exv10w2



 






Exhibit 10.2




GUARANTY AGREEMENT




     THIS GUARANTY AGREEMENT (this “Guaranty Agreement”), dated as of June 24, 2005, is
made by EACH OF THE UNDERSIGNED AND EACH OTHER PERSON WHO SHALL BECOME A PARTY HERETO BE EXECUTION
OF A GUARANTY JOINDER AGREEMENT (each a “Guarantor” and collectively the
“Guarantors”) to BANK OF AMERICA, N.A., a national banking association organized and
existing under the laws of the United States, as administrative agent (in such capacity, the
“Administrative Agent”) for each of the lenders (the “Lenders” now or hereafter
party to the Credit Agreement defined below (collectively with the Administrative Agent, and
certain other Persons parties to Related Credit Arrangements as more particularly described in
Section 19 hereof, the “Secured Parties”). All capitalized terms used but not
otherwise defined herein shall have the meanings ascribed to such terms in the Credit Agreement.



W I T N E S S E T H:




     WHEREAS, the Secured Parties have agreed to provide to Granite Construction Incorporated (the
“Borrower”) a revolving credit facility with a letter of credit and swing line sublimit
pursuant to the terms of that certain Credit Agreement dated as of June 24, 2005, among the
Borrower, the Administrative Agent and the Lenders (as from time to time amended, revised,
modified, supplemented or amended and restated, the “Credit Agreement”); and



     WHEREAS, each Guarantor is, directly or indirectly, a Material Subsidiary of the Borrower and
will materially benefit from the Loans made and to be made, and the Letters of Credit issued and to
be issued, under the Credit Agreement; and



     WHEREAS, each Guarantor is required to enter into this Guaranty Agreement pursuant to the
terms of the Credit Agreement; and



     WHEREAS, a material part of the consideration given in connection with and as an inducement to
the execution and delivery of the Credit Agreement by the Secured Parties was the obligation of the
Borrower to cause each Material Subsidiary that is not an Unrestricted Subsidiary to be a Guarantor
and to enter into this Guaranty Agreement, and the Secured Parties are unwilling to extend and
maintain the credit facilities provided under the Loan Documents unless the Guarantors enter into
this Guaranty Agreement;



     NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, the
parties hereto agree as follows:



     1. Guaranty. Each Guarantor hereby jointly and severally, unconditionally,
absolutely, continually and irrevocably guarantees to the Administrative Agent for the benefit of
the Secured Parties the payment and performance in full of the Guaranteed Liabilities (as defined
below). For all purposes of this Guaranty Agreement, “Guaranteed Liabilities” means: (a)
the Borrower’s prompt payment in full, when due or declared due and at all such times, of all
Obligations and all other amounts pursuant to the terms of the Credit Agreement, the Notes, and all
other Loan Documents heretofore, now or at any time or times hereafter owing, arising, due



 









 




or payable from the Borrower to any one or more of the Secured Parties, including principal,
interest, premiums and fees (including, but not limited to, loan fees and Attorney Costs); (b) the
Borrower’s prompt, full and faithful performance, observance and discharge of each and every
agreement, undertaking, covenant and provision to be performed, observed or discharged by the
Borrower under the Credit Agreement, the Notes and all other Loan Documents; and (c) subject to
Section 19, the prompt payment in full by each Loan Party, when due or declared due and at
all such times, of obligations and liabilities now or hereafter arising under Related Credit
Arrangements (as defined below). The Guarantors’ obligations to the Secured Parties under this
Guaranty Agreement are hereinafter collectively referred to as the “Guarantors’
Obligations” and, with respect to each Guarantor individually, the “Guarantor’s
Obligations”. Notwithstanding the foregoing, the liability of each Guarantor individually with
respect to its Guarantor’s Obligations shall be limited to an aggregate amount equal to the largest
amount that would not render its obligations hereunder subject to avoidance under Section 548 of
the United States Bankruptcy Code or any comparable provisions of any applicable state law.




     Each Guarantor agrees that it is jointly and severally, directly and primarily liable (subject
to the limitation in the immediately preceding sentence) for the Guaranteed Liabilities.



     For purposes of this Guaranty Agreement: (i) “Related Swap Contracts” means all Swap
Contracts which are entered into or maintained by any Loan Party with a Lender or Affiliate of a
Lender in connection with Indebtedness of the Borrower and which are not prohibited by the express
terms of the Loan Documents; (ii) “Related Treasury Management Arrangements” means all
arrangements for the delivery of treasury management services to or for the benefit of any Loan
Party which are entered into or maintained with a Lender or Affiliate of a Lender and which are not
prohibited by the express terms of the Loan Documents; and (iii) “Related Credit
Arrangements” means, collectively, Related Swap Contracts and Related Treasury Management
Arrangements.



     2. Payment. If the Borrower shall default in payment or performance of any of the
Guaranteed Liabilities, whether principal, interest, premium, fee (including, but not limited to,
loan fees and Attorney Costs), or otherwise, when and as the same shall become due, and after
expiration of any applicable grace period, whether according to the terms of the Credit Agreement,
by acceleration, or otherwise, or upon the occurrence and during the continuance of any Event of
Default under the Credit Agreement, then any or all of the Guarantors will, upon demand thereof by
the Administrative Agent, fully pay to the Administrative Agent, for the benefit of the Secured
Parties, subject to any restriction on each Guarantor’s Obligations set forth in Section 1
hereof, an amount equal to all the Guaranteed Liabilities then due and owing.



     3. Absolute Rights and Obligations. This is a guaranty of payment and not of
collection. The Guarantors’ Obligations under this Guaranty Agreement shall be joint and several,
absolute and unconditional irrespective of, and each Guarantor hereby expressly waives, to the
extent permitted by law, any defense to its obligations under this Guaranty Agreement to which it
is a party by reason of:




     (a) any lack of legality, validity or enforceability of the Credit Agreement, of any of
the Notes, of any other Loan Document, or of any other agreement or instrument



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creating, providing security for, or otherwise relating to any of the Guarantors’
Obligations, any of the Guaranteed Liabilities, or any other guaranty of any of the
Guaranteed Liabilities (the Loan Documents and all such other agreements and instruments
being collectively referred to as the “Related Agreements”);




     (b) any action taken under any of the Related Agreements, any exercise of any right or
power therein conferred, any failure or omission to enforce any right conferred thereby, or
any waiver of any covenant or condition therein provided;




     (c) any acceleration of the maturity of any of the Guaranteed Liabilities, of the
Guarantor’s Obligations of any other Guarantor, or of any other obligations or liabilities
of any Person under any of the Related Agreements;




     (d) any release, exchange, non-perfection, lapse in perfection, disposal, deterioration
in value, or impairment of any security for any of the Guaranteed Liabilities, for any of
the Guarantor’s Obligations of any Guarantor, or for any other obligations or liabilities of
any Person under any of the Related Agreements;




     (e) any dissolution of the Borrower or any Guarantor or any other party to a Related
Agreement, or the combination or consolidation of the Borrower or any Guarantor or any other
party to a Related Agreement into or with another entity or any transfer or disposition of
any assets of the Borrower or any Guarantor or any other party to a Related Agreement;




     (f) any extension (including without limitation extensions of time for payment),
renewal, amendment, restructuring or restatement of, any acceptance of late or partial
payments under, or any change in the amount of any borrowings or any credit facilities
available under, the Credit Agreement, any of the Notes or any other Loan Document or any
other Related Agreement, in whole or in part;




     (g) the existence, addition, modification, termination, reduction or impairment of
value, or release of any other guaranty (or security therefor) of the Guaranteed Liabilities
(including without limitation the Guarantor’s Obligations of any other Guarantor and
obligations arising under any other Guaranty now or hereafter in effect);




     (h) any waiver of, forbearance or indulgence under, or other consent to any change in
or departure from any term or provision contained in the Credit Agreement, any other Loan
Document or any other Related Agreement, including without limitation any term pertaining to
the payment or performance of any of the Guaranteed Liabilities, any of the Guarantor’s
Obligations of any other Guarantor, or any of the obligations or liabilities of any party to
any other Related Agreement;




     (i) any rights it has to require the Secured Parties (or any of them) to marshal,
foreclose upon, sell, or otherwise realize upon or collect or apply any particular part of
any other assets securing any of the Guaranteed Liabilities (including any rights arising by
virtue of Sections 2899 and 3433 of the California Civil Code);



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     (j) any and all benefits or defenses, if any, arising directly or indirectly under any
one or more of Sections 2799, 2808, 2809, 2810, 2815, 2819, 2820, 2821, 2822, 2838, 2839,
2845, 2848, 2849, and 2850 of the California Civil Code, Sections 580a, 580b, 580c, 580d,
and 726 of the California Code of Civil Procedure, and Sections 3116, 3118, 3119, 3419,
3605, 9504, 9505, and 9507 of the California Uniform Commercial Code; and




     (j) any other circumstance whatsoever (with or without notice to or knowledge of any
Guarantor) which may or might in any manner or to any extent vary the risks of such
Guarantor, or might otherwise constitute a legal or equitable defense available to, or
discharge of, a surety or a guarantor, including without limitation (i) any right to require
or claim that resort be had to the Borrower or any other Loan Party or to any collateral in
respect of the Guaranteed Liabilities or Guarantors’ Obligations and (ii) the operation of
Sections 580a, 580b, 580d, or 726 of the California Code of Civil Procedure or any similar
law of the State of California or any other jurisdiction.


It is the express purpose and intent of the parties hereto that this Guaranty Agreement and the
Guarantors’ Obligations hereunder and under each Guaranty Joinder Agreement shall be absolute and
unconditional under any and all circumstances and shall not be discharged except by payment as
herein provided.




     4. Currency and Funds of Payment. All Guarantors’ Obligations will be paid in lawful
currency of the United States of America and in immediately available funds, regardless of any law,
regulation or decree now or hereafter in effect that might in any manner affect the Guaranteed
Liabilities, or the rights of any Secured Party with respect thereto as against the Borrower, or
cause or permit to be invoked any alteration in the time, amount or manner of payment by the
Borrower of any or all of the Guaranteed Liabilities.



     5. Events of Default. Without limiting the provisions of Section 2 hereof, in
the event that there shall occur and be continuing an Event of Default, then notwithstanding any
collateral or other security or credit support for the Guaranteed Liabilities, at the
Administrative Agent’s election and without notice thereof or demand therefor, the Guarantors’
Obligations shall immediately be and become due and payable.



     6. Subordination. Until this Guaranty Agreement is terminated in accordance with
Section 22 hereof, each Guarantor hereby unconditionally subordinates all present and
future debts, liabilities or obligations now or hereafter owing to such Guarantor (i) of the
Borrower, to the payment in full of the Guaranteed Liabilities, (ii) of every other Guarantor (an
“obligated guarantor”), to the payment in full of the Guarantors’ Obligations of such obligated
guarantor, and (iii) of each other Person now or hereafter constituting a Loan Party, to the
payment in full of the obligations of such Loan Party owing to any Secured Party and arising under
the Loan Documents or the Related Credit Arrangements. All amounts due under such subordinated
debts, liabilities, or obligations shall, upon the occurrence and during the continuance of an
Event of Default, be collected and, upon request by the Administrative Agent, paid over forthwith
to the Administrative Agent for the benefit of the Secured Parties on account of the Guaranteed
Liabilities, the Guarantors’ Obligations, or such other obligations, as applicable, and,



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after such request and pending such payment, shall be held by such Guarantor as agent and
bailee of the Secured Parties separate and apart from all other funds, property and accounts of
such Guarantor.




     7. Suits. Each Guarantor from time to time shall pay to the Administrative Agent for
the benefit of the Secured Parties, on demand, at the Administrative Agent’s place of business set
forth in the Credit Agreement or such other address as the Administrative Agent shall give notice
of to such Guarantor, the Guarantors’ Obligations as they become or are declared due, and in the
event such payment is not made forthwith, the Administrative Agent may proceed to suit against any
one or more or all of the Guarantors. At the Administrative Agent’s election, one or more and
successive or concurrent suits may be brought hereon by the Administrative Agent against any one or
more or all of the Guarantors, whether or not suit has been commenced against the Borrower, any
other Guarantor, or any other Person and whether or not the Secured Parties have taken or failed to
take any other action to collect all or any portion of the Guaranteed Liabilities or have taken or
failed to take any actions against any collateral securing payment or performance of all or any
portion of the Guaranteed Liabilities, and irrespective of any event, occurrence, or condition
described in Section 3 hereof.



     8. Set-Off and Waiver. Each Guarantor waives any right to assert against any Secured
Party as a defense, counterclaim, set-off, recoupment or cross claim in respect of its Guarantor’s
Obligations, any defense (legal or equitable) or other claim which such Guarantor may now or at any
time hereafter have against the Borrower or any or all of the Secured Parties without waiving any
additional defenses, set-offs, counterclaims or other claims otherwise available to such Guarantor.
For the purposes of this Section 8, all remittances and property shall be deemed to be in
the possession of a Secured Party as soon as the same may be put in transit to it by mail or
carrier or by other bailee.



     9. Waiver of Notice; Subrogation.




     (a) Each Guarantor hereby waives to the extent permitted by law notice of the following
events or occurrences: (i) acceptance of this Guaranty Agreement; (ii) the Lenders’
heretofore, now or from time to time hereafter making Loans and issuing Letters of Credit
and otherwise loaning monies or giving or extending credit to or for the benefit of the
Borrower or any other Loan Party, or otherwise entering into arrangements with any Loan
Party giving rise to Guaranteed Liabilities, whether pursuant to the Credit Agreement or the
Notes or any other Loan Document or Related Agreement or any amendments, modifications, or
supplements thereto, or replacements or extensions thereof; (iii) presentment, demand,
default, non-payment, partial payment and protest; and (iv) any other event, condition, or
occurrence described in Section 3 hereof. Each Guarantor agrees that each Secured
Party may heretofore, now or at any time hereafter do any or all of the foregoing in such
manner, upon such terms and at such times as each Secured Party, in its sole and absolute
discretion, deems advisable, without in any way or respect impairing, affecting, reducing or
releasing such Guarantor from its Guarantor’s Obligations, and each Guarantor hereby
consents to each and all of the foregoing events or occurrences.



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     (b) Each Guarantor hereby agrees that payment or performance by such Guarantor of its
Guarantor’s Obligations under this Guaranty Agreement may be enforced by the Administrative
Agent on behalf of the Secured Parties upon demand by the Administrative Agent to such
Guarantor without the Administrative Agent being required, such Guarantor expressly waiving
to the extent permitted by law any right it may have to require the Administrative Agent, to
(i) prosecute collection or seek to enforce or resort to any remedies against the Borrower
or any other Guarantor or any other guarantor of the Guaranteed Liabilities, or (ii) seek to
enforce or resort to any remedies with respect to any security interests, Liens or
encumbrances granted to the Administrative Agent or any Lender or other party to a Related
Agreement by the Borrower, any other Guarantor or any other Person on account of the
Guaranteed Liabilities or any guaranty thereof, including in either case any defense based
upon an election of remedies by any Secured Party under the provisions of Sections 580a,
580b, 580d, and 726 of the California Code of Civil Procedure or any similar law of the
State of California or any other jurisdiction. In making this waiver, each Guarantor
specifically acknowledges that it understands and is aware that, under Sections 580b and
580d of the California Code of Civil Procedure, if the Secured Parties (or any of them)
conducted a nonjudicial foreclosure sale of real property collateral: (i) such Secured
Party(ies) would lose the right to pursue the Borrower for any deficiency that might remain
following such sale; (ii) if such Guarantor were to pay such deficiency following such sale,
it would be precluded from pursuing the Borrower for reimbursement; and (iii) as a result,
such Secured Party(ies) would be prevented from pursuing such Guarantor for such deficiency
following such sale. IT IS FURTHER EXPRESSLY UNDERSTOOD, ACKNOWLEDGED AND AGREED TO BY SUCH
GUARANTOR THAT DEMAND UNDER THIS GUARANTY AGREEMENT MAY BE MADE BY THE ADMINISTRATIVE AGENT,
AND THE PROVISIONS HEREOF ENFORCED BY THE ADMINISTRATIVE AGENT, EFFECTIVE AS OF THE FIRST
DATE ANY EVENT OF DEFAULT OCCURS AND IS CONTINUING UNDER THE CREDIT AGREEMENT.




     (c) Each Guarantor further agrees with respect to this Guaranty Agreement that it shall
have no right of subrogation, reimbursement, contribution or indemnity, nor any right of
recourse to security for the Guaranteed Liabilities unless and until 93 days immediately
following the Facility Termination Date (as defined below) shall have elapsed without the
filing or commencement, by or against any Loan Party, of any state or federal action, suit,
petition or proceeding seeking any reorganization, liquidation or other relief or
arrangement in respect of creditors of, or the appointment of a receiver, liquidator,
trustee or conservator in respect to, such Loan Party or its assets. This waiver is
expressly intended to prevent the existence of any claim in respect to such subrogation,
reimbursement, contribution or indemnity by any Guarantor against the estate of any other
Loan Party within the meaning of Section 101 of the Bankruptcy Code, in the event of a
subsequent case involving any other Loan Party. If an amount shall be paid to any Guarantor
on account of such rights at any time prior to termination of this Guaranty Agreement in
accordance with the provisions of Section 22 hereof, such amount shall be held in
trust for the benefit of the Secured Parties and shall forthwith be paid to the
Administrative Agent, for the benefit of the Secured Parties, to be credited and applied



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upon the Guarantors’ Obligations, whether matured or unmatured, in accordance with the terms
of the Credit Agreement or otherwise as the Secured Parties may elect. The agreements in
this subsection shall survive repayment of all of the Guarantors’ Obligations, the
termination or expiration of this Guaranty Agreement in any manner, including but not
limited to termination in accordance with Section 22 hereof, and occurrence of the
Facility Termination Date. For purposes of this Guaranty Agreement, “Facility
Termination Date” means the date as of which all of the following shall have occurred:
(a) the Borrower shall have permanently terminated the credit facilities under the Loan
Documents by final payment in full of all Outstanding Amounts, together with all accrued and
unpaid interest and fees thereon, other than (i) the undrawn portion of Letters of Credit
and (ii) all letter of credit fees relating thereto 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) all Commitments shall have
terminated or expired; (c) the obligations and liabilities of the Borrower and each other
Loan Party under all Related Credit Arrangements shall have been fully, finally and
irrevocably paid and satisfied in full and the Related Credit Arrangements shall have
expired or been terminated, or other arrangements satisfactory to the counterparties shall
have been made with respect thereto; and (d) the Borrower and each other Loan Party shall
have fully, finally and irrevocably paid and satisfied in full all of their respective
obligations and liabilities arising under the Loan Documents, including with respect to the
Borrower and the Obligations (except for future obligations consisting of continuing
indemnities and other contingent Obligations of the Borrower or any Loan Party that may be
owing to any Agent-Related Person or any Lender pursuant to the Loan Documents and expressly
survive termination of the Credit Agreement or any other Loan Document).



     10. Effectiveness; Enforceability. This Guaranty Agreement shall be effective as of
the date first above written and shall continue in full force and effect until termination in
accordance with Section 22 hereof. Any claim or claims that the Secured Parties may at any
time hereafter have against a Guarantor under this Guaranty Agreement may be asserted by the
Administrative Agent on behalf of the Secured Parties by written notice directed to such Guarantor
in accordance with Section 24 hereof.



     11. Representations and Warranties. Each Guarantor warrants and represents to the
Administrative Agent, for the benefit of the Secured Parties, that it is duly authorized to execute
and deliver this Guaranty Agreement (or the Guaranty Joinder Agreement to which it is a party, as
applicable), and to perform its obligations under this Guaranty Agreement, that this Guaranty
Agreement (or the Guaranty Joinder Agreement to which it is a party, as applicable) has been duly
executed and delivered on behalf of such Guarantor by its duly authorized representatives; that
this Guaranty Agreement (and any Guaranty Joinder Agreement to which such Guarantor is a party) is
legal, valid, binding and enforceable against such Guarantor in accordance with its terms except as
enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights



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generally and by general equitable principles; and that such Guarantor’s execution, delivery
and performance of this Guaranty Agreement (and any Guaranty Joinder Agreement to which such
Guarantor is a party) do not violate or constitute a breach of any of its Organizational Documents,
any agreement or instrument to which such Guarantor is a party, or any law, order, regulation,
decree or award of any governmental authority or arbitral body to which it or its properties or
operations is subject.




     12. Expenses. Each Guarantor agrees to be jointly and severally liable for the
payment of all reasonable fees and expenses, including Attorney Costs, incurred by any Secured
Party in connection with the enforcement of this Guaranty Agreement, whether or not suit be
brought.



     13. Reinstatement. Each Guarantor agrees that this Guaranty Agreement shall continue
to be effective or be reinstated, as the case may be, at any time payment received by any Secured
Party in respect of any Guaranteed Liabilities is rescinded or must be restored for any reason, or
is repaid by any Secured Party in whole or in part in good faith settlement of any pending or
threatened avoidance claim.



     14. Attorney-in-Fact. To the extent permitted by law, each Guarantor hereby appoints
the Administrative Agent, for the benefit of the Secured Parties, as such Guarantor’s
attorney-in-fact for the purposes of carrying out the provisions of this Guaranty 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 coupled with an interest and is
irrevocable; 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.



     15. Reliance. Each Guarantor represents and warrants to the Administrative Agent, for
the benefit of the Secured Parties, that: (a) such Guarantor has adequate means to obtain on a
continuing basis (i) from the Borrower, information concerning the Loan Parties and the Loan
Parties’ financial condition and affairs and (ii) from other reliable sources, such other
information as it deems material in deciding to provide this Guaranty Agreement and any Guaranty
Joinder Agreement (“Other Information”), and has full and complete access to the Loan
Parties’ books and records and to such Other Information; (b) such Guarantor is not relying on any
Secured Party or its or their employees, directors, agents or other representatives or Affiliates,
to provide any such information, now or in the future; (c) such Guarantor has been furnished with
and reviewed the terms of the Credit Agreement and such other Loan Documents and Related Agreements
as it has requested, is executing this Guaranty Agreement (or the Guaranty Joinder Agreement to
which it is a party, as applicable) freely and deliberately, and understands the obligations and
financial risk undertaken by providing this Guaranty Agreement (and any Guaranty Joinder
Agreement); (d) such Guarantor has relied solely on the Guarantor’s own independent investigation,
appraisal and analysis of the Borrower, the Borrower’s financial condition and affairs, the “Other
Information”, and such other matters as it deems material in deciding to provide this Guaranty
Agreement (and any Guaranty Joinder Agreement) and is fully aware of the same; and (e) such
Guarantor has not depended or relied on any Secured Party or its or their employees, directors,
agents or other representatives or Affiliates, for any information



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whatsoever concerning the Borrower or the Borrower’s financial condition and affairs or any
other matters material to such Guarantor’s decision to provide this Guaranty Agreement (and any
Guaranty Joinder Agreement), or for any counseling, guidance, or special consideration or any
promise therefor with respect to such decision. Each Guarantor agrees that no Secured Party has
any duty or responsibility whatsoever, now or in the future, to provide to such Guarantor any
information concerning the Borrower or the Borrower’s financial condition and affairs, or any Other
Information, other than as expressly provided herein, and that, if such Guarantor receives any such
information from any Secured Party or its or their employees, directors, agents or other
representatives or Affiliates, such Guarantor will independently verify the information and will
not rely on any Secured Party or its or their employees, directors, agents or other representatives
or Affiliates, with respect to such information.




     16. Rules of Interpretation. The rules of interpretation contained in Sections
1.02 and 1.10 of the Credit Agreement shall be applicable to this Guaranty Agreement
and each Guaranty Joinder Agreement and are hereby incorporated by reference. All representations
and warranties contained herein shall survive the delivery of documents and any extension of credit
referred to herein or guaranteed hereby.



     17. Entire Agreement. This Guaranty Agreement and each Guaranty 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, understandings, inducements, commitments or conditions, express
or implied, oral or written, except as herein contained. The express terms hereof control and
supersede any course of performance or usage of the trade inconsistent with any of the terms
hereof. Except as provided in Section 22, neither this Guaranty Agreement nor any Guaranty
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.



     18. Binding Agreement; Assignment. This Guaranty Agreement, each Guaranty 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 thereto, and to their respective heirs, legal
representatives, successors and assigns; provided, however, that no Guarantor shall
be permitted to assign any of its rights, powers, duties or obligations under this Guaranty
Agreement, any Guaranty Joinder Agreement or any other interest herein or therein without the prior
written consent of the Administrative Agent. Without limiting the generality of the foregoing
sentence of this Section 18, 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 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 10.07 thereof concerning
assignments and participations. All references herein to the Administrative Agent shall include
any successor thereof.



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     19. Related Credit Arrangements. All obligations of any Loan Party under Related
Credit Arrangements to which any Lender or its Affiliates are a party shall be deemed to be
Guaranteed Liabilities in accordance with Section 1, and each Lender or Affiliate of a
Lender party to any such Related Credit Arrangement shall be deemed to be a Secured Party hereunder
with respect to such Guaranteed Liabilities; provided, however, that such
obligations shall cease to be Guaranteed Liabilities at such time, prior to the Facility
Termination Date, as such Person (or Affiliate of such Person) shall cease to be a “Lender” under
the Credit Agreement.



     No Person who obtains the benefit of this Guaranty Agreement by virtue of the provisions of
this Section and the definition of “Secured Parties” and “Guaranteed Liabilities” shall have, prior
to the Facility Termination Date, any right to notice of any action or to consent to, direct or
object to any action hereunder or under any other Loan Document or otherwise in respect of the
Guarantors’ Obligations (including the release or modification of any Guarantors’ Obligations or
security therefor) other than in its capacity as a Lender and only to the extent expressly provided
in the Loan Documents. Each Secured Party not a party to the Credit Agreement who obtains the
benefit of this Guaranty Agreement by virtue of the provisions of this Section and the definition
of “Secured Parties” and “Guaranteed Liabilities” 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
Agent-Related Person shall be entitled to all the rights, benefits and immunities conferred under
Article IX of the Credit Agreement.



     20. Severability. The provisions of this Guaranty 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 Guaranty Agreement shall be construed as if such invalid or
unenforceable provision had never been contained herein.



     21. Counterparts. This Guaranty 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 Guaranty Agreement to produce or account for more than one
such counterpart executed by the Guarantor against whom enforcement is sought. Without limiting
the foregoing provisions of this Section 21, the provisions of Section 10.11 of the
Credit Agreement shall be applicable to this Guaranty Agreement.



     22. Termination. Subject to reinstatement pursuant to Section 13 hereof, this
Guaranty Agreement and each Guaranty Joinder Agreement, and all of the Guarantors’ Obligations
hereunder (excluding those Guarantors’ obligations relating to Guaranteed Liabilities that
expressly survive such termination) shall terminate on the Facility Termination Date.



     23. Remedies Cumulative; Late Payments. All remedies hereunder are cumulative and are
not exclusive of any other rights and remedies of the Administrative Agent or any other Secured
Party provided by law or under the Credit Agreement, the other Loan Documents or other applicable
agreements or instruments. The making of the Loans and other credit



10









 




extensions pursuant to the Credit Agreement and other Related Agreements shall be conclusively
presumed to have been made or extended, respectively, in reliance upon each Guarantor’s guaranty of
the Guaranteed Liabilities pursuant to the terms hereof. Any amounts not paid when due under this
Guaranty Agreement shall bear interest at the Default Rate.




     24. Notices. Any notice required or permitted hereunder or under any Guaranty Joinder
Agreement shall be given, (a) with respect to each Guarantor, at the address of the Borrower
indicated in Schedule 10.02 of the Credit Agreement and (b) with respect to the
Administrative Agent or any other Secured Party, 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.



     25. Joinder. Each Person who shall at any time execute and deliver to the
Administrative Agent a Guaranty Joinder Agreement substantially in the form attached as Exhibit A
hereto shall thereupon irrevocably, absolutely and unconditionally become a party hereto and
obligated hereunder as a Guarantor, and all references herein and in the other Loan Documents to
the Guarantors or to the parties to this Guaranty Agreement shall be deemed to include such Person
as a Guarantor hereunder.



     26. Revocation. Each Guarantor absolutely, unconditionally, knowingly, and expressly
waives any right to revoke such Guarantor’s guaranty obligation hereunder as to future Guaranteed
Liabilities and, in light thereof, all protection afforded such Guarantor under Section 2815 of the
California Civil Code. Each Guarantor fully realizes and understands that, upon execution of this
Agreement, such Guarantor will not have any right to revoke this Agreement as to any future
indebtedness and, thus, may have no control over such Guarantor’s ultimate responsibility for the
amount and nature of the Guaranteed Liabilities.



     27. Governing Law; Venue; Waiver of Jury Trial. The provisions of Section
10.15 and 10.16(d) of the Credit Agreement are hereby incorporated by reference as if
fully set forth herein; provided, that in such sections, as incorporated herein, references
to the Credit Agreement shall be deemed to be references to the Guaranty Agreement.



[Signature page follows.]




11









 








     IN WITNESS WHEREOF, the parties hereto have duly executed and delivered this Guaranty
Agreement as of the day and year first written above.



GUARANTORS:




	 	 	 	 	 
	 	 	GRANITE CONSTRUCTION COMPANY
	 	 	a California corporation
	 
	 	 	 	 
	 

	 	By:
	 	/s/ William G. Dorey
	 

	 	 	 	 
	 

	 	Name:
	 	William G. Dorey
	 

	 	Title:
	 	Chief Executive Officer
	 
	 	 	 	 
	 

	 	By:
	 	/s/ William E. Barton
	 

	 	 	 	 
	 

	 	Name:
	 	William E. Barton
	 

	 	Title:
	 	Chief Financial Officer
	 
	 	 	 	 
	 	 	GRANITE HALMAR CONSTRUCTION COMPANY, INC.
	 	 	a New York corporation
	 
	 	 	 	 
	 

	 	By:
	 	/s/ William G. Dorey
	 

	 	 	 	 
	 

	 	Name:
	 	William G. Dorey
	 

	 	Title:
	 	Chief Executive Officer
	 
	 	 	 	 
	 

	 	By:
	 	/s/ William E. Barton
	 

	 	 	 	 
	 

	 	Name:
	 	William E. Barton
	 

	 	Title:
	 	Chief Financial Officer
	 
	 	 	 	 
	 	 	GRANITE LAND COMPANY
	 	 	a California corporation
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Scott D. Wolcott
	 

	 	 	 	 
	 

	 	Name:
	 	Scott D. Wolcott
	 

	 	Title:
	 	President
	 
	 	 	 	 
	 

	 	By:
	 	/s/ William E. Barton
	 

	 	 	 	 
	 

	 	Name:
	 	William E. Barton
	 

	 	Title:
	 	Senior Vice President






 









 






	 	 	 	 	 
	 	 	GILC, LP
	 	 	a California limited partnership
	 
	 	 	 	 
	 

	 	By:
	 	GILC INCORPORATED
	 

	 	 	 	its general partner
	 
	 	 	 	 
	 

	 	By:
	 	/s/ William E. Barton
	 

	 	 	 	 
	 

	 	Name:
	 	William E. Barton
	 

	 	Title:
	 	Chief Executive Officer
	 
	 	 	 	 
	 

	 	By:
	 	/s/ R.C. Allbritton
	 

	 	 	 	 
	 

	 	Name:
	 	R.C. Allbritton
	 

	 	Title:
	 	Chief Financial Officer
	 
	 	 	 	 
	 	 	INTERMOUNTAIN SLURRY SEAL, INC.
	 	 	a Wyoming corporation
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Michael L. Thomas
	 

	 	 	 	 
	 

	 	Name:
	 	Michael L. Thomas
	 

	 	Title:
	 	Chief Executive Officer
	 
	 	 	 	 
	 

	 	By:
	 	/s/ David J. Brunton
	 

	 	 	 	 
	 

	 	Name:
	 	David J. Brunton
	 

	 	Title:
	 	Chief Financial Officer
	 
	 	 	 	 
	 	 	POZZOLAN PRODUCTS COMPANY (P.P.C.)
	 	 	a Utah corporation
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Michael L. Thomas
	 

	 	 	 	 
	 

	 	Name:
	 	Michael L. Thomas
	 

	 	Title:
	 	Chief Executive Officer
	 
	 	 	 	 
	 

	 	By:
	 	/s/ David J. Brunton
	 

	 	 	 	 
	 

	 	Name:
	 	David J. Brunton
	 

	 	Title:
	 	Chief Financial Officer






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	 	 	ADMINISTRATIVE AGENT:
	 
	 	 	 	 
	 	 	BANK OF AMERICA, N.A., as Administrative
	 

	 	Agent	 	 
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Brenda H. Little
	 

	 	 	 	 
	 

	 	Name:
	 	Brenda H. Little
	 

	 	Title:
	 	Assistant Vice President






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EXHIBIT A




Form of Guaranty Joinder Agreement




GUARANTY JOINDER AGREEMENT




     THIS GUARANTY JOINDER AGREEMENT (the “Guaranty Joinder Agreement”), dated as of
                    , 20___is made by                                         , a                      (the
“Joining Guarantor”), delivered to BANK OF AMERICA, N.A., in its capacity as
Administrative Agent (the “Administrative Agent”) under that certain Credit Agreement (as
amended, revised, modified, supplemented or amended and restated from time to time, the “Credit
Agreement”), dated as of June 24, 2005, by and among Granite Construction Incorporated (the
“Borrower”), the Lenders party thereto and the Administrative Agent. All capitalized terms not
otherwise defined herein shall have the meanings given to such terms in the Credit Agreement.



     WHEREAS, the Joining Guarantor is a Subsidiary and required by the terms of the Credit
Agreement to become a “Guarantor” under the Credit Agreement and be joined as a party to
the Guaranty; and



     WHEREAS, the Joining Guarantor will materially benefit directly and indirectly from the credit
facilities made available and to be made available to the Borrower by the Lenders under the Credit
Agreement; and



     NOW, THEREFORE, the Joining Guarantor hereby agrees as follows with the Administrative Agent,
for the benefit of the Secured Parties (as defined in the Guaranty and including any Lender or
Affiliate of any Lender party to any Related Credit Arrangement):



     1. Joinder. The Joining Guarantor hereby irrevocably, absolutely and unconditionally
becomes a party to the Guaranty as a Guarantor and bound by all the terms, conditions, obligations,
liabilities and undertakings of each Guarantor or to which each Guarantor is subject thereunder,
including without limitation the joint and several, unconditional, absolute, continuing and
irrevocable guarantee to the Administrative Agent for the benefit of the Secured Parties of the
payment and performance in full of the Guaranteed Liabilities (as defined in the Guaranty) whether
now existing or hereafter arising, all with the same force and effect as if the Joining Guarantor
were a signatory to the Guaranty.



     2. Affirmations. The Joining Guarantor hereby acknowledges and reaffirms as of the
date hereof with respect to itself, its properties and its affairs each of the waivers,
representations, warranties, acknowledgements and certifications applicable to any Guarantor
contained in the Guaranty.



     3. Severability. The provisions of this Guaranty 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



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enforceability of any other provision hereof, but this Guaranty Joinder Agreement shall be
construed as if such invalid or unenforceable provision had never been contained herein.




     4. Counterparts. This Guaranty 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 Guaranty Joinder Agreement to produce or account for more
than one such counterpart executed by the Joining Guarantor. Without limiting the foregoing
provisions of this Section 4, the provisions of Section 10.11 of the Credit
Agreement shall be applicable to this Guaranty Joinder Agreement.



     5. Delivery. Joining Guarantor hereby irrevocably waives notice of acceptance of this
Guaranty Joinder Agreement and acknowledges that the Guaranteed Liabilities are and shall be deemed
to be incurred, and credit extensions under the Loan Documents and the Related Credit Arrangements
made and maintained, in reliance on this Guaranty Joinder Agreement and the Guarantor’s joinder as
a party to the Guaranty as herein provided.



     6. Governing Law; Venue; Waiver of Jury Trial. The provisions of Section 27
of the Guaranty are hereby incorporated by reference as if fully set forth herein.



[Signature page follows.]




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



	 	 	 	 	 
	 	 	JOINING GUARANTOR:
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	Name:	 	 
	 

	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 





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