<PAGE>
 
                                PROMISSORY NOTE
<TABLE> 
<CAPTION> 
-------------------------------------------------------------------------------------------------------
  Principal     Loan Date    Maturity    Loan No    Call    Collateral   Account   Officer    Initials
<S>            <C>          <C>          <C>        <C>     <C>          <C>       <C>       <C>        
 $420,000.00   08-06-1996   08-15-2003    5001       91        5140      7326653    15575    [INITIALS  
                                                                                           APPEAR HERE]
-------------------------------------------------------------------------------------------------------
References in the shaded areas are for Lender's use only and do not limit the applicability of this
document to any particular loan or item.
-------------------------------------------------------------------------------------------------------
</TABLE> 

Borrower:    Ready Mix, Inc. (TIN: 08-0171959)
             100 W. Country Club Dr.
             Henderson, NV 89015

Lender:      NEVADA STATE BANK
             CORPORATE BANKING
             201 SOUTH 4TH STREET
             P.O. BOX 980
             LAS VEGAS, NV 89125-0980

================================================================================

Principal Amount:  $420,000.00                     Date of Note:  August 6, 1996


PROMISE TO PAY.  Ready Mix, Inc. ("Borrower") promises to pay to NEVADA STATE 
BANK ("Lender"), or order, in lawful money of the United States of America, the 
principal amount of Four Hundred Twenty Thousand & 00/100 Dollars ($420,000.00),
together with interest on the unpaid principal balance from August 15, 1996, 
until paid in full.

PAYMENT.  Borrower will pay this loan in accordance with the following payment 
schedule:

          "6 consecutive monthly interest payments, beginning September 15,
          1996, with interest calculated on the unpaid principal balances at an
          interest rate of 8.330% per annum; and 78 consecutive monthly
          principal and interest payments of $7,227.38, each, beginning March
          15, 1997, with interest calculated on the unpaid principal balances at
          an interest rate of 9.330% per annum. Borrower's final payment of
          $7,227.38 will be due on August 15, 2003. This estimated final payment
          is based on the assumption that all payments will be made exactly as
          scheduled; the actual final payment will be for all principal and
          accrued interest not yet paid, together with any other unpaid amounts
          under this Note.

Interest on this Note is computed on a 365/360 simple interest basis; that is, 
by applying the ratio of the annual interest rate over a year of 360 days, 
multiplied by the outstanding principal balance, multiplied by the actual number
of days the principal balance is outstanding.  Borrower will pay Lender at 
Lender's address shown above or at such other place as Lender may designate in 
writing.  Unless otherwise agreed or required by applicable law, payments will 
be applied first to any unpaid collection costs and any late charges, then to 
any unpaid interest, and any remaining amount to principal.

PREPAYMENT.  Borrower agrees that all loan fees and other prepaid finance 
charges are earned fully as of the date of the loan and will not be subject to 
refund upon early payment (whether voluntary or as a result of default), except 
as otherwise required by law.  Except for the foregoing, Borrower may pay 
without penalty all or a portion of the amount owed earlier than it is due.  
Early payments will not, unless agreed to by Lender in writing, relieve Borrower
of Borrower's obligation to continue to make payments under the payment
schedule. Rather, they will reduce the principal balances due and may result in
Borrower making fewer payments.

DEFAULT.  Borrower will be in default if any of the following happens:  (a) 
Borrower fails to make any payment when due.  (b) Borrower breaks any promise 
Borrower has made to Lender, or Borrower fails to comply with or to perform when
due any other term, obligation, covenant, or condition contained in this Note or
any agreement related to this Note, or in any other agreement or loan Borrower 
has with Lender.  (c) Borrower defaults under any loan, extension of credit, 
security agreement, purchase or sales agreement, or any other agreement, in
favor of any other creditor or person that may materially affect any of
Borrower's property or Borrower's ability to repay this Note or perform 
Borrower's obligations under this Note or any of the Related Documents.  (d) Any
representation or statement made or furnished to Lender by Borrower or on 
Borrower's behalf is false or misleading in any material respect either now or 
at the time made or furnished.  (e) Borrower becomes insolvent, a receiver is 
appointed for any part of Borrower's property, Borrower makes an assignment for 
the benefit of creditors, or any proceeding is commenced either by Borrower or 
against Borrower under any bankruptcy or insolvency laws.  (f) Any creditor 
tries to take any of Borrower's property on or in which Lender has a lien or 
security interest. This includes a garnishment of any of Borrower's accounts
with Lender. (g) Any guarantor dies or any of the other events described in this
default section occurs with respect to any guarantor of this Note. (h) A
material adverse change occurs in Borrower's financial condition, or Lender
believes the prospect of payment or performance of the indebtedness is impaired.
(i) Lender in good faith deems itself insecure.

If any default, other than a default in payment, is curable and if Borrower has 
not been given a notice of a breach of the same provision of this Note within 
the preceding twelve (12) months, it may be cured (and no event of default will 
have occurred) if Borrower, after receiving written notice from Lender demanding
cure of such default: (a) cures the default within ten (10) days; or (b) if the 
cure requires more than ten (10) days, immediately initiates steps which Lender 
deems in Lender's sole discretion to be sufficient to cure the default and 
thereafter continues and completes all reasonable and necessary steps sufficient
to produce compliance as soon as reasonably practical.

LENDER'S RIGHTS.  Upon default, Lender may declare the entire unpaid principal 
balance on this Note and all accrued unpaid interest immediately due, without 
notice, and then Borrower will pay that amount.  Upon default, including failure
to pay upon final maturity, Lender, at its option, may also, if permitted under
applicable law, increase the interest rate on this Note 3.000 percentage points.
The interest rate will not exceed the maximum rate permitted by applicable law. 
Lender may hire or pay someone else to help collect this Note if Borrower does 
not pay.  Borrower also will pay Lender that amount.  This includes, subject to 
any limits under applicable law, Lender's attorneys' fees and Lender's legal 
expenses whether or not there is a lawsuit, including attorneys' fees and legal 
expenses for bankruptcy proceedings (including efforts to modify or vacate any 
automatic stay or injunction), appeals, and any anticipated post-judgment 
collection services.  If not prohibited by applicable law, Borrower also will 
pay any court costs, in addition to all other sums provided by law.  This Note 
has been delivered to Lender and accepted by Lender in the State of Nevada.  If 
there is a lawsuit, Borrower agrees upon Lender's request to submit to the 
jurisdiction of the courts of Clark County, the State of Nevada (Initial Here
[INITIALS APPEAR HERE]).  Lender and Borrower hereby waive the right to any jury
trial in any action, proceeding, or counterclaim brought by either Lender or 
Borrower against the other.  This Note shall be governed by and construed in 
accordance with the laws of the State of Nevada.

RIGHT OF SETOFF.  Borrower grants to Lender a contractual possessory security 
interest in, and hereby assigns, conveys, delivers, pledges, and transfers to 
Lender all Borrower's right, title and interest in and to, Borrower's accounts 
with Lender (whether checking, savings, or some other account), including 
without limitation all accounts held jointly with someone else and all accounts 
Borrower may open in the future, excluding however all IRA and Keogh accounts, 
and all trust accounts for which the grant of a security interest would be 
prohibited by law.  Borrower authorizes Lender, to the extent permitted by 
applicable law, to charge or setoff all sums owing on this Note against any and 
all such accounts, and, at Lender's option to administratively freeze all such
accounts to allow Lender to protect Lender's charge and setoff rights provided 
on this paragraph.

COLLATERAL.  This Note is secured by a Deed of Trust of even date.

ARBITRATION.  Lender and borrower agree that:
(a)  Any controversy or claim between or among the parties, including but not 
limited to those arising out of or relating to this Agreement or any agreements 
or instruments relating hereto or delivered in connection herewith, AND 
including but not limited to a claim based on or arising from an alleged tort,
shall at the request of any party be determined by arbitration in accordance 
with the Commercial Arbitration Rules of the American Arbitration Association.  
The arbitration proceedings shall be conducted in Las Vegas, Nevada.  The 
arbitrator(s) shall have the qualifications set forth in subparagraph (c) 
hereto.  All statutes of limitations which would otherwise be applicable in a 
judicial action brought by a party shall apply to any arbitration or reference 
proceeding hereunder.

(b)  In any judicial action or proceeding arising out of or relating to this 
Agreement or any agreements or instruments relating hereto or delivered in 
connection herewith, including but not limited to a claim based on or arising 
from an alleged tort, if the controversy or claim is not submitted to 
arbitration as provided and limited in subparagraph (a) hereto, all decisions of
fact and law shall be determined by a reference in accordance with Rule 53 of 
the Federal Rules of Civil Procedure or Rule 53 of the Nevada Rules of Civil 
Procedure or other comparable, applicable reference procedure.  The parties 
shall designate to the court the referee(s) selected under the auspices of the 
American Arbitration Association in the same manner as arbitrators are selected 
in Association-sponsored arbitration proceedings.  The referee(s) shall have the
qualifications set forth in subparagraph (c) hereto.  

(c)  The arbitrator(s) or referee(s) shall be selected in accordance with the 
rules of the American Arbitration Association from panels maintained
by the Association.  A single arbitrator or referee shall be knowledgeable in 
the subject matter of the dispute.  Where three arbitrators or referees conduct 
an arbitration or reference proceeding, the claim shall be decided by a 
majority vote of the three arbitrators or referees, at least one of whom must be
knowledgeable in the subject matter of the dispute and at least one of whom must
be a practicing attorney.  The arbitrator(s) or referee(s) shall award recovery 
of all costs and fees (including attorney's fees, administrative fees, 
arbitrator's fees and court costs).  The arbitrator(s) or referee(s) also may 
grant provisional or ancillary remedies such as, for example, injunctive relief,
attachment, or the appointment of a receiver, either during the pendency of the 
arbitration or reference proceeding or as part of the arbitration or reference
award.

(d)  Judgment upon an arbitration or reference award may be entered in any court
having jurisdiction, subject to the following limitation, the arbitration or
reference award is binding upon the parties only if the amount does not exceed
Two Million Dollars ($2,000,000), if the award exceeds that limit, either party
may commence legal action for a court trial de novo. Such legal action must be
filed within thirty (30) days following the date of the arbitration or reference
award; if such legal action is not filed within that time period, the amount of
the arbitration or reference award shall be binding. The computation of the
total amount of an arbitration or reference award shall include amounts awarded
for arbitration fees, attorneys' fees and all other related costs.

<PAGE>
 
                       CORPORATE RESOLUTION TO GUARANTEE
<TABLE> 
 <S>           <C>          <C>          <C>        <C>    <C>          <C>       <C>           <C> 
----------------------------------------------------------------------------------------------------------------
 Principal     Loan Date     Maturity    Loan No    Call   Collateral   Account   Officer       Initials
$420,000.00    08-06-1996   08-15-2003    5001       91       5140      7326653    15575  [INITIALS APPEAR HERE]
----------------------------------------------------------------------------------------------------------------
</TABLE> 

     References in the shaded area are for Lender's use only and do not limit
     the applicability of this document to any particular loan or item.
--------------------------------------------------------------------------------

Borrower:   Ready Mix, Inc. (TIN: 88-0171959)
            100 W. Country Club Dr.
            Henderson, NV 89015

Guarantor:  Meadow Valley Corporation
            4411 South 40th St. STE D11
            Phoenix, AZ 85040

Lender:     NEVADA STATE BANK
            CORPORATE BANKING
            201 SOUTH 4TH STREET
            P.O. BOX 990
            LAS VEGAS, NV 89125-0990
================================================================================
 I, the undersigned Secretary of Assistant Secretary of the Meadow Valley
 Corporation (the "Corporation"), HEREBY CERTIFY that the Corporation is
 organized and existing under and by virtue of the laws of the State of Arizona
 with its principal office at 4411 South 40th St. STE D11, Phoenix, AZ 85040.

 I FURTHER CERTIFY that at a meeting of the Directors of the Corporation, duly
 called and held on AUG 5, 1996, at which a quorum was present and voting, or
                    -----------
 by other duly authorized corporate action in lieu of a meeting, the following
 resolutions were adopted:

 BE IT RESOLVED, that any one (1) of the following named officers, employees, or
 agents of this Corporation, whose actual signatures are shown below:

       NAME                    POSITION                 ACTUAL SIGNATURE
       ----                    --------                 ----------------
   
       Kenneth Nelson          C.F.O.                   X /s/ Kenneth Nelson
                                                          -------------------

 acting for and on behalf of the Corporation and as its act and deed be, and he
 or she hereby is, authorized and empowered:

       Guaranty. To guarantee or act as surety for loans or other financial
       accommodations to Ready Mix, Inc. from NEVADA STATE BANK ("Lender") on
       such guarantee or surety terms as may be agreed upon betweeen the
       officers or employees of this Corporation and Lender and in such sum or
       sums of money as in his or her judgment should be guaranteed or assured,
       without limit (the "Guaranty").

       Grant Security. To mortgage, pledge, transfer, endorse, hypothecate, or
       otherwise encumber and deliver to Lender, as security for the Guaranty,
       any property now or hereafter belonging to the Corporation or in which
       the Corporation now or hereafter may have an interest, including without
       limitation all real property and all personal property (tangible or
       intangible) of the Corporation. Such property may be mortgaged, pledged,
       transferred, endorsed, hypothecated, or encumbered at the time such loans
       are obtained or such indebtedness is incurred, or at any other time or
       times, and may be either in addition to or in lieu of any property
       theretofore mortgaged, pledged, transferred, endorsed, hypothecated, or
       encumbered. The provisions of these Resolutions authorizing or relating
       to the pledge, mortgage, transfer, endorsement, hypothecation, granting
       of a security interest in, or in any way encumbering, the assets of the
       Corporation shall include, without limitation, doing so in order to lend
       collateral security for the indebtedness, now or hereafter existing, and
       of any nature whatsoever, of Ready Mix, Inc. to Lender. The Corporation
       has considered the value to itself of lending collateral in support of
       such indebtedness, and the Corporation represents to Lender that the
       Corporation is benefited by doing so.

       Execute Security Documents. To execute and deliver to Lender the forms of
       mortgage, deed of trust, pledge agreement, hypothecation agreement, and
       other security agreements and financing statements which may be submitted
       by Lender, and which shall evidence the terms and conditions under and
       pursuant to which such liens and encumbrances, or any of them, are given;
       and also to execute and deliver to Lender any other written instruments,
       any chattel paper, or any other collateral, of any kind or nature, which
       he or she may in his or her discretion deem reasonably necessary or
       proper in connection with or pertaining to the giving of the liens and
       encumbrances.

       Further Acts. To do and perform such other acts and things and to execute
       and deliver such other documents and agreements, including agreements
       waiving the right to a trail by jury, as he or she may in his or her
       discretion deem reasonably necessary or proper in order to carry into
       effect the provisions of these Resolutions.

 BE IT FURTHER RESOLVED, that the corporation will notify Lender in writing at
 Lender's address shown above (or such other addresses as Lender may designate
 from time to time) prior to any (a) change in the name of the Corporation, (b)
 change in the assumed business name(s) of the Corporation, (c) change in the
 management of the Corporation, (d) change in the authorized signer(s) or (e)
 change in any other aspect of the Corporation that directly or indirectly
 relates to any agreements between the Corporation and Lender. No change in the
 name of the Corporation will take effect until after Lender has been notified.

 BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to these
 Resolutions are performed prior to the passage of these Resoluitons are hereby
 ratified and approved, that these Resolutions shall remain in full force and
 effect and Lender may rely on these Resolutions until written notice of his or
 her revocation shall have been delivered to and received by Lender. Any such
 notice shall not affect any of the Corporation's agreements or commitments in
 effect at the time notice is given.

 I FURTHER CERTIFY that the officer, employee, or agent named above is duly
 elected, appointed, or employed by or for the Corporation, as the case may be,
 and occupies the position set opposite the name; that the foregoing Resolutions
 now stand of record on the books of the Corporation; and that the Resolutions
 are in full force and effect and have not been modified or revoked in any
 manner whatsoever.

 IN TESTIMONY WHEREOF, I have hereunto set my hand on August 6, 1996 and attest
 that the signatures set opposite the names listed above are their genuine
 signatures.

                                          CERTIFIED TO AND ATTESTED BY:         
                                                                                
                                          X                                     
                                           -------------------------------------
                                                                                
                                          X [SIGNATURE APPEARS HERE]            
                                           -------------------------------------

 NOTE: In case the Secretary or other certifying officer is designated by the
 foregoing resolutions as one of the signing officers, it is advisable to have
 this certificate signed by a second Officer or Director of the Corporation.

================================================================================

<PAGE>
 
                        CORPORATE RESOLUTION TO BORROW

<TABLE> 
<CAPTION> 

--------------------------------------------------------------------------------------------------------------------
Principal      Loan Date    Maturity   Loan No   Call   Collateral    Account    Officer           Initials
<S>           <C>          <C>         <C>       <C>    <C>           <C>        <C>         <C> 
$420,000.00   08-06-1996   08-15-2003   5001      91       5140       7326653     15575      [INITIALS APPEAR HERE]
--------------------------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the applicability of this document to any 
particular loan or item.
--------------------------------------------------------------------------------------------------------------------
</TABLE> 

Borrower:  Ready Mix, Inc. (TIN: 88-0171959)    Lender:  NEVADA STATE BANK
           100 W. Country Club Dr.                       CORPORATE BANKING
           Henderson, NV 89015                           201 SOUTH 4TH STREET
                                                         P.O. BOX 990
                                                         LAS VEGA, NV 89125-0990

================================================================================
I, the undersigned Secretary or Assistant Secretary of Ready Mix, Inc. (the 
"Corporation"), HEREBY CERTIFY that the Corporation is organized and existing 
under and by virtue of the laws of the State of Nevada as a corporation for 
profit, with its principal office at 100 W. Country Club Dr., Henderson, NV 
89015, and is duly authorized to transact business in the State of Nevada.

I FURTHER CERTIFY that at a meeting of the Directors of the Corporation, duly 
called and held on Aug 5, 1996, at which a quorum was present and voting, or by 
other duly authorized corporate action in lieu of a meeting, the following 
resolutions were adopted:

BE IT RESOLVED, that any one (1) of the following named officers, employees or 
agents of this Corporation, whose actual signatures are shown below:

     NAME                POSITION                     ACTUAL SIGNATURE
     ----                --------                     ----------------
     Kenneth Nelson      Treasurer                    X /s/ Kenneth Nelson
                                                       ----------------------

acting for and on behalf of the Corporation and as its act and deed be, and he 
or she hereby is, authorized and empowered:

     Borrow Money. To borrow from time to time from NEVADA STATE BANK
     ("Lender"), on such terms as may be agreed upon between the Corporation and
     Lender, such sum or sums of money as in his or her judgment should be
     borrowed, without limitation.

     Execute Notes. To execute and deliver to Lender the promissory note or
     notes, or other evidence of credit accomodations of the Corporation, on
     Lender's forms, at such rates of interest and on such terms as may be
     agreed upon, evidencing the sums of money so borrowed or any indebtedness
     of the Corporation to Lender, and also to execute and deliver to Lender one
     or more renewals, extensions, modifications, refinancings, consolidations,
     or substitutions for one or more of the notes, any portion of the notes, or
     any other evidence of credit accomodations.

     Grant Security. To mortgage, pledge, transfer, endorse, hypothecate, or
     otherwise encumber and deliver to Lender, as security for the payment of
     any loans or credit accomodations so obtained, any promissory notes so
     executed (including any amendments to or modifications, renewals, and
     extensions of such promissory notes), or any other of further indebtedness
     of the Corporation to Lender at any time owing, however the same may be
     evidenced, any property now or hereafter belonging to the Corporation or in
     which the Corporation now or hereafter may have an interest, including
     without limitation all real property and all personal property (tangible or
     intangible) of the Corporation. Such property may be mortgaged, pledged,
     transferred, endorsed, hypothecated, or encumbered at the time such loans
     are obtained or such indebtedness is incurred, or at any other time or
     times, and may be either in addition to or in lieu of any property
     theretofore mortgaged, pledged, transferred, endorsed, hypothecated, or
     encumbered.

     Execute Security Documents. To execute and deliver to Lender the forms of
     mortgage, deed of trust, pledge agreement, hypothecation agreement, and
     other security agreements and financing statements which may be submitted
     by Lender, and which shall evidence the terms and conditions under and
     pursuant to which such liens and encumbrances, or any of them, are given;
     and also to execute and deliver to Lender any other written instruments,
     any chattel paper, or any other collateral, of any kind or nature, which he
     or she may in his or her discretion deem reasonably necessary or proper in
     connection with or pertaining to the giving of the liens and encumbrances.

     Negotiate Items. To draw, endorse, and discount with Lender all drafts,
     trade acceptances, promissory notes, or other evidences of indebtedness
     payable to or belonging to the Corporation in which the Corporation may
     have an interest, and either to receive cash for the same or to cause such
     proceeds to be credited to the account of the Corporation with Lender, or
     to cause such other disposition of the proceeds derived therefrom as they
     may deem advisable.

     Further Acts. In the case of lines of credit, to designate additional or
     alternate individuals as being authorized to request advances thereunder,
     and in all cases, to do and perform such other acts and things, to pay any
     and all fees and costs, and to execute and deliver such other documents and
     agreements, including agreements waiving the right to a trial by jury, as
     he or she may in his or her discretion deem reasonably necessary or proper
     in order to carry into effect the provisions of these Resolutions.

BE IT FURTHER RESOLVED, that any and all acts authorized pursuant to these 
Resolutions and performed prior to the passage of these Resolutions are hereby 
ratified and approved, that these Resolutions shall remain in full force and 
effect and Lender may rely on these Resolutions until written notice of his or 
her revocation shall have been delivered to and received by Lender. Any such 
notice shall not affect any of the Corporation's agreements or commitments in 
effect at the time notice is given.

BE IT FURTHER RESOLVED, that the Corporation will notify Lender in writing at 
Lender's address shown above (or such other addresses as Lender may designate 
from time to time) prior to any (a) change in the name of the Corporation, (b) 
change in the assumed business name(s) of the Corporation, (c) change in the 
management of the Corporation, (d) change in the authorized signer(s) or (e) 
change in any other aspect of the Corporation that directly or indirectly 
relates to any agreements between the Corporation and Lender. No change in the 
name of the Corporation will take effect until after Lender has been notified.

I FURTHER CERTIFY that the officer, employee, or agent named above is duly
elected, appointed, or employed by or for the Corporation, as the case may be,
and occupies the position set opposite the name; that the foregoing Resolutions
now stand of record on the books of the Corporation; and that the Resolutions
are in full force and effect and have not been modified or revoked in any manner
whatsoever. The Corporation has no corporate seal, and therefore, no seal is
affixed to this certificate.

IN TESTIMONY WHEREOF, I have hereunto set my hand on August 6, 1996 and attest 
that the signatures set opposite the names listed above are their genuine 
signatures.

                                               CERTIFIED TO AND ATTESTED BY:

                                               X
                                                --------------------------------

                                               X [SIGNATURE APPEARS HERE]
                                                --------------------------------

NOTE: In case the Secretary or other certifying officer is designated by the 
foregoing resolutions as one of the signing officers, it is advisable to have 
this certificate signed by a second Officer or Director of the Corporation.

================================================================================


LASER PRO, Reg. U.S. Pat. & T.M. Off., Ver. 3.21(c) 1996 CFI ProServices, Inc. 
All rights reserved. [NV-C10 1READYMI.LN R18.OVL]

        

<PAGE>
 
                              COMMERCIAL GUARANTY

<TABLE> 
<CAPTION> 

--------------------------------------------------------------------------------------------------------------------
Principal      Loan Date    Maturity   Loan No   Call   Collateral    Account    Officer           Initials
<S>           <C>          <C>         <C>       <C>    <C>           <C>        <C>         <C> 
                                                  91       5140       7326653     15575      [INITIALS APPEAR HERE]
--------------------------------------------------------------------------------------------------------------------
References in the shaded area are for Lender's use only and do not limit the applicability of this document to any 
particular loan or item.
--------------------------------------------------------------------------------------------------------------------
</TABLE> 

Borrower:  Ready Mix, Inc. (TIN: 88-0171959)    Lender: NEVADA STATE BANK      
           100 W. Country Club Dr.                      CORPORATE BANKING      
           Henderson, NV 89015                          201 SOUTH 4TH STREET   
                                                        P.O. BOX 990           
Guarantor: Meadow Valley Corporation                    LAS VEGAS, NV 89125-0990
           4411 South 40th St. STE D11        
           Phoenix, AZ 85040                  

================================================================================

AMOUNT OF GUARANTY. The amount of this Guaranty is Unlimited.

CONTINUING UNLIMITED GUARANTY. For good and valuable consideration, Meadow 
Valley Corporation ("Guarantor") absolutely and unconditionally guarantees and 
promises to pay to NEVADA STATE BANK ("Lender") or its order, in legal tender of
the United States of America, the indebtedness (as that term is defined below) 
of Ready Mix, Inc. ("Borrower") to Lender on the terms and conditions set forth 
in this Guaranty. Under this Guaranty, the liability of Guarantor is unlimited 
and the obligations of Guarantor are continuing.

DEFINITIONS. The following words shall have the following meanings when used in 
             this Guaranty:

    Borrower. The word "Borrower" means Ready Mix, Inc.

    Guarantor. The word "Guarantor" means Meadow Valley Corporation.

    Guaranty. The word "Guaranty" means this Guaranty made by Guarantor for the 
              benefit of Lender dated August 6, 1996.

    Indebtedness. The word "Indebtedness" is used in its most comprehensive
    sense and means and includes any and all of Borrower's liabilities,
    obligations, debts, and indebtedness to Lender, now existing or hereinafter
    incurred or created, including, without limitation, all loans, advances,
    interest, costs, debts, overdraft indebtedness, credit card indebtedness,
    lease obligations, other obligations, and liabilities of Borrower, or any of
    them, and any present or future judgments against Borrower, or any of them;
    and whether any such indebtedness is voluntarily or involuntarily incurred,
    due or not due, absolute or contingent, liquidated or unliquidated,
    determined or undetermined; whether Borrower may be liable individually or
    jointly with others, or primarily or secondarily, or as guarantor or surety;
    whether recovery on the indebtedness may be or may become barred or
    unenforceable against Borrower for any reason whatsoever; and whether the
    indebtedness arises from transactions which may be voidable on account of
    infancy, insanity, ultra vires, or otherwise.

    Lender. The word "Lender" means NEVADA STATE BANK, its successors and 
            assigns. 

    Related Documents. The words "Related Documents" mean and include without
    limitation all promissory notes, credit agreements, loan agreements,
    environmental agreements, guaranties, security agreements, mortgages, deeds
    of trust, and all other instruments, agreements and documents, whether now
    or hereafter existing, executed in connection with the indebtedness.

NATURE OF GUARANTY. Guarantor's liability under this Guaranty shall be open and
continuous for so long as this Guaranty remains in force. Guarantor intends to
guarantee at all times the performance and prompt payment when due, whether at
maturity or earlier by reason of acceleration or otherwise, of all indebtedness.
Accordingly, no payments made upon the indebtedness will discharge or diminish
the continuing liability of Guarantor in connection with any remaining portions
of the indebtedness or any of the indebtedness which subsequently arises or is
thereafter incurred or contracted. Any married person who signs this Guaranty as
the Guarantor hereby expressly agrees that recourse under this agreement may be
had against both his or her separate property and community property, whether
now owned or hereafter acquired.

DURATION OF GUARANTY. This Guaranty will take effect when received by Lender
without the neccessity of any acceptance by Lender, or any notice to Guarantor
or to Borrower, and will continue in full force until all indebtedness incurred
or contracted before receipt by Lender of any notice of revocation shall have
been fully and finally paid and satisfied and all other obligations of Guarantor
under this Guaranty shall have been performed in full. If Guarantor elects to
revoke this Guaranty, Guarantor may only do so in writing. Guarantor's written
notice of revocation must be mailed to Lender, by certified mail, at the address
of Lender listed above or such other place as Lender may designate in writing.
Written revocation of this Guaranty will apply only to advances or new
indebtedness created after actual receipt by Lender of Guarantor's written
revocation. For this purpose and without limitation, the term "new indebtedness"
does not include indebtedness which at the time of notice of revocation is
contingent, unliquidated, undetermined or not due and which later becomes
absolute, liquidated, determined or due. This Guaranty will continue to bind
Guarantor for all indebtedness incurred by Borrower or committed by Lender prior
to receipt of Guarantor's written notice of revocation, including any
extensions, renewals, substitutions of modifications of the indebtedness. All
renewals, extensions, substitutions, and modifications of the indebtedness
granted after Guarantor's revocation, are contemplated under this Guaranty and,
specifically will not be considered to be new indebtedness. This Guaranty shall
bind the estate of Guarantor as to indebtedness created both before and after
the death or incapacity of Guarantor, regardless of Lender's actual notice of
Guarantor's death. Subject to the foregoing, Guarantor's executor or
administrator or other legal representative may terminate this Guaranty in the
same manner in which Guarantor might have terminated it and with the same
effect. Release of any other guarantor or termination of any other guaranty of
the indebtedness shall not affect the liability of Guarantor under this
Guaranty. A revocation received by Lender from any one or more Guarantors shall
not affect the liability of any remaining Guarantors under this Guaranty. It is
anticipated that fluctuations may occur in the aggregate amount of indebtedness
covered by this Guaranty, and it is specifically acknowledged and agreed by
Guarantor that reductions in the amount of indebtedness, even to zero dollars
($0.00), prior to written revocation of this Guaranty by Guarantor shall not
constitute a termination of this Guaranty. This Guaranty is binding upon
Guarantor and Guarantor's heirs, successors and assigns so long as any of the
guaranteed indebtedness remains unpaid and even though the indebtedness
guaranteed may from time to time be zero dollars ($0.00).

GUARANTOR'S AUTHORIZATION TO LENDER. Guarantor authorizes Lender, either before 
or after any revocation hereof, without notice or demand and without lessening 
Guarantor's liability under this Guaranty, from time to time: (a) prior to 
revocation as set forth above, to make one or more additional secured or 
unsecured loans to Borrower, to lease equipment or other goods to Borrower, or 
otherwise to extend additional credit to Borrower; (b) to alter, compromise, 
renew, extend, accelerate, or otherwise change one or more times the time for 
payment or other terms of the indebtedness or any part of the indebtedness, 
including increases and decreases of the rate of interest on the indebtedness; 
extensions may be repeated and may be for longer than the original loan term; 
(c) to take and hold security for the payment of this Guaranty or the 
indebtedness, and exchange, enforce, waive, subordinate, fall or decide not to 
perfect, and release any such security, with or without the substitution of new 
collateral; (d) to release, substitute, agree not to sue, or deal with any one 
or more of Borrower's sureties, endorsers, or other guarantors on any terms or 
in any manner Lender may choose; (e) to determine how, when and what application
of payments and credits shall be made on the indebtedness; (f) to apply such 
security and direct the order or manner of sale thereof, including without 
limitation, any nonjudicial sale permitted by the terms of the controlling 
security agreement or deed of trust, as Lender in its discretion may determine; 
(g) to sell, transfer, assign, or grant participations in all or any part of the
indebtedness; and (h) to assign or transfer this Guaranty in whole or in part.

GUARANTOR'S REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to
Lender that (a) no representations or agreements of any kind have been made to 
Guarantor which would limit or qualify in any way the terms of this Guaranty; 
(b) this Guaranty is executed at Borrower's request and not at the request of 
Lender; (c) Guarantor has full power, right and authority to enter into this 
Guaranty; (d) the provisions of this Guaranty do not conflict with or result in
a default under any agreement or other instrument binding upon Guarantor and
do not result in a violation of any law, regulation, court decree or order
applicable to Guarantor; (e) Guarantor has not and will not, without the prior
written consent of Lender, sell, lease, assign, encumber, hypothecate, transfer,
or otherwise dispose of all or substantially all of Guarantor's assets, or any
interest therein; (f) upon Lender's request, Guarantor will provide to Lender
financial and credit information in form acceptable to Lender, and all such
financial information which currently has been, and all future financial
information which will be provided to Lender is and will be true and correct in
all material respects and fairly present the financial condition of Guarantor as
of the dates the financial information is provided; (g) no material adverse
change has occurred in Guarantor's financial condition since the date of the
most recent financial statements provided to Lender and no event has occurred
which may materially adversely affect Guarantor's financial condition; (h) no
litigation, claim, investigation, administrative proceeding or similar action
(including those for unpaid taxes) against Guarantor is pending or threatened;
(i) Lender has made no representation to Guarantor as to the creditworthiness of
Borrower; and (j) Guarantor has established adequate means of obtaining from
Borrower on a continuing basis information regarding Borrower's financial
condition. Guarantor agrees to keep adequately informed from such means of any
facts, events, or circumstances which might in any way affect Guarantor's risks
under this Guaranty, and Guarantor further agrees that, absent a request for
information, Lender shall have no obligation to disclose to Guarantor any
information or documents acquired by Lender in the course of its relationship
with Borrower.

GUARANTOR'S WAIVERS. Except as prohibited by applicable law, Guarantor waives 
any right to require Lender (a) to continue lending money or to extend other 
credit to Borrower; (b) to make any presentment, protest, demand, or notice of 
any kind, including notice of any nonpayment of the indebtedness or of any 
nonpayment related to any collateral, or notice of any action or nonaction on
the part of Borrower, Lender, any surely, endorser, or other guarantor in
connection with the indebtedness or in connection with the creation of new or
additional loans or obligations; (c) to resort for payment or to proceed
directly or at once against any person, including Borrower or any other
guarantor; (d) to proceed directly against or exhaust any
<PAGE>
 
08-06-1996                    COMMERCIAL GUARANTY                     Page 3
Loan No 5001                      (Continued)

================================================================================

subparagraph (c) hereto. All statutes of limitations which would otherwise be 
applicable in a judicial action brought by a party shall apply to any 
arbitration or reference proceeding hereunder.
(b) In any judicial action or proceeding arising out of or relating to this 
Agreement or any agreements or instruments relating hereto or delivered in 
connection herewith, including but not limited to a claim based on or arising 
from an alleged tort, if the controversy or claim is not submitted to 
arbitration as provided and limited in subparagraph (a) hereto, all decisions of
fact and law shall be determined by a reference in accordance with Rule 53 of 
the Federal Rules of Civil Procedure or Rule 53 of the Nevada Rules of Civil 
Procedure or other comparable, applicable reference procedure. The parties shall
designate to the court the referee(s) selected under the auspices of the 
American Arbitration Association in the same manner as arbitrators are selected 
in Association-sponsored arbitration proceedings. The referee(s) shall have the 
qualifications set forth in subparagraph (c) hereto.
(c) The arbitrator(s) or referee(s) shall be selected in accordance with the 
rules of the American Arbitration Association from panels maintained by the 
Association. A single arbitrator or referee shall be knowledgeable in the 
subject matter of the dispute. Where three arbitrators or referees conduct an 
arbitration or reference proceeding, the claim shall be decided by a majority 
vote of the three arbitrators or referees, at least one of whom must be 
knowledgeable in the subject matter of the dispute and at least one of whom must
be a practicing attorney. The arbitrator(s) or referee(s) shall award recovery 
of all costs and fees (including attorneys' fees, administrative fees, 
arbitrator's fees and court costs). The arbitrator(s) or referee(s) also may 
grant provisional or ancillary remedies such as, for example, injunctive relief,
attachment, or the appointment of a receiver, either during the pendency of the 
arbitration or reference proceeding or as part of the arbitration or reference 
award.
(d) Judgment upon an arbitration or reference award may be entered in any court
having jurisdiction, subject to the following limitation: the arbitration or
reference award is binding upon the parties only if the amount does not exceed 
Two Million Dollars ($2,000,000); if the award exceeds that limit, either party 
may commence legal action for a court trial de novo. Such legal action must be 
filed within thirty (30) days following the date of the arbitration or reference
award; if such legal action is not filed within that time period, the amount of 
the arbitration or reference award shall be binding. The computation of the 
total amount of an arbitration or reference award shall include amounts awarded 
for arbitration fees, attorneys' fees and all other related costs.
(e) At the Bank's option, foreclosure under a deed of trust or mortgage may be 
accomplished either by exercise of a power of sale under the deed of trust or 
mortgage or by judicial foreclosure. The institution and maintenance of an 
action for judicial relief or pursuit of a provisional or ancillary remedy shall
not constitute a waiver of the right of any party, including the plaintiff, to 
submit the controversy or claim to arbitration if any other party contests such 
action for judicial relief.
(f) Notwithstanding the applicability of other law to any other provision of 
this Agreement, the Federal Arbitration Act, 9 U.S.C. Section 1 et seq., shall 
apply to the construction and interpretation of this arbitration paragraph.

EACH UNDERSIGNED GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS 
GUARANTY AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT 
THIS GUARANTY IS EFFECTIVE UPON GUARANTOR'S EXECUTION AND DELIVERY OF THIS 
GUARANTY TO LENDER AND THAT THE GUARANTY WILL CONTINUE UNTIL TERMINATED IN THE 
MANNER SET FORTH IN THE SECTION TITLED "DURATION OF GUARANTY." NO FORMAL 
ACCEPTANCE BY LENDER IS NECESSARY TO MAKE THIS GUARANTY EFFECTIVE. THIS GUARANTY
IS DATED AUGUST 6, 1996.

GUARANTOR:

Meadow Valley Corporation

By: /s/ Kenneth Nelson
   ---------------------------
   Kenneth Nelson, C.F.O.

--------------------------------------------------------------------------------
                           CORPORATE ACKNOWLEDGMENT

STATE OF Nevada                  )
        -------------------------
                                 )ss
COUNTY OF Clark                  )
         ------------------------      

On this 9th day of August, 1999, before me, the undersigned Notary Public, 
personally appeared Kenneth Nelson, C.F.O. of Meadow Valley Corporation, and 
known to me to be an authorized agent of the corporation that executed the 
Commercial Guaranty and acknowledged the Guaranty to be the free and voluntary 
act and deed of the corporation, by authority of its Bylaws or by resolution of 
its board of directors, for the uses and purposes therein mentioned, and on 
oath stated that he or she is authorized to execute this Guaranty and in fact 
executed the Guaranty on behalf of the corporation.
 

                                                      [SEAL APPEARS HERE]

By /s/ Carol A. Voorhees                 Residing at
  ---------------------------                        --------------------------

Notary Public in and for the State of        
                                      -----------------------------


My commission expires
                      ----------------------------

================================================================================
LASER PRO, Reg. U.S. Pat, & T.M. Off., Ver. 3.21 (c)1996 CFI ProServices, Inc.
All Rights reserved. [NV-E20 1READYMI.LNR18.OVL]
<PAGE>
 
                    DISBURSEMENT REQUEST AND AUTHORIZATION
<TABLE> 
--------------------------------------------------------------------------------------------------------------
 Principal   Loan Date     Maturity    Loan No   Call   Collateral   Account   Officer   Initials
<S>          <C>          <C>          <C>       <C>    <C>          <C>       <C>       <C> 
$420,000.00  08-06-1996   08-15-2003    5001      91       5140      7326653    15575    [INITIALS APPEAR HERE]
 ..............................................................................................................
</TABLE> 
References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan item.
--------------------------------------------------------------------------------
Borrower:                              Lender:
  Ready Mix, Inc. (TIN: 88-0171959)      NEVADA STATE BANK
  100 W. Country Club Dr.                CORPORATE BANKING
  Henderson, NV  89015                   201 SOUTH 4TH STREET
                                         P.O. BOX 990
                                         LAS VEGAS, NV  89125-0990
================================================================================

LOAN TYPE. This is a Fixed Rate (9.330% initial rate), Irregular Payment Loan to
a Corporation for $420,000.00 due on August 15, 2003.

PRIMARY PURPOSE OF LOAN. The primary purpose of this loan is for:
        
        [_] Personal, Family, or Household Purposes or Personal Investment.
        [x] Business (Including Real Estate Investment).

SPECIFIC PURPOSE. The specific purpose of this loan is: Acquire Property for 
Concrete Batch Plant.

DISBURSEMENT INSTRUCTIONS. Burrower understands that no loan proceeds will be 
disbursed until all Lender's conditions for making the loan have been satisfied.
Please disburse the loan proceeds of $420,000.00 as follows:

                Amount paid to Borrower directly:                   $420,000.00
                 $420,000.00 Lender's Check # CC# 720592            
                                                 ---------------   -------------

                Note Principal:                                     $420,000.00

CHARGES PAID IN CASH. Borrower has paid or will pay in cash as agreed the 
following charges:

                Prepaid Finance Charges Paid in Cash:                 $2,100.00 
                  $2,100.00 Points                                 
                                                                   -------------

                Total Charges Paid in Cash:                           $2,100.00


FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND
WARRANTS TO LENDER THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND
THAT THERE HAS BEEN NO MATERIAL ADVERSE CHANGE IN BORROWER'S FINANCIAL CONDITION
AS DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO LENDER. THIS
AUTHORIZATION IS DATED AUGUST______________.


BORROWER:

Ready Mix, Inc.

By: /s/ Kenneth Nelson
   --------------------------
   Kenneth Nelson, Treasurer

================================================================================
Fixed Rate. Irregular.   LASER PRO, Reg. U.S. Pat.& T.M. Off., Ver.3.21(c) 
1996 CFI ProServices, Inc. All rights reserved.[NV-120 1READYMI.LN R18.OVL]