Document:

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                                                                    EXHIBIT 10.2

                          CONTINUING GUARANTY AGREEMENT

         This CONTINUING GUARANTY AGREEMENT (this "Agreement"), dated as of June
27, 2003, is made by each of the undersigned (each, a "Guarantor" and,
collectively, the "Guarantors"), in favor of each Guaranteed Party (as
hereinafter defined).

         WHEREAS, Granite Construction Incorporation, a Delaware corporation
(together with its successors, the "Company"), Bank of America, N.A., as
Administrative Agent, as L/C Issuer and as a Lender, and the other financial
institutions as are, or may from time to time become, parties thereto have
entered into or are in the process of entering into that certain Credit
Agreement, dated as of June 27, 2003 as amended, modified and/or supplemented
from time to time, the "Credit Agreement", pursuant to which the Lenders have
provided the Commitments and agreed to make Loans to the Company and to
participate in Letters of Credit issued by the L/C Issuer for the account of the
Company or its Subsidiaries on the terms and conditions contained therein; and

         WHEREAS, to induce the Lenders and the L/C Issuer to provide and to
continue to provide financial accommodations to the Company pursuant to the
terms of the Credit Agreement and the other Loan Documents, the Guarantors have
each agreed to enter into this Agreement;

         NOW, THEREFORE, for good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged), and intending to be legally bound
hereby, each Guarantor irrevocably and unconditionally undertakes and agrees for
the benefit of Guaranteed Party as follows:

                                    ARTICLE I
                  CERTAIN DEFINITIONS AND RULES OF CONSTRUCTION

         Section 1.1 Certain Definitions. Each capitalized term used but not
otherwise defined herein has the meaning ascribed thereto in the Credit
Agreement. As used herein, the term "Guaranteed Party" means, as the context may
require, the Administrative Agent, the L/C Issuer, each Lender and each
Indemnitee (and each such Person's respective successors, transferees and
assigns).

         Section 1.2 Construction. For purposes of this Agreement and unless
otherwise specified herein: (a) references to the plural include the singular
and to the singular include the plural, references to any gender include any
other gender, the part includes the whole, the term "including" is not limiting,
and the term "or" has, except where otherwise indicated, the inclusive meaning
represented by the phrase "and/or"; (b) references in this Agreement to any
determination by the Guaranteed Party include good faith estimates (in the case
of quantitative determinations) and good faith beliefs (in the case of
qualitative determinations) by any Guaranteed Party; any determination made in
good faith by any Guaranteed Party shall be conclusive absent manifest error;
(c) the words "hereof," "herein," "hereby," and "hereunder," and any other
similar words, refer to this Agreement as a whole and not to any particular

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provision of this Agreement; (d) article, section, subsection, clause, exhibit
and schedule references are to this Agreement; and (e) any reference to this
Agreement or any other Loan Document includes all permitted alterations,
amendments, changes, extensions, modifications, renewals, or supplements thereto
or thereof, as applicable.

                                   ARTICLE II
                             GUARANTY BY GUARANTORS

         Section 2.1 Promise to Pay and Perform. Each Guarantor jointly and
severally unconditionally and irrevocably guarantees to each Guaranteed Party
the payment and performance of all Obligations when and as the same shall become
due and payable (whether at stipulated or any accelerated or earlier date of
maturity (including the date of any required prepayment)) (the "Guaranteed
Obligations"), it being each Guarantor's intent that such Guarantor's guaranty
is a guaranty of payment and not a guaranty of collection. If the Company fails
to pay or perform any Guaranteed Obligation on or before the date when due
(whether at stipulated or any accelerated or earlier date of maturity (including
the date of any required prepayment)), each Guarantor shall jointly and
severally unconditionally and immediately make such payment or render such
performance upon written demand therefor by any Guaranteed Party.

         Section 2.2 Cumulative Obligations; Continuing Guaranty. The
obligations of each Guarantor hereunder are in addition to any other obligations
of such Guarantor under any other guaranties of the Indebtedness or other
obligations of the Company or any other Person at any time given to any
Guaranteed Party. This Agreement shall not affect or invalidate any such other
guaranties. This Agreement is a continuing guaranty and shall remain in full
force and effect notwithstanding the fact that, at any particular time, no
Guaranteed Obligations may be outstanding.

         Section 2.3 Joint and Several Obligation; Independent Obligation. Each
Guarantor is directly, jointly and severally with all other guarantors of the
Guaranteed Obligations or any portion thereof, liable to the Guaranteed Parties.
The obligations of each Guarantor hereunder are direct and primary and are
independent of the obligations of the Company or any other such guarantor, and a
separate action may be brought against each Guarantor irrespective of whether an
action is brought against the Company or any other such other guarantor or
whether the Company or any such other guarantor is joined in such action. Each
Guarantor's liability hereunder shall not be contingent upon the exercise or
enforcement by the Guaranteed Parties of any remedies they may have against the
Company or any other guarantor or the enforcement of any Lien or realization
upon any security the Guaranteed Parties may at any time possess. Any release
that may be given by the Guaranteed Parties to the Company or any other
guarantor shall not release any Guarantor hereunder unless such release
expressly so provides.

         Section 2.4 Limit of Liability. Notwithstanding anything to the
contrary contained herein, each Guarantor shall be liable hereunder only for the
largest amount that would not render such Guarantor's obligations hereunder
subject to avoidance under Section 548 of the Bankruptcy Code or comparable
provisions of any applicable state law; provided that such amount shall be
presumed to be the entire amount of the Guaranteed Obligations. If, any
Guarantor claims that such Guarantor's liability hereunder is less than the
entire amount of the

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Guaranteed Obligations, such Guarantor shall have the burden of proving, by
clear and convincing evidence, that such Guarantor's liability hereunder should
be so limited since the information concerning, and the circumstances of, the
financial condition of such Guarantor are more readily available to and are
under the control of such Guarantor. All payments received by any Guaranteed
Party from any Person other than a Guarantor on account of the Guaranteed
Obligations shall be deemed as having been applied to Guaranteed Obligations
that, pursuant to this Section 2.4, are in excess of the amounts guaranteed
hereunder.

                                   ARTICLE III
                                    PAYMENTS

         Section 3.1 Nature and Application of Payments. Each Guarantor shall
make all payments hereunder in immediately available lawful money of the United
States, without deduction or withholding (whether for taxes (whether income,
excise, or otherwise) or offset). Without regard to the form in which received,
the Guaranteed Parties may apply any payment with respect to the Guaranteed
Obligations or any other amounts due hereunder in such order as the Guaranteed
Parties shall in their sole and absolute discretion determine, irrespective of
any contrary instructions received from any other Person.

         Section 3.2 Indefeasible Payment; Revival. If any portion of any
payment to the Guaranteed Parties is set aside and repaid by any Guaranteed
Party for any reason after being made by any Guarantor, the amount so set aside
shall be revived as a Guaranteed Obligation and each Guarantor shall be liable
for the full amount the Guaranteed Parties are, or any Guaranteed Party is,
required to repay plus all costs and expenses (including attorneys' fees, costs,
and expenses) incurred by the Guaranteed Parties in connection therewith.

                                   ARTICLE IV
              CERTAIN REPRESENTATIONS AND WARRANTIES OF GUARANTORS

         Each Guarantor represents and warrants as follows (which
representations and warranties shall be true, correct, and complete at all
times):

         Section 4.1 No Contravention; No Default. The execution, delivery, and
performance by such Guarantor of this Agreement do not and will not: (a)
conflict with or result in any breach or contravention of, or the creation of
any Lien under, any contractual obligation to which such Guarantor is a party or
any order, injunction, writ, or decree of any Governmental Authority to which
such Guarantor or such Guarantor's properties are subject; or (b) violate any
Laws of any Governmental Authority.

         Section 4.2 Binding Effect. This Agreement constitutes the legal,
valid, and binding obligation of such Guarantor, enforceable against such
Guarantor in accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, or similar laws affecting the enforcement
of creditors' rights generally or by equitable principles relating to
enforceability.

         Section 4.3 Litigation. Except as set forth on Schedule 5.06 to the
Credit Agreement, there are no actions, suits, proceedings, claims, or disputes
pending, or, to the best knowledge of

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such Guarantor, threatened in writing, at law, in equity, in arbitration, or
before any Governmental Authority, against such Guarantor or any of such
Guarantor's properties which purport to affect or pertain to this Agreement, any
of the other Loan Documents, or any of the transactions contemplated hereby or
thereby.

         Section 4.4 Regulated Entity. Neither such Guarantor nor any Person
controlling such Guarantor is: (a) an "investment company" within the meaning of
the Investment Company Act of 1940; or (b) subject to regulation by any federal
or state statute or regulation limiting such Guarantor's ability to incur such
Guarantor's obligations hereunder.

         Section 4.5 No Action Required. No consent, license, permit, approval
or authorization of, exemption by, notice or report to, or registration, filing,
or declaration with any Governmental Authority or of, to, or with any other
Person, is or will be required for: (a) the execution, delivery, or performance
of this Agreement by such Guarantor; or (b) the exercise by the Guaranteed
Parties of any of their respective rights and remedies provided for herein.

         Section 4.6 Changes Affecting the Guaranteed Obligations. Such
Guarantor has taken and is taking all steps in such Guarantor's opinion
necessary or appropriate to be informed on a continuing basis of changes or
potential changes affecting the Guaranteed Obligations. Without limiting the
generality of the foregoing, such Guarantor hereby confirms that it has received
and reviewed the Credit Agreement, the Fee Letter and all other Loan Documents
(and all other agreements, documents and instruments related thereto) that such
Guarantor, in such Guarantor's sole determination, has deemed necessary or
appropriate to receive and review.

         Section 4.7 Reliance by Guarantor: Financial Condition of the Company.
This Agreement is not made by such Guarantor in reliance on any representation
or warranty, express or implied, by any Guaranteed Party concerning the
financial condition of the Company, the nature, value, or extent of any security
for the Guaranteed Obligations, or any other matter. Such Guarantor is presently
informed of the financial condition of the Company and of all other
circumstances that a diligent inquiry would reveal and which bear upon the risk
of nonpayment of the Guaranteed Obligations. Such Guarantor has reviewed each of
the Loan Documents.

         Section 4.8 Adequate Consideration. The consideration given or
provided, or to be given or provided, by the Guaranteed Parties in connection
with this Agreement is adequate and satisfactory in all respects, and represents
reasonably equivalent value, to support this Agreement and such Guarantor's
obligations hereunder.

                                    ARTICLE V
                        CERTAIN COVENANTS OF GUARANTORS

         Section 5.1 Knowledge of Financial Condition. Each Guarantor shall keep
informed of the Company's financial condition, the status of any guarantors or
of any security for the Guaranteed Obligations, and all other circumstances that
bear upon the risk of nonpayment of the Guaranteed Obligations.

         Section 5.2 Further Assurances. Each Guarantor shall, from time to
time, at the expense of such Guarantor, promptly execute and deliver all further
documents and take all

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further action that may be necessary, or that the Guaranteed Parties (or any of
them) may reasonably request, to enable the Guaranteed Parties (or any of them)
to exercise and enforce their respective rights and remedies hereunder.

         Section 5.3 Sales, Dispositions, etc. Each Guarantor will not, without
the prior written consent of the Guaranteed Party, sell, lease, assign,
encumber, hypothecate, transfer or otherwise dispose of all of substantially all
of such Guarantor's properties or assets, or any interest therein, except as
otherwise permitted by the Credit Agreement.

                                   ARTICLE VI
             CERTAIN ACKNOWLEDGEMENTS AND AGREEMENTS OF GUARANTORS

         Section 6.1 Modifications to Loan Documents and Guaranteed Obligations.
Each Guarantor acknowledges and agrees that, without notice to such Guarantor
and without affecting or impairing the obligations of such Guarantor hereunder,
the Guaranteed Parties (or any of them) may, by action or inaction, compromise
or settle, extend the period of duration or the time for the payment, or
discharge the performance of, or may refuse to, or otherwise not enforce, or
may, by action or inaction, release all or any one or more parties to, any one
or more of the Loan Documents or otherwise with respect to the Guaranteed
Obligations or may grant other indulgences to the Company in respect thereof, or
may amend or modify in any manner and at any time (or from time to time) any one
or more of the Loan Documents or otherwise with respect to the Guaranteed
Obligations, or may, by action or inaction, release or substitute any guarantor,
if any, of the Guaranteed Obligations, or may enforce, exchange, release, or
waive, by action or inaction, any security for the Guaranteed Obligations or any
guaranty of the Guaranteed Obligations, or any portion thereof.

         Section 6.2 Subordination. Each Guarantor agrees that any and all
present and future indebtedness of the Company owing to such Guarantor is
postponed in favor of and subordinated to indefeasible payment, in full, in
cash, of the Guaranteed Obligations. In this regard, upon the occurrence and
during the continuance of a Default or an Event of Default, no payment of any
kind whatsoever shall be made with respect to such indebtedness until the
Guaranteed Obligations have been indefeasibly paid in full. Any payment received
by any Guarantor in respect of such indebtedness shall be held by such Guarantor
as trustee for the Guaranteed Parties and promptly paid over to the Guaranteed
Parties on account of the Guaranteed Obligations but without reducing or
affecting in any manner the liability of such Guarantor under the other
provisions of this Agreement.

         Section 6.3 Administrative Agent as Each Guarantor's Attorney-in-Fact.
Each Guarantor irrevocably appoints the Administrative Agent as such Guarantor's
attorney-in-fact, with full authority in the place and stead and name of such
Guarantor, from time to time at the Administrative Agent's discretion but only
following the occurrence and during the continuation of an Event of Default, to
take any action and to execute any instrument which the Guaranteed Parties (or
any of them) may, in accordance with the provisions of the Loan Documents or
this Agreement, require as necessary or advisable to accomplish the purposes of
this Agreement.

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                                   ARTICLE VII
                               GENERAL PROVISIONS

         Section 7.1 Notices. All notices, requests, and other communications to
any party under this Agreement shall be in writing (including telegraphic,
telex, telefacsimile, or cable communication) and mailed, telegraphed, telexed,
sent by telefacsimile, cabled, or delivered to such party at its address or
telefacsimile number set forth, in the case of each Guarantor, on the signature
pages hereof, or, in the case of the Guaranteed Parties, on Schedule 10.02 to
the Credit Agreement, or such other address or telefacsimile number as such
party may hereafter specify for the purpose by notice to the other party given
in accordance with this Section 7.1. Each such notice, request or other
communication shall be deemed to have been received: (a) if mailed as provided
above by any method other than overnight delivery service, on the third Business
Day after deposit in the mails; (b) if mailed by overnight delivery service,
telegraphed, telexed, sent by telefacsimile, or cable, when delivered for
overnight delivery, delivered to the telegraph company, confirmed by telex
answerback, transmitted by telefacsimile (with electronic confirmation), or
delivered to the cable company, respectively; or (c) if delivered by hand, upon
delivery. If any conflict exists between any oral communication to any
Guaranteed Party and the written confirmation thereof, the oral communication
shall control if any Guaranteed Party has acted thereon prior to actual receipt
of such written confirmation.

         Section 7.2 Amendments, Waivers, and Consents. No amendments or waivers
of any provision of this Agreement nor any consent to any departure by any
Guarantor from the terms hereof shall in any event be effective unless the same
shall be in writing and signed by the Administrative Agent (or all Guaranteed
Parties if required by the terms of the Credit Agreement) and the Guarantors.
Any such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.

         Section 7.3 No Waiver; Cumulative Nature of Remedies. No failure or
delay on the part of any Guaranteed Party in exercising any of its rights and
remedies under this Agreement, any of the Loan Documents, or otherwise with
respect to any of the Guaranteed Obligations shall operate as a waiver thereof;
nor shall any single or partial exercise of any right under this Agreement, the
Loan Documents, or otherwise with respect to the Guaranteed Obligations preclude
any other or further exercise thereof or the exercise of any other right or
remedies. The rights and remedies provided in this Agreement and otherwise with
respect to the Guaranteed Obligations are cumulative and not exclusive of any
rights and remedies provided by law.

         Section 7.4 Costs and Expenses. Each Guarantor shall pay or reimburse
the Guaranteed Parties on demand for all fees, costs, and expenses incurred by
the Guaranteed Parties in connection with the enforcement or attempted
enforcement of this Agreement, the preservation of any rights or remedies under
this Agreement, or in any action, case, or proceeding (whether at law or in
equity) relating to this Agreement. Without limiting the generality of the
foregoing, such fees, costs, and expenses shall include reasonable Attorney
Costs actually incurred by the Guaranteed Parties or any of them (irrespective
of whether the Company is liable therefor), whether or not suit is brought, in
connection therewith.

         Section 7.5 Successors and Assigns. This Agreement shall: (a) be
binding upon each Guarantor and each Guarantor's successors and assigns; and (b)
inure to the benefit of each

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Guaranteed Party and its successors and assigns (all to the extent permitted by
the Loan Documents). Without limiting the generality of the foregoing subsection
(b) but subject to the provisions of the Credit Agreement, any Guaranteed Party
may assign or otherwise transfer all or any part of the Guaranteed Obligations
owed to it to any other Person.

         Section 7.6 Headings. Section and subsection headings in this Agreement
are included herein for convenience of reference only and shall not constitute a
part of this Agreement and shall not be given any substantive effect.

         Section 7.7 Ambiguities. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved using any presumption against
any Guarantor or any Guaranteed Party, whether under any rule of construction or
otherwise. On the contrary, this Agreement has been reviewed by each Guarantor
and each Guaranteed Party and their respective counsel. In case of any ambiguity
or uncertainty, this Agreement shall be construed and interpreted according to
the ordinary meaning of the words used to accomplish fairly the purposes and
intentions of all parties hereto.

         Section 7.8 Severability. In case any provision in or obligation under
this Agreement shall be invalid, illegal, or unenforceable in any jurisdiction,
the validity, legality, and enforceability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby. In addition, all agreements and
covenants herein shall be given independent effect such that, if a particular
action or condition is prohibited by the terms of any such agreement or
covenant, the fact that such action or condition would be permitted by another
agreement or covenant shall not be construed as allowing such action to be taken
or condition to exist.

         Section 7.9 Counterparts; Telefacsimile Signatures. This Agreement may
be executed in one or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same instrument.
Each Guarantor may effect execution and delivery of this Agreement by executing
a counterpart hereof and sending the signature page bearing such Guarantor's
signature to the Administrative Agent by telefacsimile and, thereafter, promptly
sending by mail or delivering such signature page to the Administrative Agent;
provided that the failure to deliver such signature page by such Guarantor shall
not affect the validity, enforceability, or binding effect of this Agreement
against such Guarantor.

         Section 7.10 Entire Agreement. This Agreement and the Credit Agreement
embody the entire agreement and understanding concerning the Guarantors and the
Guaranteed Parties relating to the subject matter hereof and supersede all prior
agreements and understandings relating to the subject matter hereof. No course
of prior dealing between any Guarantor and the Guaranteed Parties (or any of
them), no usage of the trade, and no parole or extrinsic evidence of any nature,
shall be used or be relevant to supplement, explain or modify any term used
herein.

                                   ARTICLE VIII
                          CERTAIN WAIVERS BY GUARANTORS

         EACH GUARANTOR MAKES THE FOLLOWING WAIVERS WITH FULL KNOWLEDGE AND
UNDERSTANDING THAT SUCH WAIVERS, IF NOT SO MADE,

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MIGHT OTHERWISE RESULT IN SUCH GUARANTOR BEING ABLE TO AVOID OR LIMIT SUCH
GUARANTOR'S LIABILITY HEREUNDER EITHER IN WHOLE OR IN PART.

         Section 8.1 Notices. Each Guarantor absolutely, unconditionally,
knowingly, and expressly waives: (a) notice of the acceptance by the Guaranteed
Parties of this Agreement; (b) notice of any Credit Extensions consisting
Guaranteed Obligations; (c) notice of the amount of the Guaranteed Obligations,
subject, however, to such Guarantor's right to make inquiry, at any reasonable
time, of any Guaranteed Party to ascertain the amount of the Guaranteed
Obligations owing to such Guaranteed Party; (d) notice of any adverse change in
the financial condition of the Company, of any change in value, or the release,
of any collateral, or of any other fact that might increase such Guarantor's
risk hereunder; (e) notice of presentment for payment, demand, protest, and
notice thereof as to any instrument; (f) notice of any Default or Event of
Default; and (g) all other notices (except if such notice is expressly required
to be given to such Guarantor under this Agreement) and demands to which
guarantor might otherwise be entitled.

         Section 8.2 Revocation. Each Guarantor absolutely, unconditionally,
knowingly, and expressly waives any right to revoke such Guarantor's guaranty
obligation hereunder as to future Guaranteed Obligations 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
Obligations.

         Section 8.3 Defenses of the Company. Each Guarantor absolutely,
unconditionally, knowingly, and expressly waives any defense arising by reason
of any disability or other defense (other than the defense that the Guaranteed
Obligations shall have been fully and finally performed and indefeasibly paid)
of the Company or by reason of the cessation from any cause whatsoever
(including any act or failure to act by the Company or the Guaranteed Parties)
of the liability of the Company in respect thereof, including any such defense
or cessation of liability arising from or as a result of: (a) any statute of
limitations; (b) any lack of power or authority of the Company or any Person
acting or purporting to act on the Company's behalf; (c) 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; or (d) any
claim of fraudulent transfer or preference.

         Section 8.4 Suretyship and Certain Other Rights and Defenses of
Guarantors. Each Guarantor absolutely, unconditionally, knowingly, and expressly
waives:

         (a)      any right to assert against the Guaranteed Parties (or any of
them) any defense (legal or equitable), set-off, counterclaim, or claim which
such Guarantor may now or at any time hereafter have against the Company or any
other Person liable to the Guaranteed Parties (or any of them);

         (b)      any defense, set-off, counterclaim, or claim, of any kind or
nature, arising directly or indirectly from the present or future lack of
perfection, sufficiency, validity, or enforceability

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of any of the Guaranteed Obligations or any security therefor or from any
failure of the Guaranteed Parties (or any of them) to act in a commercially
reasonable manner;

        (c)      any defense arising by reason of or deriving from any claim or
defense based upon an election of remedies by the Guaranteed Parties (or any of
them) (including a nonjudicial foreclosure sale of any real property collateral
which destroys, diminishes, or otherwise adversely affects any Guarantor's
rights of subrogation, reimbursement, indemnity, or contribution or other rights
against the Company or any other Person), including any defense based upon an
election of remedies by any Guaranteed 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 Guaranteed Parties (or any of them) conducted a nonjudicial
foreclosure sale of real property collateral: (i) such Guaranteed Party(ies)
would lose the right to pursue the Company 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 Company for
reimbursement; and (iii) as a result, such Guaranteed Party(ies) would be
prevented from pursuing such Guarantor for such deficiency following such sale;

         (d)      the benefit of any statute of limitations affecting such
Guarantor's liability hereunder (or the enforcement thereof);

         (e)      any defense based on any alteration, impairment, or release of
the Guaranteed Obligations or any security therefor, irrespective of whether
resulting from any act or failure to act by the Guaranteed Parties (or any of
them); and

         (f)      any right to require the Guaranteed Parties (or any of them):
(i) to institute suit or otherwise proceed against the Company or any other
Person; or (ii) to exhaust any rights and remedies which the Guaranteed Parties
(or any of them) have or may have against the Company or any other Person.

         Section 8.5 Marshalling. Each Guarantor absolutely, unconditionally,
knowingly, and expressly waives any rights it has to require the Guaranteed
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 Obligations (including any rights arising by virtue of Sections
2899 and 3433 of the California Civil Code).

         Section 8.6 Claims Against the Company and Others. Each Guarantor
absolutely, unconditionally, knowingly, and expressly agrees that, until the
Guaranteed Obligations have been indefeasibly repaid in full, such Guarantor
will not in any manner enforce or pursue, or seek to enforce or pursue, any or
all of the following rights (it being expressly agreed that all such rights are
subordinate to any claims of the Guaranteed Parties (or any of them)): (a) any
right of subrogation, indemnity, or contribution such Guarantor has or may have
as against the Company or any other Person with respect to any of the Guaranteed
Obligations; (b) any right to proceed against the Company or any other Person,
now or hereafter, for contribution, indemnity, reimbursement, or any other
suretyship rights and claims (irrespective of whether direct or indirect,
liquidated or contingent) with respect to any of the Guaranteed Obligations; and
(c) any

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right to proceed or to seek recourse against or with respect to any assets of
the Company or any other Person with respect to any of the Guaranteed
Obligations.

         Section 8.7 Certain Additional Statutory Rights. Without limiting the
generality of any other waiver or other provision set forth in this agreement,
each Guarantor absolutely, unconditionally, knowingly, and expressly waives 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.

                                   ARTICLE IX
         GOVERNING LAW; JURISDICTION AND VENUE: WAIVER OF TRIAL BY JURY

         Section 9.1 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAW OF THE STATE OF CALIFORNIA,
PROVIDED THAT THE GUARANTEED PARTIES SHALL RETAIN ALL RIGHTS ARISING UNDER
FEDERAL LAW.

         Section 9.2 Jurisdiction. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF CALIFORNIA OR OF THE UNITED STATES FOR THE NORTHERN DISTRICT OF
CALIFORNIA, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH GUARANTOR AND
EACH OF THE GUARANTEED PARTIES CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THOSE COURTS. EACH GUARANTOR AND
EACH OF THE GUARANTEED PARTIES IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY
OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR
PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT OR ANY DOCUMENT
RELATED HERETO. EACH GUARANTOR AND EACH OF THE GUARANTEED PARTIES WAIVES
PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE
BY ANY OTHER MEANS PERMITTED BY CALIFORNIA LAW.

         Section 9.3. Waiver of Jury Trial. EACH GUARANTOR AND EACH OF THE
GUARANTEED PARTIES WAIVES ITS RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE OTHER LOAN
DOCUMENTS, OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY, IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST
ANY OTHER PARTY OR ANY INDEMNIFIED PERSON, PARTICIPANT OR ASSIGNEE, WHETHER WITH
RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH GUARANTOR AND EACH
OF THE GUARANTEED PARTIES AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE
TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE
PARTIES FURTHER

                                       10

<PAGE>

AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF
THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN
WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT
OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

         EACH GUARANTOR WARRANTS AND AGREES THAT EACH OF THE WAIVERS SET FORTH
ABOVE IS MADE WITH SUCH GUARANTOR'S FULL KNOWLEDGE OF ITS SIGNIFICANCE AND
CONSEQUENCE AND THAT, UNDER THE CIRCUMSTANCES, THE WAIVERS ARE REASONABLE AND
NOT CONTRARY TO PUBLIC POLICY OR LAW. IF ANY SUCH WAIVER IS DETERMINED TO BE
CONTRARY TO ANY APPLICABLE LAW OR PUBLIC POLICY, SUCH WAIVER SHALL BE EFFECTIVE
ONLY TO THE EXTENT, BUT TO THE FULLEST EXTENT, PERMITTED BY LAW OR PUBLIC
POLICY.

         EACH GUARANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS
AGREEMENT AND AGREES TO ITS TERMS. IN ADDITION, EACH GUARANTOR UNDERSTANDS THAT
THIS AGREEMENT IS EFFECTIVE UPON SUCH GUARANTOR'S EXECUTION AND DELIVERY OF THIS
AGREEMENT TO THE ADMINISTRATIVE AGENT ON BEHALF OF ALL OF THE GUARANTEED
PARTIES. NO FORMAL ACCEPTANCE BY THE GUARANTEED PARTIES IS NECESSARY TO MAKE
THIS AGREEMENT EFFECTIVE.

                                       11

<PAGE>

         IN WITNESS WHEREOF, each Guarantor has executed this Agreement as of
the date first written above.

                                    GRANITE CONSTRUCTION COMPANY,
                                    a California corporation

                                    By: /s/ William G. Dorey
                                        ----------------------------------------
                                        William G. Dorey
                                        President

                                    By: /s/ William E. Barton
                                        ----------------------------------------
                                        William E. Barton
                                        Chief Financial Officer

                                    Notice:
                                    c/o Granite Construction Incorporated
                                    P.O. Box 50085
                                    Watsonville, CA 95077
                                    Attn: William Barton, Senior Vice President,
                                          Chief Financial Officer
                                    Telephone: (831)761-4704
                                    Facsimile: (831)722-9657

                SIGNATURE PAGE 1 TO CONTINUING GUARANTY AGREEMENT

<PAGE>

         IN WITNESS WHEREOF, each Guarantor has executed this Agreement as of
the date first written above.

                               GRANITE LAND COMPANY,
                               a California corporation

                               By: /s/ William G. Dorey
                                   ---------------------------------------------
                                   William G. Dorey
                                   President, Granite Construction Incorporated

                               By: /s/ William E. Barton
                                   ---------------------------------------------
                                   William E. Barton
                                   Chief Financial Officer, Granite Construction
                                   Incorporated

                               Notice:
                               c/o Granite Construction Incorporated
                               P.O. Box 50085
                               Watsonville, CA 95077
                               Attn: William Barton, Senior Vice President,
                                     Chief Financial Officer
                               Telephone: (831)761-4704
                               Facsimile: (831)722-9657

                SIGNATURE PAGE 2 TO CONTINUING GUARANTY AGREEMENT

<PAGE>

         IN WITNESS WHEREOF, each Guarantor has executed this Agreement as of
the date first written above.

                                    INTERMOUNTAIN SLURRY SEAL, INC.,
                                    a Wyoming corporation

                                    By: /s/ Michael L. Thomas
                                        ----------------------------------------
                                        Michael L. Thomas
                                        President

                                    By: /s/ David J. Brunton
                                        ----------------------------------------
                                        David J. Brunton
                                        Chief Financial Officer

                                    Notice:
                                    c/o Granite Construction Incorporated
                                    P.O. Box 50085
                                    Watsonville, CA 95077
                                    Attn: William Barton, Senior Vice President,
                                          Chief Financial Officer
                                    Telephone: (831)761-4704
                                    Facsimile: (831)722-9657

                SIGNATURE PAGE 3 TO CONTINUING GUARANTY AGREEMENT

<PAGE>

         IN WITNESS WHEREOF, each Guarantor has executed this Agreement as of
the date first written above.

                                    POZZOLAN PRODUCTS COMPANY
                                    (P.P.C.), a Utah corporation

                                    By: /s/ Michael L. Thomas
                                        ----------------------------------------
                                        Michael L. Thomas
                                        President

                                    By: /s/ David J. Brunton
                                        ----------------------------------------
                                        David J. Brunton
                                        Chief Financial Officer

                                    Notice:
                                    c/o Granite Construction Incorporated
                                    P.O. Box 50085
                                    Watsonville, CA 95077
                                    Attn: William Barton, Senior Vice President,
                                          Chief Financial Officer
                                    Telephone: (831)761-4704
                                    Facsimile: (831)722-9657

                SIGNATURE PAGE 4 TO CONTINUING GUARANTY AGREEMENT

<PAGE>

         IN WITNESS WHEREOF, each Guarantor has executed this Agreement as of
the date first written above.

                                 GILC, L.P.,
                                 a California Limited Partnership

                                 By: /s/ William E. Barton
                                     -------------------------------------------
                                     William E. Barton
                                     Chief Executive Officer, GILC Incorporated,
                                     its sole General Partner

                                 By: /s/ Michael Futch
                                     -------------------------------------------
                                     Michael Futch
                                     Secretary, GILC Incorporated,
                                     its sole General Partner

                                 Notice:
                                 c/o Granite Construction Incorporated
                                 P.O. Box 50085
                                 Watsonville, CA 95077
                                 Attn: William Barton, Senior Vice President,
                                       Chief Financial Officer
                                 Telephone: (831)761-4704
                                 Facsimile: (831)722-9657

                SIGNATURE PAGE 5 TO CONTINUING GUARANTY AGREEMENT

<PAGE>

         IN WITNESS WHEREOF, each Guarantor has executed this Agreement as of
the date first written above.

                                    GRANITE HALMAR CONSTRUCTION
                                    COMPANY, INC.,
                                    a New York corporation

                                    By: /s/ William G. Dorey
                                        ----------------------------------------
                                        William G. Dorey
                                        President

                                    By: /s/ William E. Barton
                                        ----------------------------------------
                                        William E. Barton
                                        Chief Financial Officer

                                    Notice:
                                    c/o Granite Construction Incorporated
                                    P.O. Box 50085
                                    Watsonville, CA 95077
                                    Attn: William Barton, Senior Vice President,
                                          Chief Financial Officer
                                    Telephone: (831)761-4704
                                    Facsimile: (831)722-9657

                SIGNATURE PAGE 6 TO CONTINUING GUARANTY AGREEMENT<PAGE>

                                                                    EXHIBIT 10.3

================================================================================

                        GRANITE CONSTRUCTION INCORPORATED

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

                                 FIRST AMENDMENT
                            Dated as of June 15, 2003

                                       to

                  AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
                          Dated as of November 1, 2001

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

Re:      $60,000,000 6.54% Senior Notes due March 15, 2010

================================================================================

<PAGE>

         FIRST AMENDMENT TO AMENDED AND RESTATED NOTE PURCHASE AGREEMENT

         THIS FIRST AMENDMENT dated as of June 15, 2003 (the or this "First
Amendment") to that certain Amended and Restated Note Purchase Agreement dated
as of November 1, 2001 is between GRANITE CONSTRUCTION INCORPORATED, a Delaware
corporation (the "Company"), and each of the institutional investors listed on
the signature pages hereto (collectively, the "Noteholders")

                                    RECITALS:

         A.       The Company and each of the Noteholders have heretofore
entered into that certain Amended and Restated Note Purchase Agreement dated as
of November 1, 2001 (the "Note Purchase Agreement"). The Company has heretofore
issued $60,000,000 aggregate principal amount of its 6.54% Senior Notes due
March 15, 2010 (the "Notes"} pursuant to the Note Purchase Agreement. The
Noteholders are the holders of 100% of the outstanding principal amount of the
Notes.

         B.       The Company and the Noteholders now desire to amend the Note
Purchase Agreement in the respects, but only in the respects, hereinafter set
forth.

         C.       Capitalized terms used herein shall have the respective
meanings ascribed thereto in the Note Purchase Agreement unless herein defined
or the context shall otherwise require.

         D.       All requirements of law have been fully complied with and all
other acts and things necessary to make this First Amendment a valid, legal and
binding instrument according to its terms for the purposes herein expressed have
been done or performed.

         Now, THEREFORE, upon the full and complete satisfaction of the
conditions precedent to the effectiveness of this First Amendment set forth in
Section 3.1 hereof, and in consideration of good and valuable consideration the
receipt and sufficiency of which is hereby acknowledged, the Company and the
Noteholders do hereby agree as follows:

SECTION  1. AMENDMENTS.

         1.1. Section 9.6(a)(I) of the Note Purchase Agreement shall be and is
hereby amended by inserting the following new sentence at the end of such
Section.

         "Notwithstanding the foregoing, Wilder shall not be required to execute
         a supplement to the Guaranty Agreement or otherwise Guaranty the Notes
         until the earliest to occur of: (A) Wilder becoming an obligor or
         guarantor of any Debt existing under the Bank Credit Agreement, (B)(I)
         the total net revenues of Wilder and its Subsidiaries for the period of
         the immediately preceding four fiscal quarters is equal to or greater
         than 15% of the consolidated total net revenues of the Company and its
         Subsidiaries for such period determined in accordance with GAAP, in
         each case as reflected in the most recent annual

<PAGE>

         or quarterly financial statements of the Company and its Subsidiaries;
         or (II) the total assets of Wilder and its Subsidiaries, as of the last
         day of the immediately preceding fiscal quarter, is equal to or greater
         than 15% of consolidated total assets of the Company and its
         Subsidiaries as of such date determined in accordance with GAAP, in
         each case as reflected in the most recent annual or quarterly financial
         statements of the Company and its Subsidiaries and (C) Wilder becoming
         a Wholly-Owned Subsidiary of the Company."

         1.2.     SCHEDULE B to the Note Purchase Agreement shall be and is
hereby amended by inserting the following new definition in the proper
alphabetical order:

                  ""Wilder" shall mean Wilder Construction Co., a Washington
         corporation, and any successor thereto."

SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

         2.1.     To induce the Noteholders to execute and deliver this First
Amendment (which representations shall survive the execution and delivery of
this First Amendment), the Company represents and warrants to the Noteholders
that:

                  (a)      this First Amendment has been duly authorized,
         executed and delivered by it and this First Amendment constitutes the
         legal, valid and binding obligation, contract and agreement of the
         Company enforceable against it in accordance with its terms, except as
         enforcement may be limited by bankruptcy, insolvency, reorganization,
         moratorium or similar laws or equitable principles relating to or
         limiting creditors' rights generally;

                  (b)      the Note Purchase Agreement, as amended by this First
         Amendment, constitutes the legal, valid and binding obligation,
         contract and agreement of the Company enforceable against it in
         accordance with its terms, except as enforcement may be limited by
         bankruptcy, insolvency, reorganization, moratorium or similar laws or
         equitable principles relating to or limiting creditors' rights
         generally;

                  (c)      the execution, delivery and performance by the
         Company of this First Amendment (i) has been duly authorized by all
         requisite corporate action and, if required, shareholder action, (ii)
         does not require the consent or approval of any governmental or
         regulatory body or agency, and (iii) will not (A) violate (1) any
         provision of law, statute, rule or regulation or its certificate of
         incorporation or bylaws, (2) any order of any court or any rule,
         regulation or order of any other agency or government binding upon it,
         or (3) any provision of any indenture, agreement or other instrument to
         which it is a party or by which its properties or assets are or may be
         bound, or (B) result in a breach or constitute (alone or with due
         notice or lapse of time or both) a default under any indenture,
         agreement or other instrument referred to in clause (iii)(A)(3) of this
         Section 2.l(c);

                                     - 2 -

<PAGE>

                  (d)      as of the date hereof and after giving effect to this
         First Amendment, no Default or Event of Default has occurred which is
         continuing and no waiver of Default or Event of Default is in effect;
         and

                  (e)      except as set forth on SCHEDULE 2 hereto, all the
         representations and warranties contained in Section 5 of the Note
         Purchase Agreement are true and correct in all material respects with
         the same force and effect as if made by the Company on and as of the
         date hereof.

SECTION 3. CONDITIONS TO EFFECTIVENESS OF THIS FIRST AMENDMENT.

         3.1.     Upon satisfaction of each and every one of the following
conditions, this First Amendment shall become effective as of June 27, 2003:

                  (a)      executed counterparts of this First Amendment, duly
         executed by the Company and the holders of at least 51% of the
         outstanding principal of the Notes, shall have been delivered to the
         Noteholders;

                  (b)      each Guarantor shall have duly executed the
         reaffirmation of Guaranty Agreement attached hereto;

                  (c)      the representations and warranties of the Company set
         forth in Section 2 hereof are true and correct on and with respect to
         the date hereof;

                  (d)      each Noteholder shall have received evidence
         satisfactory to it that (i) Wilder Construction Co. is not an obligor
         or guarantor of Debt under the Credit Agreement dated as of June 27,
         2003 among the Company, each lender from time to time party thereto and
         Bank of America, N.A., as Administrative Agent, Swing Line Lender and
         L/C Issuer and (ii) the Amended and Restated Note Purchase Agreement
         dated as of November 1, 2001 by and among the Company and the
         institutional investors named therein has been amended in the same
         manner as the Note Purchase Agreement has been amended by this First
         Amendment;

                  (e)      each Noteholder shall have received, by payment in
         immediately available funds to the account of such holder set forth in
         SCHEDULE A to the Note Purchase Agreement the amount set forth opposite
         such holder's name in SCHEDULE 1 attached hereto; and

                  (f)      the Company shall have paid the fees and expenses of
         Schiff Hardin & Waite, special counsel to the Noteholders, in
         connection with the negotiation, preparation, approval, execution and
         delivery of this First Amendment.

Upon receipt of all of the foregoing, this First Amendment shall become
effective.

                                     - 3 -

<PAGE>

SECTION 4. MISCELLANEOUS.

         4.1.     This First Amendment shall be construed in connection with and
as part of the Note Purchase Agreement, and except as modified and expressly
amended by this First Amendment, all terms, conditions and covenants contained
in the Note Purchase Agreement and the Notes are hereby ratified and shall be
and remain in full force and effect.

         4.2.     Any and all notices, requests, certificates and other
instruments executed and delivered after the execution and delivery of this
First Amendment may refer to the Note Purchase Agreement without making specific
reference to this First Amendment but nevertheless all such references shall
include this First Amendment unless the context otherwise requires.

         4.3.     The descriptive headings of the various Sections or parts of
this First Amendment are for convenience only and shall not affect the meaning
or construction of any of the provisions hereof.

         4.4.     This First Amendment shall he governed by and construed in
accordance with the laws of the State of Illinois.

                  [Remainder of page intentionally left blank.]

                                     - 4 -

<PAGE>

         4.5.     The execution hereof by you shall constitute a contract
between us for the uses and purposes hereinabove set forth, and this First
Amendment may be executed in any number of counterparts, each executed
counterpart constituting an original, but all together only one agreement.

                                       GRANITE CONSTRUCTION INCORPORATED

                                       By /s/ William G. Dorey
                                          ---------------------
                                          William G. Dorey
                                          President

                                       By /s/ William E. Barton
                                          ----------------------
                                          William E. Barton
                                          Chief Financial Officer

SIGNATURE PAGE TO THE
FIRST AMENDMENT TO THE
MARCH 1, 1998 PURCHASE AGREEMENT

<PAGE>

Accepted and Agreed to:

                                       ALLSTATE LIFE INSURANCE COMPANY

                                       By __________________________
                                       Name:

                                       By___________________________
                                       Name:
                                           Authorized Signatories

                                       UNITED OF OMAHA LIFE INSURANCE COMPANY

                                       By /s/ Curtis R. Caldwell
                                          ---------------------------
                                          Its    Vice President

                                       MUTUAL OF OMAHA INSURANCE COMPANY

                                       By /s/ Curtis R. Caldwell
                                          ---------------------------
                                          Its    Vice President

                                       COMPANION LIFE INSURANCE COMPANY

                                       By /s/ Curtis R. Caldwell
                                          ---------------------------
                                          Name: Curtis R. Caldwell
                                          Title:  Authorized Signer

SIGNATURE PAGE TO THE
FIRST AMENDMENT TO THE
MARCH 1, 1998 NOTE PURCHASE AGREEMENT

<PAGE>

                                  NATIONWIDE LIFE INSURANCE COMPANY

                                  By /s/ Mark W. Poeppelman
                                     ----------------------------------------
                                     Name: Mark W. Poeppelman
                                     Title: Vice President

                                  THRIVENT FINANCIAL FOR LUTHERANS,
                                     successor by merger to Lutheran Brotherhood

                                  By _________________________________________
                                     Name:  Glen J. Vanic
                                     TITLE: Portfolio Manager

                                  AMERICAN UNITED LIFE INSURANCE COMPANY

                                  By _________________________________________
                                     Its

SIGNATURE PAGE TO THE
FIRST AMENDMENT TO THE
MARCH 1, 1998 NOTE PURCHASE AGREEMENT

<PAGE>

                                  NATIONWIDE LIFE INSURANCE COMPANY

                                  By_______________________________________
                                    Name:
                                    Title:

                                  THRIVENT FINANCIAL FOR LUTHERANS,
                                    successor by merger to Lutheran Brotherhood

                                  By /s/ Glen J. Vanic
                                     -----------------------------------------
                                     Name:  Glen J. Vanic
                                     Title: Portfolio Manager

                                  AMERICAN UNITED LIFE INSURANCE COMPANY

                                  By_________________________________________
                                    Its

SIGNATURE PAGE TO THE
FIRST AMENDMENT TO THE
MARCH 1, 1998 NOTE PURCHASE AGREEMENT

<PAGE>

Accepted and Agreed to:

                                       ALLSTATE LIFE INSURANCE COMPANY

                                       By /s/ Rhonda L. Hopps
                                          --------------------------------------
                                          Name: Rhonda L. Hopps

                                       By /s/ Jerry D. Zinkula
                                          --------------------------------------
                                          Name: Jerry D. Zinkula
                                             Authorized Signatories

                                       UNITED OF OMAHA LIFE INSURANCE COMPANY

                                       By ______________________________________
                                          Its

                                          MUTUAL OF OMAHA INSURANCE COMPANY

                                       By ______________________________________
                                          Its

                                       COMPANION LIFE INSURANCE COMPANY

                                       By_______________________________________
                                         Name:
                                         Title:

SIGNATURE PAGE TO THE
FIRST AMENDMENT TO THE
MARCH 1, 1998 NOTE PURCHASE AGREEMENT

<PAGE>

                                   NATIONWIDE LIFE INSURANCE COMPANY

                                   By_______________________________________
                                     Name:
                                     Title:

                                   THRIVENT FINANCIAL FOR LUTHERANS,
                                     successor by merger to Lutheran Brotherhood

                                   By __________________________________________
                                      Name: Glen J. Vanic
                                      Title: Portfolio Manager

                                   AMERICAN UNITED LIFE INSURANCE COMPANY

                                   By /s/ CHRISTOPHER PAHLKE
                                      ------------------------------------------
                                      Its CHRISTOPHER PAHLKE
                                          VP PRIVATE PLACEMENTS

SIGNATURE PAGE TO THE
FIRST AMENDMENT TO THE
MARCH 1, 1998 NOTE PURCHASE AGREEMENT

<PAGE>

                       REAFFIRMATION OF GUARANTY AGREEMENT

The undersigned Guarantors hereby acknowledge and agree to the foregoing First
Amendment to Note Purchase Agreement and reaffirm the Guaranty Agreement dated
as of March 1, 1998 given in favor of each Noteholder and their respective
successors and assigns:

                                 GRANITE CONSTRUCTION COMPANY

                                 By /s/ William G. Dorey
                                    ---------------------------
                                    William G. Dorey
                                    President

                                 BY /s/ William E. Barton
                                    ---------------------------
                                    William E. Barton
                                    Chief Financial Officer

                                 GRANITE LAND COMPANY

                                 BY /s/ Scott D. Wolcott
                                    ---------------------------
                                    Scott D. Wolcott
                                    President

                                 By /s/ William G. Dorey
                                    ---------------------------
                                    William G. Dorey
                                    President, Granite Construction Incorporated

                                 GRANITE HALMAR CONSTRUCTION COMPANY,
                                 INC.

                                 By /s/ William G. Dorey
                                    ---------------------------
                                    William G. Dorey
                                    President

                                 By /s/ William E. Barton
                                    -----------------------------
                                    William E. Barton
                                    Chief Financial Officer

SIGNATURE PAGE TO THE
REAFFIRMATION OF GUARANTY TO THE
MARCH 1, 1998 GUARANTY AGREEMENT

<PAGE>

                                       INTERMOUNTAIN SLURRY SEAL, INC.

                                       By /s/ Michael L. Thomas
                                          --------------------------------
                                          Michael L. Thomas
                                          President

                                       By /s/ David J. Brunton
                                          --------------------------------
                                          David J. Brunton
                                          Chief Financial Officer

                                       POZZOLAN PRODUCTS COMPANY (P.P.C.)

                                       By /s/ Michael L. Thomas
                                          ---------------------------------
                                          Michael L. Thomas
                                          President

                                       By /s/ David J. Brunton
                                          ---------------------------------
                                          David J. Brunton
                                          Chief Financial Officer

                                       GILC, L.P.

                                       By: GILC Incorporated, its sole General
                                           Partner

                                       By /s/ William E. Barton
                                          ---------------------------------
                                          William E. Barton
                                          Chief Executive Officer

                                       By /s/ R.C. Allbritton
                                          ---------------------------------
                                          R.C. Allbritton
                                          Chief Financial Officer

SIGNATURE PAGE TO THE
REAFFIRMATION OF GUARANTY TO THE
MARCH 1, 1998 GUARANTY AGREEMENT

<PAGE>

                                  FEE SCHEDULE

<TABLE>
<S>                                                        <C>
Allstate Life Insurance Company                            $ 8,555.56
United of Omaha Life Insurance Company                     $ 3,888.89
Mutual of Omaha Insurance Company                          $ 1,944.45
Companion Life Insurance Company                           $   777.78
Nationwide Life Insurance Company                          $ 3,111.11
American United Life Insurance Company                     $ 1,944.45
Thrivent Financial For Lutherans                           $ 3,111.11

                                   Total:                  $23,333.33
</TABLE>

                                   SCHEDULE 1
                              (to First Amendment)

<PAGE>

                   VARIANCES TO REPRESENTATIONS AND WARRANTIES

         The Company represents and warrants to each holder that except as
hereinafter set forth in this Schedule 2, each of the representations and
warranties set forth in Section 5 of the Note Purchase Agreement is true and
correct as of the date hereof. The Section references hereinafter set forth
correspond to the similar sections of the Note Purchase Agreement which are
supplemented hereby:

         Section 5.4. Organization and Ownership of Shares of Subsidiaries;
Affiliates. (a) Schedule 5.4 to the First Amendment contains (except as noted
therein) complete and correct lists (1) of the Company's Subsidiaries, showing,
as to each Subsidiary, the correct name thereof, the jurisdiction of its
organization, and the percentage of shares of each class of its capital stock or
similar equity interests outstanding owned by the Company and each other
Subsidiary, (2) of the Company's Affiliates, other than Subsidiaries and (3) of
the Company's directors and senior officers.

         (b) All of the outstanding shares of capital stock or similar equity
interests of each Subsidiary shown in Schedule 5.4 to the First Amendment as
being owned by the Company and its Subsidiaries have been validly issued, are
fully paid and nonassessable and are owned by the Company or another Subsidiary
free and clear of any Lien (except as otherwise disclosed in Schedule 5.4 to the
First Amendment).

         (c) Each Subsidiary identified in Schedule 5.4 to the First Amendment
is a corporation or other legal entity duly organized, validly existing and in
good standing under the laws of its jurisdiction of organization, and is duly
qualified as a foreign corporation or other legal entity and is in good standing
in each jurisdiction in which such qualification is required by law, other than
those jurisdictions as to which the failure to be so qualified or in good
standing could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. Each such Subsidiary has the corporate or other
power and authority to own or hold under lease the properties it purports to own
or hold under lease and to transact the business it transacts and proposes to
transact.

         (d) No Subsidiary is a party to, or otherwise subject to, any legal
restriction or any agreement or instrument (other than this Agreement, the
agreements listed on Schedule 5.4 to the First Amendment and customary
limitations imposed by corporate law statutes) restricting the ability of such
Subsidiary to pay dividends out of profits or make any other similar
distributions of profits to the Company or any of its Subsidiaries that own
outstanding shares of capital stock or similar equity interests of such
Subsidiary.

         Section 5.8. Litigation; Observance of Agreements, Statutes and Orders.
(a) Except as disclosed in Schedule 5.8 to the First Amendment, there are no
actions, suits or proceedings pending or, to the knowledge of the Company,
threatened against or affecting the Company or

                                   SCHEDULE 2
                              (to First Amendment)

<PAGE>

any Subsidiary or any property of the Company or any Subsidiary in any court or
before any arbitrator of any kind or before or by any Governmental Authority
that, individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect.

         Section 5.15. Existing Debt. Except as described therein, Schedule 5.15
to the First Amendment sets forth a complete and correct list of all outstanding
Debt of the Company and its Subsidiaries as of May 31, 2003 (other than with
respect to the Debt of Wilder and Presidio Vista which are as of April 30,
2003), since which date there has been no Material change in the amounts,
interest rates, sinking funds, installment payments or maturities of the Debt of
the Company or its Subsidiaries. Neither the Company nor any Subsidiary is in
default and no waiver of default is currently in effect, in the payment of any
principal or interest on any Debt of the Company or such Subsidiary and no event
or condition exists with respect to any Debt of the Company or any Subsidiary
that would permit (or that with notice or the lapse of time, or both, would
permit) one or more Persons to cause such Debt to become due and payable before
its stated maturity or before its regularly scheduled dates of payment.

         Section 5.16. Existing Investments. Schedule 5.16 to the First
Amendment sets forth a complete and correct list of all outstanding Investments
of the Company and its Subsidiaries as of May 31, 2003, since which date there
has been no Material change in the amounts of such Investments.

         Section 5.18. Environmental Matters. Neither the Company nor any
Subsidiary has knowledge of any Material claim or has received any notice of any
Material claim, and no proceeding has been instituted raising any Material claim
against the Company or any of its Subsidiaries or any of their respective real
properties now or formerly owned, leased or operated by any of them or other
assets, alleging any damage to the environment or violation of any Environmental
Laws. Except as otherwise disclosed in Schedule 5.18 to the First Amendment:

                  (a)      neither the Company nor any Subsidiary has knowledge
         of any facts which would give rise to any Material claim, public or
         private, or Material violation of Environmental Laws or damage to the
         environment emanating from, occurring on or in any way related to real
         properties now or formerly owned, leased or operated by any of them or
         to other assets or their use;

                  (b)      neither the Company nor any of its Subsidiaries
         (l)has stored any Hazardous Materials on real properties now or
         formerly owned, leased or operated by any of them or (2) has disposed
         of any Hazardous Materials in a manner contrary to any Environmental
         Laws; in each case in any manner that could reasonably be expected to
         result in a Material Adverse Effect; and

                  (c)      all buildings on all real properties now owned,
         leased or operated by the Company or any of its Subsidiaries are in
         material compliance with applicable Environmental Laws.

                                      S-2-2
<PAGE>

                        GRANITE CONSTRUCTION INCORPORATED
                                  SCHEDULE 5.4
           SUBSIDIARIES, OTHER AFFILIATES, AND DIRECTORS AND OFFICERS

<TABLE>
<CAPTION>
                                                         JURISDICTION OF                                OWNERSHIP BY COMPANY AND/OR
                         NAME                             ORGANIZATION         CAPITAL STRUCTURE                 SUBSIDIARY
                                                                                                         NAME   OWNERSHIP  POSITION
<S>                                                      <C>              <C>                           <C>     <C>        <C>
1  Granite Construction International                      California               C Corp               GCI     100.00%   investor
1  Granite Construction Company ("GCCo")                   California               C Corp               GCI     100.00%   investor
   1  Wilder Construction Company ("Wilder")               Washington               C Corp               GCCo     60.04%   investor
      1 Wilder Realty                                      Washington               C Corp              Wilder   100.00%   investor
      1 Wilder Washington                                  Washington               C Corp              Wilder   100.00%   investor
      2 Axton Aggregate Partnership                        Washington        General Partnership        Wilder    50.00%      GP
      2 Axton Aggregate Company                            Washington        General Partnership        Wilder    50.00%      GP
      1 HLA / Wilder, a Joint Venture                      Washington     Construction Joint Venture    Wilder    55.00%    partner
   2  Largo Properties, LLC                                 Maryland      Limited Liability Company      GCCo     33.30%    member
   2  Riverside Motorsports Park, LLC                      California     Limited Liability Company      GCCo      2.50%    member
   2  California Corridor Constructors, a Joint Venture    California     Construction Joint Venture     GCCo     30.00%    partner
   1  Granite Kiewit, a Joint Venture                       Montana       Construction Joint Venture     GCCo     76.00%    sponsor
   1  Granite2-Sundt, a Joint Venture                       Arizona       Construction Joint Venture     GCCo     65.00%    sponsor
   1  Granite-Frontier Kemper, a Joint Venture              Arkansas      Construction Joint Venture     GCCo     82.00%    sponsor
   2  Granite-Meyers, a Joint Venture                      California     Construction Joint Venture     GCCo     41.20%   managing
   1  Granite-PCL, a Joint Venture                          Florida       Construction Joint Venture     GCCo     64.70%    sponsor
   1  Granite-Rizzani de Eccher, a Joint Venture            Florida       Construction Joint Venture     GCCo     60.00%    sponsor
   1  Granite-Sundt, a Joint Venture                        Arizona       Construction Joint Venture     GCCo     55.00%    sponsor
   2  K-G Leasing, a Joint Venture                         California     Construction Joint Venture     GCCo     30.00%    partner
   2  K-G-W Leasing, a Joint Venture                          Utah        Construction Joint Venture     GCCo     23.00%    partner
   2  Kiewit-Granite, a Joint Venture                      California     Construction Joint Venture     GCCo     25.00%    partner
   1  Las Vegas Monorail Team, a Joint Venture               Nevada       Construction Joint Venture     GCCo     44.80%   managing
   2  LGS, a Joint Venture                                  Maryland      Construction Joint Venture     GCCo     30.00%    partner
   1  Minnesota Transit Constructors, a Joint Venture      Minnesota      Construction Joint Venture     GCCo     56.50%    sponsor
   1  River Mountain Constructors, a Joint Venture          Arkansas      Construction Joint Venture     GCCo    100.00%    sponsor
   1  Sampson-Granite, a Joint Venture                     California     Construction Joint Venture     GCCo     40.00%    partner
   1  Sierra Blanca Constructors, a Joint Venture          New Mexico     Construction Joint Venture     GCCo     52.00%    sponsor
   2  TGM Constructors                                      Kentucky      Construction Joint Venture     GCCo     25.00%    partner
   2  Tri-County Rail Constructors, a Joint Venture         Florida       Construction Joint Venture     GCCo     30.00%    partner
   1  Virginia Approach Constructors                        Maryland      Construction Joint Venture     GCCo     79.00%    partner
   2  Wasatch Constructors, a Joint Venture                   Utah        Construction Joint Venture     GCCo     23.00%    partner
   2  Washington-Granite, a Joint Venture                  California     Construction Joint Venture     GCCo     40.00%    partner
   2  Western Summit-TIC-Granite, a Joint Venture           Georgia       Construction Joint Venture     GCCo     15.00%    partner
   2  WSCI TIC Granite, a Joint Venture                     Georgia       Construction Joint Venture     GCCo     15.00%    partner
   2  Yonkers Contracting Company, Inc. / Granite          New Jersey     Construction Joint Venture     GCCo     40.00%    partner
      Construction Company, a Joint Venture
1  Granite Halmar Construction Company, Inc. ("GHCCo")      New York                C Corp               GCI     100.00%   investor
   1  Halmar-Egis, a Joint Venture                          New York      Construction Joint Venture    GHCCo    100.00%    partner
   1  Halmar-Schiavone, a Joint Venture                     New York      Construction Joint Venture    GHCCo    100.00%    partner
   1  Granite Halmar/Schiavone, a Joint Venture             New York      Construction Joint Venture    GHCCo     60.00%    partner
   1  GH/JMA, a Joint Venture                               New York      Construction Joint Venture    GHCCo     51.00%    partner
   2  Schiavone/Granite Halmar, a Joint Venture             New York      Construction Joint Venture    GHCCo     40.00%    partner
1  Intermountain Slurry Seal, Inc.                          Wyoming                 C Corp               GCI     100.00%   investor
1  Pozzolan Products Company                                  Utah                  C Corp               GCI     100.00%   investor
</TABLE>

                                  Schedule 5.4
                                   Page 1 of 2

<PAGE>

                        GRANITE CONSTRUCTION INCORPORATED
                                  SCHEDULE 5.4
           SUBSIDIARIES, OTHER AFFILIATES, AND DIRECTORS AND OFFICERS

<TABLE>
<CAPTION>
                                                       JURISDICTION OF                                OWNERSHIP BY COMPANY AND/OR
                       NAME                              ORGANIZATION       CAPITAL STRUCTURE                  SUBSIDIARY
                                                                                                      NAME     OWNERSHIP  POSITION
<S>                                                    <C>              <C>                        <C>         <C>        <C>
1  Granite Land Company ("GLC")                           California             C Corp                GCI      100.00%   investor
   1  GLC Fort Worth, LLC ("GLCFW, LLC")                     Texas      Limited Liability Company      GLC      100.00%      GP
      1 Presidio Vista I, LTD                                Texas         Limited Partnership         GLC       89.00%      LP
                                                                                                   GLCFW, LLC     1.00%      GP
   1  Main Street Ventures, LLC                           California    Limited Liability Company      GLC       90.00%   managing
   1  Granite/Mandalay Bay Finance, LLC                   California    Limited Liability Company      GLC       70.00%    member
   1  Granite/Mandalay, LLC ("GM, LLC")                   California    Limited Liability Company      GLC       90.00%    member
      2 Oly/Granite General Partnership                   California       Limited Partnership       GM, LLC     10.00%      LP
      2 Oly/Mandalay Bay General Partnership              California       Limited Partnership       GM, LLC     10.00%      LP
   2  Phase 1 Regional Park Limited                       California       Limited Partnership         GLC       25.00%      LP
   2  Williamson Ranch Plaza, LP                          California       Limited Partnership         GLC       25.00%      LP
   1  Granite Grado Ventures, LLC ("GGV, LLC")            California    Limited Liability Company      GLC       90.00%   managing
      1 Granite Grado Ventures Project 1, LLC             California    Limited Liability Company    GGV, LLC   100.00%   managing
1  GILC, Incorporated ("GILC")                            California             C Corp                GCI      100.00%   investor
   1  GILC, LP                                            California       Limited Partnership        GCCo       99.00%      LP
                                                                                                      GILC        1.00%      GP
1  Wilcott Corporation                                     Colorado              C Corp                GCI      100.00%   investor
1  Granite SR 91 Corporation ("GSR91")                    California             C Corp                GCI      100.00%   investor
   1  Granite SR 91, LP ("SR91, LP")                      California       Limited Partnership         GCI       99.00%      LP
                                                                                                      GSR91       1.00%      GP
      2 California Private Transportation Company, LP     California       Limited Partnership      SR91, LP     22.22%      LP
1  GTC, Inc. ("GTC")                                         Texas               C Corp                GCI      100.00%   investor
   1  GTC II, LP ("GTC, LP")                                 Texas         Limited Partnership         GCI       99.00%      LP
                                                                                                       GTC        1.00%      GP
      1 WR II Associates, LTD                                Texas         Limited Partnership         GCI       69.88%      LP
                                                                                                     GTC, LP      1.00%      GP
2  Paramount-Nevada Asphalt Company, LLC                     Nevada     Limited Liability Company      GCI       50.00%    member
</TABLE>

3  DIRECTORS
      David H. Watts - Chairman of the           David H. Kelsey - Director
      Board & CEO
      Joseph J. Barclay - Director               Rebecca A. McDonald - Director
      Richard M. Brooks - Director               Raymond E. Miles - Director
      Linda Griego - Director                    J. Fernando Niebla - Director
      Brian C. Kelly - Director                  George B. Searle - Director

   SENIOR OFFICERS

      William G. Dorey - President & COO
      Mark E. Boitano - Executive Vice President & Branch Division Manager
      Patrick M. Costanzo - Senior Vice President & Heavy Construction Division
        Manager
      William E. Barton - Senior Vice President & CFO
      R.C. Allbritton - Vice President & Treasurer
      Michael Futch - Vice President, Secretary & General Counsel
      Garry M. Higdem - Vice President & Heavy Construction Division Asstistant
        Manager
      James H. Roberts - Vice President & Branch Division Assistant Manager
      Michael L. Thomas - Vice President & Director of Human Resources

                                  Schedule 5.4
                                   Page 2 of 2

<PAGE>

                        GRANITE CONSTRUCTION INCORPORATED
                                  SCHEDULE 5.8
                                   LITIGATION

5.8(a)

<TABLE>
<CAPTION>
         DEFENDANT                              NATURE OF CASE                              COMMENTS
<S>                             <C>                                              <C>
USA ex rel Maxfield/Peterson    False Calims Act arising from I-15, Salt Lake    See 12/31/02 10-K, PART I, Item
vs. Wasatch (GCCo               City, UT construction contract                   3, or 03/31/03 10-Q, NOTE 7,
construction joint venture)                                                      for more information
</TABLE>

5.8(b)
                      NONE

                                  Schedule 5.8

<PAGE>

                        GRANITE CONSTRUCTION INCORPORATED
                                  SCHEDULE 5.15
                              EXISTING INDEBTEDNESS

<TABLE>
<CAPTION>
                                                                                              INTEREST
            BORROWER                 LENDER'S NAME                 DESCRIPTION                  RATE         MATURITY     BALANCE
<S>                               <C>                 <C>                                <C>                 <C>       <C>
Granite Construction Company      Benna Investments   Glendale NV property                            6.50%  12/01/07     1,043,652
Granite Construction Company      Rosemary's Mountain Southern CA Aggregate property                  8.82%  06/01/04     1,400,000
Granite Construction Incorporated Private Placement
                                    Due 03/15/10      Refinance debt & general corporate
                                                      purposes                                        6.54%  03/15/10    46,666,668
Granite Construction Incorporated Private Placement
                                    Due 05/01/13      Refinance debt & general corporate
                                                      purposes                                        6.96%  05/01/13    75,000,000
Granite Construction Incorporated Lenders under
                                    existing Bank
                                    Credit Agreement  Self insured Worker's Compensation          100.0 bps  04/30/02     1,293,390
Granite Construction Company      Bank of America
                                    Letter of Credit  City of Patterson Performance
                                                      Guarantee                                    32.5 bps  02/04/04       200,000
Wilder Construction Company (1)   Gebhardt            Promisory Note - stock repurchase               prime  05/16/07       180,997
Wilder Construction Company (1)   Hesell              Promisory Note - stock repurchase               prime  03/15/10     2,607,761
Wilder Construction Company (1)   Ross                Promisory Note - stock repurchase               prime  04/29/05     2,588,757
Wilder Construction Company (1)   Fulton              Promisory Note - stock repurchase               prime  12/20/07       104,317
Wilder Construction Company (1)   Gent                Promisory Note - stock repurchase               prime  12/20/07       948,333
Wilder Construction Company (1)   Jonasson            Promisory Note - stock repurchase               prime  12/20/07       569,000
Wilder Construction Company (1)   Suhadolnik          Promisory Note - stock repurchase               prime  12/20/07       246,567
Wilder Construction Company (1)   Giammalva           Promisory Note - stock repurchase               prime  03/15/06       897,083
Wilder Construction Company (1)   Bank of America     Priority Debt - Construction
                                                      Equipment                                       3.90%  06/01/05       975,000
Wilder Construction Company (1)   Bank of America     Priority Debt - Alaska
                                                      Yard & Office                                   7.40%  12/01/08       799,938
Wilder Construction Company (1)   Bank of America     Priority Debt - Line of Credit     prime minus 100 bp  06/01/04     1,000,000
Presidio Vista I, LTD (2)         Dell USA, L.P.      Priority Debt - Presidio Vista
                                                      Development                                     7.50%  02/08/11     4,003,877
                                                                                                                       $140,525,340
Granite Construction Incorporated BNP Paribas         $30MM notional amount floating
                                                      interest rate swap                      6 Mth LIBOR +  09/15/05      (559,168)
                                                      agreement                                  386.75 bps
Granite Construction Incorporated BNP Paribas         $20MM notional amount floating
                                                      interest rate swap                      6 Mth LIBOR +  11/05/05      (369,914)
                                                      agreement                                  418.00 bps
                                                                                                                          ($929,082)
</TABLE>

(1) - Wilder debt is not guaranteed by Granite Construction Incorporated or any
of it non-Wilder Subsidiaries or Affiliates

(2) - This debt is non-recourse debt secured by the assets of the development
project and is not guaranteed by Granite Construction Incorporated or any of its
Subsidiaries or Affiliates.

                                  Schedule 5.15

<PAGE>

                        GRANITE CONSTRUCTION INCORPORATED
                                  SCHEDULE 5.16
                              EXISTING INVESTMENTS

<TABLE>
<CAPTION>
                      INVESTMENT                                         TYPE                       VALUE
<S>                                                          <C>                                 <C>
Paramount-Nevada Asphalt Company, LLC                             Asphalt Tank Farm               2,299,957
Bank of America (BA)                                              Bankers Acceptance              1,228,989
Bank of America (BA)                                              Bankers Acceptance              4,992,625
Bank of America CD                                              Certificate of Deposit            2,500,000
AOL Time Warner                                               Commercial Paper 2nd Tier           4,983,436
Kraft Foods Inc                                               Commercial Paper 2nd Tier           4,994,263
GMAC                                                         Commercial Paper Split Rated         3,990,133
Allianz Finance Corp                                          Commercial Paper Top Tier           3,991,944
Citigroup Global Markets                                      Commercial Paper Top Tier           4,994,704
General Electric Captial Service                              Commercial Paper Top Tier           3,998,360
New York Times                                                Commercial Paper Top Tier           3,996,000
Schering-Plough                                               Commercial Paper Top Tier           4,995,703
Toyota Motor Corp                                             Commercial Paper Top Tier           4,997,797
Transamerica Financial Corp                                   Commercial Paper Top Tier           4,989,931
Verizon Net Funding                                           Commercial Paper Top Tier           2,991,420
Granite Halmar/Schiavone, a Joint Venture                     Construction Joint Venture            350,000
Granite Kiewit, a Joint Venture                               Construction Joint Venture            105,962
Granite2-Sundt, a Joint Venture                               Construction Joint Venture          5,163,735
Granite-Rizzani de Eccher, a Joint Venture                    Construction Joint Venture         (2,524,188)
Granite-Sundt, a Joint Venture                                Construction Joint Venture            497,796
Halmar-Egis, a Joint Venture                                  Construction Joint Venture          2,977,542
Halmar-Schiavone, a Joint Venture                             Construction Joint Venture          5,412,624
K-G Leasing, a Joint Venture                                  Construction Joint Venture            341,615
K-G-W Leasing, a Joint Venture                                Construction Joint Venture            759,154
Kiewit-Granite, a Joint Venture                               Construction Joint Venture            445,740
LGS, a Joint Venture                                          Construction Joint Venture          6,434,245
Minnesota Transit Constructors, a Joint Venture               Construction Joint Venture          1,667,811
Sampson-Granite, a Joint Venture                              Construction Joint Venture             11,008
Schiavone/Granite Halmar, a Joint Venture                     Construction Joint Venture            800,032
Sierra Blanca Constructors, a Joint Venture                   Construction Joint Venture          2,842,704
TGM Constructors                                              Construction Joint Venture          1,553,084
Tri-County Rail Constructors, a Joint Venture                 Construction Joint Venture          1,561,575
Virginia Approach Constructors                                Construction Joint Venture          2,370,000
Wasatch Constructors, a Joint Venture                         Construction Joint Venture             91,505
Washington-Granite, a Joint Venture                           Construction Joint Venture            252,968
Western Summit-TIC-Granite, a Joint Venture                   Construction Joint Venture             15,565
Yonkers Contracting Company, Inc. / Granite Construction
  Company, a Joint Venture                                    Construction Joint Venture          2,489,018
Largo Properties, LLC                                          Construction JV Property           2,123,970
Rancho San Carlos Partnership, L.P.                               Construction Note               6,000,000
Granite/Mandalay Bay Finance, LLC                                Development Project              1,905,999
Granite/Mandalay, LLC ("GM, LLC")                                Development Project              2,558,017
Main Street Ventures, LLC                                        Development Project                 51,740
Phase 1 Regional Park Limited                                    Development Project                546,165
Presidio Vista I, LTD                                            Development Project                135,000
Riverside Motorsports Park, LLC                                  Development Project                 50,000
Williamson Ranch Plaza, LP                                       Development Project               (364,595)
WR II Associates, LTD                                            Development Project                460,882
Bank of America/Nations Fund Sweep                                Money Market Funds              1,001,172
Fidelity Inst'l MM Domestic 690                                   Money Market Funds              7,654,560
Fidelity Inst'l MM Govern. 057                                    Money Market Funds              3,112,553
</TABLE>

                                  Schedule 5.16
                                   Page 3 of 6

<PAGE>

                        GRANITE CONSTRUCTION INCORPORATED
                                  SCHEDULE 5.16
                              EXISTING INVESTMENTS

<TABLE>
<CAPTION>
                 INVESTMENT                                         TYPE                        VALUE
<S>                                                      <C>                                <C>
JP Morgan Prime Institutional Fund                           Money Market Funds                1,466,920
JP Morgan Tax-Free Institutional Fund                        Money Market Funds               15,062,571
JPM Chase Overnight Investment                               Money Market Funds                3,873,664
CA Revenue Anticipation Note                                  Municipal Bonds                  5,003,119
California State Water Department                             Municipal Bonds                  3,000,000
New Jersey Transit Series B                                   Municipal Bonds                  3,000,000
TX Tax & Revenue Antic. Bond                                  Municipal Bonds                  2,006,560
UT Transit Authority Revenue Bond                             Municipal Bonds                  2,975,881
Franklin Balance Sheet Inv. Fund                            Mutual Fund - Equity                 698,014
Lord Abbett Mid - Cap Value Fund                            Mutual Fund - Equity                 217,013
Putnam Fund for Growth & Income                             Mutual Fund - Equity               2,205,437
Putnam International Growth CLA                             Mutual Fund - Equity               2,522,837
Putnam Investors Fund                                       Mutual Fund - Equity                 430,494
Putnam New Opportunities Fund                               Mutual Fund - Equity                 803,789
Putnam Vista Fund                                           Mutual Fund - Equity                 728,709
Putnam Voyager Fd CLA                                      Mutual Fund - Equity                 629,304
Loomis Sayles Bond FD                                    Mutual Fund - Fixed Income            1,659,494
Pimco Total Return FD                                    Mutual Fund - Fixed Income            2,416,837
TIC Holdings, Inc                                                  stock                      12,535,179
Wilder Construction Company ("Wilder")                             stock                      26,932,686
California Private Transportation Company, LP                    Toll Road                       354,349
Fannie Mae                                               US Treasury & Agency Notes            3,391,481
Fannie Mae                                               US Treasury & Agency Notes            2,993,900
Fannie Mae                                               US Treasury & Agency Notes            5,074,892
Federal Farm Credit Bank                                 US Treasury & Agency Notes            5,100,743
Federal Home Loan Bank                                   US Treasury & Agency Notes            2,707,728
Federal Home Loan Bank                                   US Treasury & Agency Notes            1,994,258
Federal Home Loan Bank                                   US Treasury & Agency Notes            5,082,445
Federal Home Loan Bank                                   US Treasury & Agency Notes            5,177,271
Freddie Mac                                              US Treasury & Agency Notes            2,997,233
Freddie Mac                                              US Treasury & Agency Notes            1,497,975
Freddie Mac                                              US Treasury & Agency Notes            5,104,376
Sallie Mae                                               US Treasury & Agency Notes            5,055,638
U.S. Treasury Note                                       US Treasury & Agency Notes            2,000,000
U.S. Treasury Note                                       US Treasury & Agency Notes            1,552,952
U.S. Treasury Note                                       US Treasury & Agency Notes            2,100,975
U.S. Treasury Note                                       US Treasury & Agency Notes            3,100,238
                                                                                            $262,255,179
</TABLE>

                                  Schedule 5.16
                                   Page 4 of 6

<PAGE>

                        GRANITE CONSTRUCTION INCORPORATED
                                  SCHEDULE 5.18
                              ENVIRONMENTAL MATTERS

5.18(a)

Granite Construction in the normal course of business utilizes petroleum
(hydrocarbon) products which may be considered hazardous materials when
encountered at regulatory levels established by the Federal EPA or the Regional
State EPA. The utilization of these asphalt products, diesel, and gasoline over
the years of operations have the potential of creating exposure to environmental
clean up requirements. All underground tanks meet current requirements. There
are no pending governmental ordered clean up requirements. However, the
following represents estimates based on construction industry housekeeping
practices as encountered during our normal course of business. Except as
indicated with an " * ", these costs do not represent actual identified
exposures. Items indicated with an " * " are carried on the books as a
liability.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
      LOCATIONS                               DESCRIPTION                          AMOUNT
---------------------        ---------------------------------------------        -------
<S>                          <C>                                                  <C>
Anchorage, AK                  Surface Spills, wash rack facilities                60,000
Anchorage, AK                  Surface Spills, former AC Plant                     17,500
Huachuca City, AZ              Surface Spills, AC Plant                            15,000
Marana, AZ                     Surface Spills, AC Plant                            15,000
Tucson, AZ                     Surface Spills                                      10,000
Tucson, AZ                     AC Plant                                            25,000
29 Palms, CA                 * Surface Spills, AC Plant                             4,409
Arcata, CA                   * Surface Spills, AC Plant                           236,000
Arvin, CA                      Surface Spills, AC Plant                            25,000
Bakersfield, CA                Surface Spills, AC Plant                           250,000
Bishop, CA                     Surface Spills, AC Plant                            15,000
Buelton, CA                    Surface Spills, AC Plant                            50,000
City of Blue Lake, CA          Surface Spills                                      40,000
Coalinga, CA                   Surface Spills, AC Plant                            50,000
Concord, CA                    Surface Spills, AC Plant                            35,000
Crescent City, CA            * Surface Spills, AC Plant                           682,836
Ducor, CA                    * Surface Spills, AC Plant                            12,529
El Centro, CA                  Surface Spills, AC Plant                            25,000
Felton, Ca                     Surface Spills, AC Plant                           100,000
French Camp, CA                Surface Spills, AC Plant, old fill material        500,000
Highway 175, CA              * Surface Spills, AC Plant                           150,000
Indio, CA                      Surface Spills, AC Plant                            25,000
Inyokern, CA                   Surface Spills, AC Plant                            25,000
Kelseyville, CA              * Surface Spills, AC Plant                           873,000
Lee Vining, CA                 Surface Spills, AC Plant                            15,000
Littlerock, CA                 Surface Spills, AC Plant                            25,000
Longvale, CA                 * Surface Spills, AC Plant                           274,000
Los Banos, CA                  AC Plant                                            10,000
Pleasanton, CA                 AC Plant                                            10,000
Rio Linda, CA                  Surface Spills, AC Plant                            50,000
Sacramento, CA                 Surface Spills, AC Plant                           500,000
Salinas, CA                    Surface Spills, AC Plant                            10,000
Salinas, CA                    Former Underground Storage Tanks                   200,000
San Jose, CA                   Surface Spills                                      10,000
Santa Barbara, CA              Surface Spills                                      25,000
</TABLE>

                                  Schedule 5.18
                                   Page 5 of 6

<PAGE>

                        GRANITE CONSTRUCTION INCORPORATED
                                  SCHEDULE 5.18
                              ENVIRONMENTAL MATTERS

5.18(a)

Granite Construction in the normal course of business utilizes petroleum
(hydrocarbon) products which may be considered hazardous materials when
encountered at regulatory levels established by the Federal EPA or the Regional
State EPA. The utilization of these asphalt products, diesel, and gasoline over
the years of operations have the potential of creating exposure to environmental
clean up requirements. All underground tanks meet current requirements. There
are no pending governmental ordered clean up requirements. However, the
following represents estimates based on construction industry housekeeping
practices as encountered during our normal course of business. Except as
indicated with an " * ", these costs do not represent actual identified
exposures. Items indicated with an " * " are carried on the books as a
liability.

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------
     LOCATIONS                               DESCRIPTION                         AMOUNT
-------------------            -----------------------------------------       ----------
<S>                            <C>                                             <C>
Tracy, CA                        Surface Spills, AC Plant                          25,000
Ukiah, CA                      * Surface Spills, AC Plant                         430,000
Watsonville, CA                  Surface Spills                                    35,000
Watsonville, CA                  Former Underground Storage Tanks                  35,000
Tampa, FL                        Surface Spills                                    75,000
Odenton, MD                      Surface Spills                                   100,000
Carson City, NV                  Surface Spills, AC Plant                          10,000
Lockwood, NV                     Surface Spills, AC Plant                          50,000
Sparks, NV                       Surface Spills, AC Plant                         100,000
Wappinger Falls, NY              Surface Spills                                   100,000
Lubbock, TX                      Surface Spills, AC Plant                         100,000
Lubbock, TX                      Surface Spills                                    75,000
Lubbock, TX                      Surface Spills                                    50,000
Morgan County, UT                Surface Spills                                    10,000
North Ogden, UT                  Old fill material                                250,000
Ogden, UT                      * Former Webb AC Plant                             723,377
Salt City, UT                  * Former 2200 North AC Plant                       132,363
Salt Lake City, UT               AC Plant                                         150,000
Salt Lake City, UT               Surface Spills                                    50,000
Salt Lake City, UT             * Former Whitehill AC Plant                         25,288
Sandy City, UT                   Surface Spills, AC Plant                         100,000
Kearns, UT                     * Surface Spills, AC Plant                          12,529
Wasatch County, UT               Surface Spills, AC Plant                          10,000
West Haven, UT                   Surface Spills, AC Plant                          25,000
Bellington, WA                   Hannegan surface spills, AC Plant, shop          500,000
Everett, WA                      Surface Spills, AC Plant                         100,000
Whatcom County, WA               Former AC Plant                                  260,000
Whatcom County, WA               Former UST and shop area                          17,500
                                                                               ----------
                                                                               $7,921,331
                                                                               ----------
</TABLE>

5.18 (b) AND (c)

                      NONE

                                  Schedule 5.18
                                   Page 6 of 6

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