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                                                                  EXHIBIT 10.256

                        SETTLEMENT AGREEMENT AND RELEASE

     THIS SETTLEMENT AGREEMENT AND RELEASE ("Settlement Agreement") is entered
into this 8th day of January, 2004, by and between Meadow Valley Contractors,
Inc., (hereafter, Plaintiff) and the New Mexico Department of Transportation,
(hereafter, Defendant) to memorialize that the parties stipulate, covenant and
agree as follows:

     1. Plaintiff has asserted various claims against the Defendant in
connection with highway construction projects commonly referred to as
TPA-NH-070-4(31)260 CN209l;TPA-0048(l2) CN1738; and, TPA-(TPO)-0048(10)CN0999R
(hereafter, the Projects); and, Defendant has denied the validity of and any
liability on those claims, and has asserted its contractual rights to withhold
retainage and liquidated damages.

     2. The parties have engaged in the required administrative reviews of the
claims made and issues raised.

     3. Plaintiff and Defendant have engaged in lengthy negotiations during
mediations of the Projects in an effort to attempt resolution of the claims made
and issues raised by the parties in connection with the Projects.

     4. Plaintiff filed suit on its claims in the First Judicial District Court
with cause numbers D-0101-CV-2002-01586(CN2091)and D-0101-CV-2003-01162(CN
1738R); but, had not filed suit on CN 0999R prior to reaching this Accord.

     5. As a result of the mediation of the claims made in connection with the


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Projects, the parties have reached an Accord with regard to all the claims and
issues between them; but, without regard to the validity or invalidity of the
claims or defenses raised by either party.

     6. As part of that Accord, the parties desire to provide for full and final
settlement in discharge of all claims and actions arising out of or connected in
any way to the Projects and to discharge one another from any and all liability
for their respective claims; provided, that the parties agree that this Accord
and settlement shall have no effect on other projects and/or claims or defenses
raised in connection with other projects not specifically referenced in this
document.

     7. In satisfaction of this Accord, Defendant agrees to pay, and Plaintiff
agrees to accept the full, final and total sum of Seven Million Dollars
($7,000,000.00), plus applicable New Mexico Gross Receipts Tax, as a lump sum
settlement, payment and discharge of all contractual obligations and all claims
which were made, or which could have been made by or through Plaintiff or by
Defendant on each of the Projects. The parties acknowledge and agree that this
amount, together with those sums already paid, represents all that will be paid
or released by Defendant, and all that will be accepted or received by Plaintiff
on each of the Projects, it being the intent of the parties to fully and finally
resolve all issues on the Projects including the parties' claims regarding
retainage, liquidated damages, change orders, interest and claims of any other
nature or description.

     8. In further satisfaction of this Accord, and in consideration of the
mutual agreements, payments, and releases contained in this Settlement
Agreement, the


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parties agree to release and forever discharge one another and their insurers
and sureties, including but not limited to Insurance Company of the State of
Pennsylvania, from any and all liability, contractual or otherwise, including
all claims which were made, or which could have been made or raised in
connection with the Projects and in connection with all work prosecuted, all
materials and labor provided, and all claims for additional compensation on the
Projects.

     9. As a condition precedent to payment of the amount agreed to, Plaintiff
agrees to submit the following documents for each Project to Defendant:
FULLY EXECUTED FINAL ESTIMATE FORM and PAYMENT VOUCHER;
FINAL CHANGE ORDER MEMORIALIZING THIS ACCORD;
PIT RELEASES OR PROOF OF COMMERCIAL PIT DESIGNATION OR COPIES
OF LONG TERM LEASES;
CONSENT OF SURETIES;
PR 47 FEDERAL EQUIPMENT, LABOR AND MATERIAL FORM; and,
COMPLETED CERTIFICATION OF PAYMENT OF CLAIMS FORM.

     10. Within seven (7) days of the execution of the Settlement Agreement,
Defendant shall prepare and deliver the Change Orders required above to
Plaintiff.

     11. Within seven (7) days of the receipt from Plaintiff by Defendant of the
executed Change Orders, Defendant shall prepare and deliver to Plaintiff the
Final Estimate Forms and Payment Vouchers required above to Plaintiff for
execution.

     12. Within 45 days of receipt by Department of all the documents referred
to in Paragraph 9 above, fully executed and completed by Plaintiff, Defendant
shall


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make the payment agreed to in Paragraph 7.

     13. Plaintiff agrees to indemnify and hold Defendant harmless from any and
all claims, charges, liens, causes of action, damages of any nature or other
demands by any mechanics, materialmen, subcontractors, utility providers,
vendors, suppliers, or others providing labor, services or materials to Meadow
Valley or its subcontractors on the Projects.

     14. The parties agree that this Settlement Agreement and the parties'
Accord and settlement shall be interpreted and construed according to New Mexico
law.

     15. The parties stipulate and agree that none of the terms of this Accord
and Settlement Agreement or the parties' negotiations shall be argued or
construed to constitute a waiver of the parties' rights and/or obligations under
other contracts or constitute any sort of estoppel or bar to enforcement of
their respective rights, claims, defenses and/or obligations under other
contracts between them, Johnson & Danley or their sureties.

     16. The parties warrant and agree that their respective representatives
participating in the mediation referred to above have the full and final
authority to reach and enter into this Accord and Settlement Agreement and to
fully bind their respective principals without further consultation or approval
by any board, executive, director or otherwise.

     17. The parties further agree and stipulate that, in making this
settlement, they have not relied on statements or representations regarding
their respective rights, claims for damages, defenses or material facts by the
other party or their agents,


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attorneys, representatives or insurers. Each party has considered all of these
matters and has relied on its own judgment and that of its agents, as well as
the advice of its own attorneys.

     18. The parties agree and stipulate that reaching this Accord and its
satisfaction does not constitute an admission of liability on the part of
either, but rather that the payment represents a compromise settlement of a
disputed claim for the purpose of resolving the claims, completing the Projects
and avoiding additional cost and expenses of litigation.

     19. Upon receipt of the payment described above, the parties agree that
they will cooperate in executing and filing appropriate papers with the First
Judicial District Court to dismiss with prejudice any lawsuits arising out of
these Projects.

     20. The parties shall bear their own costs and attorneys' fees incurred in
connection with the Projects, including prosecution of the claims and defenses
and this mediated settlement.

     STIPULATED, AGREED TO AND APPROVED THIS 8TH DAY OF JANUARY, 2004.

MEADOW VALLEY CONTRACTORS, INC.

By: /s/ Sam Grasmick
    -----------------------------------------
    Sam Grasmick

By: /s/ Ken Nelson
    -----------------------------------------
    Ken Nelson


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NEW MEXICO DEPARTMENT OF TRANSPORTATION

By: /s/ Robert Ortiz
    -----------------------------------------
    Robert Ortiz
    Acting Deputy Secretary

APPROVED:

By: /s/ John Randall Jeffries
    -----------------------------------------
    John Randall Jeffries
    Attorney for Plaintiff Meadow Valley

By: /s/ Kendall Fischer
    -----------------------------------------
    Kendall Fischer
    Deputy General Counsel
    Department of Transportation

By: /s/ Steven S. Scholl
    -----------------------------------------
    Steven S. Scholl
    Attorney for Department of Transportation

By: /s/ Ray Pederson
    -----------------------------------------
    Ray Pederson
    Federal Highway Administration
    for New Mexico Division Administrator
    J. Don Martinez


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