MEADOW VALLEY CORP
SECURITY AGREEMENT
<DOCUMENT>
<TYPE>EX-10.132
<SEQUENCE>18
<FILENAME>0018.txt
<DESCRIPTION>SECURITY AGREEMENT
<TEXT>

<PAGE>

                                                                  EXHIBIT 10.132

                INSTALLMENT SALE CONTRACT (SECURITY AGREEMENT)

PURCHASER(S):                         SELLER (DEALER):
MEADOW VALLEY                         CASHMAN EQUIPMENT COMPANY
CONTRACTORS, INC.                     3101 EAST CRAIG ROAD
4411 S. 40TH, SUITE D11               P.O. BOX 271630
P.O. BOX 60726                        LAS VEGAS, NV 89127-1630
PHOENIX, AZ 8504082-0726
County: MARICOPA          #136261
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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.
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   NEW  (IF USED)                                                      DELIVERED
   OR   FIRST  MODEL.        DESCRIPTION OF UNIT(S)      SERIAL#       CASH SALE
   USED USED                                                               PRICE
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(1)             14H          CATERPILLAR MOTOR GRADER   7WJ00561      273,500.00



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FIRST   DESCRIPTION OF ADDITIONAL SECURITY
USED     (MAKE, MODEL & SERIAL NUMBER)
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NONE



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FIRST   DESCRIPTION OF TRADE-IN EQUIPMENT
USED     (MAKE, MODEL & SERIAL NUMBER)
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NONE




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Trade-in Value                                          0.00
Less Owing to (   n/a   )                               0.00
               ---------
Net Trade-in Allowance

Location of Units:  4411 S. 40TH, SUITE D11
                    PHOENIX, AZ 85040 MARICOPA


     Sub-Total...................................  $ 273,500.00
     Sales Tax...................................  $  19,828.75
 1.  Total Cash Sale Price.......................  $ 293,328.75
     Cash Down Pay             130,530.27
     Net Trade-in Allow              0.00
 2.  Total Down Payment                            $ 130,530.27
 3.  Unpaid Balance of Cash Price (1 - 2)          $ 162,798.48
 4.  Official Fees (Specify).....................  $     250.00
     DOCUMENTATION FEE             250.00

 5.  Physical Damage Insurance...................  $
 6.  Principal Balance
     (Amount Financed)(3 + 4 + 5)................  $ 163,048.48
 7.  Finance Charge
     (Time Price Differential)...................  $  28,419.20
 8.  Time Balance
     (Total of Payments)(6 + 7)..................  $ 191,467.68
 9.  Time Sale Balance
     (Total of Payment Price(2 + 8)..............  $ 312,997.95
10.  Annual Percentage Rate                                8.11%
11.  Date FINANCE CHARGE begins to accrue May 11 2000

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 $3,988.91 each, with the first
---
installment due June 11 2000, and the balance of the installments due on the
like day of each month thereafter, (except no payments shall be due during the
months(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 of May 11 2000.

Purchaser(s):                       Seller:
MEADOW VALLEY                       CASHMAN EQUIPMENT COMPANY
CONTRACTORS, INC.

By /s/ Kenneth D. Nelson            By /s/ Mary Kaye Cashman
   ---------------------------         ------------------------------
TITLE Vice President                Name (PRINT) MARY KAYE CASHMAN
      ------------------------                   --------------------

NAME KENNETH D. NELSON              Title CEO
     -------------------------            ---------------------------

<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 to 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 Contact. 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 perfrm 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 Contact is and
shall be true, correct and complete.

10. ASSIGNMENT; COUNTERPARTS: The rights and remedies of Seller under this
Contract may be assigned by Selller 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 goverened 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 May 11, 2000 by MEADOW
VALLEY CORPORATION, (hereinafter, referred to as "Guarantor"), in favor of
CASHMAN EQUIPMENT COMPANY, 3101 EAST CRAIG ROAD, P.O. BOX 271630, LAS VEGAS, NV
89127-1630 (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 Gurantor 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 SALE CONTRACT by and between Obligor
and Seller dated May 11 2000, 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 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 Gurantor 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 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
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 has 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. Guaranty
-----------------------------------------------------------------
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

<PAGE>

(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 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                                              SNN:____________________________________________________________
      -----------------------------------------------------
</TABLE>

<PAGE>

RIDER NO 1 TO INSTALLMENT SALE CONTRACT (SECURITY AGREEMENT)
DATED AS OF MAY 11 2000
BETWEEN CASHMAN EQUIPMENT CO. ("SELLER")
AND MEADOW VALLEY CONTRACTORS, INC. ("PURCHASER")
AND ASSIGNED TO CATERPILLAR FINANCIAL SERVICES CORPORATION


                            SUBLEASING BY PURCHASER

Purchaser may sublease the Units provided each sublease is expressly subject and
subordinate to the terms and provision of the Installment Sale Contract and not
inconsistent therewith and in no way relieves Purchaser of its obligations under
the Installment Sale Contract. Moreover, Purchaser shall not sell, assign or
transfer (except to Caterpillar Financial Services Corporation) any of its
rights under any sublease or otherwise create or incur or suffer to be created
or incurred or to exist any lien, claim or security interest or encumbrance
(except in favor of Caterpillar Financial Services Corporation) of any kind on
or in any of its rights under sublease.


MEADOW VALLEY CONTRACTORS, INC.
("Purchaser")


Signature: /s/ Kenneth D. Nelson
           --------------------------

Name(Print): KENNETH D. NELSON
             ------------------------

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

Date: 5-11-00
      -------------------------------
</TEXT>
</DOCUMENT>
