District of Maricopa County, 2801 West Durango Street, Phoenix, Arizona, and
- -----------------------------------------------------------------------
such modifications of the same and other directions that may be made by the
Flood Control District of Maricopa County as provided herein.
- -----------------------------------------
ARTICLE II - CONTRACT DOCUMENTS: The Construction Specifications, i.e.
Invitation to Bid, Plans, Standard Specifications and Details, Supplementary
General Conditions, Special Provisions, Addenda, if any, Proposal, Affidavits,
Performance Bond, Payment Bond, Certificates of Insurance, and Change Orders, if
any, are by this reference made a part of this Contract and shall have the same
effect as though all of the same were fully inserted herein.
ARTICLE III - TIME OF COMPLETION: The Contractor further covenants and
agrees at its own proper cost and expense, to do all work as aforesaid for the
construction of said improvements and to completely construct the same and
install the material therein, as called for by this agreement free and clear of
all claims, liens, and charges whatsoever, in the manner and under the
conditions specified within three hundred sixty-five (365) calendar days
following notice to proceed.
ARTICLE IV - PAYMENTS: For and in consideration of the faithful performance
of the work herein embraced as set forth in the Contract Documents, which are a
part hereof and in accordance with the directions of the Owner, through its
Engineer and to its satisfaction, the Owner agrees to pay the said Contractor
the amount earned, computed from actual quantities of work performed and
accepted or materials furnished at the unit bid price on the Proposal made a
part hereof, and to make such payment in accordance with the requirements of
A.R.S. Section 34-221, as amended. The Contractor agrees to discharge its
obligations and make payments to its subcontractors and suppliers in accordance
with A.R.S. Section 34-221.
Page 20 of 29
<PAGE>
ARTICLE V - TERMINATION: The Owner hereby gives notice that pursuant to
A.R.S. Section 38-511(A) this contract may be canceled without penalty or
further obligation within three years after execution if any person
significantly involved in initiation, negotiation, securing, drafting or
creating a contract on behalf of the Owner is, at any time while the contract or
any extension of the contract is in effect, an employee or agent of any other
party to the contract in any capacity or a consultant to any other party of the
contract with respect to the subject matter of the contract. Cancellation under
this section shall be effective when written notice from the Chief Engineer and
General Manager of the Owner is received by all of the parties to the contract.
In addition, the Owner may recoup any fee for commission paid or due to any
person significantly involved in initiation, negotiation, securing, drafting or
creating the contract on behalf of the Owner from any other party to the
contract arising as a result of the contract.
ARTICLE VI - NEGOTIATION CLAUSE: Recovery of damages related to expenses
incurred by the Contractor for a delay for which the Owner is responsible, which
is unreasonable under the circumstances and which was not within the
contemplation of the parties to the contract, shall be negotiated between the
Contractor and the Owner. This provision shall be construed so as to give full
effect to any provision in the contract which requires notice of delays,
provides for arbitration or other procedure for settlement or provides for
liquidated damages.
ARTICLE VII - COMPLIANCE WITH LAWS: The Contractor is required to comply
with all Federal, State and local ordinances and regulation. The Contractor's
signature on this contract certifies compliance with the provisions of the I-9
requirements of the Immigration Reform Control Act of 1986 for all personnel
that the Contractor and any subcontractors employ to complete this project. It
is understood that the Owner shall conduct itself in accordance with the
provisions of the Maricopa County Procurement Code.
ARTICLE VIII - MBE/WBE PROGRAM: The Owner will endeavor to ensure in every
way possible that minority and women-owned business enterprises shall have every
opportunity to participate in providing professional services, purchased goods,
and contractual services to the Owner without being discriminated against on the
grounds of race, religion, sex, age, disability, or national origin. The City of
Phoenix and Maricopa County Minority, Woman and Disadvantaged Business
Enterprise Program is incorporated by reference.
ARTICLE IX - ANTI-DISCRIMINATION PROVISION: The Contractor agrees not to
discriminate against any employee or applicant for employment because of race,
religion, color, sex, national origin, age, or disability and further agrees not
to engage in any unlawful employment practices. The Contractor further agrees to
insert the foregoing provision in all subcontracts hereunder.
Page 21 of 29
<PAGE>
IN WITNESS WHEREOF: Five (5) identical counterparts of this Contract, each
of which shall for all purposes be deemed an original thereof, have been duly
executed by the parties hereinabove named, on the date and year first above
written.
Meadow Valley Contractors, Inc.
- --------------------------------------
Party of the First Part
By /s/ Bradley E. Larson
-----------------------------------
(Printed Name) (Signature)
Title: BRADLEY E. LARSON PRESIDENT
-------------------------------
Date: 12/17/99
--------------------------------
07334324-B
- --------------------------------------
Tax Identification Number
FLOOD CONTROL DISTRICT OF MARICOPA COUNTY
PARTY OF THE SECOND PART
<TABLE>
<S> <C>
RECOMMENDED BY:
/s/ [ILLEGIBLE]^^ 12/24/99 By: /s/ [ILLEGIBLE]^^ 12/30/99
- ------------------------------------------------- ----------------------------------------
Chief Engineer and General Manager Date Chairman, Board of Directors Date
Flood Control District of Maricopa County
ATTEST:
/s/ [ILLEGIBLE]^^ 12/30/99
------------------------------------------
Clerk of the Board 072699 Date
</TABLE>
LEGAL REVIEW
- ------------
Approved as to form and within the
powers and authority granted under
the laws of the State of Arizona to
the Flood Control District.
By: /s/ Julie M. Lemmon 12/23/99
----------------------------------
District, General Counsel Date
Page 22 of 29
<PAGE>
EXHIBIT 10.115
JOHNSON AND DANLEY CONSTRUCTION CO.
SUBCONTRACT AGREEMENT
Subcontract No. 9924-01
SUBCONTRACTOR: MEADOW VALLEY CONTRACTORS, INC.
PO BOX 60726
PHOENIX, AZ 85082-0726
TELEPHONE: (602) 437-4111
FAX: (602) 437-4114
OWNER: NEW MEXICO STATE HIGHWAY AND TRANSPORTATION DEPARTMENT
PROJECT: ALAMOGORDO RELIEF ROUTE, PHASE II
NMSH&TD PROJECT NO. SP-4916(202)
NMSH&TD CONTROL NO. 3650
J & D PROJECT NO. 9924
SUBCONTRACTORS' NEW MEXICO CONTRACTOR'S LICENSE NO. 068526
In consideration of the mutual promises made herein this 14/th/ day of
July, 1999, Johnson & Danley Construction Co. ("Contractor"), and Meadow Valley
Contractors, Inc. ("Subcontractor"), a corporation enter into this agreement
(the "Subcontract") and agree as follows:
1. Contract Documents.
------------------
1.1 As used herein, the term "Contract Documents" shall refer to and
include this Subcontract and its exhibits, the terms and conditions of the
contract between the Contractor and the Owner (the "Prime Contract") along with
the drawings, standard specifications, supplementary and special provisions,
Contractor's Project schedule, and all addenda, amendments or modifications
thereto, the invitation and instruction to bidders, and all other exhibits or
documents that form or are made a part of the Prime Contract. The parties agree
that the Contract Documents are incorporated herein by reference.
1.2 Subcontractor represents and warrants that it (1) has carefully
examined and understands the Contract Documents, (2) is familiar with the
conditions and circumstances under which its work will be performed, and (3) is
in no way relying upon any opinion or representation of Contractor.
1.3 Subcontractor agrees to comply with and be bound to Contractor by the
terms of the Contract Documents and to assume toward Contractor all the duties
and obligations that Contractor assumes in the Contract Documents toward the
Owner. In case of conflicts or inconsistencies between this Subcontract and the
other Contract Documents, the Subcontract shall control. Subcontractor shall
bind lower tier subcontractors and suppliers to full compliance with the
Contract Documents.
1
<PAGE>
17. Miscellaneous.
-------------
17.1 In the event Subcontractor rents, borrows, or otherwise uses any of
Contractor's equipment, scaffolding, or other appliances, Subcontractor agrees
to accept such items "as is." Any such use shall be at the sole risk of
Subcontractor, who hereby agrees to defend, hold harmless and indemnify
Contractor against any and all claims, losses, or damages arising from such use.
17.2 Subcontractor shall have available at the job site a supervisory and
authorized representative whose qualifications and attendance at the Project
site shall be subject to review by the Contractor. Failure to comply with this
requirement shall be sufficient grounds for withholding monies due Subcontractor
until a qualified supervisor is made available.
17.3 At no time prior to the expiration of any warranty period required by
the Contract Documents shall Subcontractor perform any work directly for or deal
directly with the Owner or its representatives concerning the Project unless
otherwise directed in writing by Contractor.
17.4 Contractor's waiver of any of the provisions of the Subcontract, or
Contractor's failure to exercise any options or legal remedies provided herein,
shall not be construed as a general waiver of its right thereafter to require
such compliance or to exercise such option or remedy.
17.5 This Subcontract constitutes the entire agreement between the parties
and supersedes all prior proposals, negotiations and agreements. If any
provision of this agreement is found to be invalid or otherwise unenforceable,
then the remaining provisions shall remain in full force and effect.
17.6 To be effective, all modifications or amendments to the Subcontract
must be in writing.
17.7 This agreement is not effective until signed by the Contractor and
delivered or mailed to Subcontractor.
17.8 The Subcontract shall be construed and interpreted according to the
laws or the state where the Project is located.
17.9 Initial project survey and staking will be provided by the contractor.
Any additional survey will be provided at the following rates: 2 person party -
$85.00 per hour, 3 person party - $ 10.00 per hour.
JOHNSON AND DANLEY CONSTRUCTION. MEADOW VALLEY CONTRACTORS, INC
By /s/ Joel Danley By /s/ Samuel J. Grasmick
------------------------------ --------------------------------------
Title President Title Area Manager
-------------------------- ----------------------------------
Date 7/28/99 Date 7/14/99
--------------------------- -----------------------------------
11
<PAGE>
MVCI(SUB)
PROJECT: ALAMOGORDO RELIEF ROUTE - PHASE 2
SP-4916 (202): CN 3650
OTERO COUNTY, NEW MEXICO PROJECT NO. 9924
OWNER: NMSH&TD
SUBCONTRACTOR: MEADOW VALLEY CONTRACTORS, INC.
P.O. BOX 60726
PHOENIX, ARIZONA 85082-4119
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------
BID UNIT
ITEM DESCRIPTION QUANTITY UNIT PRICE AMOUNT
- ----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
203011 ENVIRONMENT MONITOR'G 1.00 LS 9,000.00 9,000.00
511000A RDWY STR. CONC. CL.A 1,212.00 CY 260.00 315,120.00
511700 REINF.CONC.MINOR STR. 19.00 CY 550.00 10,450.00
540200 WELDED WIRE FABRIC 24,980.00 LB 1.05 26,229.00
541200 STR.STL FOR MISC STR. 7,814.00 LB 2.50 19,535.00
601000 REM.STR. & OBSTR'NS 1.00 LS 23,900.00 23,900.00
618000 TRAFF.CONTROL MGMT 1.00 LS 95,000.00 95,000.00
620001 NOXIOUS WEED MGMT 1.00 LS 22,300.00 22,300.00
621100 CONTRACTOR QC 1.00 LS 92,000.00 92,000.00
622002 T2 FIELD LAB 1.00 EA 25,000.00 25,000.00
622100 SUPPL. FIELD LAB 1.00 EA 5,252.25 5,252.25
622110 SUPERPAVE FIELD LAB 1.00 EA 25,000.00 25,000.00
702238 8' BARRICADE 8.00 EA 350.00 2,800.00
702800 TRAFFIC CONTROL PLAN 1.00 LS 25,000.00 25,000.00
801000 CONSTRUCTION STAKING 1.00 LS 125,000.00 125,000.00
210000 BRIDGE EXCAV. & BKFL 1,420.00 CY 20.00 28,400.00
502400 SOIL BORINGS 120.00 LF 55.00 6,600.00
505000 X-HOLE SONIC LOGGING 32.00 EA 800.00 25,600.00
505010 LOW STRAIN INT.TESTING 2.00 EA 3,200.00 6,400.00
511000 STRUCT.CONC. CL.A 3,062.00 CY 230.00 704,260.00
511230 4" STRUCT.CONC. CL.B 2,257.00 SY 38.00 85,766.00
511300 SUBSTRUCT.CONC. CL.A 382.00 CY 260.00 99,320.00
511700 REINF.CONC. FOR MINOR 107.00 CY 265.00 28,355.00
512000 SUPERSTRUCT. CONC. 1,123.00 CY 280.00 314,440.00
513054 T54 PS BRIDGE MEMBER 2,295.00 LF 13.00 29,835.00
514032 32" BARRIER RAILING 576.00 SF 43.00 24,768.00
532100 ANTI-GRAFFITI COATING 5,206.00 LB 2.10 10,932.60
540200 WELDED WIRE FABRIC 6,846.00 LB 0.60 4,107.60
541000 STR.STL FOR BRIDGES 9,048.00 LB 2.60 23,524.80
562000 BRIDGE JT STRIP SL 215.00 LF 105.00 22,575.00
562100 T-A POLYMER BRIDGE JT 274.00 LF 30.00 8,220.00
- ----------------------------------------------------------------------------------------------
2,244,690.25
------------
</TABLE>
INCLUSIONS: ALL ABOVE ENUMERATED WORK ITEMS COMPLETE, UNLESS SPECIFICALLY
EXCLUDED BELOW.
EXCLUSIONS: GROSS RECEIPTS TAXES AND BONDS.
Page 1 of 1
<PAGE>
New Mexico State Highway and Transportation Department
PERMISSION TO SUBCONTRACT REQUEST
No. 9924-01
---------------
Date July 14, 1999
--------------
I/We requested your permission to subcontract the work listed below in
connection with my/our
Project No. SP-4916(202) Control No. 3650
------------------------------- -------------------
to Meadow Valley Contractors, Inc.
-----------------------------------------------------------------------------
whose address is P0 Box 60726, Phoenix, AZ 85082
---------------------------------------------------------------
whose license no. is 068526
------------------------------------------------------------
and whose license classification is ____________________________________________
This subcontractor (a) N/A is (b) N/A is not (check (a) (b) as
----------- -------
appropriate) a DBE Firm.
WORK TO BE SUBCONTRACTED
<TABLE>
<CAPTION>
Contract
Item No. Description Unit Quantity Unit Price Amount
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
SEE ATTACHED SCOPE OF WORK
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
- -------------------------------------------------------------------------------------------------------------
TOTAL SUBCONTRACTED AMT $ 2,244,690.25
------------------
</TABLE>
This subcontracted amount is 18.1296 % of $ 12,381,289.00 the total contract
--------- ---------------
amount.
<TABLE>
<S> <C>
Previous amount subcontracted under this contract... $ 0.00
---------------
Total Amount subcontracted to date.................. $2,244,690.25
---------------
Total % subcontracted to date....................... 18.1296 %
---------------
</TABLE>
I/We verify that the subcontractor has the appropriate license classification to
perform the work, certify that the same plans, specifications, special
provisions, and all other contract provisions are to apply to the work under the
subcontract as apply to the prime contract, and guarantee that they will be
observed and followed by the subcontractor.
Copies of the following documents are hereby attached to this application:
letters of consent from the bonding company; copy of subcontract; a copy of the
subcontractor's "wallet card" issued by the Construction and Industries Division
of the Regulation and Licensing Department; assignment of antitrust claims
signed by the subcontractor; Form No. A-571 previous performance certification
signed by the subcontractor; and if applicable, Form No. A585, DB-A1, Contract
Goal for Disadvantage Business in Highway Construction.
I/We certify that the following checked provisions are incorporated into the
subcontract and that the subcontractor has these provisions in his possession
with a signed original form of the subcontract.
<TABLE>
<S> <C> <C>
* N/A Form FHWA-1273 (rev.8-89) * N/A Requirement For Affirmative X NM Minimum wage rates
- -------- -------- --------
* N/A Special Provision Specific Action to Ensure Decision No. OT 99-1061A
- -------- ------------
EEO Resp.(23 U.S.C. 140) EEO (E.O. 11246) X Wage Rates Notice to
--------
* N/A Std. EEO Const. Contract * N/A Notices to Prospective Fed. Aid Contractors
- -------- --------
Specification (E.0. 11246) Const. Contractors (9-18-75) X Special Provisions for
--------
* N/A Notice to contractors * N/A General wage decision, No.____________ submission of weekly payrolls
- -------- --------
modifying above item N/A Special Provision for X Special Provision for
-------- --------
* N/A Training Special Provisions DBE participation Apprentices
- --------
</TABLE>
*NOT REQUIRED ON 100% STATE FUNDED PROJECTS
I/We certify that the provisions checked above are in my/our possession and
attached to my/our copy of the subcontract.
<TABLE>
<S> <C> <C>
Meadow Valley Contractors, Inc. /s/ Samuel J. Grasmick 7/14/99
- ------------------------------------------------------------------------------------------------------------------------------------
Name of Subcontracting Firm Signature and Title of Official from Subcontracting Firm Date
</TABLE>
I/We certify this to be correct and agree to allow audit verification by the New
Mexico State Highway and Transportation Department
<TABLE>
<S> <C> <C>
Johnson and Danley Construction Co. /s/ Joel Danley 7/28/99
- ------------------------------------------------------------------------------------------------------------------------------------
Name of Prime Contracting Firm Signature and Title of Official from Prime Contracting Firm Date
</TABLE>
RECOMMENDED:
__________________________________________
Project Manager Date
CONCURRED: APPROVED:
________________________________________________________________________________
District Construction Engineer District Engineer Date
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 8,320,996
<SECURITIES> 0
<RECEIVABLES> 28,213,139
<ALLOWANCES> 97,324
<INVENTORY> 3,603,517
<CURRENT-ASSETS> 41,234,240
<PP&E> 17,009,945
<DEPRECIATION> 1,932,272
<TOTAL-ASSETS> 58,425,361
<CURRENT-LIABILITIES> 35,067,079
<BONDS> 9,540,448
0
0
<COMMON> 3,601
<OTHER-SE> 14,809,222
<TOTAL-LIABILITY-AND-EQUITY> 58,425,361
<SALES> 210,002,272
<TOTAL-REVENUES> 210,002,272
<CGS> 200,070,826
<TOTAL-COSTS> 200,070,826
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 209,872
<INCOME-PRETAX> 3,930,586
<INCOME-TAX> 1,590,480
<INCOME-CONTINUING> 2,340,106
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,340,106
<EPS-BASIC> .67
<EPS-DILUTED> .66
</TABLE>
