<PAGE>
 
                                                                   Debtor's Copy
                                                                   -------------
[LOGO OF THE ASSOCIATED 
GENERAL CONTRACTORS        CONVEYOR SALES COMPANY
OF AMERICA APPEARS HERE]     425 S. 48TH STREET
                           Phoenix, Arizona 85034
                     Phone: 602-273-1455 Fax: 602-273-1457



               CONDITIONAL SALES CONTRACT AND SECURITY AGREEMENT
This Conditional Sales Contract and Security Agreement is made this 18th day of 
December, 1996 between MEADOW VALLEY CONTRACTORS, INC. hereafter referred to as 
"Debtor" and Conveyor Sales Company, an Arizona Corporation, hereafter referred 
to as "Seller".  Debtor hereby grants to Seller a security interest in the 
personal property described in Exhibit "A" hereto, together with all attachments
replacements, substitutions, additions, and proceeds.

For Mailing, Billing, and Notice Purposes, the following Addresses, Phone 
Numbers and Facsimile Numbers shall be used:
For Debtor:                                       For Seller:
            Meadow Valley Contractors, Inc.       Conveyor Sales Company
            4411 South 40th Street., Suite D-11   425 S. 48th Street
            Phoenix, AZ 85040                     Phoenix, Arizona 85034
Attention:_____________________________________   Attention:  Paul C. Helmick
Phone:_________________________________________   Phone:  602-273-1455
Fax:___________________________________________   Fax:  602-273-1457

Seller has sold the personal property described in Exhibit "A" to this Agreement
to Debtor.  The personal property described in Exhibit "A" shall at all times 
remain personal property and shall be located at Moapa, Nevada during the term 
of this Agreement.  The personal property described in Exhibit "A" shall be 
hereafter referred to as "Equipment".

The Equipment is to be used for only business, commercial or farming use.

The agreed total purchase price to be paid for the Equipment exclusive of 
interest is $33,180.00.

Debtor has made a down payment of $ZERO.

The agreed balance owed by Debtor after application of the down payment is 
$33,180.00.

The balance owed by Debtor shall be paid for a maximum period of 36 months as 
follows:

1.   Interest Rate:  Monthly payments of $921.67 or more per month plus monthly 
interest based on a 360 day year at the rate equal to 10.0%.

In the event that Norwest Bank Arizona ceases to publish its "Prime Lending 
Rate" a comparable reference rate of interest shall apply during the term of 
this Agreement.

Seller shall notify Debtor in writing of the interest rate which shall apply to 
a particular month's payment.  The interest rate for the first monthly payment 
shall be at 10.0% per annum.

2.  Due Date of Payments:  Monthly payments shall be due and payable at the 
office of Seller on or before the 18th day of each calendar month which date 
shall hereafter be referred to as the "due date".  The first monthly payment 
under this Agreement shall be due on January 18, 1997.

3.  Delinquent Payments:  In the event that Seller receives a payment 5 days 
after its due date, there shall be added a late charge of 5% of the monthly 
payment amount due.

In the event that a payment remains delinquent 15 days after its due date, the 
interest rate due from Debtor shall be increased from the amount specified in 
paragraph 1 by 5% or the interest rate shall be increased to the maximum rate 
allowed by Arizona State law for business or commercial loans, whichever rate is
greater.


                                      -1-
<PAGE>
 
Example: The interest rate specified in paragraph 1 is 9% per annum.  A monthly 
payment remains delinquent 15 days after its due date.  In such event, the 
interest rate would be increased to 14% per annum.  In the event that the 
interest rate permitted under Arizona State Law for business or commercial loans
was 18% per annum, the interest rate would be increased to 18%.

In the event that the interest rate permitted under Arizona State Law for 
business or commercial loans was 12% per annum, then the interest rate would be 
increased to 14% per annum.

4.  Disputes: Should any dispute arise between Seller and Debtor, the parties 
agree to negotiate such dispute in good faith.  If the parties are unable to so 
resolve such dispute, the dispute shall be submitted to binding arbitration.

The arbitration shall be conducted in Phoenix, Arizona under the rules and 
procedures of the American Arbitration Association as soon as is practicable 
after notice to arbitrate has been given in writing from one party to the other.

The decision of the arbitrator shall be dispositive of the dispute and shall be 
binding on the parties.  The arbitrator's award against the non-prevailing party
shall include an award of any attorney's fees and costs incurred in preparation 
for and completion of such arbitration.

The decision of the arbitrator may be registered as a judgment against the 
non-prevailing party in the county and state of domicile of the non-prevailing 
party.

5.  Title to Remain In Seller: No title to the Equipment shall pass to the
Debtor except as provided in this paragraph. Seller reserves a purchase money
security interest in the Equipment until all sums due under this Contract are
fully paid in cash and until all of the terms and conditions of this Contract
are fully performed by Debtor.

Upon the full performance of all of the terms and conditions of this Contract, 
title to the Equipment shall pass to Debtor.

6.  Condition of Equipment: Debtor agrees that Debtor has inspected the
Equipment and has approved the condition of such Equipment "AS IS" and "WHERE
IS".

Debtor acknowledges and agrees that Seller has made no representations of any 
kind or sort regarding the condition of the Equipment, its merchantability, its
fitness for a particular purpose, nor its fitness for Debtor's Use.

7.  Liability of Debtor: Debtor's liability under this Contract shall not be 
reduced, diminished, or affected by any of the following:
     a.  Loss, Injury, or Destruction of the Equipment.
     b.  Transfer, Renewal, Extension, or Assignment of this Contract.
     c.  Any defects either actual or alleged in the Equipment including its
     lack of merchantability, its fitness for a particular purpose, or its
     fitness for Debtor's Use.

8.  Assignment of Contract By Seller: Seller may assign this Contract.  Upon 
assignment, Seller's assignee shall have all of the rights of Seller in and 
to this Contract.

Debtor shall not transfer any interest in this Contract nor in the Equipment 
without the written consent of Seller or Seller's assignee.  Debtor shall not 
place the Equipment for hire or allow use of such Equipment by third parties 
without the written consent of Seller or Seller's assignee.

9.  Insurance: The Debtor shall keep the Equipment insured for liability and 
against loss of any kind for the full insurable value of such Equipment.  The 
insurance shall be placed with an insurance company acceptable to Seller.  Such
policy shall have a loss payable to the seller and the Debtor as their interests
may appear. Debtor hereby assigns to Seller any interest Debtor may have to any
insurance proceeds. Debtor hereby authorizes Seller to make any settlement or
compromise with such insurance carrier.

10. Obligations of Debtor under this Contract: Debtor agrees that Debtor has
    the following obligations under this Contract:
     a.  To make all payments called for in this Contract in a timely manner.
     b.  To keep the Equipment free from all liens, taxes, encumbrances, 
     attachments, levies or legal process.
     c.  To keep the Equipment insured in conformance with the provisions of 
     paragraph 9 herein.
     d.  To provide proof to Seller in form satisfactory to Seller, and at such
     times as Seller shall require, that Debtor has paid all taxes and
     insurance premiums as they become due.
     e.  To keep the Equipment in good working order and repair and to preserve
     the condition of such Equipment at all times during the term of this
     Contract.

                                      -2-
     

<PAGE>
 
     f.To use the Equipment for only legal purposes and to operate such
     Equipment in conformance with all rules, regulations, and operating
     standards issued by any governmental entities having authority over the
     operation of such Equipment.
     g.To obtain the written permission of Seller or Seller's assignee before
     moving or relocating the Equipment from the agreed location of the
     Equipment shown on page 1 of this Contract.

11.Default: The following events shall constitute a default under the terms of 
   this Contract:
     a.Debtor fails to fulfill any of its obligations under the terms of this 
     Contract.
     b.Debtor becomes insolvent.
     c.Debtor files or is placed into Bankruptcy.
     d.Debtor makes a general assignment for the benefit of creditors or a 
     Receiver is appointed for Debtor.
     e.Debtor makes a material misrepresentation to Seller about its financial 
     condition, the operation, condition, or maintenance of the Equipment.
     f.Debtor takes such actions or omits such actions so as to give reasonable 
     cause to Seller to believe that the Equipment is in danger of misuse,
     removal, concealment, or confiscation.

12.Rights of Seller Upon Default: In the event of default by Debtor, Seller or 
Seller's assignee shall have all of the rights of a secured party of an unpaid 
Seller of  goods under the Uniform Commercial Code of Arizona and other 
applicable Arizona state laws.

Such rights shall include the right of Seller to require Debtor to assemble the 
Equipment and make it available to Seller at a place designated by Seller.

The laws of the State of Arizona shall apply to this Contract.

13.No Waiver of  Default: Debtor agrees that time is of the essence for this 
   Contract.

The following shall not be deemed to be a waiver of any of Seller's rights under
this Contract nor shall the following be deemed to be a waiver of Seller's right
to strictly enforce the terms of this Contract:
     a.The acceptance by Seller or Seller's assignee, after default by Debtor,of
     any payment.
     b.The acceptance by Seller or Seller's assignee, after default by Debtor,of
     any other performance by Debtor.
     c.The failure of Seller or Seller's assignee to promptly enforce the terms 
of this Contract.

This Contract cannot be modified except by a written modification signed by both
Seller and Debtor. This Contract cannot be modified by the course of conduct or 
dealings between Seller and Debtor.
<PAGE>
 
EXHIBIT "A" TO CONDITIONAL SALES CONTRACT AND SECURITY AGREEMENT

BETWEEN CONVEYOR SALES COMPANY                                         as SELLER
        ---------------------------------------------------------------

AND   Meadow Valley Contractors, Inc.
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                                                                       as DEBTOR
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    Description of Personal Property ("Equipment") being sold and in which a
    Security Interest is Granted:

  1.  36" x 60" Channel Conveyor (9-36-7511AA) w/Marathon 20hp motor (9M20M-370)
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      & Leroy Somer 215 Reducer (19153040/001), valued @ 12,500.00. Less 10%
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  2.  30" x 84" Lattice Conveyor (9-30-7284AA), w/Westinghouse 20hp motor 
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      (9M20W-321) & Leroy Somer 215 Reducer (794313/023)w/Carrier (9-2496AA), 
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      valued @ $23,700.00 Less 10% Freight = $600.00
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CONVEYOR SALES COMPANY                         MEADOW VALLEY CONTRACTORS, INC.
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BY: [SIGNATURE APPEARS HERE]   (President)     BY: /s/ Kenneth D. Nelson
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          (Seller)                                       (Debtor)

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