Document:

<PAGE>

                                                                    Exhibit 10.2

                                      [LOGO]
                                     MISSION
                                    RESOURCES

Wednesday, January 30, 2002

Kent Rogers
Vice President - Houston Operations
Torch Energy Services
1221 Lamar Street, Suite 1600
Houston, TX 77010-3030

Kent:

Pursuant to paragraph 1 in our Restated and Amended Field Operating Services
Agreement, that was executed by you, on behalf of Torch Energy Services, Inc.
(TES) and Joe Nicknish, on behalf of Mission Resources Corporation (MSSN)
effective July 1, 2001, this letter will serve as formal 120 days notice of our
intent to terminate the agreement.

MSSN has enjoyed our relationship and appreciates the commitment that TES has
demonstrated over the last several months. We expect that same level of
commitment to continue through the termination date of our contract which is
06/30/2002.

As our termination date approaches, MSSN will evaluate operational needs and
respond accordingly.

Should you have any questions, please advise.

/s/ Stephen W. Turk
Stephen W. Turk
Operations Manager
Mission Resources Corporation

Cc     Doughlas Manner
       Jon Clarkson
       Joe Nicknish
       Kent Williamson
       Dan Foley
       Byron Yeatman
       Ann Kaesermann

                                      *
           1331 LAMAR, SUITE 1455  HOUSTON, TEXAS 77010-3039
      TEL (713) 495-3000 FAX (713) 652-2916 WWW.MISSIONRESOURCESCORP.COM
<PAGE>

                                      [LOGO]
                                     MISSION
                                    RESOURCES

February 1, 2002

Mr. J. P. Bryan
Torch Energy Advisors, Inc.
1221 Lamar, Suite 1600
Houston, Texas 77010

Dear J.P.:

Pursuant to Section 1 of the Restated and Amended Oil and Gas Administration
Services Agreement between Mission Resources Corporation and Novistar, Inc.,
Mission is electing to terminate such Agreement between Mission and Novistar.
The termination date is June 30, 2002. As required in the Agreement, the
termination date is at least 90 days from the date of notice. Since there will
be no Base or Variable Fees remaining in this Agreement, calculated from the
termination date, no termination fee is required. The termination of the
Agreement will relieve Mission of any and all future obligations associated with
the Agreement.

We appreciate the very professional and efficient execution of the Agreement by
Novistar over the past years.

Sincerely,

/s/ Jon Clarkson
Jon Clarkson
President

Acknowledged and Agreed
/s/ J.P. Bryan
--------------
J.P. Bryan

                                      *
           1331 LAMAR, SUITE 1455  HOUSTON, TEXAS 77010-3039
      TEL (713) 495-3000 FAX (713) 652-2916 WWW.MISSIONRESOURCESCORP.COM<PAGE>
                                                                  EXHIBIT 10.187

                                                                    C#:18009
                                                                    L#:17204
                                                                  Ls#:FLP0011391
[LOGO]

                                                                 Promissory Note
________________________________________________________________________________

$266,160.00                        Funding Date:____________________/_____(Year)

     FOR VALUE RECEIVED, READY MIX, INC., a Nevada corporation ("Maker"),
promises to pay to the order of Key Equipment Finance, a Division of Key
Corporate Capital Inc., ("Holder"), the sum of $266,160.00 in lawful money of
the United States of America (the "Principal"), with interest thereon as
hereafter provided ("Interest"), to be paid in the manner set forth herein. This
Note is executed pursuant to that certain security agreement (the "Security
Agreement") dated as of April 15, 2002 between Maker and Holder. Capitalized
terms used herein without definition shall have the meaning given them in the
Security Agreement.

1.   Interest Rate; Place of Payment. Interest on the balance of the Principal
     -------------------------------
outstanding on this Note shall accrue from the Funding Date of this Note and
shall be due and payable at a fixed rate of nine percent (9.00%) per annum (the
"Interest Rate"). Interest shall be calculated on the basis of a 360-day year
consisting of twelve 30-day months. Payment of the Principal and Interest
hereunder shall be made to Holder at 66 South Pearl Street, Post Office Box
1865, Albany, NY 12207-1865, or at such other place as Holder may designate from
time to time in writing. Holder reserves the right to require payment on this
Note to be made by wired federal funds or other immediately available funds.

2.   Repayment Terms. The Principal and Interest shall be due and payable in
     ---------------
twenty four (24) consecutive monthly installments payable in advance, each in an
amount equal to $12,068.93 commencing and payable on the Funding Date and on the
same day of each month thereafter. In addition, Maker will pay a late payment
charge of five percent (5%) of any payment due hereunder that is not paid on or
before the date due hereunder.

3.   Security. Payment of the Principal and Interest hereunder, and the
     --------
performance and observance by Maker of all agreements, covenants and provisions
contained herein, is secured by a first priority security interest in the
Collateral.

4.   Prepayment. Except as contemplated by clause (3) of section 10 of the
     ----------
Security Agreement, Maker may not prepay, in whole or in part, the principal
outstanding hereunder; provided, however, that Maker may prepay, in whole but
                       --------  -------
not in part, the principal outstanding hereunder by paying to Holder such
outstanding principal, together with all accrued and unpaid interest thereon,
plus a prepayment premium ("Prepayment Premium") equal to five percent (5%) of
such outstanding principal.

5.   Transfer or Assignment. Holder may at any time assign or otherwise transfer
     ----------------------
or negotiate this Note in whole or in part, without any notice to Maker. The
rights and obligations of Maker may not be assigned or delegated.

6.   Application of Payments. Prior to an Event of Default, each payment
     -----------------------
received on this Note shall be applied first to all costs of collection, then to
unpaid late payment charges (if any) and Prepayment Premium (if any) hereunder,
then to Interest as of the payment due date and the balance, if any, to the
outstanding Principal as of the date received. Upon the occurrence, and during
the continuance, of an Event of Default, any payments in respect of the Secured
Obligations and any proceeds of the Collateral when received by Holder in cash
or its equivalent, will be applied first to costs of collection and, thereafter,
in reduction of the Secured Obligations in such order and manner as Holder may
direct in its sole discretion, and Maker irrevocably waives the right to direct
the application of such payments and proceeds and acknowledges and agrees that
Holder shall have the continuing and exclusive right to apply any and all such
payments and proceeds in the Holder's sole discretion, notwithstanding any entry
to the contrary upon any of its books and records.

7.   Events of Default. (a) Maker shall be in default if any of the following
     -----------------
happens (an "Event of Default"): (1) Maker fails to make any installment of the
Principal or Interest, or any other payment due and owing, under this Note
within ten (10) days after the same becomes due and payable; or (2) Maker fails
to perform any other obligation required to be performed by Maker under this
Note, the Security Agreement or any of the other Loan
________________________________________________________________________________
                                                                     Page 1 of 3
<PAGE>

Documents for thirty (30) days after written notice from Holder of such failure;
or (3) any representation, warranty or other statement by or on behalf of Maker
in connection with this Note is false or misleading in any material respect; or
(4) an Event of Default has occurred and is continuing under the Security
Agreement.

     (b) Notwithstanding anything to the contrary contained herein, upon the
occurrence of an Event of Default, Holder may declare the entire outstanding
balance of the Principal, together with all accrued and unpaid Interest
thereon, immediately due and payable without notice or demand which amounts
shall, together with all other sums due hereunder, accrue interest from such
acceleration until the date of actual payment at the Default Rate (provided,
however, that should there occur an Event of Default, and if a voluntary or
involuntary petition under the United States Bankruptcy Code is filed by or
against Maker while such default remains uncured, the entire outstanding balance
of the Principal automatically shall be accelerated and due and payable with
interest thereon at the Default Rate), and Holder may exercise any and all of
its remedies hereunder, under the other Loan Documents and under Applicable Law.
The remedies of Holder provided herein, in the Security Agreement and under
Applicable Law shall be cumulative and concurrent and may be pursued singly,
successively or concurrently at the sole discretion of Holder and may be
exercised as often as occasion therefor shall occur. The failure to exercise,
or any delay in the exercise of, any right or remedy shall in no event be
construed as a waiver, release or exhaustion of any such remedies.

8.   Collection Costs. In addition to the Principal, Interest, Prepayment
     ----------------
Premium (if any), and late payment charges (if any), Maker shall pay Holder on
demand, and Holder shall be entitled to collect all costs and expenses of
collection, including, without limitation, reasonable attorney's fees, incurred
in connection with enforcement of its rights and remedies hereunder and under
the other Loan Documents, the protection or realization or the Collateral or in
connection with Holder's collection efforts, or in connection with any
bankruptcy or other judicial proceeding, whether or not suit on this Note or any
foreclosure proceeding is filed. All such costs and expenses shall be payable on
demand and, until paid, shall be Secured Obligations secured by the security
interest granted under the Security Agreement and all other collateral, if any,
held by Holder as security for Maker's obligations under this Note.

9.   Governing Law; Binding Agreement. The provisions of this Note shall be
     --------------------------------
binding upon, and shall inure to the benefit of, the parties hereto and their
respective successors and assigns.  THIS NOTE IS BEING DELIVERED IN THE STATE OF
NEW YORK AND SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR CONFLICT OF LAWS
PROVISION OR RULE (WHETHER OF THE STATE OF NEW YORK OR ANY OTHER JURISDICTION)
THAT WOULD CAUSE THE APPLICATION OF THE LAWS OF ANY JURISDICTION OTHER THAN THE
STATE OF NEW YORK.

10.  More than One Signer. If more than one person or entity signs this Note as
     --------------------
a Maker, the obligations contained herein shall be deemed joint and several and
all references to "Maker" shall apply both jointly and severally.

11.  General. Maker represents and warrants that this Note evidences a loan for
     -------
business or commercial purposes. Prior to signing this Note, Maker read and
understood the provisions hereof, and agrees to all terms and conditions
contained herein.

12.  Waiver. MAKER AND ALL ENDORSERS, SURETIES, AND GUARANTORS HEREOF HEREBY
     ------
JOINTLY AND SEVERALLY WAIVE PRESENTMENT FOR PAYMENT, DEMAND, NOTICE OF NON-
PAYMENT OR DISHONOR, NOTICE OF INTENTION TO ACCELERATE THE MATURITY, NOTICE OF
PROTEST AND PROTEST OF THIS NOTE, HOLDER AND MAKER HEREBY EACH WAIVE THEIR
RESPECTIVE RIGHTS TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF OR RELATED TO THIS NOTE, THE OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION OR PROCEEDING TO
WHICH HOLDER OR MAKER MAY BE PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS,
TORT CLAIMS, OR OTHERWISE, INCLUDING WITHOUT LIMITATION ANY ACTION COUNTERCLAIM
OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY
OR ENFORCEABILITY, OF THIS NOTE OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION
HEREOF OR THEREOF. THIS WAIVER IS MADE KNOWINGLY, WILLINGLY AND VOLUNTARILY BY
HOLDER AND THE MAKER WHO EACH ACKNOWLEDGE THAT NO REPRESENTATIONS HAVE BEEN MADE
BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL
________________________________________________________________________________
                                                                     Page 2 of 3
<PAGE>

BY JURY OR IN ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. THIS WAIVER SHALL APPLY
TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS
NOTE AND OTHER LOAN DOCUMENTS.

13.  Usury; Partial Invalidity. (a) At no time shall the Interest Rate (or the
     -------------------------
Default Rate or other amounts paid or collected hereunder) exceed the highest
rate allowed by applicable law for this type of loan. Should Holder ever collect
interest at a rate that exceeds such applicable legal limit, such excess will be
credited to the Principal.

          (b) Whenever possible, each provision of this Note shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Note shall be prohibited by or invalid under the
laws of any applicable jurisdiction, such provision, as to such jurisdiction,
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Note in any other jurisdiction.

14.  Notices. All notices and other communications under this Note shall be in
     -------
writing and shall be addressed: (a) if to Maker, 3430 E. FLAMINGO RD., SUITE
100, LAS VEGAS, NV 89121-5003; and (b) if to Holder, Key Equipment Finance, a
Division of Key Corporate Capital Inc., 66 South Pearl Street, Post Office Box
1865, Albany, NY 12207-1865, Attention: Account Manager, or such other address
as either party hereto shall communicate to the other party at its address
specified above. All such notices and other communications shall be deemed to
have been duly given if delivered by hand, overnight courier or if sent by
centified mail, return receipt requested, to the party to whom such notice is
intended to be given, and shall be effective upon receipt.

15.  Funding Date. The Funding Date for this Note shall be the date on which
     ------------
Holder disburses funds hereunder. TO THE EXTENT THE FUNDING DATE IS LEFT BLANK
ABOVE, OR DOES NOT REFLECT THE ACTUAL DATE THAT HOLDER DISBURSES FUNDS
HEREUNDER, MAKER HEREBY AUTHORIZES HOLDER TO WRITE IN THE CORRECT DATE AT THE
TIME OF DISBURSEMENT.

     IN WITNESS WHEREOF, Maker, intending to be legally bound, has caused this
Note to be duly executed on the day and year first above written.

MAKER:

READY MIX, INC.

X /s/ Kenneth D. Nelson
  ---------------------
Name:  KENNETH D. NELSON
Title: VICE PRESIDENT

STATE OF ARIZONA    )
                    )ss.:
COUNTY OF MARICOPA  )

     On this 3/RD/ (Day) day of May (Month), 2002 (Year), before me the
subscriber personally appeared Kenneth D. Nelson, who being by me duly sworn,
did depose and say; that (s)he resides at Maricopa County, State of Arizona:
that (s)he is a Vice President of Ready Mix, Inc., the corporation described in
and which excecuted the foregoing instrument; and that (s)he signed his/her name
thereto by order of the Board of Directors of said corporation.

/s/ Sujean E. Sherbon
---------------------
NOTARY PUBLIC

My Commission Expires:                  [STAMP]
     June 30, 2003

________________________________________________________________________________
                                                                     Page 3 0f 3

<PAGE>

                                                                        C#:18009
                                                                        L#:17204
                                                                  Ls#:FLP0011391
[LOGO]

                                                              Security Agreement
--------------------------------------------------------------------------------

     THIS SECURITY AGREEMENT (this "Agreement" or "Security Agreement") dated as
of April 15, 2002 is made by and between READY MIX, INC., a Nevada corporation
having its chief executive office at 3430 E. FLAMINGO RD., SUITE 100, LAS VEGAS,
NV 891215003 (the "Borrower"), and Key Equipment Finance, a Division of Key
Corporate Capital Inc. and assigns, having an office at 66 South Pearl Street,
Post Office Box 1865, Albany, NY 12207-1865 ("KEF").

                             W I T N E S S E T H:
                             - - - - - - - - - -

1.   Grant of Security Interest in the Equipment. In consideration of one or
     -------------------------------------------
more loans, advances or other financial accommodations at any time before, at or
after the date hereof, made or extended by KEF to or for the account of the
Borrower, directly or indirectly, as principal, guarantor or otherwise and to
secure the prompt payment and performance in full when due, whether by lapse of
time, acceleration or otherwise, of the Secured Obligations, the Borrower hereby
pledges, assigns, transfers hypothecates to KEF and grants to KEF a security
interest in, and acknowledges and agrees that this Agreement shall create a
continuing security interest in, all of Borrower's right, title and interest in
and to the Collateral.

     The Secured Obligations of the Borrower are absolute, irrevocable and
unconditional under any and all circumstances whatsoever and shall not be
subject to any right of set-off, counterclaim, deduction, defense or other right
which the Borrower may have for any reason against any vendor, supplier,
manufacturer, KEF or any other party. All obligations of Borrower hereunder
shall survive the expiration, cancellation or other termination of this
Agreement.

2.   Definitions. Unless the context otherwise requires, as used in this
     -----------
Agreement, the following terms shall have the respective meanings indicated
below and shall be equally applicable to both the singular and the plural forms
thereof:
"Alteration" shall have the meaning specified in Section 6 hereof.
 ----------
"Applicable Law" shall mean all applicable Federal, state, local and foreign
 --------------
laws, ordinances, judgments, decrees, injunctions, writs, rules, regulations,
orders, licenses and permits of any Governmental Authority.
"Authorized Signer" shall mean any officer of Borrower, set forth on an
 -----------------
incumbency certificate (in form and substance satisfactory to KEF) delivered by
Borrower to KEF, who is authorized and empowered to execute the Loan Documents.
"Certificate of Acceptance" shall mean a certificate of acceptance, in form and
 -------------------------
substance satisfactory to KEF, executed and delivered by Borrower in accordance
with Section 3 hereof.
"Collateral" shall mean the Equipment and any and all substitutions,
 -----------
replacements or exchanges therefor, and any and all proceeds (both cash and non-
cash) receivable or received from the sale, lease, license, collection, use,
exchange or other disposition of the Collateral, including insurance proceeds,
thereof (including, without limitation, claims of the Borrower against third
parties for Loss or Damage to any such collateral).
"Collateral Schedule" shall mean each collateral schedule now or hereafter
 -------------------
attached hereto and made a part hereof, in substantially the form of Schedule 1
hereto.
"Default" shall mean any event or condition which, with the passage of time or
 -------
the giving of notice, or both, would constitute an Event of Default.
"Default Rate" shall mean an annual interest rate equal to the lesser of 18% or
 ------------
the maximum interest rate permitted by Applicable Law.
"Equipment" shall mean an item or items of personal property which are described
 ---------
on the Collateral Schedule, together with all replacement parts, additions and
accessories incorporated therein or affixed thereto including.

________________________________________________________________________________
<PAGE>

without limitation, any software that is a component or integral part of, or is
included or used in connection with, any Item of Equipment, but with respect to
such software, only to the extent of Borrower's interest therein, if any.
"Equipment Location" shall mean the location of the Equipment, as set forth on
 ------------------
Schedule 1, or such other location (approved in writing by KEF) as Borrower
shall from time to time specify in writing.
"Event of Default" shall have the meaning specified in Section 16 hereof.
 ----------------
"GAAP" shall have the meaning specified in Section 22(g) hereof.
 ----
"Governmental Action" shall mean all authorizations, consents, approvals,
 -------------------
waivers, filings and declarations of any Governmental Authority, including,
without limitation, those environmental and operating permits required for the
ownership, lease, use and operation of the Equipment.
"Governmental Authority" shall mean any foreign, Federal, state, county,
 ----------------------
municipal or other governmental authority, agency, board or court.
"Guarantor" shall mean any guarantor of the Secured Obligations.
 ---------
"Installment(s)" shall mean the periodic payments due to repay the Note, and,
 -------------
where the context hereof requires, all such additional amounts as may from time
to time be payable under any provision of the Loan Documents.
"Item of Equipment" shall mean each item of the Equipment.
 -----------------
"Liability" shall have the meaning set forth in Section 18 hereof.
 ---------
"Loan Documents" shall mean, collectively, this Agreement, the Note, and all
 --------------
other documents prepared by KEF and now or hereafter executed in connection
therewith.
"Lien" shall mean all mortgages, pledges, security interests, liens,
 ----
encumbrances, claims or other charges of any kind whatsoever, except the
security interest of KEF created by this Agreement.
"Loss or Damage" shall mean any loss, theft, destruction, disappearance or any
 --------------
condemnation, expropriation or requisition of or damage to any Item of
Equipment.
"Note" shall mean that certain Promissory Note in the original principal amount
 ----
of $266,160.00 executed in connection herewith, together with any extensions,
modifications, renewals, refinancings or other restructurings thereof.
"Secured Obligations" means all of the following obligations of Borrower,
 -------------------
whether direct or indirect, absolute or contingent, matured or unmatured,
originally contracted with KEF or another party, and now or hereafter owing to
or acquired in any manner partially or totally by KEF or in which KEF may have
acquired a participation, contracted by Borrower alone or jointly or severally:
(a) any and all indebtedness, obligations, liabilities, contracts, indentures,
agreements, warranties, covenants, guaranties, representations, provisions,
terms, and conditions of whatever kind, now existing or hereafter arising, and
however evidenced, that are now or hereafter owed, incurred or executed by
Borrower to, in favor of, or with KEF (including, without limitation, those as
are set forth or contained in, referred to, evidenced by, or executed with
reference to the Loan Documents, any letter of credit agreements, advance
agreements, indemnity agreements, guaranties, lines of credit, mortgage deeds,
security agreements, assignments, pledge agreements, hypothecation agreements,
instruments, and acceptance financing agreements), and including any partial or
total extension, restatement, renewal, amendment, and substitution thereof or
therefor; (b) any and all claims of whatever kind of KEF against Borrower, now
existing or hereafter arising, including, without limitation, any arising out of
or in any way connected with warranties made by Borrower to KEF in connection
with any instrument purchased by KEF; and (c) any and all of KEF's fees, costs
and expenses related to the foregoing.
"Supplier" shall mean the manufacturer or the vendor of the Equipment, as set
 --------
forth on each Collateral Schedule.
"Term" shall mean the term of the Note.
 ----
"UCC" shall have the meaning set forth in Section 16(b)(2) hereof. Where
 ---
applicable and except as otherwise defined herein, terms used in this Agreement
shall have the meaning assigned to them in the UCC.
"Upgrade" shall have the meaning specified in Section 8 hereof.
 -------

3.   Delivery and Acceptance. Concurrently with execution of the Collateral
     -----------------------
Schedule hereunder, Borrower shall execute and deliver to KEF a Certificate of
Acceptance for the Equipment described on such Collateral Schedule. KEF SHALL
HAVE NO OBLIGATION TO ADVANCE ANY FUNDS TO BORROWER UNLESS AND UNTIL KEF SHALL
HAVE RECEIVED A CERTIFICATE OF ACCEPTANCE RELATING TO THE EQUIPMENT EXECUTED BY
BORROWER. Such Certificate of Acceptance shall constitute Borrower's
acknowledgment that such Equipment (a) was received by Borrower, (b) is
satisfactory to Borrower in all respects,

________________________________________________________________________________
                                                                    Page 2 of 12
<PAGE>

(c) is suitable for Borrower's purposes, (d) is in good order, repair and
condition, (e) has been installed and operates properly, and (f) is subject to
all of the terms and conditions of the Loan Documents. Borrower's execution and
delivery of a Certificate of Acceptance shall be conclusive evidence as between
KEF and Borrower that the Items of Equipment described therein are in all of the
foregoing respects satisfactory to Borrower, and Borrower shall not assert any
claim of any nature whatsoever against KEF based on any of the foregoing
matters; provided, however, that nothing contained herein shall in any way bar,
         --------- -------
reduce or defeat any claim that Borrower may have against the Supplier or any
other person (other than KEF).

4.   Payments. Borrower shall pay the Note on the terms set forth therein.  All
     --------
Installments shall be payable when due whether or not Borrower has received any
additional notice that such Installments are due.  All Installments shall be
paid to KEF at 66 South Pearl Street, Post Office Box 1865, Albany, NY
12207-1865, or as otherwise directed by KEF in writing.

5.   Location; Inspection; Labels.  The Equipment shall be delivered to the
     ----------------------------
Equipment Location and shall not be removed therefrom without KEF's prior
written consent.  Borrower shall maintain possession and control of the
Equipment at all times.  Borrower will promptly give written notice to KEF of
any change in the identity or location of any Item of Equipment which might
require new filings or other action to assure continued perfection of the
security interest of KEF granted hereby. The Borrower owns, and will continue to
own, all Equipment Locations except as otherwise indicated on Schedule 1. KEF
shall have the right to enter upon the Equipment Location and inspect the
Equipment at any reasonable time.

6.   Use; Alterations.  Borrower shall use the Equipment only in the course of
     ----------------
its business commercial purposes (and shall not permanently discontinue use of
the Equipment), and in compliance with Applicable Law and the requirements of
any applicable insurance policies, and only in the manner for which it was
designed and intended and so as to subject it only to ordinary wear and tear.
Borrower shall comply with all Applicable Law with respect to the Equipment.
Borrower shall immediately notify KEF in writing of any existing or threatened
investigation, claim or action by any Governmental Authority in connection with
any Applicable Law or Governmental Action which could adversely affect the value
of the Equipment or the perfection or priority of the security interest of KEF
in the Collateral. Borrower shall not make any material alterations, additions,
modifications or improvements (each, an "Alteration") to the Equipment without
KEF's prior written consent; provided that Borrower, at its own expense, shall
make Alterations as may be required from time to time to meet the requirements
of Applicable Law or Governmental Action. All such Alterations immediately, and
without further act, shall be deemed to constitute Items of Equipment and fully
be subject to the security interest granted to KEF hereunder.

7.   Repairs and Maintenance.  Borrower, at Borrower's own cost and expense,
     -----------------------
shall (a) keep the Equipment in good repair, operating condition and working
order and in compliance with the manufacturer's specifications and Borrower's
standard practices (but with respect to the latter, in no event less than
industry practices). An alternate source of maintenance may be used by Borrower
with KEF's prior written consent.  Borrower, at its own cost and expense and
within a reasonable period of time, shall replace any part of any Item of
Equipment that is unfit or unavailable for use from any cause (whether or not
such replacement is covered by the aforesaid maintenance agreement) with a
replacement part of the same manufacture, value, remaining useful life and
utility as the replaced part immediately preceding the replacement (assuming
that such replaced part was in the condition required by this Agreement). Such
replacement part shall be free and clear of all Liens and upon installation,
attachment or incorporation in, on or into such Item of Equipment, such
replacement part immediately, and without further act, shall be deemed to
constitute an Item of Equipment and fully be subject to the security interest
granted to KEF hereunder. If KEF repossesses the Equipment pursuant to its
rights under this Agreement and at that time, in the opinion of KEF, any Item of
Equipment fails to meet the standards set forth above, Borrower agrees to pay on
demand all costs and expenses incurred in connection with repairing or restoring
such Item of Equipment so as to meet such standards and/or assembling and
delivering such Item of Equipment.

________________________________________________________________________________
                                                                    Page 3 of 12
<PAGE>

8.   Equipment Upgrades/Attachments. In addition to the requirements of Section
     ------------------------------                                     -------
6 hereof, Borrower, at its own expense, may from time to time add or install
-
upgrades or attachments (each, an "Upgrade") to the Equipment; provided, that
                                                               --------
such Upgrades are readily removable without causing material damage to the
Equipment, and do not materially adversely affect the fair market value of the
Equipment. Any such Upgrades shall be owned by Borrower, shall become subject to
the security interest created by this Agreement and shall be kept free and clear
of all Liens so long as attached to the Equipment.

9.   Lease and Assignment. (a) WITHOUT KEF'S PRIOR WRITTEN CONSENT, BORROWER
     --------------------
SHALL NOT (1) ASSIGN, TRANSFER, PLEDGE, HYPOTHECATE OR OTHERWISE DISPOSE OF, THE
EQUIPMENT OR ANY INTEREST THEREIN, OR ASSIGN OR DELEGATE ITS RIGHTS OR
OBLIGATIONS UNDER THE LOAN DOCUMENTS, OR (2) LEASE OR LEND THE EQUIPMENT TO, OR
PERMIT THE EQUIPMENT TO BE USED BY, ANYONE OTHER THAN BORROWER.

     (b) KEF, at any time with or without notice to Borrower, may sell,
transfer, grant participations in, assign and/or grant a security interest in
any or all of KEF's right, title and interest in and to the Loan Documents, or
in KEF's security interest in any Item of Equipment. In any such event, any such
purchaser, transferee, assignee or secured party shall have and may exercise all
of KEF's rights hereunder or thereunder, and BORROWER SHALL NOT ASSERT AGAINST
ANY SUCH PURCHASER, TRANSFEREE, ASSIGNEE OR SECURED PARTY ANY DEFENSE,
COUNTERCLAIM OR OFFSET THAT BORROWER MAY HAVE AGAINST KEF. Borrower agrees that
upon written notice to Borrower of any such sale, transfer, assignment and/or
security interest, Borrower shall acknowledge receipt thereof in writing and
shall comply with the reasonable directions and demands of such purchaser,
transferee, assignee or secured party.

     (c) Subject to the foregoing, all covenants and agreements contained herein
shall be binding upon, and inure to the benefit of, KEF and its successors and
permitted assigns and Borrower and its successors and permitted assigns.

10.  Loss of or Damage to Equipment. (a) In the event of Loss or Damage to any
     ------------------------------
Item of Equipment, Borrower shall immediately notify KEF of same and, at the
option of KEF, as specified in a notice from KEF to Borrower, Borrower shall
within thirty (30) days following such Loss or Damage: (1) place such Item of
Equipment in good condition and repair, in accordance with the terms hereof; (2)
replace such Item of Equipment with replacement equipment (acceptable to KEF) in
as good condition and repair, and with the same or better fair market value as
such replaced Item of Equipment immediately preceding the Loss or Damage
(assuming that such replaced Item of Equipment was in the condition required by
this Agreement), which replacement equipment shall immediately, and without
further act, be deemed to constitute Items of Equipment and be fully subject to
this Agreement and the security interest granted to KEF as if originally
pledged as Collateral hereunder and shall be free and clear of all Liens; or (3)
pay to KEF any unpaid Installments and other charges due prior to the payment
date specified in such notice plus an amount, with respect to an Item of
Equipment, equal to the pro rata portion of the Installments attributable to
such Item of Equipment under the Loan Documents after discounting such
Installments to present worth as of the payment date specified in such notice on
the basis of a per annum rate of discount equal to three percent (3%) from the
respective dates upon which such Installments would have been paid but for the
operation of this clause, together with interest on such amount at the Default
Rate from the payment date specified in such notice to the date of actual
payment.

     (b) Upon KEF's receipt of the payment required under clause (3) above, KEF
shall release its security interest in such Item of Equipment. If Borrower fails
to either restore or replace the Item of Equipment pursuant to clauses (1) or
(2) above, respectively, Borrower shall make the payment under clause (3) above.

11.  Insurance. (a) Borrower, at Borrower's own cost and expense, shall maintain
     ---------
(1) insurance against all risks of physical loss or damage to the Equipment
(which shall include theft and collision for Equipment consisting of motor
vehicles, and shall not exclude loss resulting from flood or earthquake) in an
amount not less than the full replacement value thereof and (2) comprehensive
public liability insurance including blanket contractual liability for personal
and bodily injury and property damage in an amount satisfactory to KEF.

________________________________________________________________________________
                                                                    Page 4 of 12
<PAGE>

     (b)  All insurance policies required hereunder shall (1) require 30 days'
prior written notice to KEF of cancellation or material change in coverage (any
such cancellation or change, as applicable, not being effective until the
thirtieth (30th) day after the giving of such notice); (2) name "KeyCorp and
its subsidiaries and affiliated companies, including Key Equipment Finance, a
Division of Key Corporate Capital Inc., their successors and assigns" as sole
loss payee under the property insurance policies; (3) not require contributions
from other policies held by KEF; (4) waive any right of subrogation against KEF;
(5) in respect of any liability of KEF; except for the insurers' salvage rights
in the event of a Loss or Damage, waive the right of such insurers to set-off,
to counterclaim or to any other deduction, whether by attachment or otherwise,
to the extent of any monies due KEF under such policies; (6) not require that
KEF pay or be liable for any premiums with respect to such insurance covered
thereby; (7) be in full force and effect throughout any geographical areas at
any time traversed by any Item of Equipment; and (8) contain breach of warranty
provisions providing that, in respect of the interests of KEF in such policies,
the insurance shall not be invalidated by any action or inaction of Borrower or
any other person (other than KEF) and shall insure KEF regardless of any breach
or violation of any warranty, declaration or condition contained in such
policies by Borrower or by any other person (other than KEF).  Prior to funding
the Note, and thereafter not less than 15 days prior to the expiration dates of
the expiring policies theretofore delivered pursuant to this Section, Borrower
shall deliver to KEF a duplicate original of all policies (or in the case of
blanket policies, certificates thereof issued by the insurers thereunder) for
the insurance maintained pursuant to this Section.

     (c)  Proceeds of insurance with respect to physical loss or damage to the
Equipment shall be applied, at the option of KEF, to repair or replace the
Equipment or to reduce or satisfy (as applicable) the Secured Obligations.

12.  Taxes.  Borrower shall pay when due any and all taxes, fees, levies,
     -----
imposts, duties, assessments and public and private charges levied or assessed
on or with respect to the Equipment, on the use thereof, or on this Agreement or
any of the other Loan Documents.

13.  KEF's Right to Perform for Borrower.  I Borrower fails to perform any of
     -----------------------------------
its obligations contained in the Loan Documents, KEF may (but shall not be
obligated to) itself perform such obligations, and the amount of the reasonable
costs and expenses of KEF incurred in connection with such performance, together
with interest on such amount from the date paid by KEF until the date repaid by
Borrower to KEF, at the Default Rate, shall be payable by Borrower to KEF upon
demand.  No such performance KEF shall be deemed a waiver of any rights or
remedies of KEF, or be deemed to cure the default of Borrower hereunder.  All
such sums and amounts so expended by KEF shall be repayable by the Borrower
immediately without notice or demand, shall constitute additional Secured
Obligations and shall bear interest from the date said amounts are expended at
the Default Rate.

14.  Delinquent Payments; Interest.  If Borrower fails to pay any of the
     -----------------------------
Installments on the date when the same becomes due, Borrower shall pay to KEF a
late charge equal to five percent (5%) of such delinquent amount. Such late
charge shall be payable by Borrower upon demand by KEF and shall be deemed part
of the Secured Obligations. In no event shall such late charge exceed the
maximum amounts permitted under Applicable Law.

15.  Personal Property; Liens; Warranty of Title.  The Borrower is, and will
     -------------------------------------------
continue to be, the sole owner of the Equipment, free from any Lien.  KEF and
Borrower hereby agree that the Equipment is, and shall at all times remain,
personal property notwithstanding the fact that any Item of Equipment may now
be, or hereafter become, in any manner affixed or attached to real property or
any improvements thereon.  Borrower shall at all times keep the Equipment free
and clear from all Liens, and the Borrower shall obtain and deliver to KEF (to
be recorded at the Borrower's expense) from each person having a Lien on any
Equipment Location waivers of any Lien which such person might have or hereafter
obtain or claim with respect to the Equipment.  Borrower shall (a) give KEF
immediate written notice of any Lien on the Collateral, (b) promptly, at
Borrower's sole cost and expense, take such action as may be necessary to
discharge any such Lien, and (c) indemnify and hold KEF, on an after-tax

________________________________________________________________________________
                                                                    Page 5 of 12
<PAGE>

basis, harmless from and against any loss or damage caused by any such Lien.
Borrower warrants that it has good, valid and marketable title to the Equipment,
and that (1) the security interest in the Collateral granted to KEF hereunder,
when properly perfected by filing, shall constitute a valid and perfected first
priority security interest in the Collateral and, (2) the Collateral is not
subject to, and Borrower will not grant or permit to exist, any Liens or claims
on or against the Collateral, whether senior, superior, junior, subordinate or
equal to the security interest granted to KEF hereby, or otherwise.

16.  Events of Default; Remedies.  (a)  As used herein, the term "Event of
     ---------------------------
Default" shall mean any of the following events: (1) Borrower fails to pay any
Installment within ten (10) days after the same shall have become due and
payable; (2) Borrower or any Guarantor becomes insolvent or makes an assignment
for the benefit of its creditors; (3) a receiver, trustee, conservator or
liquidator of Borrower or any Guarantor or of all or a substantial part of
Borrower's of such Guarantor's assets is appointed with or without the
application or consent of Borrower or such Guarantor, respectively; (4) a
petition is filed by or against Borrower or any Guarantor under any bankruptcy,
insolvency or similar legislation; (5) Borrower or any Guarantor violates or
fails to perform any provision of either the Loan Documents or any other loan,
lease or credit agreement or any acquisition or purchase agreement with KEF or
any other party; (6) Borrower violates or fails to perform any covenant or
representation made by Borrower in the Loan Documents; (7) any representation or
warranty made herein or in any of the Loan Documents, certificates, financial
statements or other statements furnished to KEF (or KEF's parent, subsidiaries
or affiliates) shall prove to be false or misleading in any material respect as
of the date on which the same was made; (8) Borrower makes a bulk transfer of
furniture, fixtures or other equipment or inventory; (9) there is a material
adverse change in Borrower's or any Guarantor's financial condition; (10)
Borrower merges or consolidates with any other corporation or entity, or sells,
leases or disposes of all or substantially all of its assets without the prior
written consent of KEF; (11) a change in control occurs in Borrower or any
Guarantor; (12) the death or dissolution of Borrower or any Guarantor; (13) any
of the liens created or granted hereby, or intended to be granted or created
hereby, to KEF shall fail to be valid, first priority perfected liens subject to
no prior or equal lien; or (14) an additional Lien attaches to the Equipment or
the Equipment becomes subject to risk of seizure or forfeiture.

     (b)  (1) Upon the occurrence of an Event of Default, KEF, at its option,
may declare any or all of the Secured Obligations, including, without
limitation, the Note, to be immediately due and payable, without demand or
notice to Borrower or any Guarantor.  The obligations and liabilities
accelerated thereby shall bear interest (both before and after any judgment)
until paid in full at the Default Rate.  Should there occur a Default and if a
voluntary or involuntary petition under the United States Bankruptcy Code is
filed by or against Borrower while such Default remains uncured, the Secured
Obligations automatically shall be accelerated and due and payable and interest
thereon at the Default Rate automatically shall apply as of the date of the
first occurrence of the Default, without any notice, demand or action of any
type on the part of KEF (including any action evidencing the acceleration or
imposition of the Default Rate).  The fact that KEF has, prior to the filing of
the voluntary or involuntary petition under the United States Bankruptcy Code,
acted in a manner which is inconsistent with the acceleration and imposition of
the Default Rate shall not constitute a waiver of this provision or estop KEF
from asserting or enforcing KEF's rights hereunder.

          (2) Furthermore, upon the occurrence of an Event of Default, KEF shall
have, in addition to the rights and remedies provided herein, in the other Loan
Documents or by law, the rights and remedies of a secured party under the
Uniform Commercial Code under the laws of the State of New York (the "UCC")
(regardless of whether the UCC is the law of the jurisdiction where the rights
and remedies are asserted and regardless of whether the UCC applies to the
affected Collateral), and further KEF may do any one or more of the following as
KEF in its sole discretion may elect, with or without judicial process or the
aid and assistance of others; (a) enter and remain on any premises on which any
of the Equipment may be located and, without resistance or interference by the
Borrower, without liability to KEF by reason of such entry or taking possession,
take possession of the Equipment, (b) prepare for sale and sell or otherwise
dispose of any Equipment on any such premises, (c) require the Borrower to
assemble and make available to KEF at Borrower's expense any Equipment at any
place and time designated by KEF, (d) remove any Equipment from any such
premises for the
________________________________________________________________________________
                                                                    Page 6 of 12
<PAGE>

purpose of effecting sale or other disposition thereof, (e) without demand and
without advertisement, notice, hearing or process of law, all of which the
Borrower hereby waives, at any place and time or times, sell and deliver any or
all Equipment held by or for it at public or private sale, by one or more
contracts, in one or more parcels, for cash, upon credit or otherwise, at such
prices and upon such terms as KEF deems advisable, in its sole discretion, or
(f) lease all or any portion of the Equipment on such terms and conditions as
KEF in its sole discretion may determine. In addition to all other sums due KEF
hereunder, the Borrower shall pay KEF all reasonable costs and expenses incurred
by KEF, including reasonable attorneys' fees and court costs, in obtaining or
liquidating the Collateral, in enforcing payment of Secured Obligations, or in
the prosecution or defense of any action or proceeding by or against KEF or the
Borrower concerning any matter arising out of or connected with the Loan
Documents, the Collateral or the Secured Obligations, including without
limitation any of the foregoing arising in, arising under or related to a case
under the United States Bankruptcy Code.

          (3) Borrower's waivers regarding disposition of the equipment. IF AN
EVENT OF DEFAULT OCCURS, BORROWER HEREBY WAIVES ANY DEFENSES, RIGHTS, OFFSETS OR
CLAIMS AGAINST KEF ARISING OUT OF THE REPOSSESSION, RETENTION, SALE, MANNER OR
METHOD OF SALE OR DISPOSITION OF ANY ITEMS OF EQUIPMENT. THE BORROWER AGREES
THAT ANY REQUIREMENT OF REASONABLE NOTICE SHALL BE MET IF SUCH NOTICE IS
PERSONALLY SERVED ON OR MAILED, POSTAGE PREPAID, TO THE BORROWER IN ACCORDANCE
WITH THE NOTICE PROVISIONS HEREOF AT LEAST 10 DAYS BEFORE THE TIME OF SALE OR
OTHER EVENT GIVING RISE TO THE REQUIREMENT OF SUCH NOTICE, KEF SHALL NOT BE
OBLIGATED TO MAKE ANY SALE OR OTHER DISPOSITION OF THE EQUIPMENT REGARDLESS OF
NOTICE HAVING BEEN GIVEN. KEF MAY BE THE PURCHASER AT ANY SUCH SALE. THE
BORROWER HEREBY WAIVES ALL OF ITS RIGHTS OF REDEMPTION FROM ANY SUCH SALE. KEF
MAY POSTPONE OR CAUSE THE POSTPONEMENT OF THE SALE OF ALL OR ANY PORTION OF THE
EQUIPMENT BY ANNOUNCEMENT AT THE TIME AND PLACE OF SUCH SALE, AND SUCH SALE MAY,
WITHOUT FURTHER NOTICE, BE MADE AT THE TIME AND PLACE TO WHICH THE SALE WAS
SCHEDULED. NONE OF KEF'S RIGHTS OR REMEDIES HEREUNDER ARE INTENDED TO BE
EXCLUSIVE OF, BUT EACH SHALL BE CUMULATIVE AND IN ADDITION TO, ANY OTHER RIGHT
OR REMEDY REFERRED TO HEREUNDER OR OTHERWISE AVAILABLE TO KEF OR ITS ASSIGNS AT
LAW OR IN EQUITY, AND MAY BE PURSUED SINGLY, SUCCESSIVELY OR CONCURRENTLY AT THE
SOLE DISCRETION OF LENDER AND MAY BE EXERCISED AS OFTEN AS OCCASION THEREFOR
SHALL OCCUR. THE FAILURE TO EXERCISE, OR ANY DELAY IN THE EXERCISE OF, ANY RIGHT
OR REMEDY SHALL IN NO EVENT BE CONSTRUED AS A WAIVER, RELEASE OR EXHAUSTION OF
ANY SUCH REMEDIES. NO EXPRESS OR IMPLIED WAIVER BY KEF OR ANY EVENT OF DEFAULT
SHALL CONSTITUTE A WAIVER OF ANY OTHER EVENT OF DEFAULT OR A WAIVER OF ANY OF
KEF'S RIGHTS UPON THE REOCCURRENCE OF ANY SUCH EVENT OF DEFAULT.

     (c)  The Borrower hereby authorizes KEF, upon the occurrence and during the
continuation of any Event of Default hereunder, at KEF's option to adjust,
compromise and settle any losses under any insurance afforded, and the Borrower
does hereby irrevocably constitute KEF and each of its designees, as its
attorneys-in-fact, with full power and authority, upon the occurrence and during
the continuation of any Event of Default hereunder, to effect such adjustment,
compromise and/or settlement and to endorse any drafts drawn by an insurer of
the Equipment or any part thereof and to do everything necessary to carry out
such purposes and to receive and receipt for any unearned premiums due under
policies of such insurance; but unless or until KEF elects to adjust, compromise
or settle losses as aforesaid, such insurance proceeds shall be subject to the
lien and security interest of KEF hereunder.

     (d)  Upon the occurrence, and during the continuance, of an Event of
Default hereunder, any payments in respect of the Secured Obligations and any
proceeds of the Collateral, when received by KEF in cash or its equivalent, will
be applied first to costs of collection and, thereafter, in reduction of the
Secured Obligations in such order and manner as KEF may direct in its sole
discretion, and the Borrower irrevocably waives the right to direct the
application of such payments and proceeds and acknowledges and agrees that KEF
shall have the continuing and exclusive right to apply any and all such payments
and proceeds in KEF's sole discretion,

________________________________________________________________________________
                                                                    Page 7 of 12
<PAGE>

notwithstanding any entry to the contrary upon any of its books and records. The
Borrower shall remain liable to KEF for any deficiency. Any surplus remaining
after the full payment and satisfaction of the Secured Obligations shall be
returned to the Borrower or to whomsoever a court of competent jurisdiction
shall determine to be entitled thereto.

     (e)  To the extent that any of the Secured Obligations are now or hereafter
secured by property other than the Collateral, or by a guarantee, endorsement or
property of any other person, then KEF also shall have the right to proceed
against such other property, guarantee or endorsement upon the occurrence of a
default hereunder, and KEF shall have the right, in its sole discretion, to
determine which rights, liens, security interests or remedies KEF shall at any
time pursue, relinquish, subordinate or modify, without in any way affecting the
Secured Obligations or any of KEF's rights under this agreement.

17.  Notices. All notices and other communications hereunder shall be in writing
     -------
and shall be transmitted by hand, overnight courier or certified mail (return
receipt requested), postage prepaid. Such notices and other communications shall
be addressed to the respective party at the address set forth above or at such
other address as any party may from time to time designate by notice duly given
in accordance with this Section. Such notices and other communications shall be
effective upon the earlier of receipt or three (3) days after mailing if mailed
in accordance with the terms of this section.

18.  General Indemnification. Borrower shall pay, and shall indemnify and hold
     -----------------------
KEF and its directors, officers, employees, counsel, agents and advisors
harmless on an after-tax basis from and against, any and all liabilities, causes
of action, claims, suits, penalties, damages, losses, costs or expenses
(including attorneys' fees), obligations, liabilities, demands and judgments,
and Liens, of any nature whatsoever (collectively, a "Liability") arising out of
or in any way related to: (a) the Loan Documents, (b) a failure to comply fully
with Applicable Law and (c) Borrower's failure to perform any covenant, or
breach of any representation or warranty under the Loan Documents; provided,
                                                                   --------
that the foregoing indemnity shall not extend to the Liabilities to the extent
resulting solely from the gross negligence or willful misconduct of KEF.
Borrower shall promptly deliver to KEF copies of any documents received from the
United States Environmental Protection Agency or to any state, county or
municipal environmental or health agency concerning the Equipment or its
operation and copies of any documents submitted by Borrower or any of its
subsidiaries to the United States Environmental Protection Agency or any state,
county or municipal environmental or health agency concerning the Equipment or
its operation. Borrower further agrees to indemnify KEF against and hold it
harmless from all present and future stamp, transfer, documentary and other such
taxes, levies, fees, assessments or other charges made by any jurisdiction by
reason of the execution, delivery, performance and enforcement of the Loan
Documents.

19.  Severability; Captions. Whenever possible, each provision of this Agreement
     ----------------------
shall be interpreted in such manner as to be effective and valid under
Applicable Law. If, however, any provision of this Agreement or any of the Loan
Documents shall be prohibited or unenforceable in any jurisdiction, it shall, as
to such jurisdiction, be deemed modified to conform to the minimum requirements
of such law, or if for any reason it is not deemed so modified, it shall be
ineffective only to the extent of such prohibition or unenforceability without
affecting the remaining provisions hereof, and any such prohibition or
unenforceability shall not invalidate or render unenforceable such provision in
any other jurisdiction.  Captions are intended for convenience or reference
only, and shall not be construed to define, limit or describe the scope or
intent of any provisions hereof.

20.  Financial and Other Data. During the Term hereof, Borrower shall furnish
     ------------------------
KEF (a) as soon as available, and in any event within 120 days after the last
day of each fiscal year, financial statements of Borrower and each Guarantor and
(b) from time to time as KEF may reasonably request, other financial reports,
information or data (including federal and state income tax returns) and
quarterly or interim financial statements of Borrower and each Guarantor.  All
such information shall be audited (or if audited information is not available,
compiled or reviewed) by an independent certified public accountant.

21.  [RESERVED]

________________________________________________________________________________
                                                                    Page 8 of 12

<PAGE>

22. Representations and Warranties of Borrower. Borrower represents and warrants
    ------------------------------------------

that: (a) Borrower is a corporation duly organized and validly existing in good
standing under the laws of the state of its corporation; (b) the execution,
delivery and performance of this Agreement and all related instruments and
documents: (1) have been duly authorized by all necessary corporate action on
the part of Borrower, (2) do not require the approval of any stockholder,
partner, trustee, or holder of any obligations of Borrower except such as have
been duly obtained, and (3) do not and will not contravene any law, governmental
rule, regulation or order now binding on Borrower, or the charter or by-laws of
Borrower, or contravene the provisions of, or constitute a default under, or
result in the creation of any lien or encumbrance upon the property of Borrower
under, any indenture, mortgage, contract or other agreement to which Borrower is
a party or by which it or its property is bound; (c) the Loan Documents, when
entered into, will constitute legal, valid and binding obligations of Borrower
enforceable against Borrower in accordance with the terms thereof; (d) there are
no pending actions or proceedings to which Borrower is a party, and there are no
other pending or threatened actions or proceedings of which Borrower has
knowledge, before any court, arbitrator or administrative agency, which, either
individually or in the aggregate, would adversely affect the financial condition
of Borrower, or the ability of Borrower to perform its obligations under the
Loan Documents; (e) Borrower is not in default under any obligation for the
payment of borrowed money, for the deferred purchase price of property or for
the payment of any installments under any lease agreement which, either
individually or in the aggregate, would have the same such effect; (f) under the
laws of the state(s) in which the Equipment is to be located, the Equipment
consists solely of personal property and not fixtures; (g) the financial
statements of Borrower (copies of which have been furnished to KEF) have been
prepared in accordance with generally accepted accounting principles
consistently applied ("GAAP"), and fairly present Borrower's financial condition
and the results of its operations as of the date of and for the period covered
by such statements, and since the date of such statements there has been no
material adverse change in such conditions or operations; (h) the address stated
above is the chief place of business and chief executive office, or in the case
of individuals, the primary residence, of Borrower; (i) Borrower does not
conduct business under a trade, assumed or fictitious name, except as set forth
in Schedule 1; (j) this Agreement creates a valid first priority security
interest in the Collateral securing payment and performance of the Secured
Obligations and all filings and other action necessary to perfect such security
interest have been taken or shall be promptly taken; (k) Borrower has filed or
has caused to have been filed all Federal, state and local tax returns which, to
the knowledge of Borrower, are required to be filed, and has paid or caused to
have been paid all taxes as shown on such returns or on any assessment received
by it, to the extent that such taxes have become due, unless and to the extent
only that such taxes, assessments and governmental charges are currently
contested in good faith and by appropriate proceedings by Borrower and adequate
reserves therefor have been established as required under GAAP and, to the
extent Borrower believes it advisable to do so, Borrower has set up reserves
which are believed by Borrower to be adequate for the payment of additional
taxes for years which have not been audited by the respective tax authorities;
(l) except as previously disclosed in writing to KEF, neither Borrower nor any
of its officers or directors (if a corporation), partners (if a partnership) or
members or managers (if a limited liability corporation) has, directly or
indirectly, any financial interest in the Supplier; and (m) Borrower is not in
violation of any Applicable Law, the violation of which would have a material
adverse effect on the conduct of its business, and Borrower has obtained any and
all licenses, permits, franchises or other governmental authorizations necessary
for the ownership of its properties and the conduct of its business; and (n)
none of the proceeds of the loan made by KEF will be used, directly or
indirectly, by Borrower for the purpose of purchasing or carrying, or for the
purpose of reducing or retiring any indebtedness which was originally incurred
to purchase or carry any "margin stock" within the meaning of Regulation U (12
CFR Part 221), of the Board of Governors of the Federal Reserve System (herein
called "margin stock") or for any other purpose which might make the
transactions contemplated herein a "purpose credit" within the meaning of
Regulation U, or cause this Agreement to violate any other regulation of the
Board of Governors of the Federal Reserve System or the Securities Exchange Act
of 1934 or the Small Business Investment Act of 1958, as amended, or any rules
or regulations promulgated under any of such statutes.

23.  Further Covenants of Borrower. The Borrower further covenants and agrees
     -----------------------------
that it will not change its legal name, be a party to a merger, consolidation or
other change in structure or use a trade name in its business

________________________________________________________________________________
                                                                    Page 9 of 12
<PAGE>

without at least 30 days' prior written notice to KEF; and shall execute and
deliver to KEF (to be filed at Borrower's expense) all UCC statements as may be
required by KEF in connection with such event.

24.  Miscellaneous. Time is of the essence with respect to this Agreement. ANY
     -------------
FAILURE OF KEF TO REQUIRE STRICT PERFORMANCE BY BORROWER OR ANY WAIVER BY KEF OF
ANY PROVISION HEREIN SHALL NOT BE CONSTRUED AS A CONSENT OR WAIVER OF ANY
PROVISION OF THIS AGREEMENT. None of the Loan Documents may be amended except by
a writing signed by KEF and Borrower. This Agreement will be binding upon KEF
only if executed by a duly authorized officer or representative of KEF at KEF's
principal place of business as set forth above. This Agreement and all other
Loan Documents shall be executed on Borrower's behalf by Authorized Signers of
Borrower. The Borrower hereby waives presentment, notice of dishonor and protest
of all instruments included in or evidencing any Secured Obligations, and all
other notices and demands whatsoever (except as expressly provided herein). THIS
AGREEMENT IS BEING DELIVERED IN THE STATE OF NEW YORK AND SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING
ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE WITHOUT GIVING EFFECT TO
ANY CHOICE OF LAW OR CONFLICT OF LAWS PROVISION OR RULE (WHETHER OF THE STATE
OF NEW YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE
LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.

25.  Jury Trial Waiver. KEF AND BORROWER HEREBY EACH WAIVE THEIR RESPECTIVE
     -----------------
RIGHTS TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING
OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION OR PROCEEDING TO
WHICH KEF OR BORROWER MAY BE PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS,
TORT CLAIMS, OR OTHERWISE, INCLUDING WITHOUT LIMITATION ANY ACTION, COUNTERCLAIM
OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY
OR ENFORCEABILITY, OF THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR ANY
PROVISION HEREOF OR THEREOF. THIS WAIVER IS MADE KNOWINGLY, WILLINGLY AND
VOLUNTARILY BY KEF AND THE BORROWER WHO EACH ACKNOWLEDGE THAT NO REPRESENTATIONS
HAVE BEEN MADE BY ANY INDIVIDUAL TO INDUCE THIS WAIVER OF TRIAL BY JURY OR IN
ANY WAY TO MODIFY OR NULLIFY ITS EFFECT. THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT
AND THE OTHER LOAN DOCUMENTS.

26.  More than One Borrower. If more than one person or entity executes this
     ----------------------
Agreement, each of the other Loan Documents, and all addenda or other documents
executed in connection herewith or therewith, as "Borrower," the obligations of
"Borrower" contained herein and therein shall be deemed joint and several and
all references to "Borrower" shall apply both individually and jointly.

27.  Entire Agreement. This Agreement together with the other Loan Documents,
     ----------------
collectively constitute the entire understanding or agreement between KEF and
Borrower with respect to the financing of the Equipment, and there is no
understanding or agreement, oral or written, which is not set forth herein or
therein. This Agreement shall not be modified except by the written agreement
of KEF and Borrower.

28.  Execution in Counterparts. This Agreement may be executed in any number of
     -------------------------
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute but one and the same instrument.
________________________________________________________________________________
                                                                   Page 10 of 12
<PAGE>

29. Power of Attorney; UCC Filings. BORROWER SHALL EXECUTE AND DELIVER TO KEF
    ------------------------------
CONCURRENTLY WITH THE EXECUTION OF THIS AGREEMENT, AND AT ANY TIME FROM TIME TO
TIME THEREAFTER, ALL FINANCING STATEMENTS, AMENDMENTS TO FINANCING STATEMENTS,
CHATTEL MORTGAGES, ASSIGNMENTS, AND ALL OTHER INSTRUMENTS, IN FORM SATISFACTORY
TO KEF, AND TAKE ALL OTHER ACTION AS KEF MAY REASONABLY REQUIRE, TO PERFECT AND
CONTINUE PERFECTED, MAINTAIN THE PRIORITY OF OR PROVIDE NOTICE OF KEF'S SECURITY
IN THE COLLATERAL, BORROWER HEREBY APPOINTS KEF, OR ITS ASSIGNEE AND ANY OF
KEF'S OR ASSIGNEE'S OFFICERS OR EMPLOYEES AS ITS TRUE AND LAWFUL ATTORNEY IN
FACT, IRREVOCABLY AND COUPLED WITH AN INTEREST, TO EXECUTE AND FILE ON BEHALF OF
BORROWER ALL UCC FINANCING STATEMENTS WHICH IN KEF'S SOLE DISCRETION ARE
NECESSARY OR PROPER TO SECURE KEF'S INTEREST IN THE EQUIPMENT IN ALL APPLICABLE
JURISDICTIONS. Borrower hereby ratifies, to the extent permitted by law, all
that KEF shall lawfully and in good faith do or cause to be done by reason of
and in compliance with this paragraph

Lender:                                                Borrower:

Key Equipment Finance, a Division of Key Corporate    READY MIX, INC.
Capital Inc.

By: _____________________                              X /s/ Kenneth D. Nelson
                                                         ---------------------
Name:                                                  Name:  Kenneth D. Nelson
Title:                                                 Title: Vice President

________________________________________________________________________________
                                                                   Page 11 of 12

<PAGE>

                              COLLATERAL SCHEDULE
                              -------------------

                                  Schedule 1
________________________________________________________________________________
                             BORROWER TRADE NAMES

None
________________________________________________________________________________
                           DESCRIPTION OF EQUIPMENT

Equipment  3430 E. Flamingo Rd., Suite 100
---------
Location:  Las Vegas, NV 89121-5003
--------
           Clark County

Vendor:           McNeilus Truck and Manufacturing Co.
-------

<TABLE>
<CAPTION>
Quantity:         Description:                                VIN or Serial No.          Invoice No.
---------         ------------                                -----------------          -----------
<S>               <C>                                         <C>                        <C>
       1          1997 IHC Truck with Bridgemaster III Mixer, 2HTTWAHT7VC029174          91051
                  serial number 43047-09034

       1          1997 IHC Truck with Bridgemaster III Mixer, 2HTTWAHT8VC027143          91051
                  serial number 43067-09044

       1          1997 IHC Truck with Bridgemaster III Mixer, 2HTTWAHT5VC029173          91051
                  serial number 43029-09027

       1          1997 IHC Truck with Bridgemaster III Mixer, 2HTTWAHT4VC027009          91051
                  serial number 42869-08953

       1          1997 IHC Truck with Bridgemaster III Mixer, 2HTTWAHT6VC027013          91051
                  serial number 42863-08950

       1          1997 IHC Truck with Bridgemaster III Mixer, 2HTTWAHT2VC027140          91051
                  serial number 43058-09040

       1          1997 IHC Truck with Bridgemaster III Mixer, 2HTTWAHT4VC027141          91051
                  serial number 43069-09046

       1          1997 IHC Truck with Bridgemaster III Mixer, 2HTTWATT3VC017210          91051
                  serial number 43087-09055
</TABLE>

                             *** End of Exhibit***
--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

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