Exhibit 10.3
SECURITIES PLEDGE AGREEMENT
     THIS SECURITIES PLEDGE AGREEMENT dated as of December 23, 2010 (this
“Pledge Agreement”), is being entered into among GRANITE CONSTRUCTION
INCORPORATED, a Delaware corporation (the “Company” and a “Borrower”), GRANITE
CONSTRUCTION COMPANY, a California corporation (“GCC” and a “Borrower”), GILC
INCORPORATED, a California corporation (“GILC” and a “Borrower”, and together
with the Company and GCC, collectively, the “Borrower”), EACH OF THE UNDERSIGNED
SUBSIDIARIES OF THE COMPANY AND EACH OTHER PERSON THAT SHALL BECOME A PARTY
HERETO BY EXECUTION OF A PLEDGE JOINDER AGREEMENT (each a “Guarantor” and,
together with the Borrowers, collectively, the “Pledgors”), and BANK OF AMERICA,
N.A., as Administrative Agent (in such capacity, the “Administrative Agent”) for
each of the Secured Parties (as defined in the Credit Agreement referenced
below).
RECITALS:
     A. Pursuant to a Credit Agreement dated as of June 22, 2010 (as amended,
restated, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among the Borrowers, the Administrative Agent, Bank of America,
N.A., as L/C Issuer, and the lenders now or hereafter party thereto (the
“Lenders”), the Lenders have agreed to provide to the Borrowers a revolving
credit facility with a letter of credit sublimit and swing line facility.
     B. Certain additional extensions of credit may be made from time to time
for the benefit of the Pledgors pursuant to certain Secured Cash Management
Agreements, Secured Hedge Agreements and Secured Cash Related Products
Agreements (each as defined in Section 1 below).
     C. It is a condition precedent to the Secured Parties’ obligations to make
and maintain such extensions of credit that the Pledgors shall have executed and
delivered this Pledge Agreement to the Administrative Agent.
     In order to induce the Secured Parties to from time to time make and
maintain extensions of credit under the Credit Agreement and such Secured Cash
Management Agreements, Secured Hedge Agreements and Secured Cash Related
Products Agreements, the parties hereto agree as follows:
     1. Certain Definitions. All capitalized terms used but not otherwise
defined herein shall have the meanings assigned thereto in the Credit Agreement.
Terms used in this Pledge Agreement that are not otherwise expressly defined
herein or in the Credit Agreement, and for which meanings are provided in the
Uniform Commercial Code of the State of California (the “UCC”), shall have such
meanings unless the context requires otherwise. In addition, for purposes of
this Pledge Agreement, the following terms have the following definitions:
     “Card Related Products Agreement” means any agreement to provide credit,
purchasing, debit and other credit related card arrangements.

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     “Card Related Products Bank” means any Person that, (a) at the time it
enters into a Card Related Products Agreement, is a Lender or an Affiliate of a
Lender, or (b) is party to a Card Related Products Agreement on the date that
such Person or its Affiliate becomes a Lender, in each case in its capacity as a
party to such Card Related Products Agreement.
     “Cash Management Agreement” means any agreement to provide cash management
services, including treasury, depository, overdraft, electronic funds transfer
and other cash management arrangements.
     “Cash Management Bank” means any Person that, (a) at the time it enters
into a Cash Management Agreement, is a Lender or an Affiliate of a Lender, or
(b) is party to a Cash Management on the date that such Person or its Affiliate
becomes a Lender, in each case in its capacity as a party to such Cash
Management Agreement.
     “Direct Foreign Subsidiary” means a Foreign Subsidiary a majority of whose
Voting Securities, or a majority of whose Subsidiary Securities, are owned by
any Borrower or a Domestic Subsidiary.
     “Domestic Subsidiary” means any Subsidiary that is organized under the laws
of any political subdivision of the United States.
     “Facility Termination Date” means the date as of which all of the following
shall have occurred: (a) the Aggregate Commitments have been terminated, (b) all
Obligations have been paid in full, other than (i) contingent indemnification
obligations, (ii) the undrawn portion of Letters of Credit and (iii) all fees
relating to any Letters of Credit accruing after such date (which fees shall be
payable solely for the account of the L/C Issuer and shall be computed (based on
interest rates and the Applicable Rate then in effect) on such undrawn amounts
to the respective expiry dates of the Letters of Credit), in each case as have
been fully Cash Collateralized or as to which other arrangements with respect
thereto satisfactory to the Administrative Agent and the L/C Issuer shall have
been made, (b) the Commitments of all Lenders, if any, shall have terminated or
expired, (c) the obligations and liabilities of the Borrowers and each other
Loan Party under all Secured Hedge Agreements and Secured Cash Management
Agreements shall have been fully, finally and irrevocably paid and satisfied in
full and the Secured Hedge Agreements and Secured Cash Management Agreements
shall have expired or been terminated, or other arrangements satisfactory to the
applicable Cash Management Bank or Hedge Bank shall have been made with respect
thereto, (d) the obligations and liabilities of the Borrowers and each other
Loan Party under all Secured Cash Related Products Agreements shall have been
fully, finally and irrevocably paid and satisfied in full and the Secured Card
Related Products Agreements shall have expired or been terminated, or other
arrangements satisfactory to the Applicable Card Related Agreements Banks shall
have been made with respect thereto, and (e) each Guarantor shall have fully,
finally and irrevocably paid and satisfied in full its respective obligations
and liabilities arising under the Loan Documents (except for future obligations
consisting of continuing indemnities and other contingent Obligations of the
Borrowers or any Loan Party that may be owing to any Related Party of the
Administrative Agent or any Lender pursuant to the Loan Documents and expressly
survive termination of the Credit Agreement).

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     “Foreign Subsidiary” means any Subsidiary that is organized under the laws
of a jurisdiction other than the United States, a State thereof or the District
of Columbia.
     “Hedge Bank” means any Person that (a) at the time that it enters into any
Swap Contract, is a Lender or an Affiliate of a Lender, or (b) is party to an
interest rate Swap Contract on the date that such Person or its Affiliate
becomes a Lender, in each case in such Person’s capacity as a party to such Swap
Contract.
     “Person” means any natural person, corporation, limited liability company,
trust, Joint Venture, association, company, partnership, Governmental Authority
or other entity.
     “Secured Card Related Products Agreement” means any Card Related Products
Agreement permitted by Article VII of the Credit Agreement that is entered into
by and between any Loan Party and any Card Related Products Bank.
     “Secured Cash Management Agreement” means any Cash Management Agreement
permitted by Article VII of the Credit Agreement that is entered into by and
between any Loan Party and any Cash Management Bank.
     “Secured Hedge Agreement” means any Swap Contract permitted by Article VII
of the Credit Agreement that is entered into by and between any Loan Party and
any Hedge Bank.
     “Secured Parties” means, collectively, the Administrative Agent, the
Lenders, the L/C Issuer, the Hedge Banks, the Cash Management Banks, the Card
Related Products Banks, each co-agent or sub-agent appointed by the
Administrative Agent from time to time pursuant to Section 9.05 of the Credit
Agreement and the other Persons the Obligations owing to which are or are
purported to be secured by the Collateral under the terms hereof.
     “Subsidiary” of a Person means a corporation, partnership, Joint Venture,
limited liability company or other business entity of which a majority of the
shares of securities or other interests having ordinary voting power for the
election of directors or other governing body (other than securities or
interests having such power only by reason of the happening of a contingency)
are at the time beneficially owned, or the management of which is otherwise
controlled, directly, or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise specified, all references herein to a
“Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of
the Company.
     “Subsidiary Securities” means the shares of capital stock or other equity
interests issued by or equity participations in any Subsidiary, whether or not
constituting a “security” under Article 8 of the Uniform Commercial Code as in
effect in any jurisdiction.
     “Voting Securities” means shares of capital stock issued by a corporation,
or equivalent interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the election
of directors (or persons performing similar functions) of such Person, even if
the right so to vote has been suspended by the happening of such a contingency.

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     2. Pledge of Pledged Interests; Other Collateral.
     (a) Each Borrower hereby grants as collateral security for the payment,
performance and satisfaction of all of the Obligations and the obligations and
liabilities of any Loan Party now existing or hereafter arising, and each
Guarantor hereby grants as collateral security for the payment, performance and
satisfaction of all of its Guarantor’s Obligations (as defined in the Guaranty)
and the payment and performance of its obligations and liabilities (whether now
existing or hereafter arising) hereunder or under any of the other Loan
Documents and any Secured Cash Management Agreements, Secured Hedge Agreements
and Secured Card Related Products Agreements to which it is now or hereafter
becomes a party (such obligations and liabilities of the Borrowers and the other
Pledgors are referred to collectively as the “Secured Obligations”), to the
Administrative Agent for the benefit of the Secured Parties a first priority
security interest (subject only to Permitted Liens) in all of the following
items of property in which it now has or may at any time hereafter acquire an
interest or the power to transfer rights therein, and wheresoever located:
     (i) all Subsidiary Securities in all of its Material Subsidiaries (limited,
in the case of Foreign Subsidiaries to Subsidiary Securities that, when taken
with all other Subsidiary Securities pledged hereunder, constitute no more than
(x) 65% of the Voting Securities of each Direct Foreign Subsidiary and (y) 100%
of the other Subsidiary Securities of such Pledgor in each Direct Foreign
Subsidiary), in each case, whether now existing or hereafter created or acquired
(collectively, the “Pledged Interests”), including without limitation the
Pledged Interests more particularly described on Schedule I hereto (such
Subsidiaries, together with all other Subsidiaries whose Subsidiary Securities
may be required to be subject to this Pledge Agreement from time to time, are
referred to collectively as the “Pledged Subsidiaries”);
     (ii) all money, securities, security entitlements and other investment
property, dividends, rights, general intangibles and other property at any time
and from time to time (x) declared or distributed in respect of or in exchange
for or on conversion of any Pledged Interest, or (y) by its or their terms
exchangeable or exercisable for or convertible into any Pledged Interest;
     (iii) all other property of whatever character or description, including
money, securities, security entitlements and other investment property, and
general intangibles hereafter delivered to the Administrative Agent in
substitution for or as an addition to any of the foregoing;
     (iv) all securities accounts to which may at any time be credited any or
all of the foregoing or any proceeds thereof and all certificates and
instruments representing or evidencing any of the foregoing or any proceeds
thereof; and
     (v) all proceeds of any of the foregoing.

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All such Pledged Interests, certificates, instruments, cash, securities,
interests, dividends, rights and other property referred to in clauses (i)
through (v) of this Section 2 are herein collectively referred to as the
“Collateral.”
     (b) Subject to Section 11(a), each Pledgor agrees to deliver all
certificates, instruments or other documents representing any Collateral to the
Administrative Agent at such location as the Administrative Agent shall from
time to time designate by written notice pursuant to Section 23 for its custody
at all times until termination of this Pledge Agreement, together with such
instruments of assignment and transfer as requested by the Administrative Agent.
     (c) Each Pledgor agrees to execute and deliver, or cause to be executed and
delivered by other Persons, at Pledgor’s expense, all share certificates,
documents, instruments, agreements, financing statements (and amendments thereto
and continuations thereof), assignments, control agreements, or other writings
as the Administrative Agent may request from time to time to carry out the terms
of this Pledge Agreement or to protect or enforce the Administrative Agent’s
Lien and security interest in the Collateral hereunder granted to the
Administrative Agent for the benefit of the Secured Parties and further agrees
to do and cause to be done upon the Administrative Agent’s request, at Pledgor’s
expense, all things reasonably determined by the Administrative Agent to be
necessary or advisable to perfect and keep in full force and effect the Lien in
the Collateral hereunder granted to the Administrative Agent for the benefit of
the Secured Parties, including the prompt payment of all out-of-pocket fees and
reasonable expenses incurred in connection with any filings made to perfect or
continue the Lien and security interest in the Collateral hereunder granted in
favor of the Administrative Agent for the benefit of the Secured Parties.
     (d) All filing fees, advances, charges, costs and expenses, including all
fees and expenses of counsel (collectively, “Attorneys’ Costs”), incurred or
paid by the Administrative Agent or any Lender in exercising any right, power or
remedy conferred by this Pledge Agreement, or in the enforcement thereof, shall
become a part of the Secured Obligations secured hereunder and shall be paid to
the Administrative Agent for the benefit of the Secured Parties by the Pledgor
in respect of which the same was incurred immediately upon demand therefor, and
any amounts not so paid on demand (in addition to other rights and remedies
resulting from such nonpayment) shall bear interest from the date of demand
until paid in full at the Default Rate.
     (e) Each Pledgor agrees to register and cause to be registered the interest
of the Administrative Agent, for the benefit of the Secured Parties, in the
Collateral on its own books and records and the registration books of each of
the Pledged Subsidiaries.
     3. Status of Pledged Interests. Each Pledgor hereby represents, warrants
and covenants to the Administrative Agent for the benefit of the Secured
Parties, with respect to itself and the Collateral as to which it has or
acquires any interest, that:

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     (a) All of the Pledged Interests are, as of the date of execution of this
Pledge Agreement or Pledge Joinder Agreement by each Pledgor pledging such
Pledged Interests (such date as applicable with respect to each Pledgor, its
“Applicable Date”), and shall at all times thereafter be validly issued and
outstanding, fully paid and non-assessable and constitute (i) 65% of the issued
and outstanding Voting Securities (or if any Pledgor shall own less than 65% of
such Voting Securities, then 100% of the Voting Securities owned by such
Pledgor) and 100% of the other issued and outstanding Subsidiary Securities of
each Direct Foreign Subsidiary constituting a Pledged Subsidiary and (ii) all of
the issued and outstanding Subsidiary Securities of all Domestic Subsidiaries
constituting Pledged Subsidiaries, and are accurately described on Schedule I.
     (b) The Pledgor is at its Applicable Date and shall at all times thereafter
(subject to Dispositions permitted under the Credit Agreement) be the sole
registered and record and beneficial owner of the Pledged Interests, free and
clear of all Liens, charges, equities, options, hypothecations, encumbrances and
restrictions on pledge or transfer, including transfer of voting rights (other
than Permitted Liens, the pledge hereunder and applicable restrictions pursuant
to federal and state and applicable foreign securities laws). Without limiting
the foregoing, the Pledged Interests are not and will not be subject to any
voting trust, shareholders agreement, right of first refusal, voting proxy,
power of attorney or other similar arrangement (other than the rights hereunder
in favor of the Administrative Agent).
     (c) At no time shall any Pledged Interests (i) be held or maintained in the
form of a security entitlement or credited to any securities account and
(ii) which constitute a “security” (or as to which the related Pledged
Subsidiary has elected to have treated as a “security”) under Article 8 of the
UCC (including, for the purposes of this Section, the Uniform Commercial Code of
any other applicable jurisdiction) be maintained in the form of uncertificated
securities. With respect to Pledged Interests that are “securities” under the
UCC, or as to which the issuer has elected at any time to have such interests
treated as “securities” under the UCC, such Pledged Interests are, and shall at
all times be, represented by the share certificates listed on Schedule I hereto,
which share certificates, with stock powers duly executed in blank by the
Pledgor, have been delivered to the Administrative Agent or are being delivered
to the Administrative Agent simultaneously herewith or, in the case of
Additional Interests as defined in Section 22, shall be delivered pursuant to
Section 22. In addition, with respect to all Pledged Interests, including
Pledged Interests that are not “securities” under the UCC and as to which the
applicable Pledged Subsidiary has not elected to have such interests treated as
“securities” under the UCC, the Pledgor has at its Applicable Date delivered to
the Administrative Agent (or has previously delivered to the Administrative
Agent or, in case of Additional Interests shall deliver pursuant to Section 22)
Uniform Commercial Code financing statements (or appropriate amendments thereto)
duly authorized by the Pledgor and naming the Administrative Agent for the
benefit of the Secured Parties as “secured party,” in form, substance and number
sufficient in the reasonable opinion of the Administrative Agent to be filed in
all UCC filing offices and in all jurisdictions in which

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filing is necessary or advisable to perfect in favor of the Administrative Agent
for the benefit of the Secured Parties the Lien on such Pledged Interests,
together with all required filing fees. Without limiting the foregoing
provisions of this Section 3(c), with respect to any Pledged Interests issued by
any Direct Foreign Subsidiary, Pledgor shall deliver or cause to be delivered,
(i) in addition to or in substitution for all or any of the foregoing items, as
the Administrative Agent may elect, such other instruments, certificates,
agreements, notices, filings, and other documents, and take or cause to be taken
such other action, as the Administrative Agent may determine to be necessary or
advisable under the laws of the jurisdiction of formation of such Direct Foreign
Subsidiary, to grant, perfect and protect as a first priority lien (subject to
Permitted Liens) in such Collateral in favor of the Administrative Agent for the
benefit of the Secured Parties, and (ii) if requested by the Administrative
Agent, an opinion of counsel acceptable in form and substance to the
Administrative Agent issued by a law firm acceptable to the Administrative Agent
licensed to practice law in such foreign jurisdiction, addressing with respect
to such Pledged Interests the matters described in Section 6.14 of the Credit
Agreement.
     (d) It has full corporate power, legal right and lawful authority to
execute this Pledge Agreement (and any Pledge Joinder Agreement applicable to
it) and to pledge, assign and transfer its Pledged Interests in the manner and
form hereof.
     (e) The pledge, assignment and delivery of its Pledged Interests (along
with undated stock powers executed in blank, financing statements and other
agreements referred to in Section 3(c) hereof) to the Administrative Agent for
the benefit of the Secured Parties pursuant to this Pledge Agreement (or any
Pledge Joinder Agreement) creates or continues, as applicable, a valid and
perfected first priority security interest (subject to Permitted Liens) in such
Pledged Interests in favor of the Administrative Agent for the benefit of the
Secured Parties, securing the payment of the Secured Obligations, assuming, in
the case of the Pledged Interests which constitute certificated “securities”
under the UCC (including, for the purposes of this Section, the Uniform
Commercial Code of any other applicable jurisdiction), continuous and
uninterrupted possession by or on behalf of the Administrative Agent. The
Pledgor will at its own cost and expense defend the Secured Parties’ right,
title and security interest in and to the Collateral against the claims and
demands of all persons whomsoever.
     (f) Except as otherwise expressly provided herein pursuant to a Disposition
permitted under the Credit Agreement, none of the Pledged Interests (nor any
interest therein or thereto) shall be sold, transferred or assigned without the
Administrative Agent’s prior written consent, which may be withheld for any
reason.
     (g) It shall at all times cause the Pledged Interests of such Pledgor that
constitute “securities” (or as to which the issuer elects to have treated as
“securities”) under the UCC to be represented by the certificates now and
hereafter delivered to the Administrative Agent in accordance with Sections 2, 3
and 22 hereof and that it shall cause each of the Pledged Subsidiaries as to
which it is the Pledgor not to issue any Subsidiary Securities, or securities
convertible into, or exchangeable or exercisable for,

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Subsidiary Securities, at any time during the term of this Pledge Agreement
unless the Pledged Interests of such Pledge Subsidiary are issued solely to
either (y) such Pledgor who shall immediately comply with Sections 3 and 22
hereof with respect to such property or (z) any Borrower or another Guarantor
who shall immediately pledge such additional Subsidiary Securities to the
Administrative Agent for the benefit of the Secured Parties pursuant to
Section 22 or 24 hereof, as applicable, on substantially identical terms as are
contained herein and deliver or cause to be delivered the appropriate documents
described in Section 3(c) hereof to the Administrative Agent and take such
further actions as the Administrative Agent may deem necessary in order to
perfect a first priority security interest (subject to Permitted Liens) in such
Subsidiary Securities.
     (h) The exact legal name and address, type of Person, jurisdiction of
formation, jurisdiction of formation identification number (if any), and
location of the chief executive office of such Pledgor are as specified on
Schedule II attached hereto. No Pledgor shall change its name, jurisdiction of
formation (whether by reincorporation, merger or otherwise), or the location of
its chief executive office, except upon giving not less than thirty (30) days’
prior written notice to the Administrative Agent and taking or causing to be
taken all such action at such Pledgor’s expense as may be reasonably requested
by the Administrative Agent to perfect or maintain the perfection of the Lien of
the Administrative Agent in Collateral.
     4. Preservation and Protection of Collateral.
     (a) The Administrative Agent shall be under no duty or liability with
respect to the collection, protection or preservation of the Collateral, or
otherwise, beyond the use of reasonable care in the custody and preservation
thereof while in its possession.
     (b) Each Pledgor agrees to pay when due all taxes, charges, Liens and
assessments against the Collateral in which it has an interest, unless being
contested in good faith by appropriate proceedings diligently conducted and
against which adequate reserves have been established in accordance with GAAP
applied on a basis consistent with that used in preparing the Audited Financial
Statements and evidenced to the satisfaction of the Administrative Agent and
provided that all enforcement proceedings in the nature of levy or foreclosure
are effectively stayed. Upon the failure of any Pledgor to so pay or contest
such taxes, charges, Liens or assessments, or upon the failure of any Pledgor to
pay any amount pursuant to Section 2(c), the Administrative Agent at its option
may pay or contest any of them (the Administrative Agent having the sole right
to determine the legality or validity and the amount necessary to discharge such
taxes, charges, Liens or assessments) but shall not have any obligation to make
any such payment or contest. All sums so disbursed by the Administrative Agent,
including Attorneys’ Costs, court costs, expenses and other charges related
thereto, shall be payable on demand by the applicable Pledgor to the
Administrative Agent and shall be additional Secured Obligations secured by the
Collateral, and any amounts not so paid on demand (in addition to other rights
and remedies resulting from such nonpayment) shall bear interest from the date
of demand until paid in full at the Default Rate.

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     (c) Each Pledgor hereby (i) irrevocably authorizes the Administrative Agent
to file (with, or to the extent permitted by applicable law, without the
signature of the Pledgor appearing thereon) financing statements (including
amendments thereto and continuations and copies thereof) showing such Pledgor as
“debtor” at such time or times and in all filing offices as the Administrative
Agent may from time to time reasonably determine to be necessary or advisable to
perfect or protect the rights of the Administrative Agent and the Secured
Parties hereunder, or otherwise to give effect to the transactions herein
contemplated, and (ii) irrevocably ratifies and acknowledges all such actions
taken by or on behalf of the Administrative Agent prior to the Applicable Date.
     5. Default. Upon the occurrence and during the continuance of any Event of
Default, the Administrative Agent is given full power and authority, then or at
any time thereafter, to sell, assign, deliver or collect the whole or any part
of the Collateral, or any substitute therefor or any addition thereto, in one or
more sales, with or without any previous demands or demand of performance or, to
the extent permitted by law, notice or advertisement, in such order as the
Administrative Agent may elect; and any such sale may be made either at public
or private sale at the Administrative Agent’s place of business or elsewhere,
either for cash or upon credit or for future delivery, at such price or prices
as the Administrative Agent may reasonably deem fair; and the Administrative
Agent or any other Secured Party may be the purchaser of any or all Collateral
so sold and hold the same thereafter in its own right free from any claim of any
Pledgor or right of redemption. Demands of performance, advertisements and
presence of property and sale and notice of sale are hereby waived to the extent
permissible by law. Any sale hereunder may be conducted by an auctioneer or any
officer or agent of the Administrative Agent. Each Pledgor recognizes that the
Administrative Agent may be unable to effect a public sale of the Collateral by
reason of certain prohibitions contained in the Securities Act of 1933, as
amended (the “Securities Act”), and applicable state law, and may be otherwise
delayed or adversely affected in effecting any sale by reason of present or
future restrictions thereon imposed by governmental authorities, and that as a
consequence of such prohibitions and restrictions the Administrative Agent may
be compelled (i) to resort to one or more private sales to a restricted group of
purchasers who will be obliged to agree, among other things, to acquire the
Collateral for their own account, for investment and not with a view to the
distribution or resale thereof, or (ii) to seek regulatory approval of any
proposed sale or sales, or (iii) to limit the amount of Collateral sold to any
Person or group. Each Pledgor agrees and acknowledges that private sales so made
may be at prices and upon terms less favorable to such Pledgor than if such
Collateral was sold either at public sales or at private sales not subject to
other regulatory restrictions, and that the Administrative Agent has no
obligation to delay the sale of any of the Collateral for the period of time
necessary to permit the Pledged Subsidiary to register or otherwise qualify the
Collateral, even if such Pledged Subsidiary would agree to register or otherwise
qualify such Collateral for public sale under the Securities Act or applicable
state law. Each Pledgor further agrees, to the extent permitted by applicable
law, that the use of private sales made under the foregoing circumstances to
dispose of the Collateral shall be deemed to be dispositions in a commercially
reasonable manner. Each Pledgor hereby acknowledges that a ready market may not
exist for the Pledged Interests if they are not traded on a national securities
exchange or quoted on an automated quotation system and agrees and acknowledges
that in such

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event the Pledged Interests may be sold for an amount less than a pro rata share
of the fair market value of the Pledged Subsidiary’s assets minus its
liabilities. In addition to the foregoing, the Secured Parties may exercise such
other rights and remedies as may be available under the Loan Documents, at law
(including without limitation the UCC) or in equity.
     6. Proceeds of Sale. The net cash proceeds resulting from the collection,
liquidation, sale, or other disposition of the Collateral shall be applied first
to the expenses (including all Attorneys’ Costs) of retaking, holding, storing,
processing and preparing for sale, selling, collecting, liquidating and the
like, and then to the satisfaction of all Secured Obligations in accordance with
the terms of Section 8.03 of the Credit Agreement. Each Pledgor shall be liable
to the Administrative Agent, for the benefit of the Secured Parties, and shall
pay to the Administrative Agent, for the benefit of the Secured Parties, on
demand any deficiency which may remain after such sale, disposition, collection
or liquidation of the Collateral.
     7. Presentments, Demands and Notices. The Administrative Agent shall not be
under any duty or obligation whatsoever to make or give any presentments,
demands for performances, notices of nonperformance, protests, notice of protest
or notice of dishonor in connection with any obligations or evidences of
indebtedness held thereby as collateral, or in connection with any obligations
or evidences of indebtedness which constitute in whole or in part the Secured
Obligations secured hereunder.
     8. Attorney-in-Fact. Each Pledgor hereby appoints the Administrative Agent
as the Pledgor’s attorney-in-fact for the purposes of carrying out the
provisions of this Pledge Agreement and taking any action and executing any
instrument which the Administrative Agent may deem necessary or advisable to
accomplish the purposes hereof, which appointment is irrevocable and coupled
with an interest; provided, that the Administrative Agent shall have and may
exercise rights under this power of attorney only upon the occurrence and during
the continuance of an Event of Default. Without limiting the generality of the
foregoing, upon the occurrence and during the continuance of an Event of
Default, the Administrative Agent shall have the right and power to receive,
endorse and collect all checks and other orders for the payment of money made
payable to any Pledgor representing any dividend, interest payment, principal
payment or other distribution payable or distributable in respect to the
Collateral or any part thereof and to give full discharge for the same.
     9. Reinstatement. The granting of a security interest in the Collateral and
the other provisions hereof shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any of the Secured Obligations is
rescinded or must otherwise be returned by any Secured Party or is repaid by any
Secured Party in whole or in part in good faith settlement of a pending or
threatened avoidance claim, whether upon the insolvency, bankruptcy or
reorganization of any Pledgor or any other Loan Party or otherwise, all as
though such payment had not been made. The provisions of this Section 9 shall
survive repayment of all of the Secured Obligations and the termination or
expiration of this Pledge Agreement in any manner, including but not limited to
termination upon occurrence of the Facility Termination Date.
     10. Waiver by the Pledgors. Each Pledgor waives to the extent permitted by
applicable law (a) any right to require any Secured Party or any other obligee
of the Secured

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Obligations to (i) proceed against any Person or entity, including without
limitation any Loan Party, (ii) proceed against or exhaust any Collateral or
other collateral for the Secured Obligations, or (iii) pursue any other remedy
in its power, (b) any defense arising by reason of any disability or other
defense of any other Person, or by reason of the cessation from any cause
whatsoever of the liability of any other Person or entity, (c) any right of
subrogation, (d) any right to enforce any remedy which any Secured Party or any
other obligee of the Secured Obligations now has or may hereafter have against
any other Person and any benefit of and any right to participate in any
collateral or security whatsoever now or hereafter held by the Administrative
Agent for the benefit of the Secured Parties. Each Pledgor authorizes each
Secured Party and each other obligee of the Secured Obligations without notice
(except notice required by applicable law) or demand and without affecting its
liability hereunder or under the Loan Documents from time to time to: (x) take
and hold security, other than the Collateral herein described, for the payment
of such Secured Obligations or any part thereof, and exchange, enforce, waive
and release the Collateral herein described or any part thereof or any such
other security; and (y) apply such Collateral or other security and direct the
order or manner of sale thereof as such Secured Party or obligee in its
discretion may determine.
     The Administrative Agent may at any time deliver (without representation,
recourse or warranty) the Collateral or any part thereof to a Pledgor and the
receipt thereof by such Pledgor shall be a complete and full acquittance for the
Collateral so delivered, and the Administrative Agent shall thereafter be
discharged from any liability or responsibility therefor.
     11. Dividends and Voting Rights.
     (a) All dividends and other distributions with respect to any of the
Pledged Interests shall be subject to the pledge hereunder, provided, however,
that cash dividends paid to a Pledgor as record owner of the Pledged Interests,
to the extent permitted by the Credit Agreement to be declared and paid, may be
retained by such Pledgor so long as no Event of Default shall have occurred and
be continuing, free from any Liens hereunder.
     (b) So long as no Event of Default shall have occurred and be continuing,
the registration of the Collateral in the name of a Pledgor as record and
beneficial owner shall not be changed and such Pledgor shall be entitled to
exercise all voting and other rights and powers pertaining to the Collateral for
all purposes not inconsistent with the terms of the Loan Documents.
     (c) Upon the occurrence and during the continuance of any Event of Default,
all rights of the Pledgors to receive and retain cash dividends and other
distributions upon the Collateral pursuant to subsection (a) above shall cease
and shall thereupon be vested in the Administrative Agent for the benefit of the
Secured Parties, and each Pledgor shall promptly deliver, or shall cause to be
promptly delivered, all such cash dividends and other distributions with respect
to the Pledged Interests to the Administrative Agent (together, if the
Administrative Agent shall request, with the documents described in
Sections 2(c) and 3(c) hereof or other negotiable documents or instruments so
distributed) to be held by it hereunder or, at the option of the Administrative
Agent, to be applied to the Secured Obligations. Pending delivery to the
Administrative Agent of such property,

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each Pledgor shall keep such property segregated from its other property and
shall be deemed to hold the same in trust for the benefit of the Secured
Parties.
     (d) Upon the occurrence and during the continuance of any Event of Default,
at the option of the Administrative Agent, all rights of each of the Pledgors to
exercise the voting or consensual rights and powers which it is authorized to
exercise pursuant to subsection (b) above shall cease and the Administrative
Agent may thereupon (but shall not be obligated to), at its request, cause such
Collateral to be registered in the name of the Administrative Agent or its
nominee or agent for the benefit of the Secured Parties and/or exercise such
voting or consensual rights and powers as appertain to ownership of such
Collateral, and to that end each Pledgor hereby appoints the Administrative
Agent as its proxy, with full power of substitution, to vote and exercise all
other rights as a shareholder with respect to such Pledged Interests hereunder
upon the occurrence and during the continuance of any Event of Default, which
proxy is coupled with an interest and is irrevocable until the Facility
Termination Date, and each Pledgor hereby agrees to provide such further proxies
as the Administrative Agent may request; provided, however, that the
Administrative Agent in its discretion may from time to time refrain from
exercising, and shall not be obligated to exercise, any such voting or
consensual rights or such proxy.
     12. Continued Powers. Until the Facility Termination Date shall have
occurred, the power of sale and other rights, powers and remedies granted to the
Administrative Agent for the benefit of the Secured Parties hereunder shall
continue to exist and may be exercised by the Administrative Agent at any time
and from time to time irrespective of the fact that any of the Secured
Obligations or any part thereof may have become barred by any statute of
limitations or that any part of the liability of any Pledgor may have ceased.
     13. Other Rights. The rights, powers and remedies given to the
Administrative Agent for the benefit of the Secured Parties by this Pledge
Agreement shall be in addition to all rights, powers and remedies given to the
Administrative Agent or any Secured Party under any other Loan Document or by
virtue of any statute or rule of law. Any forbearance or failure or delay by the
Administrative Agent in exercising any right, power or remedy hereunder shall
not be deemed to be a waiver of such right, power or remedy, and any single or
partial exercise of any right, power or remedy hereunder shall not preclude the
further exercise thereof; and every right, power and remedy of the Secured
Parties shall continue in full force and effect until such right, power or
remedy is specifically waived in accordance with the terms of the Credit
Agreement.
     14. Anti-Marshaling Provisions. The right is hereby given by each Pledgor
to the Administrative Agent, for the benefit of the Secured Parties, to make
releases (whether in whole or in part) of all or any part of the Collateral
agreeable to the Administrative Agent without notice to, or the consent,
approval or agreement of other parties and interests, including junior lienors,
which releases shall not impair in any manner the validity of or priority of the
Liens and security interests in the remaining Collateral conferred hereunder,
nor release any Pledgor from personal liability for the Secured Obligations.
Notwithstanding the existence of any other security interest in the Collateral
held by the Administrative Agent, for the benefit of the Secured

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Parties, the Administrative Agent shall have the right to determine the order in
which any or all of the Collateral shall be subjected to the remedies provided
in this Pledge Agreement. Each Pledgor hereby waives any and all right to
require the marshaling of assets in connection with the exercise of any of the
remedies permitted by applicable law or provided herein or in any Loan Document.
     15. Entire Agreement. This Pledge Agreement and each Pledge Joinder
Agreement, together with the Credit Agreement and other Loan Documents,
constitutes and expresses the entire understanding between the parties hereto
with respect to the subject matter hereof, and supersedes all prior
negotiations, agreements and understandings, inducements, commitments or
conditions, express or implied, oral or written, except as herein contained. The
express terms hereof and of the Pledge Joinder Agreements control and supersede
any course of performance or usage of the trade inconsistent with any of the
terms hereof and thereof. Neither this Pledge Agreement nor any Pledge Joinder
Agreement nor any portion or provision hereof or thereof may be changed,
altered, modified, supplemented, discharged, canceled, terminated, or amended
orally or in any manner other than as provided in the Credit Agreement.
     16. Further Assurances. Each Pledgor agrees at its own expense to do such
further acts and things, and to execute and deliver, and cause to be executed
and delivered as may be necessary or advisable to give effect thereto, such
additional conveyances, assignments, financing statements, control agreements,
documents, certificates, stock powers, agreements and instruments, as the
Administrative Agent may at any time reasonably request in connection with the
administration or enforcement of this Pledge Agreement or any Pledge Joinder
Agreement or related to the Collateral or any part thereof or in order better to
assure and confirm unto the Administrative Agent its rights, powers and remedies
for the benefit of the Secured Parties hereunder or thereunder. Each Pledgor
hereby consents and agrees that the Pledged Subsidiaries and all other Persons,
shall be entitled to accept the provisions hereof and of the Pledge Joinder
Agreements as conclusive evidence of the right of the Administrative Agent, on
behalf of the Secured Parties, to exercise its rights, privileges, and remedies
hereunder and thereunder with respect to the Collateral, notwithstanding any
other notice or direction to the contrary heretofore or hereafter given by any
Pledgor or any other Person to any of such Pledged Subsidiaries or other
Persons.
     17. Binding Agreement; Assignment. This Pledge Agreement and each Pledge
Joinder Agreement, and the terms, covenants and conditions hereof and thereof,
shall be binding upon and inure to the benefit of the parties hereto, and to
their respective successors and assigns, except that no Pledgor shall be
permitted to assign this Pledge Agreement, any Pledge Joinder Agreement or any
interest herein or therein or in the Collateral, or any part thereof or interest
therein, or otherwise pledge, encumber or grant any option with respect to the
Collateral, or any part thereof, or any cash or property held by the
Administrative Agent as Collateral under this Pledge Agreement. Without limiting
the generality of the foregoing sentence of this Section 17, any Lender may
assign to one or more Persons, or grant to one or more Persons participations in
or to, all or any part of its rights and obligations under the Credit Agreement
(to the extent permitted by the Credit Agreement); and to the extent of any such
assignment or participation such other Person shall, to the fullest extent
permitted by law, thereupon become vested with all

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the benefits in respect thereof granted to such Lender herein or otherwise,
subject however, to the provisions of the Credit Agreement, including Article IX
thereof (concerning the Administrative Agent) and Section 10.06 thereof
(concerning assignments and participations). All references herein to the
Administrative Agent and to the Secured Parties shall include any successor
thereof or permitted assignee, and any other obligees from time to time of the
Secured Obligations.
     18. Secured Cash Management Agreements, Secured Hedge Agreements and
Secured Card Related Products Agreements. No Secured Party (other than the
Administrative Agent) that obtains the benefit of this Pledge Agreement shall
have any right to notice of any action or to consent to, direct or object to any
action hereunder or otherwise in respect of the Collateral (including the
release or impairment of any Collateral) other than in its capacity as a Lender
and, in such case, only to the extent expressly provided in the Loan Documents.
Notwithstanding any other provision of this Pledge Agreement to the contrary,
the Administrative Agent shall only be required to verify the payment of, or
that other satisfactory arrangement have been made with respect to, the Secured
Obligations arising under Secured Cash Management Agreements, Secured Hedge
Agreements and Secured Cash Related Products Agreements to the extent the
Administrative Agent has received written notice of such Obligations, together
with such supporting documentation as it may request, from the applicable Cash
Management Bank, Hedge Bank and Card Related Products Bank, as the case may be.
Each Secured Party not a party to the Credit Agreement that obtains the benefit
of this Pledge Agreement shall be deemed to have acknowledged and accepted the
appointment of the Administrative Agent pursuant to the terms of the Credit
Agreement, and that with respect to the actions and omissions of the
Administrative Agent hereunder or otherwise relating hereto that do or may
affect such Secured Party, the Administrative Agent and each of its Related
Parties shall be entitled to all the rights, benefits and immunities conferred
under Article IX of the Credit Agreement.
     19. Severability. The provisions of this Pledge Agreement are independent
of and separable from each other. If any provision hereof shall for any reason
be held invalid or unenforceable, such invalidity or unenforceability shall not
affect the validity or enforceability of any other provision hereof, but this
Pledge Agreement shall be construed as if such invalid or unenforceable
provision had never been contained herein.
     20. Counterparts. This Pledge Agreement may be executed in any number of
counterparts each of which when so executed and delivered shall be deemed an
original, and it shall not be necessary in making proof of this Pledge Agreement
to produce or account for more than one such counterpart executed by the Pledgor
against whom enforcement is sought. Without limiting the foregoing provisions of
this Section 20, the provisions of Section 10.10 of the Credit Agreement shall
be applicable to this Pledge Agreement.
     21. Termination. Subject to the provisions of Section 9, this Pledge
Agreement and each Pledge Joinder Agreement, and all obligations of the Pledgors
hereunder (excluding those obligations and liabilities that expressly survive
such termination) shall terminate without delivery of any instrument or
performance of any act by any party on the Facility Termination Date. Upon such
termination of this Pledge Agreement, the Administrative Agent shall, at the

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sole expense of the Pledgors, promptly deliver to the Pledgors the certificates
evidencing its shares of Pledged Interests (and any other property received as a
dividend or distribution or otherwise in respect of such Pledged Interests to
the extent then held by the Administrative Agent as additional Collateral
hereunder), together with any cash then constituting the Collateral not then
sold or otherwise disposed of in accordance with the provisions hereof, and take
such further actions at the request of the Pledgors as may be necessary to
effect the same.
     22. Additional Interests. If any Pledgor shall at any time acquire or hold
any additional Pledged Interests, including any Pledged Interests issued by any
Subsidiary not listed on Schedule I hereto which are required to be subject to a
Lien pursuant to a Pledge Agreement by the terms hereof or of any provision of
the Credit Agreement (any such shares being referred to herein as the
“Additional Interests”), such Pledgor shall deliver to the Administrative Agent
for the benefit of the Secured Parties (i) a Pledge Agreement Supplement in the
form of Exhibit A hereto with respect to such Additional Interests duly
completed and executed by such Pledgor and (ii) any other document required in
connection with such Additional Interests as described in Section 3(c). Each
Pledgor shall comply with the requirements of this Section 22 concurrently with
the acquisition of any such Additional Interests or, in the case of Additional
Interests to which Section 6.14 of the Credit Agreement applies, within the time
period specified in such Section or elsewhere in the Credit Agreement with
respect to such Additional Interests; provided, however, that the failure to
comply with the provisions of this Section 22 shall not impair the Lien on
Additional Interests conferred hereunder.
     23. Notices. Any notice required or permitted hereunder shall be given
(a) with respect to any Borrower, at the address of the Borrowers indicated in
Schedule 10.02 of the Credit Agreement, (b) with respect to each Subsidiary
which is a Pledgor hereunder, at the address then in effect for the giving of
notices to such Subsidiary under the Guaranty to which it is a party, and
(c) with respect to the Administrative Agent or a Lender, at the Administrative
Agent’s address indicated in Schedule 10.02 of the Credit Agreement. All such
addresses may be modified, and all such notices shall be given and shall be
effective, as provided in Section 10.02 of the Credit Agreement for the giving
and effectiveness of notices and modifications of addresses thereunder.
     24. Joinder. Each Person who shall at any time execute and deliver to the
Administrative Agent a Pledge Joinder Agreement substantially in the form
attached as Exhibit B hereto shall thereupon irrevocably, absolutely and
unconditionally become a party hereto and obligated hereunder as a Pledgor and
shall have thereupon pursuant to Section 2 hereof granted a security interest in
and collaterally assigned and pledged to the Administrative Agent for the
benefit of the Secured Parties all Pledged Interests which it has at its
Applicable Date or thereafter acquires any interest or the power to transfer,
and all references herein and in the other Loan Documents to the Pledgors or to
the parties to this Pledge Agreement shall be deemed to include such Person as a
Pledgor hereunder. Each Pledge Joinder Agreement shall be accompanied by the
Supplemental Schedules referred to therein, appropriately completed with
information relating to the Pledgor executing such Pledge Joinder Agreement and
its property. Each of the applicable Schedules attached hereto shall be deemed
amended and supplemented without further action by such information reflected on
the Supplemental Schedules.

15

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     25. Rules of Interpretation. The rules of interpretation contained in
Section 1.02 of the Credit Agreement shall be applicable to this Pledge
Agreement and each Pledge Joinder Agreement and are hereby incorporated by
reference. All representations and warranties contained herein shall survive the
delivery of documents and any Credit Extensions referred to herein or secured
hereby.
     26. Governing Law; Waivers.
     (a) THIS PLEDGE AGREEMENT AND EACH PLEDGE JOINDER AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
CALIFORNIA.
     (b) EACH PLEDGOR IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND
ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF
CALIFORNIA SITTING IN THE CITY AND COUNTY OF SAN FRANCISCO AND OF THE UNITED
STATES DISTRICT COURT OF THE NORTHERN DISTRICT OF CALIFORNIA, AND ANY APPELLATE
COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS PLEDGE AGREEMENT OR A PLEDGE JOINDER AGREEMENT, OR FOR RECOGNITION OR
ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH CALIFORNIA STATE COURT OR, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE
PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING
SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE
JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS PLEDGE
AGREEMENT OR ANY PLEDGE JOINDER AGREEMENT SHALL AFFECT ANY RIGHT THAT THE
ADMINISTRATIVE AGENT MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING
RELATING TO THIS PLEDGE AGREEMENT OR A PLEDGE JOINDER AGREEMENT AGAINST ANY
PLEDGOR OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.
     (c) EACH PLEDGOR IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS PLEDGE AGREEMENT OR ANY PLEDGE JOINDER AGREEMENT IN ANY COURT
REFERRED TO IN PARAGRAPH (b) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING
IN ANY SUCH COURT.

16

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     (d) EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE
MANNER PROVIDED FOR NOTICES IN SECTION 23. NOTHING IN THIS PLEDGE AGREEMENT OR
ANY PLEDGE JOINDER AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.
     (e) IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES
UNDER OR RELATED TO THIS PLEDGE AGREEMENT OR ANY PLEDGE JOINDER AGREEMENT OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR THAT MAY IN THE FUTURE
BE DELIVERED IN CONNECTION WITH THE FOREGOING, EACH PARTY HEREBY AGREES, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY SUCH ACTION, SUIT OR PROCEEDING
SHALL BE ARBITRATED IN ACCORDANCE WITH SECTION 10.15 OF THE CREDIT AGREEMENT.
[Signature pages follow.]

17

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     IN WITNESS WHEREOF, the parties have duly executed this Pledge Agreement on
the day and year first written above.

            PLEDGORS:

GRANITE CONSTRUCTION INCORPORATED
      By:   /s/ Jigisha Desai         Name:   Jigisha Desai        Title:   V.P.
Treasurer        GRANITE CONSTRUCTION COMPANY
      By:   /s/ Jigisha Desai         Name:   Jigisha Desai        Title:   V.P.
Treasurer              By:   /s/ Laurel J. Krzeminski         Name:   Laurel J.
Krzeminski        Title:   V.P. CFO        GILC INCORPORATED
      By:   /s/ Jigisha Desai         Name:   Jigisha Desai        Title:   V.P.
and CFO              By:   /s/ Laurel J. Krzeminski         Name:   Laurel J.
Krzeminski        Title:   President and CEO   

SECURITIES PLEDGE AGREEMENT
Signature Page

 

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            GRANITE CONSTRUCTION NORTHEAST, INC.
      By:   /s/ Jigisha Desai         Name:   Jigisha Desai        Title:   V.P.
Treasurer              By:   /s/ Laurel J. Krzeminski         Name:   Laurel J.
Krzeminski        Title:   VP and CFO        GRANITE NORTHWEST, INC.
      By:   /s/ Kathleen Schreckengost         Name:   Kathleen Schreckengost   
    Title:   V.P., Treasurer and Asst. Secretary              By:   /s/ Cynthia
Johnson         Name:   Cynthia Johnson        Title:   Authorized Officer     
  GRANITE LAND COMPANY
      By:   /s/ Jigisha Desai         Name:   Jigisha Desai        Title:   V.P.
Treasurer              By:   /s/ Laurel J. Krzeminski         Name:   Laurel J.
Krzeminski        Title:   V.P.   

SECURITIES PLEDGE AGREEMENT
Signature Page

 

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            INTERMOUNTAIN SLURRY SEAL, INC.
      By:   /s/ Kathleen Schreckengost         Name:   Kathleen Schreckengost   
    Title:   V.P., Treasurer and Asst. Secretary              By:   /s/ Cynthia
Johnson         Name:   Cynthia Johnson        Title:   Authorized Officer     
  POZZOLAN PRODUCTS COMPANY (P.P.C.)
      By:   /s/ Kathleen Schreckengost         Name:   Kathleen Schreckengost   
    Title:   V.P., Treasurer and Asst. Secretary              By:   /s/ Cynthia
Johnson         Name:   Cynthia Johnson        Title:   Authorized Officer   

SECURITIES PLEDGE AGREEMENT
Signature Page

 

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            ADMINISTRATIVE AGENT:

BANK OF AMERICA, N.A., as Administrative Agent
      By:   /s/ Aamir Saleem         Name:   Aamir Saleem        Title:   Vice
President   

SECURITIES PLEDGE AGREEMENT
Signature Page

 

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SCHEDULE I

                                                                      Total
Amount                                                   of Class or     Total  
                                  Name, Jurisdiction of   Class or   Type of    
Amount of                             Name of       Formation and Type of   Type
of   Pledged     Class or     Total     Certificate     Par Value     Transfer  
    Entity of Pledged   Pledged   Interests     Type     Amount     Number (if  
  (if     Agent   Name of Pledgor   Subsidiary   Interest   Authorized    
Outstanding     Pledged     applicable)     applicable)     (if any)  
Granite Construction Inc.
  Granite Construction Company   Common Stock     30,000,000       10,000,000  
    10,000,000       38     $ 0.01          
Granite Construction Inc.
  Granite Land Company   Common Stock             100       100             $
1,000.00          
Granite Construction Inc.
  Granite SR 91 Corporation   Common Stock             1,000       1,000        
    $ 100.00          
Granite Construction Inc.
  GILC Incorporated   Common Stock             5,000       5,000             $
100.00          
Granite Construction Inc.
  Intermountain Slurry Seal, Inc.   Common Stock     250,000       103,035      
103,035             $ 1.00          
Granite Construction Inc.
  Granite Construction International   Common Stock     1,000,000       1,040  
    1,040       2     $ 10.00          
Granite Construction Inc.
  Pozzolan Products Company   Common Stock             1,000       1,000        
    $ 1.00          
Granite Construction Inc.
  Granite Construction Northeast, Inc.   Common Stock     400       300      
300             None        
Granite Construction Inc.
  Granite Northwest, Inc.   Common Stock     1,000,000       100       100      
1     None        

 

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SCHEDULE II
() [d78612d7861201.gif]

 

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EXHIBIT A
PLEDGE AGREEMENT SUPPLEMENT
     THIS PLEDGE AGREEMENT SUPPLEMENT dated as of _____________, 20__ (this
“Pledge Agreement Supplement”), is made by _____________________, a
________________ (the “Pledgor”), in favor of BANK OF AMERICA, N.A., in its
capacity as Administrative Agent (the “Administrative Agent”) for the Secured
Parties.
RECITALS:
     A. The Pledgor is party to that certain Securities Pledge Agreement dated
as of December 23, 2010 (as in effect on the date hereof, the “Pledge
Agreement”; all capitalized terms used but not defined herein shall have the
meanings provided therefor such Pledge Agreement), among Granite Construction
Incorporated, a Delaware corporation (the “Company” and a “Borrower”), Granite
Construction Company, a California corporation (“GCC” and a “Borrower”), GILC
Incorporated, a California corporation (“GILC” and a “Borrower”, and together
with the Company and GCC, collectively, the “Borrower”), certain Subsidiaries of
the Company and the Administrative Agent.
     B. The Pledgor has acquired rights in the Pledged Interests listed on Annex
A to this Supplement (the “Additional Interests”) and desires to pledge, and
evidence its prior pledge, to the Administrative Agent for the benefit of the
Secured Parties all of the Additional Interests in accordance with the terms of
the Credit Agreement and the Pledge Agreement.
     In order to induce the Secured Parties to from time to time make and
maintain extensions of credit under the Credit Agreement, Secured Cash
Management Agreements, Secured Hedge Agreements and Secured Cash Related
Products Agreements, the Pledgor hereby agrees as follows:
     1. Affirmations. The Pledgor hereby reaffirms and acknowledges the pledge
and collateral assignment to, and the grant of security interest in, the
Additional Interests contained in the Pledge Agreement and pledges and
collaterally assigns to the Administrative Agent for the benefit of the Secured
Parties, and grants to the Administrative Agent for the benefit of the Secured
Parties a first priority lien and security interest (subject to Permitted Liens)
in, the Additional Interests and all of the following:
     (a) all money, securities, security entitlements and other investment
property, dividends, rights, general intangibles and other property at any time
and from time to time (x) declared or distributed in respect of or in exchange
for or on conversion of any or all of the Additional Interests or (y) by its or
their terms exchangeable or exercisable for or convertible into any Additional
Interest or other Pledged Interest;
     (b) all other property of whatever character or description, including
money, securities, security entitlements and other investment property, and
general intangibles

 

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hereafter delivered to the Administrative Agent in substitution for or as an
addition to any of the foregoing;
     (c) all securities accounts to which may at any time be credited any or all
of the foregoing or any proceeds thereof and all certificates and instruments
representing or evidencing any of the foregoing or any proceeds thereof; and
     (d) all proceeds of any of the foregoing.
The Pledgor hereby acknowledges, agrees and confirms by its execution of this
Supplement that the Additional Interests constitute “Pledged Interests” under
and are subject to the Pledge Agreement, and the items of property referred to
in clauses (a) through (d) above (the “Additional Collateral”) shall
collectively constitute “Collateral” under and are subject to the Pledge
Agreement. Each of the representations and warranties with respect to Pledged
Interests and Collateral contained in the Pledge Agreement is hereby made by the
Pledgor with respect to the Additional Interests and the Additional Collateral,
respectively. The Pledgor further represents and warrants that Annex A attached
to this Supplement contains a true, correct and complete description of the
Additional Interests, and that all other documents required to be furnished to
the Administrative Agent pursuant to Section 3(c) of the Pledge Agreement in
connection with the Additional Collateral have been delivered or are being
delivered simultaneously herewith to the Administrative Agent. The Pledgor
further acknowledges that Schedule I to the Pledge Agreement shall be deemed, as
to it, to be supplemented as of the date hereof to include the Additional
Interests as described on Annex A to this Supplement.
     2. Counterparts. This Pledge Agreement Supplement may be executed in any
number of counterparts each of which when so executed and delivered shall be
deemed an original, and it shall not be necessary in making proof of this Pledge
Agreement Supplement to produce or account for more than one such counterpart
executed by the Pledgor. Without limiting the foregoing provisions of this
Section 2, the provisions of Section 10.10 of the Credit Agreement shall be
applicable to this Pledge Agreement.
     3. Governing Law; Venue; Waiver of Jury Trial. The provisions of Section 26
of the Pledge Agreement are hereby incorporated by reference as if fully set
forth herein.
[Signature page follows.]

 

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     IN WITNESS WHEREOF, the Pledgor has caused this Supplement to be duly
executed by it’s authorized officer as of the day and year first above written.

            PLEDGOR:

        By:           Name:           Title:        

 

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ANNEX A
(to Pledge Agreement Supplement of __________ dated __________)
Additional Interests

                                                                      Name,    
        Total Amount                                         Jurisdiction of    
        of Class or                                         Formation and      
      Type of     Total Amount                                   Type of Entity
    Class or Type     Additional     of Class or             Certificate        
    Name of   Name of   of Pledged     of Additional     Interests     Type    
Total Amount     Number (if     Par Value (if     Transfer Agent   Pledgor  
Subsidiary     Interest     Authorized     Outstanding     Pledged    
applicable)     applicable)     (if any)  
 
                                                               
 
                                                               

 

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EXHIBIT B
PLEDGE JOINDER AGREEMENT
     THIS PLEDGE JOINDER AGREEMENT dated as of _____________, 20__ (this “Pledge
Joinder Agreement”), is made by _____________________, a ________________ (the
“Joining Pledgor”), in favor of BANK OF AMERICA, N.A., in its capacity as
Administrative Agent (the “Administrative Agent”) for the Secured Parties.
RECITALS:
     A. Granite Construction Incorporated, a Delaware corporation,
[___________], a [___________], and [___________], a [___________]
(collectively, the “Borrower”), certain Subsidiaries of the Company and the
Administrative Agent, are party to a Pledge Agreement dated as of December 23,
2010 (as in effect on the date hereof, the “Pledge Agreement”; all capitalized
terms used but not defined herein shall have the meanings provided therefor in
such Pledge Agreement).
     B. The Joining Pledgor is a Subsidiary of the Borrower and is required by
the terms of the Credit Agreement to become a Guarantor and be joined as a party
to the Pledge Agreement as a Pledgor.
     C. The Joining Pledgor will materially benefit directly and indirectly from
the making and maintenance of the extensions of credit made from time to time
under the Credit Agreement, Secured Cash Management Agreements, Secured Hedge
Agreements and Secured Cash Related Products Agreements.
     In order to induce the Secured Parties to from time to time make and
maintain extensions of credit under the Credit Agreement, Secured Cash
Management Agreements, Secured Hedge Agreements and Secured Cash Related
Products Agreements, the Joining Pledgor hereby agrees as follows:
     1. Joinder. The Subsidiary hereby irrevocably, absolutely and
unconditionally becomes a party to the Pledge Agreement as a Pledgor and bound
by all the terms, conditions, obligations, liabilities and undertakings of each
Pledgor or to which each Pledgor is subject thereunder, including without
limitation the grant pursuant to Section 2 of the Pledge Agreement of a security
interest to the Administrative Agent for the benefit of the Secured Parties in,
and collateral assignment and pledge to the Administrative Agent of, the Pledged
Interests and other property constituting Collateral of such Pledgor or in which
such Pledgor has or may have or acquire an interest or the power to transfer
rights therein, whether now owned or existing or hereafter created, acquired or
arising and wheresoever located, as security for the payment and performance of
the Secured Obligations, all with the same force and effect as if the Joining
Pledgor were a signatory to the Pledge Agreement.
     2. Affirmations. The Joining Pledgor hereby acknowledges and affirms as of
the date hereof with respect to itself, its properties and its affairs each of
the waivers,

 

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representations, warranties, acknowledgements and certifications applicable to
any Pledgor contained in the Pledge Agreement.
     3. Supplemental Schedules. Attached to this Pledge Joinder Agreement are
duly completed schedules (the “Supplemental Schedules”) supplementing as thereon
indicated the respective Schedules to the Pledge Agreement. The Joining Pledgor
represents and warrants that the information contained on each of the
Supplemental Schedules with respect to such Joining Pledgor and its properties
and affairs is true, complete and accurate as of its Applicable Date.
     4. Severability. The provisions of this Pledge Joinder Agreement are
independent of and separable from each other. If any provision hereof shall for
any reason be held invalid or unenforceable, such invalidity or unenforceability
shall not affect the validity or enforceability of any other provision hereof,
but this Pledge Joinder Agreement shall be construed as if such invalid or
unenforceable provision had never been contained herein.
     5. Counterparts. This Pledge Joinder Agreement may be executed in any
number of counterparts each of which when so executed and delivered shall be
deemed an original, and it shall not be necessary in making proof of this Pledge
Joinder Agreement to produce or account for more than one such counterpart
executed by the Joining Pledgor. Delivery of an executed counterpart of a
signature page of this Pledge Joinder Agreement by facsimile or electronic
transmission (including .pdf file) shall be effective as delivery of a manually
executed counterpart hereof.
     6. Delivery. The Joining Pledgor hereby irrevocably waives notice of
acceptance of this Pledge Joinder Agreement and acknowledges that the Secured
Obligations are and shall be deemed to be incurred, and credit extensions under
the Loan Documents, Secured Cash Management Agreements, Secured Hedge Agreements
and Secured Cash Related Products Agreements made and maintained, in reliance on
this Pledge Joinder Agreement and the Pledgor’s joinder as a party to the Pledge
Agreement as herein provided.
     7. Governing Law; Venue; Waiver of Jury Trial. The provisions of Section 26
of the Pledge Agreement are hereby incorporated by reference as if fully set
forth herein.
[Signature page follows.]

 

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     IN WITNESS WHEREOF, the Joining Pledgor has duly executed and delivered
this Pledge Joinder Agreement as of the day and year first written above.

            JOINING PLEDGOR:

        By:           Name:           Title:        

 

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SUPPLEMENTAL
SCHEDULE I

                                                                      Name,    
        Total Amount                                         Jurisdiction of    
        of Class or                                         Formation and      
      Type of     Total Amount                                   Type of Entity
    Class or Type     Pledged     of Class or             Certificate          
  Name of   Name of   of Pledged     of Pledged     Interests     Type     Total
Amount     Number (if     Par Value (if     Transfer Agent   Pledgor  
Subsidiary     Interest     Authorized     Outstanding     Pledged    
applicable)     applicable)     (if any)  
 
                                                               
 
                                                               
 
                                                               
 
                                                               
 
                                                               
 
                                                               

Delivered Pursuant to Pledge Joinder Agreement of: ________________________
Applicable Date: __________, 20__

 

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SUPPLEMENTAL
SCHEDULE II

                                  Name and           Jurisdiction of Formation  
  Jurisdiction of Formation     Address of Chief   Address of Pledgor   Type of
Person     of Pledgor     Identification Number     Executive Office  
 
                               
 
                               
 
                               
 
                               
 
                               
 
                               
 
                               
 
                               
 
                               
 
                               

Delivered Pursuant to Pledge Joinder Agreement of: ________________________
Applicable Date: __________, 20__