10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended September 30, 2012

OR

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from ___________ to ___________
	Commission File Number: 1-12911

GRANITE CONSTRUCTION INCORPORATED

State of Incorporation:	I.R.S. Employer Identification Number:
Delaware	77-0239383

Address of principal executive offices:

585 W. Beach Street

Watsonville, California 95076

(831) 724-1011

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. xYes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). xYes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer x Accelerated filer o Non-accelerated filer o Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o Yes x No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of October 22, 2012.

Class	Outstanding
Common Stock, $0.01 par value	38,711,183 shares

Index

PART I. FINANCIAL INFORMATION
	Item 1.	Financial Statements
		Condensed Consolidated Balance Sheets as of September 30, 2012, December 31, 2011 and September 30, 2011
		Condensed Consolidated Statements of Income for the Three and Nine Months Ended September 30, 2012 and 2011
		Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2012 and 2011
		Notes to the Condensed Consolidated Financial Statements
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk
	Item 4.	Controls and Procedures
PART II. OTHER INFORMATION
	Item 1.	Legal Proceedings
	Item 1A.	Risk Factors
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds
	Item 3.	Defaults Upon Senior Securities
	Item 4.	Mine Safety Disclosures
	Item 5.	Other Information
	Item 6.	Exhibits
SIGNATURES
EXHIBIT 10.1
EXHIBIT 10.2
EXHIBIT 10.3
EXHIBIT 10.4
EXHIBIT 10.5
EXHIBIT 10.6
EXHIBIT 10.7
EXHIBIT 31.1
EXHIBIT 31.2
EXHIBIT 32
EXHIBIT 95
EXHIBIT 101.INS
EXHIBIT 101.SCH
EXHIBIT 101.CAL
EXHIBIT 101.DEF
EXHIBIT 101.LAB
EXHIBIT 101.PRE

2

PARTI.FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited - in thousands, except share and per share data)
	September 30, 2012		December 31, 2011		September 30, 2011
ASSETS
Current assets
Cash and cash equivalents ($74,020, $75,122 and $65,350 related to consolidated construction joint ventures (“CCJV”))	$	287,322	$	256,990	$	193,099
Short-term marketable securities	47,185		70,408		77,389
Receivables, net ($31,028, $30,332 and $28,493 related to CCJVs)	363,455		251,838		357,807
Costs and estimated earnings in excess of billings	49,548		37,703		45,884
Inventories	63,999		50,975		57,987
Real estate held for development and sale	57,964		67,037		79,173
Deferred income taxes	38,571		38,571		52,714
Equity in construction joint ventures	97,890		101,029		97,415
Other current assets	13,974		35,171		29,526
Total current assets	1,019,908		909,722		990,994
Property and equipment, net ($6,661, $8,671 and $9,821 related to CCJVs)	432,293		447,140		453,822
Long-term marketable securities	37,802		79,250		59,509
Investments in affiliates	30,257		31,071		33,435
Other noncurrent assets	78,375		80,616		80,709
Total assets	$	1,598,635	$	1,547,799	$	1,618,469
LIABILITIES AND EQUITY
Current liabilities
Current maturities of long-term debt	$	8,352	$	9,102	$	8,351
Current maturities of non-recourse debt	16,712		23,071		16,690
Accounts payable ($30,975, $38,193 and $36,660 related to CCJVs)	209,683		158,660		216,600
Billings in excess of costs and estimated earnings ($13,955, $22,251 and $17,116 related to CCJVs)	91,348		90,845		89,505
Accrued expenses and other current liabilities ($3,495, $5,129 and $5,997 related to CCJVs)	167,166		166,790		185,624
Total current liabilities	493,261		448,468		516,770
Long-term debt	200,168		208,501		208,519
Long-term non-recourse debt	4,375		9,912		27,755
Other long-term liabilities	47,913		49,221		46,985
Deferred income taxes	3,644		4,034		10,330
Commitments and contingencies
Equity
Preferred stock, $0.01 par value, authorized 3,000,000 shares, none outstanding	—		—		—
Common stock, $0.01 par value, authorized 150,000,000 shares; issued and outstanding 38,706,966 shares as of September 30, 2012, 38,682,771 shares as of December 31, 2011 and 38,664,403 shares as of September 30, 2011	387		387		387
Additional paid-in capital	114,917		111,514		108,096
Retained earnings	699,277		687,296		673,626
Total Granite Construction Incorporated shareholders’ equity	814,581		799,197		782,109
Noncontrolling interests	34,693		28,466		26,001
Total equity	849,274		827,663		808,110
Total liabilities and equity	$	1,598,635	$	1,547,799	$	1,618,469

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited - in thousands, except per share data)
	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Revenue
Construction	$	385,744		$	431,101		$	748,803		$	784,393
Large project construction	255,918			213,320			648,645			513,478
Construction materials	86,782			83,171			175,754			165,083
Real estate	38			986			5,055			7,029
Total revenue	728,482			728,578			1,578,257			1,469,983
Cost of revenue
Construction	352,471			372,561			688,989			696,911
Large project construction	198,104			187,763			540,343			443,965
Construction materials	76,798			73,617			166,720			154,329
Real estate	10			744			4,254			5,941
Total cost of revenue	627,383			634,685			1,400,306			1,301,146
Gross profit	101,099			93,893			177,951			168,837
Selling, general and administrative expenses	41,280			39,112			125,274			121,277
Gain on sales of property and equipment	1,622			5,598			6,493			11,572
Operating income	61,441			60,379			59,170			59,132
Other income (expense)
Interest income	485			476			2,140			2,295
Interest expense	(2,561		)	(3,418		)	(8,570		)	(7,653		)
Equity in income of affiliates	1,481			1,881			380			1,443
Other income (expense), net	2,013			(1,833		)	3,866			(1,951		)
Total other income (expense)	1,418			(2,894		)	(2,184		)	(5,866		)
Income before provision for income taxes	62,859			57,485			56,986			53,266
Provision for income taxes	17,113			15,109			15,440			11,973
Net income	45,746			42,376			41,546			41,293
Amount attributable to noncontrolling interests	(8,625		)	(5,908		)	(14,249		)	(8,886		)
Net income attributable to Granite Construction Incorporated	$	37,121		$	36,468		$	27,297		$	32,407
Net income per share attributable to common shareholders (see Note 14)
Basic	$	0.96		$	0.94		$	0.71		$	0.84
Diluted	$	0.94		$	0.93		$	0.70		$	0.83
Weighted average shares of common stock
Basic	38,518			38,172			38,418			38,092
Diluted	39,141			38,598			39,013			38,428
Dividends per common share	$	0.13		$	0.13		$	0.39		$	0.39

 The accompanying notes are an integral part of these condensed consolidated financial statements.

4

GRANITE CONSTRUCTION INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited - in thousands)
Nine Months Ended September 30,	2012			2011
Operating activities
Net income	$	41,546		$	41,293
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization	43,651			45,691
Non-cash restructuring, net	(1,782		)	1,031
Other non-cash impairment charges	3,101			—
Gain on sales of property and equipment	(6,493		)	(11,572		)
Stock-based compensation	8,910			8,994
(Gain) loss on company owned life insurance	(1,829		)	639
Changes in assets and liabilities:
Receivables	(115,066		)	(112,790		)
Costs and estimated earnings in excess of billings, net	(11,342		)	(66,045		)
Inventories	(13,024		)	(6,969		)
Real estate held for development and sale	98			(2,756		)
Equity in construction joint ventures	3,139			(22,699		)
Other assets, net	20,312			9,359
Accounts payable	51,025			86,900
Accrued expenses and other current liabilities, net	(2,083		)	30,942
Net cash provided by operating activities	20,163			2,018
Investing activities
Purchases of marketable securities	(59,936		)	(115,146		)
Maturities of marketable securities	70,100			85,875
Proceeds from sale of marketable securities	55,000			33,268
Additions to property and equipment	(25,971		)	(34,748		)
Proceeds from sales of property and equipment	8,368			20,071
Other investing activities, net	1,165			2,313
Net cash provided by (used in) investing activities	48,726			(8,367		)
Financing activities
Long-term debt principal payments	(11,584		)	(17,293		)
Cash dividends paid	(15,078		)	(15,090		)
Purchases of common stock	(4,521		)	(3,840		)
Distributions to noncontrolling partners, net	(8,022		)	(17,489		)
Other financing activities	648			1,138
Net cash used in financing activities	(38,557		)	(52,574		)
Increase (decrease) in cash and cash equivalents	30,332			(58,923		)
Cash and cash equivalents at beginning of period	256,990			252,022
Cash and cash equivalents at end of period	$	287,322		$	193,099

Supplementary Information
Cash paid during the period for:
Interest	$	6,948	$	9,718
Income taxes	1,131		905
Non-cash investing and financing activities:
Restricted stock/units issued, net of forfeitures	$	11,532	$	6,896
Accrued cash dividends	5,032		5,026
Debt payments out of escrow from sale of assets	1,109		3,446
Debt extinguishment from joint venture interest transfer	9,115		—
Debt payment from refinancing	1,150		—

The accompanying notes are an integral part of these condensed consolidated financial statements.

5

GRANITE CONSTRUCTION INCORPORATED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Basis of Presentation

The condensed consolidated financial statements included herein have been prepared by Granite Construction Incorporated (“we,” “us,” “our,” “Company” or “Granite”) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2011. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted, although we believe the disclosures which are made are adequate to make the information presented not misleading. Further, the condensed consolidated financial statements reflect, in the opinion of management, all normal recurring adjustments necessary to state fairly our financial position at September 30, 2012 and 2011 and the results of our operations and cash flows for the periods presented. The December 31, 2011 condensed consolidated balance sheet data was derived from audited consolidated financial statements, but does not include all disclosures required by U.S. GAAP.

We prepared the accompanying condensed consolidated financial statements on the same basis as our annual consolidated financial statements except for the adoption of the following new accounting guidance in the first quarter of 2012:

• Accounting Standards Update (“ASU”) No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income, which eliminates the option to present the components of other comprehensive income as part of the statement of stockholders’ equity or as a footnote to the condensed consolidated financial statements, and provides the option of presenting comprehensive income in a continuous statement of comprehensive income. This guidance became effective for our quarter ended March 31, 2012 and requires prior year amounts to conform to current year presentation. For all periods presented comprehensive income was equal to net income; therefore, a separate or continuous statement of comprehensive income is not included in the accompanying condensed consolidated financial statements.

• ASU No. 2011-04, Fair Value Measurement (Topic 820):Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards, which clarifies the application of certain existing fair value measurement guidance and expands the disclosure requirements for fair value measurements that are estimated using significant unobservable (Level 3) inputs and for assets and liabilities disclosed but not recorded at fair value. This guidance was effective for our quarter ended March 31, 2012. As a result of this new guidance, we disclosed the level of the fair value hierarchy within which the fair value measurements of assets and liabilities disclosed but not recorded at fair value were categorized (see Note 5). Other items in this new guidance had no impact to our condensed consolidated financial statements.

• ASU No. 2011-08, Intangibles - Goodwill and Other (Topic 350): Testing Goodwill for Impairment, which gives companies the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value when assessing goodwill for impairment. If it is determined that it is more likely than not that the fair value of a reporting unit exceeds its carrying value, further impairment analysis is not necessary. However, if it is concluded otherwise, we are required to perform step one of the goodwill impairment test. This guidance was effective as of January 1, 2012 and will be applied during our annual goodwill impairment tests to be performed during the fourth quarter of 2012, and earlier if fact and circumstances indicate that an impairment has occurred. This new guidance will have no impact to our condensed consolidated financial statements for our 2012 fiscal year.

Interim results are subject to significant seasonal variations and the results of operations for the three and nine months ended September 30, 2012 are not necessarily indicative of the results to be expected for the full year. 

6

GRANITE CONSTRUCTION INCORPORATED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

2. Recently Issued Accounting Pronouncements

In December 2011, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. This ASU requires companies to disclose both gross and net information about financial instruments that have been offset on the consolidated balance sheet. This ASU will be effective commencing with our quarter ending March 31, 2013. We do not expect the adoption of this ASU to have an impact on our consolidated financial statements.

In July 2012, the FASB issued ASU No. 2012-02, Intangibles - Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. This ASU gives companies the option to first assess qualitative factors to determine whether it is more likely than not that the indefinite-lived intangible asset is impaired. If it is determined that it is more likely than not the indefinite-lived intangible asset is impaired, a quantitative impairment test is required. However, if it is concluded otherwise, the quantitative test is not necessary. This ASU will be effective commencing with our quarter ending March 31, 2013. We do not expect the adoption of this ASU to have an impact on our consolidated financial statements.

3. Revisions in Estimates

Our profit recognition related to construction contracts is based on estimates of costs to complete each project. These estimates can vary in the normal course of business as projects progress and uncertainties are resolved. We do not recognize revenue on contract change orders or claims until we have a signed agreement; however, we do recognize costs as incurred and revisions to estimated total costs as soon as the obligation to perform is determined. Approved change orders and claims, as well as changes in related estimates of costs to complete, are considered revisions in estimates. We use the cumulative catch-up method applicable to construction contract accounting to account for revisions in estimates. Under this option, revisions in estimates are accounted for in their entirety in the period of change. As of September 30, 2012, we had no revisions in estimates that are reasonably certain to impact future periods.

7

GRANITE CONSTRUCTION INCORPORATED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Construction

The net changes in project profitability from revisions in estimates, both increases and decreases, that individually had an impact of $1.0 million or more on gross profit were net decreases of $6.0 million and $9.4 million for the three and nine months ended September 30, 2012, respectively. The net changes for the three and nine months ended September 30, 2011 were a net decrease of $1.3 million and a net increase of $1.6 million, respectively. The projects are summarized as follows:

Increases

		Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in millions)		2012		2011		2012		2011
Number of projects with upward estimate changes		1		2		4		4
Range of increase in gross profit from each project, net	$	1.6	$	1.3 - 1.4	$	1.0 - 3.0	$	1.1 - 2.9
Increase on project profitability	$	1.6	$	2.7	$	7.1	$	7.0

The increases during the three and nine months ended September 30, 2012 were due to lower than anticipated costs and settlement of outstanding issues with contract owners. The increases during the three and nine months ended September 30, 2011 were primarily due to improved salvage prices for excess material, the settlement of outstanding cost issues and owner directed scope changes.

Decreases

		Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in millions)		2012		2011		2012		2011
Number of projects with downward estimate changes		4		2		6		3
Range of reduction in gross profit from each project, net	$	1.1 - 3.9	$	1.4 - 2.6	$	1.1 - 6.3	$	1.4 - 2.6
Decrease on project profitability	$	7.6	$	4.0	$	16.5	$	5.4

The decreases during the three and nine months ended September 30, 2012 were due to lower productivity than originally anticipated. The decreases during the three and nine months ended September 30, 2011 were due to lower productivity than anticipated and unanticipated rework costs.

8

GRANITE CONSTRUCTION INCORPORATED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Large Project Construction

The net changes in project profitability from revisions in estimates, both increases and decreases, that individually had an impact of $1.0 million or more on gross profit were net increases of $35.9 million and $48.9 million for the three and nine months ended September 30, 2012, respectively. The net changes for the three and nine months ended September 30, 2011 were net increases of $2.7 million and $7.9 million, respectively. Amounts attributable to noncontrolling interests were $5.7 million and $6.6 million of the net increases for the three and nine months ended September 30, 2012, respectively, and were $1.0 million and $0.6 million of the net increases for the three and nine months ended September 30, 2011, respectively. The projects are summarized as follows:

Increases

		Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in millions)		2012		2011		2012		2011
Number of projects with upward estimate changes		8		5		8		6
Range of increase in gross profit from each project, net	$	1.1 - 12.6	$	1.0 - 2.6	$	1.1 - 16.3	$	1.4 - 4.2
Increase on project profitability	$	35.9	$	8.8	$	54.7	$	17.7

The increases during the three and nine months ended September 30, 2012 were due to owner directed scope changes and lower than anticipated construction costs. The increases during the three and nine months ended September 30, 2011 were due to the settlement of outstanding issues with a contract owner, owner directed scope change, lower than anticipated construction costs and the resolution of a project claim.

Decreases

		Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in millions)		2012		2011		2012		2011
Number of projects with downward estimate changes		—		3		2		2
Range of reduction in gross profit from each project, net	$	—	$	1.7 - 2.4	$	1.7 - 4.1	$	4.2 - 5.6
Decrease on project profitability	$	—	$	6.1	$	5.8	$	9.8

There were no downward estimate changes during the three months ended September 30, 2012. The downward estimate changes during the nine months ended September 30, 2012 were due to lower productivity than anticipated. The downward estimate changes during the three and nine months ended September 30, 2011 were due to increased costs to resolve project uncertainties and lower productivity than anticipated.

9

GRANITE CONSTRUCTION INCORPORATED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

4. Marketable Securities

All marketable securities were classified as held-to-maturity for the dates presented and the carrying amounts of held-to-maturity securities were as follows:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
U.S. Government and agency obligations	$	15,062	$	40,240	$	40,218
Commercial paper	19,976		24,980		29,978
Municipal bonds	7,082		2,057		4,036
Corporate bonds	5,065		3,131		3,157
Total short-term marketable securities	47,185		70,408		77,389
U.S. Government and agency obligations	36,103		65,109		45,268
Municipal bonds	1,699		8,909		8,952
Corporate bonds	—		5,232		5,289
Total long-term marketable securities	37,802		79,250		59,509
Total marketable securities	$	84,987	$	149,658	$	136,898

Scheduled maturities of held-to-maturity investments were as follows (in thousands):

September 30, 2012
Due within one year	$	47,185
Due in one to five years	37,802
Total	$	84,987

10

GRANITE CONSTRUCTION INCORPORATED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

5. Fair Value Measurement

Effective in 2012, we adopted a new accounting standard that expands the disclosure of our assets and liabilities disclosed, but not recorded at fair value. As of September 30, 2012, December 31, 2011, and September 30, 2011, these assets and liabilities were our held-to-maturity marketable securities and senior notes payable. The following tables summarize each class of assets and liabilities measured at fair value on a recurring basis as well as assets and liabilities that are disclosed but not recorded at fair value: 

September 30, 2012	Fair Value Measurement at Reporting Date Using
(in thousands)	Level 11		Level 22		Level 33		Total
Cash equivalents
Money market funds	$	185,586	$	—	$	—	$	185,586
Held-to-maturity commercial paper	14,495		—		—		14,495
Marketable securities
Held-to-maturity marketable securities	85,133		—		—		85,133
Total assets	$	285,214	$	—	$	—	$	285,214
Long-term debt (including current maturities)
Senior notes payable	$	—	$	—	$	243,219	$	243,219
Total liabilities	$	—	$	—	$	243,219	$	243,219

December 31, 2011	Fair Value Measurement at Reporting Date Using
(in thousands)	Level 11		Level 22		Level 33		Total
Cash equivalents
Money market funds	$	178,174	$	—	$	—	$	178,174
Held-to-maturity commercial paper	4,999		—		—		4,999
Marketable securities
Held-to-maturity marketable securities	149,979		—		—		149,979
Total assets	$	333,152	$	—	$	—	$	333,152
Long-term debt (including current maturities)
Senior notes payable	$	—	$	—	$	250,541	$	250,541
Total liabilities	$	—	$	—	$	250,541	$	250,541

September 30, 2011	Fair Value Measurement at Reporting Date Using
(in thousands)	Level 11		Level 22		Level 33		Total
Cash equivalents
Money market funds	$	149,966	$	—	$	—	$	149,966
Held-to-maturity commercial paper	4,997		—		—		4,997
Marketable securities
Held-to-maturity marketable securities	137,194		—		—		137,194
Total assets	$	292,157	$	—	$	—	$	292,157
Long-term debt (including current maturities)
Senior notes payable	$	—	$	—	$	242,698	$	242,698
Total liabilities	$	—	$	—	$	242,698	$	242,698

¹Quoted prices in active markets for identical assets or liabilities.

²Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

³Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

11

GRANITE CONSTRUCTION INCORPORATED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

A reconciliation of money market funds to consolidated cash and cash equivalents is as follows:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Money market funds	$	185,586	$	178,174	$	149,966
Held-to-maturity commercial paper	14,495		4,999		4,997
Cash	87,241		73,817		38,136
Total cash and cash equivalents	$	287,322	$	256,990	$	193,099

The carrying values of receivables, other current assets, and accrued expenses and other current liabilities approximate their fair values because of the short-term nature of these instruments. In addition, the fair value measured using Level 3 inputs of non-recourse debt approximates its carrying value due to its relative short-term nature and competitive interest rates. The fair value of the senior notes payable was based on borrowing rates available to us for long-term loans with similar terms, average maturities, and credit risk. The carrying amount of senior notes payable, including current maturities, was $208.3 million, $216.7 million and $216.7 million as of September 30, 2012, December 31, 2011 and September 30, 2011, respectively. See Note 4 for the carrying amount of held-to-maturity marketable securities as of September 30, 2012, December 31, 2011 and September 30, 2011.

We measure certain nonfinancial assets and liabilities at fair value on a nonrecurring basis. During the nine months ended September 30, 2012, the only significant fair value adjustment was a $2.8 million non-cash impairment charge to write-off our cost method investment in the preferred stock of a corporation that designs and manufactures power generation equipment. The fair value was estimated based on Level 3 inputs using the expected future cash flows attributable to the asset and on other assumptions that market participants would use in determining fair value, such as liquidation preferences, market discount rates, transaction prices for other comparable assets, and other market data. No other significant fair value adjustments related to nonfinancial assets and liabilities measured at fair value on a nonrecurring basis were recorded during the three and nine months ended September 30, 2012 and 2011.

6. Receivables, net

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Construction contracts:
Completed and in progress	$	228,865	$	122,987	$	223,292
Retentions	68,590		77,038		74,795
Total construction contracts	297,455		200,025		298,087
Construction material sales	59,396		30,356		52,157
Other	9,029		24,337		10,177
Total gross receivables	365,880		254,718		360,421
Less: allowance for doubtful accounts	2,425		2,880		2,614
Total net receivables	$	363,455	$	251,838	$	357,807

Receivables include amounts billed and billable for public and private contracts and do not bear interest. The balances billed but not paid by customers pursuant to retainage provisions in construction contracts generally become due upon completion and acceptance of the contract by the owners. Included in other receivables at September 30, 2012, December 31, 2011 and September 30, 2011 were items such as notes receivable, interest receivable, fuel tax refunds and income tax refunds. No such receivables individually exceeded 10% of total net receivables at any of these dates.

Financing receivables consisted of long-term notes receivable and retentions receivable. As of September 30, 2012, December 31, 2011 and September 30, 2011, long-term notes receivable outstanding were $1.9 million, $2.0 million, and $2.1 million, respectively, and primarily related to loans made to employees and were included in other noncurrent assets in our condensed consolidated balance sheets.

12

GRANITE CONSTRUCTION INCORPORATED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

We segregate our retention receivables into two categories: escrow and non-escrow. The balances in each category were as follows:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Escrow	$	42,297	$	43,378	$	38,517
Non-escrow	26,293		33,660		36,278
Total retention receivables	$	68,590	$	77,038	$	74,795

The escrow receivables include amounts due to Granite which have been deposited into an escrow account and bear interest. Typically, escrow retention receivables are held until work on a project is complete and has been accepted by the owner who then releases those funds, along with accrued interest, to us. There is minimal risk of not collecting on these amounts.

Non-escrow retention receivables are amounts that the project owner has contractually withheld that will be paid upon owner acceptance of contract completion. We evaluate our non-escrow retention receivables for collectability using certain customer information that includes the following:

• Federal - includes federal agencies such as the Bureau of Reclamation, the Army Corp of Engineers, and the Bureau of Indian Affairs. The obligations of these agencies are backed by the federal government. Consequently, there is minimal risk of not collecting the amounts we are entitled to receive.    

• State - primarily state departments of transportation. The risk of not collecting on these accounts is small; however, we have experienced occasional delays in payment as states have struggled with budget issues.

• Local - these customers include local agencies such as cities, counties and other local municipal agencies. The risk of not collecting on these accounts is small; however, we have experienced occasional delays in payment as some local agencies have struggled to deal with budget issues.       

• Private - includes individuals, developers and corporations. The majority of our collection risk is associated with these customers. We perform ongoing credit evaluations of our customers and generally do not require collateral, although the law provides us certain remedies, including, but not limited to, the ability to file mechanics’ liens on real property improved for private customers in the event of non-payment by such customers.

The following table summarizes the amount of our non-escrow retention receivables within each category:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Federal	$	2,569	$	2,811	$	2,148
State	3,595		5,453		6,046
Local	12,003		14,708		17,666
Private	8,126		10,688		10,418
Total	$	26,293	$	33,660	$	36,278

13

GRANITE CONSTRUCTION INCORPORATED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

We regularly review our accounts receivable, including past due amounts, to determine their probability of collection. If it is probable that an amount is uncollectible, it is charged to bad debt expense and a corresponding reserve is established in allowance for doubtful accounts. If it is deemed certain that an amount is uncollectible, the amount is written off. Based on contract terms, non-escrow retention receivables are typically due within 60 days of owner acceptance of contract completion. We consider retention amounts beyond 60 days of owner acceptance of contract completion to be past due. The following tables present the aging of our non-escrow retention receivables (in thousands):

September 30, 2012	Current		1 - 90 Days Past Due		Over 90 Days Past Due		Total
Federal	$	2,012	$	—	$	557	$	2,569
State	3,177		239		179		3,595
Local	11,141		555		307		12,003
Private	7,495		321		310		8,126
Total	$	23,825	$	1,115	$	1,353	$	26,293

December 31, 2011	Current		1 - 90 Days Past Due		Over 90 Days Past Due		Total
Federal	$	2,462	$	326	$	23	$	2,811
State	2,751		860		1,842		5,453
Local	12,313		1,326		1,069		14,708
Private	9,599		765		324		10,688
Total	$	27,125	$	3,277	$	3,258	$	33,660

September 30, 2011	Current		1 - 90 Days Past Due		Over 90 Days Past Due		Total
Federal	$	1,976	$	77	$	95	$	2,148
State	3,880		1,397		769		6,046
Local	13,801		1,465		2,400		17,666
Private	9,911		108		399		10,418
Total	$	29,568	$	3,047	$	3,663	$	36,278

Federal, state and local agencies generally require several approvals to release payments, and these approvals often take over 90 days past contractual due dates to obtain. Amounts past due from government agencies primarily result from delays caused by paperwork processing and obtaining proper agency approvals rather than lack of funds. As of September 30, 2012, December 31, 2011 and September 30, 2011, our allowance for doubtful accounts contained no material provision related to non-escrow retention receivables as we determined there were no significant collectibility issues.

14

GRANITE CONSTRUCTION INCORPORATED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

7. Construction and Line Item Joint Ventures

We participate in various construction joint venture partnerships. We also participate in various “line item” joint venture agreements under which each partner is responsible for performing certain discrete items of the total scope of contracted work.

Our agreements with our joint venture partners for both construction joint ventures and line item joint ventures provide that each party will pay for any losses it is responsible for under the joint venture agreement. Circumstances that could lead to a loss under our joint venture arrangements beyond our stated ownership interest include the failure of a partner to contribute additional funds to the venture in the event the project incurs a loss or additional costs that we could incur should a partner fail to provide the services and resources that it had committed to provide in the joint venture agreement. Due to the joint and several nature of the obligations under our joint venture arrangements, if one of our joint venture partners fails to perform, we and the remaining joint venture partners would be responsible for performance of the outstanding work.

At September 30, 2012, there was approximately $1.6 billion of construction revenue to be recognized on unconsolidated and line item construction joint venture contracts of which $0.6 billion represented our share and the remaining $1.0 billion represented our partners’ share.  Due to the uncertainties associated with the nature of our work, we are not able to quantify our maximum exposure on the underlying arrangements and contracts that may be required beyond the remaining cost of the work to be performed. These costs could be offset by billings to the customer or by proceeds from our partners’ corporate and/or other guarantees.

Construction Joint Ventures

Generally, each construction joint venture is formed to complete a specific contract and is jointly controlled by the joint venture partners. The joint venture agreements typically provide that our interests in any profits and assets, and our respective share in any losses and liabilities resulting from the performance of the contracts are limited to our stated percentage interest in the project. We have no significant commitments beyond completion of the contracts. Under our contractual arrangements, we provide capital to these joint ventures in return for an ownership interest. In addition, partners dedicate resources to the ventures necessary to complete the contracts and are reimbursed for their cost. The operational risks of each construction joint venture are passed along to the joint venture partners. As we absorb our share of these risks, our investment in each venture is exposed to potential losses.

We have determined that certain of these joint ventures are variable interest entities (“VIEs”) as defined by Accounting Standards Codification (“ASC”) Topic 810, Consolidation, and related standards. To ascertain if we are required to consolidate the VIE, we continually evaluate whether we are the VIE’s primary beneficiary. The factors we consider in determining whether we are a VIE’s primary beneficiary include the decision authority of each partner, which partner manages the day-to-day operations of the project and the amount of our equity investment in relation to that of our partners.

Based on our initial primary beneficiary analysis, we determined that decision making responsibility is shared between the venture partners for one construction joint venture. Therefore, this joint venture did not have an identifiable primary beneficiary partner and we continue to report the pro rata results. All other joint ventures were assigned one primary beneficiary partner. Based on our primary beneficiary assessment during the nine months ended September 30, 2012, we determined no change was required to the accounting for existing construction joint ventures.

15

GRANITE CONSTRUCTION INCORPORATED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Consolidated Construction Joint Ventures

The carrying amounts and classification of assets and liabilities of construction joint ventures we are required to consolidate are included in our condensed consolidated financial statements as follows:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Cash and cash equivalents1	$	74,020	$	75,122	$	65,350
Other current assets	32,379		33,750		31,215
Total current assets	106,399		108,872		96,565
Noncurrent assets	6,661		8,671		9,821
Total assets2	$	113,060	$	117,543	$	106,386
Accounts payable	$	30,975	$	38,193	$	36,660
Billings in excess of costs and estimated earnings1	13,955		22,251		17,116
Accrued expenses and other current liabilities	3,495		5,129		5,997
Total current liabilities	48,425		65,573		59,773
Noncurrent liabilities	—		4		33
Total liabilities2	$	48,425	$	65,577	$	59,806

¹The volume and stage of completion of contracts from our consolidated construction joint ventures may cause fluctuations in cash and cash equivalents, as well as billings in excess of costs and estimated earnings between periods.

²The assets and liabilities of each joint venture relate solely to that joint venture. The decision to distribute joint venture cash and cash equivalents and assets must generally be made jointly by all of the partners and, accordingly, these cash and cash equivalents and assets generally are not available for the working capital needs of Granite.

At September 30, 2012, we were engaged in two active consolidated construction joint venture projects with total contract values of $245.1 million and $334.3 million. Our proportionate share of the equity in these joint ventures was 45.0% and 60.0%, respectively. During the three and nine months ended September 30, 2012, total revenue of the consolidated construction joint ventures was $77.4 million and $174.0 million, respectively. During the three and nine months ended September 30, 2011, total revenue of the consolidated construction joint ventures was $73.9 million and $171.1 million, respectively. Total cash provided by consolidated construction joint venture operations was $16.1 million and $6.0 million during the nine months ended September 30, 2012 and 2011, respectively.

Unconsolidated Construction Joint Ventures

We account for our share of construction joint ventures that we are not required to consolidate on a pro rata basis in the condensed consolidated statements of income and as a single line item on the condensed consolidated balance sheets. As of September 30, 2012, these unconsolidated joint ventures were engaged in eight active construction projects with total contract values ranging from $59.4 million to $1.2 billion. Our proportionate share of the equity in these unconsolidated joint ventures ranged from 20.0% to 50.0%. As of September 30, 2012, our share of the revenue remaining to be recognized on these unconsolidated joint ventures ranged from $0.4 million to $186.6 million.

16

GRANITE CONSTRUCTION INCORPORATED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Following is summary financial information related to unconsolidated construction joint ventures:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Assets:
Cash and cash equivalents1	$	304,065	$	338,681	$	356,399
Other assets	273,848		264,901		265,549
Less partners’ interest	353,165		364,979		378,523
Granite’s interest	224,748		238,603		243,425
Liabilities:
Accounts payable	94,788		85,075		85,602
Billings in excess of costs and estimated earnings1	243,578		280,650		302,039
Other liabilities	8,299		8,595		9,460
Less partners’ interest	219,807		236,746		251,091
Granite’s interest	126,858		137,574		146,010
Equity in construction joint ventures	$	97,890	$	101,029	$	97,415

¹The volume and stage of completion of contracts from our unconsolidated construction joint ventures may cause fluctuations in cash and cash equivalents, as well as billings in excess of costs and estimated earnings between periods.

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2012		2011		2012		2011
Revenue:
Total1	$	286,308	$	243,654	$	776,235	$	667,920
Less partners’ interest1,2	181,679		158,079		497,743		448,357
Granite’s interest	104,629		85,575		278,492		219,563
Cost of revenue:
Total1	200,688		212,485		597,689		546,495
Less partners’ interest1,2	129,840		140,506		389,171		370,865
Granite’s interest	70,848		71,979		208,518		175,630
Granite’s interest in gross profit	$	33,781	$	13,596	$	69,974	$	43,933

¹While Granite’s interest in revenue, cost of revenue and gross profit were correctly stated, total and partners’ interest for revenue and cost of revenue for the three and six month periods ended June 30, 2012 were inadvertently misstated in our Quarterly Report for the quarter ended June 30, 2012. Total revenue, partner’s interest in revenue, total cost of revenue and partners’ interest in cost of revenue reported was (in thousands): $663,536, $563,302, $544,838 and $467,540, respectively, for the three months ended June 30, 2012, and $869,368, $695,505, $714,450 and $576,780, respectively, for the six months ended June 30, 2012. Total revenue, partner’s interest in revenue, total cost of revenue and partners’ interest in cost of revenue should have been (in thousands): $284,095, $183,861, $227,389, and $150,091, respectively, for the three months ended June 30, 2012, and $489,926, $316,064, $397,001, and $259,331, respectively, for the six months ended June 30, 2012.

²Partners’ interest represents amounts to reconcile total revenue and total cost of revenue as reported by our partners to Granite’s interest, adjusted to reflect our accounting policies.

Line Item Joint Ventures

The revenue for each line item joint venture partner’s discrete items of work is defined in the contract with the project owner and each venture partner bears the profitability risk associated with its own work. There is not a single set of books and records for a line item joint venture. Each partner accounts for its items of work individually as it would for any self-performed contract. We account for our portion of these contracts as project revenues and costs in our accounting system and include receivables and payables associated with our work in our condensed consolidated financial statements. As of September 30, 2012, we had five active line item joint venture construction projects with total contract values ranging from $42.0 million to $133.2 million of which our portions ranged from $21.9 million to $55.7 million. As of September 30, 2012, our share of revenue remaining to be recognized on these line item joint ventures ranged from $2.5 million to $29.0 million.

17

GRANITE CONSTRUCTION INCORPORATED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

8. Real Estate Entities and Investments in Affiliates

The operations of our Real Estate segment are conducted through our wholly owned subsidiary, Granite Land Company (“GLC”). Generally, GLC participates with third-party partners in entities that are formed to accomplish specific real estate development projects. The agreements with GLC’s partners in these real estate entities define each partner’s management role and financial responsibility in the project. If one of GLC’s partners is unable to fulfill its management role or make its required financial contribution, GLC may assume full management or financial responsibility for the project. This may result in the consolidation of entities that are accounted for under the equity method in our consolidated financial statements. The amount of GLC’s exposure is limited to GLC’s equity investment in the real estate joint venture.

Substantially all the assets of these real estate entities in which we are participants through our GLC subsidiary are classified as real estate held for development and sale. All outstanding debt of these entities is non-recourse to Granite. However, there is recourse to our real estate affiliates that incurred the debt. Our real estate affiliates include limited partnerships or limited liability companies of which we are a limited partner or member. In the fourth quarter of 2010, we publicly announced our work in progress on our Enterprise Improvement Plan which includes business plans to orderly divest of our real estate investment business by the end of 2013, subject to market conditions and our ability to negotiate sales of certain assets at prices acceptable to us. In 2011, development activities were curtailed for the majority of our real estate development projects as divestiture efforts increased. During the nine months ended September 30, 2012, we recorded amounts associated with the sale or other disposition of two real estate projects, the impact of which was not significant to our results of operations. Subsequent to the sale or other disposition of these projects, GLC had no significant continuing involvement with the associated entities.

GLC receives authorization to provide additional financial support for certain of its real estate entities in increments to address changes in business plans.  During the nine months ended September 30, 2012, GLC was not authorized to increase its financial support to consolidated real estate entities and during the nine months ended September 30, 2011, GLC was authorized to increase its financial support to consolidated real estate entities by $12.0 million on three separate projects. As of September 30, 2012, $3.1 million of the total authorized investment had yet to be contributed to the consolidated entities.

We have determined that certain of the real estate joint ventures are VIEs as defined by ASC Topic 810, Consolidation, and related standards. To ascertain if we are required to consolidate the VIE, we continually evaluate whether we are the VIE’s primary beneficiary. The factors we consider in determining whether we are a VIE’s primary beneficiary include the decision authority of each partner, which partner manages the day-to-day operations of the project and the amount of our equity investment in relation to that of our partners. Based on our ongoing primary beneficiary assessments, there were no changes to our determinations of whether we are the VIE’s primary beneficiary for existing real estate entities during the nine months ended September 30, 2012 and 2011.

To determine if impairment charges should be recognized, the carrying amount of each consolidated real estate development project is reviewed on a quarterly basis in accordance with ASC Topic 360, Property, Plant, and Equipment, and each real estate development project accounted for under the equity method of accounting is reviewed in accordance with ASC Topic 323, Investments - Equity Method and Joint Ventures. The review of each project includes an evaluation of entitlement status, market conditions, existing offers to purchase, cost of construction, debt load, development schedule, status of joint venture partners and other factors specific to each project to determine if events or changes in circumstances indicate that a project’s carrying amount may not be recoverable. If events or changes in circumstances indicate that a consolidated project’s carrying amount may not be recoverable, the future undiscounted cash flows are estimated and compared to the project’s carrying amount. In the event that the project’s estimated future undiscounted cash flows are not sufficient to recover the carrying amounts, it is written down to its estimated fair value. The projects accounted for under the equity method are evaluated for impairment using the other-than-temporary impairment model, which requires an impairment charge to be recognized if the project’s carrying amount exceeds its fair value, and the decline in fair value is deemed to be other than temporary. In the event that the estimated fair value is not sufficient to recover the carrying amount of a project, it is written down to its estimated fair value.

Based on our quarterly evaluations of each project’s business plan and our review of each project, we recorded no significant impairment charges to our real estate development projects or investments during the three and nine months ended September 30, 2012 and 2011.

18

GRANITE CONSTRUCTION INCORPORATED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Consolidated Real Estate Entities

The carrying amounts and classification of assets and liabilities of real estate entities we are required to consolidate are included in our condensed consolidated balance sheets as follows:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Real estate held for development and sale	$	57,964	$	67,037	$	79,173
Other current assets	1,946		4,715		2,801
Total assets	$	59,910	$	71,752	$	81,974
Current maturities of non-recourse debt	$	16,712	$	22,571	$	16,190
Other current liabilities	404		1,794		1,901
Total current liabilities	17,116		24,365		18,091
Long-term non-recourse debt	4,375		9,912		27,755
Other noncurrent liabilities	—		74		278
Total liabilities	$	21,491	$	34,351	$	46,124

Substantially all of the consolidated real estate entities’ real estate held for development and sale is pledged as collateral for the debt of the real estate entities. All outstanding debt of the real estate entities is recourse only to the real estate affiliate that incurred the debt (i.e. the limited partnership or limited liability company of which we are a limited partner or member). Our proportionate share of the profits and losses of these entities depends on the ultimate operating results of the entities.

Included in current assets on our condensed consolidated balance sheets is real estate held for development and sale. The breakdown by type and location of our real estate held for development and sale is summarized below:

	September 30, 2012			December 31, 2011			September 30, 2011
(dollars in thousands)	Amount		Number of Projects	Amount		Number of Projects	Amount		Number of Projects
Residential	$	48,527	3	$	54,610	4	$	55,672	5
Commercial	9,437		4	12,427		5	23,501		7
Total	$	57,964	7	$	67,037	9	$	79,173	12
Washington	$	48,122	2	$	47,600	2	$	47,109	2
California	2,609		4	4,006		5	16,382		8
Texas	7,233		1	8,859		1	8,859		1
Oregon	—		—	6,572		1	6,823		1
Total	$	57,964	7	$	67,037	9	$	79,173	12

Investments in Affiliates

We account for our share of unconsolidated real estate entities in which we have determined we are not the primary beneficiary in other income in the condensed consolidated statements of income and as a single line item on our condensed consolidated balance sheets as investments in affiliates. At September 30, 2012, these entities were engaged in real estate development projects with total assets ranging from approximately $2.7 million to $45.8 million. Our proportionate share of the profits and losses of these entities depends on the ultimate operating results of the entities.

19

GRANITE CONSTRUCTION INCORPORATED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Additionally, we have investments in non-real estate affiliates that are accounted for using the equity method. The most significant of these investments is a 50% interest in a limited liability company which owns and operates an asphalt terminal in Nevada. During the three months ended June 30, 2012, it was determined that the carrying amount of our cost method investment in a power generation equipment manufacturer exceeded its fair value, which required us to recognize a non-cash impairment charge of $2.8 million.

Our investments in affiliates balance consists of the following:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Equity method investments in real estate affiliates	$	18,873	$	16,478	$	15,856
Equity method investments in other affiliates	11,384		11,841		11,129
Total equity method investments	30,257		28,319		26,985
Cost method investments	—		2,752		6,450
Total investments in affiliates	$	30,257	$	31,071	$	33,435

The breakdown by type and location of our interests in real estate affiliates accounted for under the equity method is summarized below:

	September 30, 2012			December 31, 2011			September 30, 2011
(dollars in thousands)	Amount		Number of Projects	Amount		Number of Projects	Amount		Number of Projects
Residential	$	12,805	2	$	11,903	2	$	11,511	2
Commercial	6,068		3	4,575		3	4,345		3
Total	$	18,873	5	$	16,478	5	$	15,856	5
Texas	$	18,873	5	$	16,478	5	$	15,856	5
Total	$	18,873	5	$	16,478	5	$	15,856	5

The following table provides summarized balance sheet information for our affiliates accounted for under the equity method on a 100% combined basis:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Total assets	$	156,992	$	157,771	$	157,054
Net assets	85,162		82,511		80,306
Granite’s share of net assets	30,257		28,319		26,985

9. Property and Equipment, net

Balances of major classes of assets and allowances for depreciation and depletion are included in property and equipment, net on our condensed consolidated balance sheets as follows:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Land and land improvements	$	125,842	$	124,216	$	122,728
Quarry property	177,814		175,612		175,431
Buildings and leasehold improvements	80,916		81,272		81,217
Equipment and vehicles	718,965		733,158		753,776
Office furniture and equipment	64,767		55,570		48,996
Property and equipment	1,168,304		1,169,828		1,182,148
Less: accumulated depreciation and depletion	736,011		722,688		728,326
Property and equipment, net	$	432,293	$	447,140	$	453,822

20

GRANITE CONSTRUCTION INCORPORATED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

10. Intangible Assets

The balances of the following intangible assets are included in other noncurrent assets on our condensed consolidated balance sheets:

Indefinite-lived Intangible Assets:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Goodwill1	$	9,900	$	9,900	$	9,900
Use rights and other	393		393		1,319
Total unamortized intangible assets	$	10,293	$	10,293	$	11,219

¹Goodwill for all periods presented primarily relates to our Construction segment.

Amortized Intangible Assets:

September 30, 2012			Accumulated
(in thousands)	Gross Value		Amortization			Net Value
Permits	$	29,713	$	(10,588	)	$	19,125
Customer lists	2,198		(2,113		)	85
Covenants not to compete	1,588		(1,541		)	47
Other	871		(696		)	175
Total amortized intangible assets	$	34,370	$	(14,938	)	$	19,432

December 31, 2011
(in thousands)
Permits	$	29,713	$	(7,573	)	$	22,140
Customer lists	2,198		(1,942		)	256
Covenants not to compete	1,588		(1,476		)	112
Other	871		(583		)	288
Total amortized intangible assets	$	34,370	$	(11,574	)	$	22,796

September 30, 2011
(in thousands)
Permits	$	29,713	$	(7,205	)	$	22,508
Customer lists	2,198		(1,885		)	313
Covenants not to compete	1,588		(1,439		)	149
Other	871		(545		)	326
Total amortized intangible assets	$	34,370	$	(11,074	)	$	23,296

Amortization expense related to these intangible assets for the three and nine months ended September 30, 2012 was approximately$1.2 million and $3.3 million, respectively, and approximately $0.5 million and $1.5 million for the three and nine months ended September 30, 2011, respectively. Based on the amortized intangible assets balance at September 30, 2012, amortization expense expected to be recorded in the future is as follows: $0.4 million for the remainder of 2012; $1.3 million in 2013; $1.1 million in 2014; $1.1 million in 2015; $1.0 million in 2016; and $14.5 million thereafter.

21

GRANITE CONSTRUCTION INCORPORATED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

11. Restructuring

Selling, general and administrative expenses for the nine months ended September 30, 2012 included a net gain on restructuring of $1.8 million related to divestiture activities of our real estate investment business. We recorded no significant restructuring charges during the three months ended September 30, 2012 or during the three and nine months ended September 30, 2011. During 2013, we may record up to $8.0 million of restructuring charges, primarily related to previously planned additional consolidation efforts and assets to be held-for-sale as part of our Enterprise Improvement Plan. The ultimate amount and timing of future restructuring charges is subject to market conditions and our ability to negotiate sales of certain assets at prices acceptable to us.

12. Covenants and Events of Default

Our debt and credit agreements require us to comply with various affirmative, restrictive and financial covenants. Our failure to comply with any of these covenants, or to pay principal, interest or other amounts when due thereunder, would constitute an event of default under the applicable agreements. Under certain circumstances, the occurrence of an event of default under one of our debt or credit agreements (or the acceleration of the maturity of the indebtedness under one of our agreements) may constitute an event of default under one or more of our other debt or credit agreements. Default under our debt and credit agreements could result in (1) us no longer being entitled to borrow under the agreements, (2) termination of the agreements, (3) the requirement that any letters of credit under the agreements be cash collateralized, (4) acceleration of the maturity of outstanding indebtedness under the agreements and/or (5) foreclosure on any collateral securing the obligations under the agreements.

As of September 30, 2012, we were in compliance with the covenants contained in our senior note agreements, Credit Agreement, and debt agreements related to our consolidated real estate entities. We are not aware of any non-compliance by any of our unconsolidated entities with the covenants contained in their debt agreements. Subsequent to September 30, 2012, one of our consolidated real estate entities was in default under debt agreements as a result of its failure to make a timely required payment. The affected loans are non-recourse to Granite and these defaults do not result in cross-defaults under other debt agreements under which Granite is the obligor; however, there is recourse to the real estate entity that incurred the debt. The real estate entity in default is currently in discussions with its lenders concerning disposition of the property.

13. Weighted Average Shares Outstanding

A reconciliation of the weighted average shares outstanding used in calculating basic and diluted net income per share in the accompanying condensed consolidated statements of operations is as follows:

	Three Months Ended September 30,		Nine Months Ended September 30,
(in thousands)	2012	2011	2012	2011
Weighted average shares outstanding:
Weighted average common stock outstanding	38,707	38,669	38,679	38,678
Less: weighted average unvested restricted stock outstanding	189	497	261	586
Total basic weighted average shares outstanding	38,518	38,172	38,418	38,092
Diluted weighted average shares outstanding:
Weighted average common stock outstanding, basic	38,518	38,172	38,418	38,092
Effect of dilutive securities:
Common stock options and restricted stock units	623	426	595	336
Total weighted average shares outstanding assuming dilution	39,141	38,598	39,013	38,428

14. Earnings Per Share

We calculate earnings per share (“EPS”) under the two-class method by allocating earnings to both common shares and unvested restricted stock which are considered participating securities. However, net losses are not allocated to participating securities for purposes of computing EPS under the two-class method. The following is a reconciliation of net income attributable to Granite and related weighted average shares of common stock outstanding for purposes of calculating basic and diluted net income per share using the two-class method:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share amounts)	2012		2011		2012		2011
Basic
Numerator:
Net income attributable to Granite	$	37,121	$	36,468	$	27,297	$	32,407
Less: net income allocated to participating securities	181		469		184		491
Net income allocated to common shareholders for basic calculation	$	36,940	$	35,999	$	27,113	$	31,916
Denominator:
Weighted average common shares outstanding, basic	38,518		38,172		38,418		38,092
Net income per share, basic	$	0.96	$	0.94	$	0.71	$	0.84
Diluted
Numerator:
Net income attributable to Granite	$	37,121	$	36,468	$	27,297	$	32,407
Less: net income allocated to participating securities	178		462		181		487
Net income allocated to common shareholders for diluted calculation	$	36,943	$	36,006	$	27,116	$	31,920
Denominator:
Weighted average common shares outstanding, diluted	39,141		38,598		39,013		38,428
Net income per share, diluted	$	0.94	$	0.93	$	0.70	$	0.83

15. Income Taxes

Our effective tax rate was 27.2% and 27.1% for the three and nine months ended September 30, 2012, respectively, and was 26.3% and 22.5% for the three and nine months ended September 30, 2011, respectively. The changes from the prior year were primarily due to the recognition and measurement of previously unrecognized tax benefits, which was considered a discrete item for tax provision purposes for the nine months ended September 30, 2011. The recognition and measurement of these tax benefits was the result of a favorable settlement of an income tax examination.

16. Equity

The following tables summarize our equity activity for the periods presented:

(in thousands)	Granite Construction Incorporated			Noncontrolling Interests			Total Equity
Balance at December 31, 2011	$	799,197		$	28,466		$	827,663
Purchase of common stock1	(4,521		)	—			(4,521		)
Other transactions with shareholders3	7,690			—			7,690
Transactions with noncontrolling interests, net4	—			(8,022		)	(8,022		)
Net income	27,297			14,249			41,546
Dividends on common stock	(15,082		)	—			(15,082		)
Balance at September 30, 2012	$	814,581		$	34,693		$	849,274

(in thousands)
Balance at December 31, 2010	$	761,031		$	34,604		$	795,635
Purchase of common stock2	(3,840		)	—			(3,840		)
Other transactions with shareholders3	7,589			—			7,589
Transactions with noncontrolling interests, net4	—			(17,489		)	(17,489		)
Net income	32,407			8,886			41,293
Dividends on common stock	(15,078		)	—			(15,078		)
Balance at September 30, 2011	$	782,109		$	26,001		$	808,110

¹Represents 154,000 shares purchased in connection with employee tax withholding for shares/units granted under our Amended and Restated 1999 Equity Incentive Plan.

²Represents 138,000 shares purchased in connection with employee tax withholding for shares/units granted under our Amended and Restated 1999 Equity Incentive Plan.

³Amounts are comprised primarily of amortized restricted stock and units.

⁴Amounts are comprised primarily of distributions to noncontrolling partners.

17. Legal Proceedings

In the ordinary course of business, we are involved in various legal proceedings that are pending against us and our affiliates alleging, among other things, breach of contract or tort in connection with the performance of professional services, the various outcomes of which cannot be predicted with certainty. The most significant of these proceedings are as follows:

• US Highway 20 Project: Our wholly owned subsidiaries, Granite Construction Company (“GCCO”) and Granite Northwest, Inc., are members of a joint venture known as Yaquina River Constructors (“YRC”) which was contracted by the Oregon Department of Transportation (“ODOT”) to construct a new road alignment of US Highway 20 near Eddyville, Oregon. The project involved constructing seven miles of new road through steep and forested terrain in the Coast Range Mountains. During the fall and winter of 2006, extraordinary rain events produced runoff that overwhelmed installed erosion control measures and resulted in discharges to surface water and alleged violations of YRC’s stormwater permit. In June 2009, YRC was informed that the U.S. Department of Justice (“USDOJ”) had assumed the criminal investigation that the Oregon Department of Justice had initiated in connection with stormwater runoff from the project. The USDOJ has since informed YRC that the USDOJ will not criminally charge YRC or any Granite affiliate in connection with these matters. We have negotiated material terms of a consent decree, including payment of a civil penalty which will be included in documents being prepared by the government. This matter is not expected to have direct or indirect consequences that could have a material adverse effect on our financial position, results of operations, cash flow and/or liquidity.

• Grand Avenue Project Disadvantaged Business Enterprise (“DBE”) Issues: On March 6, 2009, the U.S. Department of Transportation, Office of Inspector General (“OIG”) served upon our wholly-owned subsidiary, Granite Construction Northeast, Inc. (“Granite Northeast”), a United States District Court Eastern District of New York subpoena to testify before a grand jury by producing documents. The subpoena seeks all documents pertaining to the use of a DBE firm (the “Subcontractor”), and the Subcontractor’s use of a non-DBE lower tier subcontractor/consultant, on the Grand Avenue Bus Depot and Central Maintenance Facility for the Borough of Queens Project, a Granite Northeast project.  The subpoena also seeks any documents regarding the use of the Subcontractor as a DBE on any other projects and any other documents related to the Subcontractor or to the lower-tier subcontractor/consultant.  We have received two follow-up requests from the USDOJ for additional information and documents.  We have complied with the subpoena and the requests, and are fully cooperating with the OIG’s investigation. To date, Granite Northeast has not been notified that it is either a subject or target of the OIG’s investigation. Accordingly, we do not know whether any criminal charges or civil lawsuits will be brought against any party as a result of the investigation. We cannot, however, rule out the possibility of civil or criminal actions or administrative sanctions being brought against Granite Northeast.

• Other Legal Proceedings/Government Inquiries: We are a party to a number of other legal proceedings arising in the normal course of business. From time to time, we also receive inquiries from public agencies seeking information concerning our compliance with government construction contracting requirements and related laws and regulations. We believe that the nature and number of these proceedings and compliance inquiries are typical for a construction firm of our size and scope. Our litigation typically involves claims regarding public liability or contract related issues. While management currently believes, after consultation with counsel, that the ultimate outcome of pending proceedings and compliance inquiries, individually and in the aggregate, will not have a material adverse affect on our financial position or overall trends in results of operations or cash flows, litigation is subject to inherent uncertainties. Were one or more unfavorable rulings to occur, there exists the possibility of a material adverse effect on our financial position, results of operations, cash flows and/or liquidity for the period in which the ruling occurs. In addition, our government contracts could be terminated, we could be suspended or debarred, or payment of our costs disallowed. While any one of our pending legal proceedings is subject to early resolution as a result of our ongoing efforts to settle, whether or when any legal proceeding will be resolved through settlement is neither predictable nor guaranteed.

We record amounts in our condensed consolidated balance sheets representing our estimated liability relating to legal proceedings and government inquiries. During the three and nine months ended September 30, 2012 and 2011, there were no significant additions or revisions to the estimated liability that were recorded in our condensed consolidated statements of income, or significant changes to our accrual for such ligation loss contingencies on our condensed consolidated balance sheets.

22

GRANITE CONSTRUCTION INCORPORATED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

18. Business Segment Information

Our reportable segments are: Construction, Large Project Construction, Construction Materials and Real Estate. 

The Construction segment performs various heavy civil construction projects with a large portion of the work focused on new construction and improvement of streets, roads, highways, bridges, site work and other infrastructure projects. These projects are typically bid-build projects completed within two years with a contract value of less than $75 million.

The Large Project Construction segment focuses on large, complex infrastructure projects which typically have longer duration than our Construction segment work. These projects include major highways, mass transit facilities, bridges, tunnels, waterway locks and dams, pipelines, canals and airport infrastructure. This segment primarily includes bid-build, design-build and construction management/general contractor contracts, generally with contract values in excess of $75 million.

The Construction Materials segment mines and processes aggregates and operates plants that produce construction materials for internal use and for sale to third parties.

The Real Estate segment purchases, develops, operates, sells and invests in real estate related projects and provides real estate services for the Company’s operations. The Real Estate segment’s current portfolio consists of residential, retail and office site development projects for sale to home and commercial property developers in Washington, California and Texas. In October 2010, we announced our Enterprise Improvement Plan that includes plans to orderly divest of our real estate investment business consistent with our strategy to focus on our core business.

The accounting policies of the segments are the same as those described in the Summary of Significant Accounting Policies contained in our 2011 Annual Report on Form 10-K. We evaluate segment performance based on gross profit or loss, and do not include overhead and non-operating income or expense. Segment assets include property and equipment, intangibles, inventory, equity in construction joint ventures and real estate held for development and sale.

23

GRANITE CONSTRUCTION INCORPORATED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Summarized segment information is as follows:

	Three Months Ended September 30,
(in thousands)	Construction		Large Project Construction		Construction Materials			Real Estate		Total
2012
Total revenue from reportable segments	$	385,744	$	255,918	$	169,350		$	38	$	811,050
Elimination of intersegment revenue	—		—		(82,568		)	—		(82,568		)
Revenue from external customers	385,744		255,918		86,782			38		728,482
Gross profit	33,273		57,814		9,984			28		101,099
Depreciation, depletion and amortization	3,160		1,102		7,498			—		11,760
2011
Total revenue from reportable segments	$	431,101	$	213,320	$	170,574		$	986	$	815,981
Elimination of intersegment revenue	—		—		(87,403		)	—		(87,403		)
Revenue from external customers	431,101		213,320		83,171			986		728,578
Gross profit	58,540		25,557		9,554			242		93,893
Depreciation, depletion and amortization	3,437		1,259		7,487			46		12,229

	Nine Months Ended September 30,
(in thousands)	Construction		Large Project Construction		Construction Materials			Real Estate		Total
2012
Total revenue from reportable segments	$	748,803	$	648,645	$	316,211		$	5,055	$	1,718,714
Elimination of intersegment revenue	—		—		(140,457		)	—		(140,457		)
Revenue from external customers	748,803		648,645		175,754			5,055		1,578,257
Gross profit	59,814		108,302		9,034			801		177,951
Depreciation, depletion and amortization	9,973		3,279		22,055			—		35,307
Segment assets	110,402		109,114		353,756			57,964		631,236
2011
Total revenue from reportable segments	$	784,393	$	513,478	$	309,846		$	7,029	$	1,614,746
Elimination of intersegment revenue	—		—		(144,763		)	—		(144,763		)
Revenue from external customers	784,393		513,478		165,083			7,029		1,469,983
Gross profit	87,482		69,513		10,754			1,088		168,837
Depreciation, depletion and amortization	11,362		3,316		21,594			143		36,415
Segment assets	114,359		108,272		368,141			87,232		678,004

A reconciliation of segment gross profit to consolidated income before provision for income taxes is as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
(in thousands)	2012		2011			2012			2011
Total gross profit from reportable segments	$	101,099	$	93,893		$	177,951		$	168,837
Selling, general and administrative expenses	41,280		39,112			125,274			121,277
Gain on sales of property and equipment	1,622		5,598			6,493			11,572
Other income (expense), net	1,418		(2,894		)	(2,184		)	(5,866		)
Income before provision for income taxes	$	62,859	$	57,485		$	56,986		$	53,266

24

GRANITE CONSTRUCTION INCORPORATED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

19.    Subsequent Events

Credit Agreement

On October 11, 2012, we entered into an Amended and Restated Credit Agreement, which provides for a $215.0 million committed revolving credit facility, with a sublimit for letters of credit of $100.0 million (the “Credit Agreement”), which expires October 11, 2016 and replaces our previous $100.0 million facility. Borrowings under the Credit Agreement bear interest at LIBOR or a base rate (at our option), plus an applicable margin based on certain financial ratios calculated quarterly. LIBOR varies based on the applicable loan term, market conditions and other external factors. The applicable margin is based upon certain financial ratios calculated quarterly. Had the terms of the Credit Agreement been in effect at September 30, 2012, the applicable margin would have been 2.00% for loans bearing interest based on LIBOR and 1.00% for loans bearing interest at the base rate. Accordingly, the effective interest rate would have been between 2.36% and 4.25% at September 30, 2012. Our obligations under the Credit Agreement are guaranteed by certain of our subsidiaries and are collateralized on an equivalent basis with the obligations under the 2013 Notes and the 2019 Notes (each defined below) by first priority liens (subject only to other liens permitted under the Credit Agreement) on substantially all of the assets of the Company and our subsidiaries that are guarantors or borrowers under the Credit Agreement. At September 30, 2012, there were no revolving loans outstanding under the predecessor to the Credit Agreement, but there were standby letters of credit totaling approximately $4.2 million. The letters of credit will expire between March and October 2013. Subsequent to September 30, 2012, total standby letters of credit increased to approximately $7.5 million.

The Credit Agreement provides for the release of the liens securing the obligations, at our option and expense, after June 30, 2013, so long as certain conditions as defined by the terms in the Credit Agreement are satisfied (“Collateral Release Period”). If, subsequently, our Consolidated Fixed Charge Coverage Ratio is less than 1.25 or our Consolidated Leverage Ratio is greater than 2.50, then we will be required to promptly re-pledge substantially all of the assets of the Company and our subsidiaries that are guarantors or borrowers under the Credit Agreement.

The most significant restrictive covenants under the terms of our Credit Agreement require the maintenance of a minimum Consolidated Tangible Net Worth, a minimum Consolidated Interest Coverage Ratio and a maximum Consolidated Leverage Ratio. The calculations and terms of such financial covenants are defined in the Credit Agreement filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q. As of September 30, 2012 and pursuant to the definitions in the Credit Agreement, our Consolidated Tangible Net Worth was $791.8 million, which exceeded the minimum of $666.6 million, the Consolidated Interest Coverage Ratio was 11.24, which exceeded the minimum of 4.00 and the Consolidated Leverage Ratio was 1.44, which did not exceed the maximum of 3.25. The maximum Consolidated Leverage Ratio decreases to 3.00 for the quarter ending December 31, 2013, and each quarter ending thereafter. During any Collateral Release Period the maximum Consolidated Leverage Ratio decreases to 2.50.

25

GRANITE CONSTRUCTION INCORPORATED

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Senior Notes Payable

As of September 30, 2012, senior notes payable in the amount of $8.3 million were due to a group of institutional holders in nine equal annual installments which began in 2005 and bear interest at 6.96% per annum (“2013 Notes”). In addition, senior notes payable in the amount of $200.0 million were due to a second group of institutional holders in five equal annual installments beginning in 2015 and bear interest at 6.11% per annum (“2019 Notes”).

On October 11, 2012, we amended the note purchase agreements governing the 2013 Notes and 2019 Notes (the “2013 NPA” and the “2019 NPA,” respectively) such that our obligations under these agreements are now guaranteed by certain of our subsidiaries and are collateralized on an equivalent basis with the Credit Agreement by liens on substantially all of the assets of the Company and subsidiaries that are guarantors or borrowers under the Credit Agreement. The 2013 NPA and 2019 NPA provide for the release of liens and re-pledge of collateral on substantially the same terms and conditions as those set forth in the Credit Agreement.

The most significant restrictive covenants under the terms of the 2013 NPA and 2019 NPA require the maintenance of a minimum Consolidated Tangible Net Worth, a minimum Consolidated Interest Coverage Ratio and a maximum Consolidated Leverage Ratio, the calculations and terms of which are defined by the applicable agreement filed as Exhibit 10.6 or Exhibit 10.7 to this Quarterly Report on Form 10-Q. As of September 30, 2012 and pursuant to the definitions in the 2013 NPA and 2019 NPA our Consolidated Tangible Net Worth was $791.8 million, which exceeded the minimum of $666.6 million, the Consolidated Interest Coverage Ratio was 11.24, which exceeded the minimum of 4.00 and the Consolidated Leverage Ratio was 1.44, which did not exceed the maximum of 3.50. The maximum Consolidated Leverage Ratio decreases to 3.25 for the quarter ending December 31, 2012, and each quarter ending thereafter. During any Collateral Release Period the maximum Consolidated Leverage Ratio decreases to 2.50.

Asset Optimization

In the fourth quarter of 2012, we expect to record a gain of between $17.0 million and $18.0 million related to our process of continually optimizing our assets separate from the Enterprise Improvement Plan.

26

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION ANDRESULTS OF OPERATIONS

Forward-Looking Disclosure

From time to time, Granite makes certain comments and disclosures in reports and statements, including in this Quarterly Report on Form 10-Q, or statements made by its officers or directors, that are not based on historical facts, including statements regarding future events, occurrences, circumstances, activities, performance, outcomes and results, that may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements are identified by words such as “future,” “outlook,” “assumes,” “believes,” “expects,” “estimates,” “anticipates,” “intends,” “plans,” “appears,” “may,” “will,” “should,” “could,” “would,” “continue,” and the negatives thereof or other comparable terminology or by the context in which they are made. In addition, other written or oral statements which constitute forward-looking statements have been made and may in the future be made by or on behalf of Granite.  These forward-looking statements are estimates reflecting the best judgment of senior management and are based on our current expectations regarding future events, occurrences, circumstances, activities, performance, outcomes and results.  These expectations may or may not be realized.  Some of these expectations may be based on beliefs, assumptions or estimates that may prove to be incorrect.  In addition, our business and operations involve numerous risks and uncertainties, many of which are beyond our control, which could result in our expectations not being realized or otherwise materially affect our business, financial condition, results of operations, cash flows and liquidity.  Such risks and uncertainties include, but are not limited to, those more specifically described in our Annual Report on Form 10-K under “Item 1A. Risk Factors.”Due to the inherent risks and uncertainties associated with our forward-looking statements, the reader is cautioned not to place reliance on them.  The reader is also cautioned that the forward-looking statements contained herein speak only as of the date of this Quarterly Report on Form 10-Q and, except as required by law, we undertake no obligation to revise or update any forward-looking statements for any reason.

27

Overview

We are one of the largest diversified heavy civil contractors and construction materials producers in the United States, engaged in the construction and improvement of streets, roads, highways, mass transit facilities, airport infrastructure, bridges, dams, and other infrastructure-related projects. We own aggregate reserves and plant facilities to produce construction materials for use in our construction business and for sale to third parties. We also operate a real estate investment and development company. Our permanent offices are located in Alaska, Arizona, California, Florida, Nevada, New York, Texas, Utah and Washington. We have four reportable business segments: Construction, Large Project Construction, Construction Materials and Real Estate (see Note 18 of “Notes to the Condensed Consolidated Financial Statements”). In October 2010, we announced our Enterprise Improvement Plan that includes business plans to orderly divest of our real estate investment business consistent with our business strategy to focus on our core business. 

Our construction contracts are obtained through competitive bidding in response to advertisements and other general solicitations by both public agencies and private parties and on a negotiated basis as a result of direct solicitation by private parties. Our bidding activity is affected by such factors as the nature and volume of advertising and other solicitations, contract backlog, available personnel, current utilization of equipment and other resources, our ability to obtain necessary surety bonds and competitive considerations. Our contract review process includes identifying risks and opportunities during the bidding process and managing these risks through mitigation efforts such as insurance and pricing. Contracts fitting certain criteria of size and complexity are reviewed by various levels of management and, in some cases, by the Executive Committee of our Board of Directors. Bidding activity, contract backlog and revenue resulting from the award of new contracts may vary significantly from period to period.

Our typical construction project begins with the preparation and submission of a bid to a customer. If selected as the successful bidder, we generally enter into a contract with the customer that provides for payment upon completion of specified work or units of work as identified in the contract. We usually invoice our customers on a monthly basis. Our contracts frequently call for retention that is a specified percentage withheld from each payment until the contract is completed and the work accepted by the customer. Additionally, we defer recognition of profit on projects until they reach at least 25% completion (see “Gross Profit” section below) and our profit recognition is based on estimates that change over time. Our revenue, gross margin and cash flows can differ significantly from period to period due to a variety of factors including the projects’ stage of completion, the mix of early and late stage projects, our estimates of contract costs and the payment terms of our contracts. The timing differences between our cash inflows and outflows require us to maintain adequate levels of working capital.

The three primary economic drivers of our business are (1) the overall health of the economy, (2) federal, state and local public funding levels, and (3) population growth resulting in public and private development. A stagnant or declining economy will generally result in reduced demand for construction and construction materials in the private sector. This reduced demand increases competition for private sector projects and will ultimately also increase competition in the public sector as companies migrate from bidding on scarce private sector work to projects in the public sector. Greater competition can reduce our revenues and/or have a downward impact on our gross profit margins. In addition, a stagnant or declining economy tends to produce less tax revenue for public agencies, thereby decreasing a source of funds available for spending on public infrastructure improvements. Some funding sources that have been specifically earmarked for infrastructure spending, such as diesel and gasoline taxes, are not as directly affected by a stagnant or declining economy, unless actual consumption is reduced. However, even these can be temporarily at risk as state and local governments struggle to balance their budgets. Additionally, high fuel prices can have a dampening effect on consumption, resulting in overall lower tax revenue. Conversely, increased levels of public funding as well as an expanding or robust economy will generally increase demand for our services and provide opportunities for revenue growth and margin improvement.

Our market sector information reflects three geographic regions (known as “groups”) defined as follows: 1) California, which includes the Pacific; 2) Northwest, which includes our offices in Alaska, Nevada, Utah and Washington; and 3) East, which includes our offices in Arizona, Florida, New York and Texas. Each of these groups includes operations from our Construction, Large Project Construction, and Construction Materials lines of business.

28

Current Economic Environment and Outlook

Intense competition, funding issues for public sector infrastructure projects and weak demand for commercial and residential development in many of our markets continue to have a negative impact on both our Construction and Construction Materials segments. Although there is a significant amount of public infrastructure work out to bid across the country, lower tax revenues, budget deficits, financing constraints and competing priorities may impact the timing and volume of these projects. In addition, the number of new commercial and residential construction projects has been adversely affected by an oversupply of existing inventories of commercial and residential properties, declining property values and subsequent financing restrictions. While we expect these challenging conditions to persist through the remainder of 2012 and into 2013, we continue to proactively seek opportunities in our traditional markets while leveraging our capabilities and further diversifying into the rail, power, water, industrial and federal government markets.

Earlier this year, the President signed into law a 27-month reauthorization of the federal surface transportation program, Moving Ahead for Progress in the 21^st Century (“MAP-21”). MAP-21 authorizes spending for the transportation program at current fiscal 2012 levels with a slight adjustment for inflation in fiscal 2013 and 2014. State and local transportation agencies have been operating on short-term extensions of the program since the expiration of SAFETEA-LU in September 2009. The act streamlines the review and approval process for environmental permitting to provide state agencies with more visibility to plan their respective programs.

MAP-21 also reauthorized the Transportation Infrastructure Financing and Innovation Act (“TIFIA”), a credit assistance program that provides low-interest rate, flexible financing alternatives for the funding of transportation projects throughout the U.S. via direct loans, loan guarantees and standby lines of credit. The program provides for $1.7 billion in capital over the next two years and includes financing options in connection with public-private partnership (“P3”) arrangements for infrastructure financing. We are optimistic that the TIFIA program will help facilitate and accelerate many projects that would not have moved forward otherwise.

In 2010, we implemented the Enterprise Improvement Plan to reduce our cost structure. The majority of restructuring charges associated with the Enterprise Improvement Plan were recorded in 2010. During 2013, we may record up to $8.0 million of restructuring charges, primarily related to previously planned consolidation efforts and assets to be held-for-sale as part of our Enterprise Improvement Plan. The ultimate amount and timing of future restructuring charges is subject to our ability to negotiate sales of certain assets at prices acceptable to us. We had no material restructuring charges during the three and nine months ended September 30, 2012 and 2011.

Results of Operations

Interim results are subject to significant seasonal variations and the results of operations for the three and nine months ended September 30, 2012 are not necessarily indicative of the results to be expected for the full year.

Comparative Financial Summary	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2012			2011			2012			2011
Total revenue	$	728,482		$	728,578		$	1,578,257		$	1,469,983
Gross profit	101,099			93,893			177,951			168,837
Operating income	61,441			60,379			59,170			59,132
Total other income (expense)	1,418			(2,894		)	(2,184		)	(5,866		)
Amount attributable to noncontrolling interests	(8,625		)	(5,908		)	(14,249		)	(8,886		)
Net income attributable to Granite Construction Incorporated	37,121			36,468			27,297			32,407

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Revenue

Total Revenue by Segment	Three Months Ended September 30,								Nine Months Ended September 30,
(dollars in thousands)	2012				2011				2012				2011
Construction	$	385,744	52.9	%	$	431,101	59.2	%	$	748,803	47.5	%	$	784,393	53.4	%
Large Project Construction	255,918		35.2		213,320		29.3		648,645		41.1		513,478		34.9
Construction Materials	86,782		11.9		83,171		11.4		175,754		11.1		165,083		11.2
Real Estate	38		—		986		0.1		5,055		0.3		7,029		0.5
Total	$	728,482	100.0	%	$	728,578	100.0	%	$	1,578,257	100.0	%	$	1,469,983	100.0	%

Construction Revenue	Three Months Ended September 30,								Nine Months Ended September 30,
(dollars in thousands)	2012				2011				2012				2011
California:
Public sector	$	159,033	41.3	%	$	172,064	39.9	%	$	338,992	45.2	%	$	327,576	41.7	%
Private sector	14,770		3.8		11,668		2.7		34,357		4.6		33,711		4.3
Northwest:
Public sector	162,286		42.1		197,513		45.8		253,569		33.9		316,700		40.4
Private sector	29,447		7.6		14,904		3.5		76,078		10.2		24,830		3.2
East:
Public sector	15,432		4.0		34,531		8.0		36,765		4.9		80,299		10.2
Private sector	4,776		1.2		421		0.1		9,042		1.2		1,277		0.2
Total	$	385,744	100.0	%	$	431,101	100.0	%	$	748,803	100.0	%	$	784,393	100.0	%

Construction revenue for the three and nine months ended September 30, 2012 decreased by $45.4 million, or 10.5%, and $35.6 million, or 4.5%, respectively, compared to the same periods in 2011. The decrease during the quarter was primarily due to less public sector construction revenue related to entering the year with lower backlog in the Northwest and East as well as a decline in bid success in California. The decreases in the public sector were partially offset by improved private sector revenue in the Northwest associated with projects in the power and industrial markets. The decrease during the nine months ended September 30, 2012 was due to less public sector revenue in the Northwest and East. These decreases were partially offset by increased construction activity in our California public sector in the first half of 2012 primarily due to entering the year with greater backlog, as well as increased private sector revenue in the Northwest associated with work in the power and industrial markets.

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Large Project Construction Revenue1	Three Months Ended September 30,								Nine Months Ended September 30,
(dollars in thousands)	2012				2011				2012				2011
California	$	30,355	11.9	%	$	24,599	11.5	%	$	76,374	11.8	%	$	56,625	11.0	%
Northwest	94,778		37.0		71,609		33.6		225,133		34.7		132,982		25.9
East	130,785		51.1		117,112		54.9		347,138		53.5		323,871		63.1
Total	$	255,918	100.0	%	$	213,320	100.0	%	$	648,645	100.0	%	$	513,478	100.0	%

¹For the periods presented, all Large Project Construction revenue was earned from the public sector.

Large Project Construction revenue for the three and nine months ended September 30, 2012 increased by $42.6 million, or 20.0%, and $135.2 million, or 26.3%, respectively, compared to the same periods in 2011 due to progress on jobs that were awarded in late 2010 and early 2011. Revenue in the Northwest was also higher in 2012 when compared to 2011 as a result of progress on several projects.

Construction Materials Revenue	Three Months Ended September 30,								Nine Months Ended September 30,
(dollars in thousands)	2012				2011				2012				2011
California	$	48,910	56.4	%	$	46,759	56.2	%	$	107,910	61.4	%	$	103,832	62.9	%
Northwest	32,494		37.4		31,492		37.9		52,760		30.0		48,277		29.2
East	5,378		6.2		4,920		5.9		15,084		8.6		12,974		7.9
Total	$	86,782	100.0	%	$	83,171	100.0	%	$	175,754	100.0	%	$	165,083	100.0	%

Construction Materials revenue for the three and nine months ended September 30, 2012 increased by $3.6 million, or 4.3%, and $10.7 million, or 6.5%, respectively, compared to the same periods in 2011. Despite the increases in revenue, the construction materials business continues to be impacted by the weakness in the commercial and residential development markets.

Real Estate Revenue

Real Estate revenue for the three and nine months ended September 30, 2012 remained relatively unchanged when compared to the same periods in 2011.

Contract Backlog

Our contract backlog consists of the remaining unearned revenue on awarded contracts, including 100% of our consolidated joint venture contracts and our proportionate share of unconsolidated joint venture contracts. We generally include a project in our contract backlog at the time it is awarded and funding is in place. Certain federal government contracts where funding is appropriated on a periodic basis are included in contract backlog at the time of the award. Substantially all of the contracts in our contract backlog may be canceled or modified at the election of the customer; however, we have not been materially adversely affected by contract cancellations or modifications in the past.

The following tables illustrate our contract backlog as of the respective dates:

Total Contract Backlog by Segment
(dollars in thousands)	September 30, 2012				June 30, 2012				September 30, 2011
Construction	$	530,291	33.3	%	$	697,535	35.8	%	$	562,705	30.5	%
Large Project Construction	1,061,143		66.7		1,252,828		64.2		1,280,945		69.5
Total	$	1,591,434	100.0	%	$	1,950,363	100.0	%	$	1,843,650	100.0	%

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Construction Contract Backlog
(dollars in thousands)	September 30, 2012				June 30, 2012				September 30, 2011
California:
Public sector	$	291,857	55.1	%	$	367,737	52.7	%	$	334,795	59.5	%
Private sector	39,873		7.5		13,374		1.9		14,937		2.7
Northwest:
Public sector	133,147		25.1		231,574		33.2		151,916		27.0
Private sector	29,902		5.7		44,690		6.4		23,211		4.1
East:
Public sector	26,246		4.9		33,935		4.9		37,210		6.6
Private sector	9,266		1.7		6,225		0.9		636		0.1
Total	$	530,291	100.0	%	$	697,535	100.0	%	$	562,705	100.0	%

Construction contract backlog of $530.3 million at September 30, 2012 was $167.2 million, or 24.0%, lower than at June 30, 2012 and $32.4 million, or 5.8%, lower than at September 30, 2011. The decreases were due to progress on existing projects partially offset by new awards. New awards during the three months endedSeptember 30, 2012 included a $27.6 million highway improvement project and a $24.2 million solar power equipment installation private sector project, both in California.

Large Project Construction Contract Backlog1
(dollars in thousands)	September 30, 2012				June 30, 2012				September 30, 2011
California	$	171,917	16.2	%	$	177,047	14.1	%	$	221,501	17.3	%
Northwest	242,853		22.9		323,337		25.8		455,558		35.6
East	646,373		60.9		752,444		60.1		603,886		47.1
Total	$	1,061,143	100.0	%	$	1,252,828	100.0	%	$	1,280,945	100.0	%

¹For all dates presented, Large Project Construction contract backlog is related to contracts with public agencies.

Large Project Construction contract backlog of $1.1 billion at September 30, 2012 was $191.7 million, or 15.3%, lower than at June 30, 2012, and $219.8 million, or 17.2%, lower than at September 30, 2011. The decrease from June 30, 2012 primarily reflected work completed during the quarter, with no significant projects awarded during the period. The decrease from September 30, 2011 primarily reflected work completed during the period, partially offset by new awards.

Noncontrolling interests included in Large Project Construction contract backlog as of September 30, 2012, June 30, 2012, and September 30, 2011 were $86.6 million, $117.3 million and $178.2 million, respectively.

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Gross Profit

The following table presents gross profit by business segment for the respective periods:

	Three Months Ended September 30,						Nine Months Ended September 30,
(dollars in thousands)	2012			2011			2012			2011
Construction	$	33,273		$	58,540		$	59,814		$	87,482
Percent of segment revenue	8.6		%	13.6		%	8.0		%	11.2		%
Large Project Construction	57,814			25,557			108,302			69,513
Percent of segment revenue	22.6			12.0			16.7			13.5
Construction Materials	9,984			9,554			9,034			10,754
Percent of segment revenue	11.5			11.5			5.1			6.5
Real Estate	28			242			801			1,088
Percent of segment revenue	73.7			24.5			15.8			15.5
Total gross profit	$	101,099		$	93,893		$	177,951		$	168,837
Percent of total revenue	13.9		%	12.9		%	11.3		%	11.5		%

We defer profit recognition until a project reaches at least 25% completion. In the case of large, complex design/build projects, we may defer profit recognition beyond the point of 25% completion until such time as we believe we have enough information to make a reasonably dependable estimate of contract revenue and cost. Because we have a large number of smaller projects at various stages of completion in our Construction segment, this policy generally does not impact gross profit significantly on a quarterly or annual basis. However, our Large Project Construction segment has fewer projects at any given time; therefore, gross profit can vary significantly in periods where one or more projects reach our percentage of completion threshold and the deferred profit is recognized or, conversely, in periods where contract backlog is growing rapidly and a higher percentage of projects are in their early stages with no associated gross profit recognition.

The following table presents revenue from projects that have not yet reached our profit recognition threshold:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2012		2011		2012		2011
Construction	$	22,338	$	38,215	$	27,393	$	45,288
Large Project Construction	26,301		64,725		50,486		138,348
Total revenue from contracts with deferred profit	$	48,639	$	102,940	$	77,879	$	183,636

We do not recognize revenue from contract claims until we have a signed agreement and payment is assured, nor do we recognize revenue from contract change orders until the owner has agreed to the change order in writing. However, we do recognize the costs related to any contract claims or pending change orders in our forecasts when costs are incurred, and revisions to estimated total costs are reflected as soon as the obligation to perform is determined. As a result, our gross profit as a percent of revenue can vary depending on the magnitude and timing of settlement claims and change orders.

When we experience significant contract forecast changes, we undergo a process that includes reviewing the nature of the changes to ensure that there are no material amounts that should have been recorded in a prior period rather than as a change in estimate for the current period. In our review of these changes for the three and nine months ended September 30, 2012, we did not identify any material amounts that should have been recorded in a prior period.

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Construction gross profit for the three and nine months ended September 30, 2012 decreased $25.3 million and $27.7 million, respectively, compared to the same periods in 2011. Construction gross profit as a percent of revenue for the three months ended September 30, 2012 decreased to 8.6% from 13.6% in 2011 and decreased to 8.0% for the nine months ended September 30, 2012 from 11.2% in 2011. The decreases were largely due to increased competition and challenging market conditions primarily in California. In addition, the decreases during the three and nine months ended September 30, 2012 were partially due to net decreases of $6.0 million and $9.4 million from revisions in estimates, respectively, compared to a net decrease of $1.3 million and a net increase of $1.6 million, respectively, for the same periods in 2011 due to lower productivity than originally anticipated in the 2012 periods (see Note 3 of “Notes to the Condensed Consolidated Financial Statements”).

Large Project Construction gross profit for the three and nine months ended September 30, 2012 increased $32.3 million and $38.8 million, respectively, compared to the same periods in 2011. Large Project Construction gross profit as a percent of revenue for the three months ended September 30, 2012 increased to 22.6% from 12.0% in 2011 and to 16.7% for the nine months ended September 30, 2012 from 13.5% in 2011. The increases were primarily due to net increases of $35.9 million and $48.9 million, respectively, from revisions in estimates due to lower than anticipated costs and settlement of outstanding issues with contract owners compared to net increases of $2.7 million and $7.9 million, respectively, during the same periods in 2011 (see Note 3 of “Notes to the Condensed Consolidated Financial Statements”). During the three and nine months ended September 30, 2012, $26.3 million and $50.5 million, respectively, of revenue was recognized on projects that have not yet reached our profit recognition threshold compared to $64.7 million and $138.3 million, respectively, during the same periods in 2011.

Construction Materials and Real Estate gross profit remained relatively unchanged for the three and nine months ended September 30, 2012 compared to the same periods in 2011 as residential, commercial and private markets remained depressed.

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Selling, General and Administrative Expenses

The following table presents the components of selling, general and administrative expenses for the respective periods:

	Three Months Ended September 30,						Nine Months Ended September 30,
(dollars in thousands)	2012			2011			2012			2011
Selling
Salaries and related expenses	$	8,200		$	7,050		$	28,150		$	25,846
Other selling expenses	2,313			2,360			6,200			6,901
Total selling	10,513			9,410			34,350			32,747
General and administrative
Salaries and related expenses	12,299			13,179			40,936			38,607
Incentive compensation	2,525			3,447			5,622			7,777
Restricted stock amortization	2,418			2,891			8,910			8,475
Other general and administrative expenses	13,525			10,185			35,456			33,671
Total general and administrative	30,767			29,702			90,924			88,530
Total selling, general and administrative	$	41,280		$	39,112		$	125,274		$	121,277
Percent of revenue	5.7		%	5.4		%	7.9		%	8.3		%

Selling, general and administrative expenses for the three and nine months ended September 30, 2012 increased $2.2 million, or 5.5%, and $4.0 million, or 3.3%, respectively, compared to the same periods in 2011.

Selling Expenses

Selling expenses include the costs for aggregate permits, business development, estimating and bidding. Selling expenses can vary depending on the volume of projects in process and the number of employees assigned to estimating and bidding activities. As projects are completed or the volume of work slows down, we temporarily redeploy project employees to bid on new projects, moving their salaries and related costs from cost of revenue to selling expenses.

General and Administrative Expenses

General and administrative expenses include costs related to our operational offices that are not allocated to direct contract costs and expenses related to our corporate functions. These costs include variable cash and restricted stock performance-based incentives for select management personnel on which our compensation strategy heavily relies. The cash portion of these incentives is expensed when earned while the restricted stock portion is expensed over the vesting period of the restricted stock award (generally three years). Other general and administrative expenses include changes in the fair market value of our Non-Qualified Deferred Compensation (“NQDC”) plan liability, information technology, occupancy, office supplies, depreciation, travel and entertainment, outside services, training and other miscellaneous expenses.

Total general and administrative expenses for the three and nine months ended September 30, 2012 increased $1.1 million and $2.4 million, respectively, compared to the same periods in 2011. Included in other general and administrative expenses for the nine months ended September 30, 2012 was a net gain on restructuring of $1.8 million related to divestiture activities of our real estate investment business. The increase in other general and administrative expenses during the three months ended September 30, 2012 was primarily due to an increase in the fair market value for our NQDC plan liability.

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Other Income (Expense)

The following table presents the components of other income (expense) for the respective periods:

	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2012			2011			2012			2011
Interest income	$	485		$	476		$	2,140		$	2,295
Interest expense	(2,561		)	(3,418		)	(8,570		)	(7,653		)
Equity in income of affiliates	1,481			1,881			380			1,443
Other income (expense), net	2,013			(1,833		)	3,866			(1,951		)
Total other income (expense)	$	1,418		$	(2,894	)	$	(2,184	)	$	(5,866	)

The change in other income (expense), net for the three months ended September 30, 2012 when compared to the same period in 2011 was primarily due to a gain in the value of the investment portfolio associated with the Company’s NQDC plan for which there was an offsetting increase in the fair market value of the NQDC plan liability in selling, general and administrative expense (see “Selling, General and Administrative Expenses” section above for further discussion). Other income (expense), net for the nine months ended September 30, 2012 included a $5.3 million gain related to the sale of gold, a by-product of aggregate production and a $2.8 million non-cash impairment charge associated with the write-off of our cost method investment in the preferred stock of a corporation that designs and manufactures power generation equipment.

In the fourth quarter of 2012, we expect to record a gain of between $17.0 million and $18.0 million related to our process of continually optimizing our assets separate from the Enterprise Improvement Plan.

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Income Taxes

The following table presents the provision for income taxes for the respective periods:

	Three Months Ended September 30,						Nine Months Ended September 30,
(dollars in thousands)	2012			2011			2012			2011
Provision for income taxes	$	17,113		$	15,109		$	15,440		$	11,973
Effective tax rate	27.2		%	26.3		%	27.1		%	22.5		%

We calculate our income tax provision at the end of each interim period by estimating our annual effective tax rate and applying that rate to our year-to-date ordinary earnings. The effect of changes in enacted tax laws, tax rates or tax status is recognized in the interim period in which the change occurs.

Our effective tax rate was 27.2% and 27.1% for the three and nine months ended September 30, 2012, respectively, and was 26.3% and 22.5% for the three and nine months ended September 30, 2011, respectively.  The change during the nine months ended September 30, 2011 was primarily due to the recognition and measurement of previously unrecognized tax benefits, which is considered a discrete item for tax provision purposes. The recognition and measurement of these tax benefits was the result of a favorable settlement of an income tax examination.

Noncontrolling Interests

The following table presents the amount attributable to noncontrolling interests in consolidated subsidiaries for the respective periods:

	Three Months Ended September 30,						Nine Months Ended September 30,
(in thousands)	2012			2011			2012			2011
Amount attributable to noncontrolling interests	$	(8,625	)	$	(5,908	)	$	(14,249	)	$	(8,886	)

The amount attributable to noncontrolling interests represents the noncontrolling owners’ share of the income or loss of our consolidated construction joint ventures and real estate development entities. The balance for the three months ended September 30, 2012 increased compared to the same period in 2011 due to the settlement of claims on one project and owner directed scope changes on another project. The balance for the nine months ended September 30, 2012 increased primarily due to revisions in estimates on one project due to lower than anticipated construction costs.

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Certain Legal Proceedings

As discussed in Note 17 to the unaudited condensed consolidated financial statements included in this report, under certain circumstances the resolution of certain legal proceedings to which we are subject could have direct or indirect consequences that could have a material adverse effect on our financial position, results of operations, cash flows and/or liquidity.

Liquidity and Capital Resources

We believe our cash and cash equivalents, short-term investments and cash generated from operations will be sufficient to meet our expected working capital needs, capital expenditures, financial commitments, cash dividend payments, and other liquidity requirements associated with our existing operations through the next twelve months. As of September 30, 2012, we had a collateralized revolving credit facility of $100.0 million primarily to provide capital needs to fund growth opportunities, either internally or generated through acquisition. Our revolving credit facility was increased to $215.0 million subsequent to September 30, 2012 (see “Credit Agreement” section below for further discussion). We do not anticipate that this credit facility will be required to fund future working capital needs. If we experience a prolonged change in our business operating results or make a significant acquisition, we may need to acquire additional sources of financing, which, if available, may be limited by the terms of our existing debt covenants, or may require the amendment of our existing debt agreements.

The following table presents our cash, cash equivalents and marketable securities, including amounts from our consolidated joint ventures, as of the respective dates:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Cash and cash equivalents excluding consolidated joint ventures	$	213,302	$	181,868	$	127,749
Consolidated construction joint venture cash and cash equivalents1	74,020		75,122		65,350
Total consolidated cash and cash equivalents	287,322		256,990		193,099
Short-term and long-term marketable securities2	84,987		149,658		136,898
Total cash, cash equivalents and marketable securities	$	372,309	$	406,648	$	329,997

¹The volume and stage of completion of contracts from our consolidated construction joint ventures may cause fluctuations in joint venture cash and cash equivalents between periods.

²See Note 4 of “Notes to the Condensed Consolidated Financial Statements” for the composition of our marketable securities.

Our primary sources of liquidity are cash and cash equivalents and marketable securities. We may also from time to time issue and sell equity, debt or hybrid securities or engage in other capital markets transactions.

Our cash and cash equivalents consisted of commercial paper, deposits and money market funds held with established national financial institutions. Marketable securities consist of U.S. government and agency obligations, commercial paper, municipal bonds and corporate bonds. Cash and cash equivalents held by our consolidated joint ventures represent the working capital needs of each joint venture’s project. The decision to distribute joint venture cash must generally be made jointly by all of the partners and, accordingly, these funds generally are not available for the working capital or other liquidity needs of Granite.

Our principal uses of liquidity are paying the costs and expenses associated with our operations, servicing outstanding indebtedness, making capital expenditures and paying dividends on our capital stock.  We may also from time to time prepay or repurchase outstanding indebtedness, and acquire assets or businesses that are complementary to our operations.

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Cash Flows	Nine Months Ended September 30,
(in thousands)	2012			2011
Net cash provided by (used in):
Operating activities	$	20,163		$	2,018
Investing activities	48,726			(8,367		)
Financing activities	(38,557		)	(52,574		)

Cash provided by operating activities of $20.2 million for the nine months ended September 30, 2012 represents a $18.1 million increase from the amount of cash provided by operating activities during the same period in 2011.  This increase was primarily driven by more favorable change in working capital items in 2012 when compared to 2011.

Cash provided by investing activities for the nine months ended September 30, 2012 increased $57.1 million when compared to the same period in 2011, primarily due to a $61.2 million increase in net proceeds from marketable securities as we shifted cash proceeds from maturities of held-to-maturity securities from longer term and lower yield investments to more liquid and higher yield interest bearing deposit accounts classified as cash equivalents.

Cash used in financing activities for the nine months ended September 30, 2012 decreased $14.0 million compared to the same period in 2011. The decrease was primary driven by a $9.5 million decrease in net distributions to noncontrolling partners as well as a $5.7 million decrease in long-term debt principal payments associated with our real estate entities.

Capital Expenditures

During the nine months ended September 30, 2012, we had capital expenditures of $26.0 million compared to $34.7 million during the same period in 2011. Major capital expenditures are typically for aggregate and asphalt production facilities, aggregate reserves, construction equipment, buildings and leasehold improvements and investments in our information technology systems. The timing and amount of such expenditures can vary based on the progress of planned capital projects, the type and size of construction projects, changes in business outlook and other factors. Capital expenditures during 2012 are not expected to exceed $41.0 million. During the year ended December 31, 2011, we had capital expenditures of $45.0 million.

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Credit Agreement

On October 11, 2012 we entered into an Amended and Restated Credit Agreement, which provides for a $215.0 million committed revolving credit facility, with a sublimit for letters of credit of $100.0 million (the “Credit Agreement”), which expires October 11, 2016 and replaces our previous $100.0 million facility. Borrowings under the Credit Agreement bear interest at LIBOR or a base rate (at our option), plus an applicable margin based on certain financial ratios calculated quarterly. LIBOR varies based on the applicable loan term, market conditions and other external factors. The applicable margin is based upon certain financial ratios calculated quarterly. Had the terms of the Credit Agreement been in effect at September 30, 2012, the applicable margin would have been 2.00% for loans bearing interest based on LIBOR and 1.00% for loans bearing interest at the base rate. Accordingly, the effective interest rate would have been between 2.36% and 4.25% at September 30, 2012. Our obligations under the Credit Agreement are guaranteed by certain of our subsidiaries and are collateralized on an equivalent basis with the obligations under the 2013 Notes and the 2019 Notes (each defined below) by first priority liens (subject only to other liens permitted under the Credit Agreement) on substantially all of the assets of the Company and our subsidiaries that are guarantors or borrowers under the Credit Agreement. At September 30, 2012, there were no revolving loans outstanding under the predecessor to the Credit Agreement, but there were standby letters of credit totaling approximately $4.2 million. The letters of credit will expire between March and October 2013. Subsequent to September 30, 2012, total standby letters of credit increased to approximately $7.5 million.

The Credit Agreement provides for the release of the liens securing the obligations, at our option and expense, after June 30, 2013, so long as certain conditions as defined by the terms in the Credit Agreement are satisfied (“Collateral Release Period”). If, subsequently, our Consolidated Fixed Charge Coverage Ratio is less than 1.25 or our Consolidated Leverage Ratio is greater than 2.50, then we will be required to promptly re-pledge substantially all of the assets of the Company and our subsidiaries that are guarantors or borrowers under the Credit Agreement.

The most significant restrictive covenants under the terms of our Credit Agreement require the maintenance of a minimum Consolidated Tangible Net Worth, a minimum Consolidated Interest Coverage Ratio and a maximum Consolidated Leverage Ratio. The calculations and terms of such financial covenants are defined in the Credit Agreement filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q. As of September 30, 2012 and pursuant to the definitions in the Credit Agreement, our Consolidated Tangible Net Worth was $791.8 million, which exceeded the minimum of $666.6 million, the Consolidated Interest Coverage Ratio was 11.24, which exceeded the minimum of 4.00 and the Consolidated Leverage Ratio was 1.44, which did not exceed the maximum of 3.25. The maximum Consolidated Leverage Ratio decreases to 3.00 for the quarter ending December 31, 2013, and each quarter ending thereafter. During any Collateral Release Period the maximum Consolidated Leverage Ratio decreases to 2.50.

Senior Notes Payable

As of September 30, 2012, senior notes payable in the amount of $8.3 million were due to a group of institutional holders in nine equal annual installments which began in 2005 and bear interest at 6.96% per annum (“2013 Notes”). In addition, senior notes payable in the amount of $200.0 million were due to a second group of institutional holders in five equal annual installments beginning in 2015 and bear interest at 6.11% per annum (“2019 Notes”).

On October 11, 2012, we amended the note purchase agreements governing the 2013 Notes and 2019 Notes (the “2013 NPA” and the “2019 NPA,” respectively) such that our obligations under these agreements are now guaranteed by certain of our subsidiaries and are collateralized on an equivalent basis with the Credit Agreement by liens on substantially all of the assets of the Company and subsidiaries that are guarantors or borrowers under the Credit Agreement. The 2013 NPA and 2019 NPA provide for the release of liens and re-pledge of collateral on substantially the same terms and conditions as those set forth in the Credit Agreement

The most significant restrictive covenants under the terms of the 2013 NPA and 2019 NPA require the maintenance of a minimum Consolidated Tangible Net Worth, a minimum Consolidated Interest Coverage Ratio and a maximum Consolidated Leverage Ratio, the calculations and terms of which are defined by the applicable agreement filed as Exhibit 10.6 or Exhibit 10.7 to this Quarterly Report on Form 10-Q. As of September 30, 2012 and pursuant to the definitions in the 2013 NPA and 2019 NPA our Consolidated Tangible Net Worth was $791.8 million, which exceeded the minimum of $666.6 million, the Consolidated Interest Coverage Ratio was 11.24, which exceeded the minimum of 4.00 and the Consolidated Leverage Ratio was 1.44, which did not exceed the maximum of 3.50. The maximum Consolidated Leverage Ratio decreases to 3.25 for the quarter ending December 31, 2012, and each quarter ending thereafter. During any Collateral Release Period the maximum Consolidated Leverage Ratio decreases to 2.50.

40

Surety Bonds and Real Estate Mortgages

We are generally required to provide various types of surety bonds that provide an additional measure of security under certain public and private sector contracts. At September 30, 2012, approximately $1.6 billion of our contract backlog was bonded. Performance bonds do not have stated expiration dates; rather, we are generally released from the bonds after the owner accepts the work performed under contract. The ability to maintain bonding capacity to support our current and future level of contracting requires that we maintain cash and working capital balances satisfactory to our sureties.

A significant portion of our real estate held for development and sale is subject to mortgage indebtedness. All of this indebtedness is non-recourse to Granite but is recourse to the real estate entities that incurred the indebtedness. The terms of this indebtedness are typically renegotiated to reflect the evolving nature of the real estate projects as they progress through acquisition, entitlement and development. Modification of these terms may include changes in loan-to-value ratios requiring the real estate entities to repay portions of the debt. During the three and nine months ended September 30, 2012, we provided no significant funding to our real estate entities to repay portions of the debt. As of September 30, 2012, the principal amount of debt of our real estate entities secured by mortgages was $21.1 million, of which $16.7 million was included in current liabilities and $4.4 million was included in long-term liabilities on our condensed consolidated balance sheet.

Covenants and Events of Default

Our debt and credit agreements require us to comply with various affirmative, restrictive and financial covenants, including the financial covenants described above. Our failure to comply with any of these covenants, or to pay principal, interest or other amounts when due thereunder, would constitute an event of default under the applicable agreements. Under certain circumstances, the occurrence of an event of default under one of our debt or credit agreements (or the acceleration of the maturity of the indebtedness under one of our agreements) may constitute an event of default under one or more of our other debt or credit agreements. Default under our debt and credit agreements could result in (1) us no longer being entitled to borrow under the agreements, (2) termination of the agreements, (3) the requirement that any letters of credit under the agreements be cash collateralized, (4) acceleration of the maturity of outstanding indebtedness under the agreements and/or (5) foreclosure on any collateral securing the obligations under the agreements.

As of September 30, 2012, we were in compliance with the covenants contained in our senior note agreements, Credit Agreement, and debt agreements related to our consolidated real estate entities. We are not aware of any non-compliance by any of our unconsolidated entities with the covenants contained in their debt agreements. Subsequent to September 30, 2012, one of our consolidated real estate entities was in default under debt agreements as a result of its failure to make a timely required property tax payment. The affected loans are non-recourse to Granite and these defaults do not result in cross-defaults under other debt agreements under which Granite is the obligor; however, there is recourse to the real estate entity that incurred the debt. The real estate entity in default is currently in discussions with its lenders concerning disposition of the property.

41

Share Purchase Program

In 2007, our Board of Directors authorized us to purchase up to $200.0 million of our common stock at management’s discretion. As of September 30, 2012, $64.1 million was available for purchase. We did not purchase shares under the share purchase program in any of the periods presented.

Recent Accounting Pronouncements

See Note 2 of the “Notes to the Condensed Consolidated Financial Statements” for a description of recent accounting pronouncements, including the expected dates of adoption and effects on our condensed consolidated balance sheets, statements of operations and statements of cash flows.

Website Access

Our website address is www.graniteconstruction.com. On our website we make available, free of charge, our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the U.S. Securities and Exchange Commission. The information on our website is not incorporated into, and is not part of, this report. These reports, and any amendments to them, are also available at the website of the U.S. Securities and Exchange Commission, www.sec.gov.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There has been no significant change in our exposure to market risks since December 31, 2011.

Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Our management carried out, as of September 30, 2012, with the participation of our Chief Executive Officer and our Chief Financial Officer, an evaluation of the effectiveness of our disclosure controls and procedures, as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of September 30, 2012, our disclosure controls and procedures were effective to provide reasonable assurance that material information required to be disclosed by us in reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There were changes in our internal controls over financial reporting that occurred during the third quarter of 2012 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. In particular, as was disclosed in our Quarterly Report on Form 10-Q for the three months ended March 31, 2012, we implemented new enterprise resource planning software during the first quarter of 2012. In the third quarter of 2012 we modified existing internal controls as part of the ongoing integration of such enterprise resource planning software.

42

PART II. OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

The description of the matters set forth in Part I, Item 1 of this Report under “Note 17 - Legal Proceedings” is incorporated herein by reference.

Item 1A. RISK FACTORS

There have been no material changes in the risk factors previously disclosed in “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2011.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

During the three months ended September 30, 2012, we did not sell any of our equity securities that were not registered under the Securities Act of 1933, as amended. The following table sets forth information regarding the repurchase of shares of our common stock during the three months ended September 30, 2012:

Period	Total number of shares purchased1	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs	Approximate dollar value of shares that may yet be purchased under the plans or programs2
July 1, 2012 through July 31, 2012	12,309	$	26.11	—	$	64,065,401
August 1, 2012 through August 31, 2012	—	$	—	—	$	64,065,401
September 1, 2012 through September 30, 2012	2,797	$	27.59	—	$	64,065,401
	15,106	$	26.38	—

¹The number of shares purchased is in connection with employee tax withholding for shares/units granted under our Amended and Restated 1999 Equity Incentive Plan.

²In October 2007, our Board of Directors authorized us to purchase, at management’s discretion, up to $200.0 million of our common stock. Under this purchase program, the Company may purchase shares from time to time on the open market or in private transactions. The specific timing and amount of purchases will vary based on market conditions, securities law limitations and other factors. Purchases under the share purchase program may be commenced, suspended or discontinued at any time and from time to time without prior notice. 

Item 3. DEFAULTS UPON SENIOR SECURITIES

None.

Item 4. MINE SAFETY DISCLOSURES

The information concerning mine safety violations or other regulatory matters required by Section 1503(a) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Item 104 of Regulation S-K (17CFR 229.104) is included in Exhibit 95 to this Quarterly Report on Form 10-Q.

Item 5. OTHER INFORMATION

Not Applicable.

43

Item 6. EXHIBITS

10.1	†**	Amended and Restated Credit Agreement, dated October 11, 2012, by and among Granite Construction Incorporated, Granite Construction Company, GILC Incorporated, the lenders party thereto and Bank of America, N.A., as Administrative Agent, Collateral Agent, Swing Line Lender and L/C Issuer.
10.2	*	Amended and Restated Security Agreement, dated October 11, 2012, by and among Granite Construction Incorporated, Granite Construction Company, GILC Incorporated, the guarantors party thereto and Bank of America, N.A., as Collateral Agent. [Incorporated by reference from Exhibit 10.2 to the Company's Form 8-K filed on October 16, 2012]
10.3	*	Amended and Restated Securities Pledge Agreement, dated October 11, 2012, by and among Granite Construction Incorporated, Granite Construction Company, GILC Incorporated, the guarantors party thereto and Bank of America, N.A., as Collateral Agent. [Incorporated by reference from Exhibit 10.3 to the Company's Form 8-K filed on October 16, 2012]
10.4	*	Amended and Restated Guaranty Agreement, dated October 11, 2012, by and among Granite Construction Incorporated, the guarantors party thereto and Bank of America, N.A., as Administrative Agent. [Incorporated by reference from Exhibit 10.4 to the Company's Form 8-K filed on October 16, 2012]
10.5	*	Intercreditor and Collateral Agency Agreement, dated October 11, 2012, by and among Granite Construction Incorporated, for itself and on behalf of certain of its subsidiaries, Bank of America, N.A., as Collateral Agent and the secured creditors party thereto. [Incorporated by reference from Exhibit 10.5 to the Company's Form 8-K filed on October 16, 2012]
10.6	†	Second Amendment to the Note Purchase Agreement, dated October 11, 2012, between Granite Construction Incorporated and the holders of the 2013 Notes party thereto.
10.7	†	First Amendment to the Note Purchase Agreement, dated October 11, 2012, between Granite Construction Incorporated and the holders of the 2019 Notes party thereto.
31.1	†	Certification of Principal Executive Officer
31.2	†	Certification of Principal Financial Officer
32	††	Certification of Chief Executive Officer and Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
95	†	Mine Safety Disclosure
101.INS	†	XBRL Instance Document
101.SCH	†	XBRL Taxonomy Extension Schema
101.CAL	†	XBRL Taxonomy Extension Calculation Linkbase
101.DEF	†	XBRL Taxonomy Extension Definition Linkbase
101.LAB	†	XBRL Taxonomy Extension Label Linkbase
101.PRE	†	XBRL Taxonomy Extension Presentation Linkbase
	*	Incorporated by reference
	**	Portions of this exhibit have been omitted pursuant to a request for confidential treatment filed with the SEC
	†	Filed herewith
	††	Furnished herewith

44

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

			GRANITE CONSTRUCTION INCORPORATED
Date:	November 7, 2012	By:	/s/ Laurel J. Krzeminski
			Laurel J. Krzeminski
			Vice President and Chief Financial Officer
			(Principal Financial and Accounting Officer)

45

EX-10.1

Exhibit 10.1

CONFIDENTIAL TREATMENT

GRANITE CONSTRUCTION INCORPORATED HAS REQUESTED THAT THE OMITTED PORTIONS OF THIS DOCUMENT, WHICH ARE INDICATED BY ASTERISKS, BE AFFORDED CONFIDENTIAL TREATMENT PURSUANT TO RULE 24b-2 UNDER THE SECURITIES EXCHANGE ACT OF 1934. GRANITE CONSTRUCTION INCORPORATED HAS SEPARATELY FILED THE OMITTED PORTIONS OF THE DOCUMENT WITH THE SECURITIES AND EXCHANGE COMMISSION.

Published CUSIP Numbers:

Deal: 387329AC9

Revolver: 387329AD7

AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of October 11, 2012

among

GRANITE CONSTRUCTION INCORPORATED,

GRANITE CONSTRUCTION COMPANY and

GILC INCORPORATED,

as the Borrowers,

BANK OF AMERICA, N.A.,

as Administrative Agent, Collateral Agent,

Swing Line Lender and L/C Issuer,

BBVA COMPASS

and

BANK OF THE WEST,

as Co-Syndication Agents

and

The Other Lenders Party Hereto

BANK OF AMERICA Merrill Lynch,

as Sole Lead Arranger and Sole Book Manager

TABLE OF CONTENTS

Section		Page
ARTICLE I.	DEFINITIONS AND ACCOUNTING TERMS	1
1.01	Defined Terms	1
1.02	Other Interpretive Provisions	34
1.03	Accounting Terms	35
1.04	Rounding	35
1.05	Exchange Rates; Currency Equivalents	35
1.06	Additional Alternative Currencies	36
1.07	Change of Currency	36
1.08	Times of Day	37
1.09	Letter of Credit Amounts	37
1.10	Amendment and Restatement	37
ARTICLE II.	THE COMMITMENTS AND CREDIT EXTENSIONS	39
2.01	Revolving Loans	39
2.02	Borrowings, Conversions and Continuations of Revolving Loans	39
2.03	Letters of Credit	41
2.04	Swing Line Loans	51
2.05	Prepayments	54
2.06	Termination or Reduction of Commitments	55
2.07	Repayment of Loans	56
2.08	Interest	56
2.09	Fees	57
2.10	Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate	57
2.11	Evidence of Debt	58
2.12	Payments Generally; Administrative Agent’s Clawback	58
2.13	Sharing of Payments by Lenders	60
2.14	Increase in Aggregate Commitments; Incremental Term Facility	61
2.15	Cash Collateral	65
2.16	Defaulting Lenders	66
ARTICLE III.	TAXES, YIELD PROTECTION AND ILLEGALITY	69
3.01	Taxes	69
3.02	Illegality	73
3.03	Inability to Determine Rates	74
3.04	Increased Costs; Reserves on Eurodollar Rate Loans	74
3.05	Compensation for Losses	76
3.06	Mitigation Obligations; Replacement of Lenders	77
3.07	Survival	77
ARTICLE IV.	CONDITIONS PRECEDENT TO Credit Extensions	78
4.01	Conditions to Effectiveness and Initial Credit Extension	78
4.02	Conditions to all Credit Extensions	82
ARTICLE V.	REPRESENTATIONS AND WARRANTIES	83

i

5.01	Existence, Qualification and Power	83
5.02	Authorization; No Contravention	83
5.03	Governmental Authorization; Other Consents	83
5.04	Binding Effect	84
5.05	Financial Statements; No Material Adverse Effect	84
5.06	Litigation	84
5.07	No Default	85
5.08	Ownership of Property; Liens	85
5.09	Environmental Compliance	85
5.10	Insurance	86
5.11	Taxes	86
5.12	ERISA Compliance	86
5.13	Subsidiaries; Equity Interests	87
5.14	Margin Regulations; Investment Company Act	87
5.15	Disclosure	88
5.16	Intellectual Property; Licenses, Etc	88
5.17	Swap Contracts	88
5.18	Labor Relations	88
5.19	Solvency	88
5.20	Taxpayer Identification Number	88
5.21	Representations as to Foreign Obligors	88
5.22	OFAC	89
5.23	Security Instruments	90
ARTICLE VI.	AFFIRMATIVE COVENANTS	90
6.01	Financial Statements	90
6.02	Certificates; Other Information	91
6.03	Notices	92
6.04	Payment of Obligations	94
6.05	Preservation of Existence, Etc	94
6.06	Maintenance of Properties	94
6.07	Maintenance of Insurance	94
6.08	Compliance with Laws	95
6.09	Books and Records	95
6.10	Inspection Rights	95
6.11	Environmental Laws	95
6.12	Use of Proceeds	96
6.13	Tax Clearance Certificates	96
6.14	New Material Subsidiaries; Additional Guarantors; After-Acquired Real Property; Release of Collateral	96
6.15	Appraisals	99
ARTICLE VII.	NEGATIVE COVENANTS	99
7.01	Liens	99
7.02	Investments	102
7.03	Indebtedness	104
7.04	Fundamental Changes	106
7.05	Dispositions	107
7.06	[Intentionally Omitted.]	108
7.07	Restricted Payments	108
7.08	Change in Nature of Business	109
7.09	Transactions with Affiliates	110

ii

7.10	Burdensome Agreements	110
7.11	Use of Proceeds	111
7.12	Financial Covenants	111
ARTICLE VIII.	EVENTS OF DEFAULT AND REMEDIES	112
8.01	Events of Default	112
8.02	Remedies Upon Event of Default	114
8.03	Application of Funds	115
ARTICLE IX.	ADMINISTRATIVE AGENT	116
9.01	Appointment and Authority	116
9.02	Rights as a Lender	117
9.03	Exculpatory Provisions	117
9.04	Reliance by Administrative Agent	118
9.05	Delegation of Duties	118
9.06	Resignation of Administrative Agent	118
9.07	Non-Reliance on Administrative Agent and Other Lenders	120
9.08	No Other Duties, Etc	120
9.09	Administrative Agent May File Proofs of Claim	120
9.10	Collateral and Guaranty Matters	121
9.11	Secured Cash Management Agreements, Secured Hedge Agreements and Secured Card Related Products Agreements	123
ARTICLE X.	MISCELLANEOUS	123
10.01	Amendments, Etc	123
10.02	Notices; Effectiveness; Electronic Communication	125
10.03	No Waiver; Cumulative Remedies; Enforcement	127
10.04	Expenses; Indemnity; Damage Waiver	128
10.05	Payments Set Aside	130
10.06	Successors and Assigns	130
10.07	Treatment of Certain Information; Confidentiality	135
10.08	Right of Setoff	136
10.09	Interest Rate Limitation	137
10.10	Counterparts; Integration; Effectiveness	137
10.11	Survival of Representations and Warranties	138
10.12	Severability	138
10.13	Replacement of Lenders	138
10.14	Governing Law; Jurisdiction; Etc	139
10.15	Arbitration and Waiver of Jury Trial	140
10.16	California Judicial Reference	141
10.17	No Advisory or Fiduciary Responsibility	142
10.18	Electronic Execution of Assignments and Certain Other Documents	142
10.19	USA PATRIOT Act	142
10.20	Judgment Currency	143
SIGNATURES		S-1

iii

SCHEDULES
	1.01(e)	Existing Letters of Credit
	1.01(g)	Guarantors
	2.01	Commitments and Applicable Percentages
	5.05(d)	Project Debt
	5.06	Litigation
	5.09	Environmental Matters
	5.13(a)	Subsidiaries and Other Equity Investments
	5.13(b)	Permitted Notes Guarantors
	5.16	Intellectual Property Matters
	7.01	Existing Liens
	7.02(a)	Existing Investments
	7.02(b)	Investment Policy
	7.02(g)	Investments by any GLC Venture
	7.03	Existing Indebtedness
	7.03(m)(i)	Project Debt Outstanding
	7.09	Transactions with Affiliates
	10.02	Administrative Agent’s Office; Certain Addresses for Notices
EXHIBITS
	Form of
	A	Revolving Loan Notice
	B	Swing Line Loan Notice
	C	Note
	D	Compliance Certificate
	E	Assignment and Assumption
	F	Guaranty
	G	Pledge Agreement
	H	Security Agreement
	I	List of Mortgaged Properties
	J	Permitted Notes Intercreditor Agreement
	K	U.S. Tax Compliance Certificates

iv

AMENDED AND RESTATED CREDIT AGREEMENT

This AMENDED AND RESTATED CREDIT AGREEMENT (“Agreement”) is entered into as of October 11, 2012,among GRANITE CONSTRUCTION INCORPORATED, a Delaware corporation (the “Company” and a “Borrower”), GRANITE CONSTRUCTION COMPANY, a California corporation (“GCC” and a “Borrower”), GILC INCORPORATED, a California corporation (“GILC” and a “Borrower”, and together with Company and GCC, collectively, the “Borrowers”), each lender from time to time party hereto (collectively, the “Lenders” and individually, a “Lender”), and BANK OF AMERICA, N.A.,as Administrative Agent, Collateral Agent, Swing Line Lender and L/C Issuer.

The Borrowers, the lenders party thereto (the “Existing Lenders”) and Bank of America, N.A., as administrative agent, are parties to that certain Credit Agreement dated as of June 22, 2010 (as amended, restated, supplemented or otherwise modified from time to time prior to the date hereof, the “Existing Credit Agreement”), pursuant to which such Existing Lenders originally agreed to provide the Borrowers with a revolving credit facility, including a swingline subfacility and multicurrency letter of credit subfacility.

The Borrowers have requested that the Existing Credit Agreement be amended and restated in order to, among other things, extend the maturity date of the revolving credit facility, increase the potential maximum amount of the revolving credit facility from the amount in effect as of the date hereof under the Existing Credit Agreement and make certain other amendments to the Existing Credit Agreement (the “Restatement”), and the Lenders and the Administrative Agent are willing to do so on the terms and conditions set forth herein.

In consideration of the mutual covenants and agreements herein contained, the parties hereto covenant and agree as follows:

ARTICLE I. DEFINITIONS AND ACCOUNTING TERMS

1.01    Defined Terms. As used in this Agreement, the following terms shall have the meanings set forth below:

“80% Threshold” has the meaning set forth in the definition of “Material Subsidiary”.

“2013 Notes” means the Company's 6.96% Senior Notes due May 1, 2013.

“2013 Notes Agreement” means that certain Note Purchase Agreement dated as of May 1, 2001, among the Company and the purchasers named therein in respect of the 2013 Notes.

“2019 Notes” means the Company's 6.11% Series 2007-A Senior Notes due December 11, 2019 and any additional notes issued pursuant to the 2019 Notes Agreement.

“2019 Notes Agreement” means that certain Note Purchase Agreement dated as of December 12, 2007, among the Company, the purchasers of the Company's Series 2007-A Senior Notes due December 11, 2019 party thereto, and the purchasers of additional notes from time to time party thereto.

“Acquisition” means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of the assets of a Person, or of any business or division of a Person (other than a Person that is a Subsidiary), (b) the acquisition of the capital stock, partnership interests, membership interests or equity of any Person (other than a Person that is a Subsidiary), whether or not causing any Person to become a Subsidiary, or (c)a merger or consolidation or any other combination with another Person.

“Administrative Agent” means Bank of America in its capacity as administrative agent under any of the Loan Documents, or any successor administrative agent.

“Administrative Agent's Office” means, with respect to any currency, the Administrative Agent's address and, as appropriate, account as set forth on Schedule 10.02 with respect to such currency, or such other address or account with respect to such currency as the Administrative Agent may from time to time notify to the Company and the Lenders.

“Administrative Questionnaire” means an Administrative Questionnaire in a form approved by the Administrative Agent.

1

“Affiliate” means, with respect to any Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified.

“Aggregate Commitments” means the Commitments of all the Lenders.

“Agreement” means this Amended and Restated Credit Agreement.

“Alternative Currency” means each of Canadian Dollars, Euro, Sterling, Yen and each other currency (other than Dollars) that is approved in accordance with Section 1.06.

“Alternative Currency Equivalent” means, at any time, with respect to any amount denominated in Dollars, the equivalent amount thereof in the applicable Alternative Currency as determined by the Administrative Agent or the L/C Issuer, as the case may be, at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date) for the purchase of such Alternative Currency with Dollars.

“Applicable Percentage” means with respect to any Lender at any time, the percentage (carried out to the ninth decimal place) of the Aggregate Commitments represented by such Lender's Commitment at such time, subject to adjustment as provided in Section 2.16. If the commitment of each Lender to make Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have been terminated pursuant to Section 8.02 or if the Aggregate Commitments have expired, then the Applicable Percentage of each Lender shall be determined based on the Applicable Percentage of such Lender most recently in effect, giving effect to any subsequent assignments. The initial Applicable Percentage of each Lender is set forth opposite the name of such Lender on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable.

“Applicable Rate” means, from time to time, the following percentages per annum, based upon the Consolidated Leverage Ratio as set forth in the most recent Compliance Certificate received by the Administrative Agent pursuant to Section 6.02(b):

Pricing Level	Consolidated Leverage Ratio	Commitment Fee	Applicable Rate for LIBOR Loans and Financial Letter of Credit Fee	Applicable Rate for Performance Letter of Credit Fee	Applicable Rate for Base Rate Loans
1	Less than 0.50 to 1.00	0.300%	1.500%	1.000%	0.500
2	Greater than or equal to 0.50 to 1.00 but less than 1.00 to 1.00	0.350%	1.750%	1.166%	0.750%
3	Greater than or equal to 1.00 to 1.00 but less than 2.00 to 1.00	0.400%	2.000%	1.332%	1.000%
4	Greater than or equal to 2.00 to 1.00 but less than 2.50 to 1.00	0.450%	2.250%	1.500%	1.250%
5	Greater than or equal to 2.50to 1.00	0.500%	2.500%	1.666%	1.500%

Any increase or decrease in the Applicable Rate resulting from a change in the Consolidated Leverage Ratio shall become effective as of the first Business Day immediately following the date a Compliance Certificate is delivered pursuant to Section 6.02(b); provided, however, that (a) if a Compliance Certificate is not delivered when due in accordance with such Section, then, upon the request of the Required Lenders, Pricing Level 5 shall apply as of the first Business Day after the date on which such Compliance Certificate was required to have been delivered and shall remain in effect until the date on which such Compliance Certificate is delivered, and (b) subject to the preceding proviso, from the Closing Date to the first Business Day immediately following the date of delivery of the Compliance Certificate for the first fiscal quarter ending after the Closing Date, Pricing Level 3 shall apply.

Notwithstanding anything to the contrary contained in this definition, the determination of the Applicable Rate for any period shall be subject to the provisions of Section 2.10(b).

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“Approved Fund” means any Fund that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.

“Arranger” means Merrill Lynch, Pierce, Fenner & Smith Incorporated, in its capacity as sole lead arranger and sole book manager.

“Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of any party whose consent is required by Section 10.06(b)), and accepted by the Administrative Agent, in substantially the form of Exhibit E or any other form (including electronic documentation generated by MarkitClear or other electronic platform) approved by the Administrative Agent.

“Attributable Indebtedness” means, on any date, (a) in respect of any capital lease of any Person, the capitalized amount thereof that would appear as a liability on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease Obligation, the capitalized amount of the remaining lease payments under the relevant lease that would appear as a liability on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a capital lease.

“Audited Financial Statements” means the audited consolidated balance sheet of the Company and its Subsidiaries for the fiscal year ended December 31, 2011, and the related consolidated statements of income or operations, shareholders' equity and cash flows for such fiscal year of the Company and its Subsidiaries, including the notes thereto.

“Availability Period” means the period from and including the Closing Date to the earliest of (a) the Maturity Date, (b) the date of termination of the Aggregate Commitments pursuant to Section 2.06, and (c) the date of termination of the commitment of each Lender to make Loans and of the obligation of the L/C Issuer to make L/C Credit Extensions pursuant to Section 8.02.

“Bank of America” means Bank of America, N.A. and its successors.

“Bankruptcy Code” means the federal Bankruptcy Reform Act of 1978 (11 U.S.C. §101 et seq.).

“Base Rate”means for any day a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 1/2 of 1%, (b) the rate of interest in effect for such day as publicly announced from time to time by Bank of America as its “prime rate,” and (c) the Eurodollar Rate plus 1.00%. The “prime rate” is a rate set by Bank of America based upon various factors including Bank of America's costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such announced rate. Any change in such prime rate announced by Bank of America shall take effect at the opening of business on the day specified in the public announcement of such change.

“Base Rate Loan” means a Loan that bears interest based on the Base Rate.

“Base Rate Revolving Loan” means a Revolving Loan that is a Base Rate Loan.

“Borrowers” has the meaning specified in the introductory paragraph hereto. All singular references to the Borrower shall mean any Borrower, each Borrower, the Borrower that has received a Credit Extension hereunder or all of the Borrowers, as the context may require.

“Borrower Materials” has the meaning specified in Section 6.02.

“Borrowing” means a Revolving Borrowing or a Swing Line Borrowing, as the context may require.

“Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks are authorized to close under the Laws of, or are in fact closed in, the state where the Administrative Agent's Office is located and, if such day relates to any Eurodollar Rate Loan, means any such day that is also a London Banking Day.

“Canadian Dollar” means the lawful currency of Canada.

“Card Related Products Agreement” means any agreement to provide credit, purchasing, debit and other credit related card arrangements.

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“Card Related Products Bank” means any Person that, (a) at the time it enters into a Card Related Products Agreement, is a Lender or an Affiliate of a Lender that has executed and delivered to the Administrative Agent a letter of undertaking in the form approved by the Administrative Agent, or (b) is party to a Card Related Products Agreement on the date that such Person or its Affiliate becomes a Lender, in each case in its capacity as a party to such Card Related Products Agreement.

“Cash Collateralize” means to pledge and deposit with or deliver to the Administrative Agent, for the benefit of one or more of the L/C Issuer or the Lenders, as collateral for L/C Obligations or obligations of the Lenders to fund participations in respect of L/C Obligations, cash or deposit account balances or, if the Administrative Agent and the L/C Issuer shall agree in their sole discretion, other credit support, in each case pursuant to documentation in form and substance satisfactory to the Administrative Agent and the L/C Issuer. “Cash Collateral” shall have a meaning correlative to the foregoing and shall include the proceeds of such cash collateral and other credit support.

“Cash Management Agreement” means any agreement that is not prohibited by the terms hereof to provide cash management services, including treasury, depository, overdraft, electronic funds transfer and other cash management arrangements.

“Cash Management Bank” means any Person in its capacity as a party to a Cash Management Agreement that, (a) at the time it enters into a Cash Management Agreement with a Loan Party, is a Lender or an Affiliate of a Lender that has executed and delivered to the Administrative Agent a letter of undertaking in the form approved by the Administrative Agent, or (b) at the time it (or its Affiliate) becomes a Lender, is a party to a Cash Management Agreement with a Loan Party, in each case in its capacity as a party to such Cash Management Agreement (even if such Person ceases to be a Lender or such Person's Affiliate ceased to be a Lender); provided, however, that for any of the foregoing to be included as a “Secured Cash Management Agreement” on any date of determination by the Administrative Agent, the applicable Cash Management Bank (other than the Administrative Agent or an Affiliate of the Administrative Agent) must have delivered a written notice to the Administrative Agent prior to such date of determination.

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation, implementation or application thereof by any Governmental Authority or (c) the making or issuance of any request, rule, guideline or directive (whether or not having the force of law) by any Governmental Authority; provided that notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines or directives thereunder or issued in connection therewith and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall in each case be deemed to be a “Change in Law”, regardless of the date enacted, adopted or issued.

“Change of Control” means an event or series of events by which:

(a)    any “person” or “group” (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have “beneficial ownership” of all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right, an “option right”)), directly or indirectly, of 35% or more of the equity securities of the Company entitled to vote for members of the board of directors or equivalent governing body of the Company on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right); or

(b)    during any period of 12 consecutive months, a majority of the members of the board of directors or other equivalent governing body of the Company cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body.

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“Closing Date” means the first date all the conditions precedent in Section 4.01 are satisfied or waived in accordance with Section 10.01.

“Code” means the Internal Revenue Code of 1986, as amended.

“Collateral” means, collectively, all property of each Borrower, each Guarantor or any other Person in which the Collateral Agent or any Lender is granted a Lien under any Security Instrument as security for all or any portion of the Obligations. Notwithstanding anything to the contrary contained herein or in any other Loan Document, the Collateral shall not include any property that would otherwise constitute a general intangible to the extent that the grant of a security interest in such property is prohibited by any requirement of Law of a Governmental Authority, requires a consent not obtained from any Governmental Authority pursuant to such requirement of Law or is prohibited by, or constitutes a breach or default under or results in the termination of or requires any consent not obtained under, any contract, license, permit, agreement, instrument or other document evidencing or giving rise to such property or, in the case of any investment property, any applicable shareholder, joint venture or similar agreement, except in each case to the extent that such requirement of Law or the term in such contract, license, agreement, instrument or other document or shareholder, joint venture or similar agreement providing for such prohibition, breach, default or termination or requiring such consent is ineffective under applicable Law; provided that this exclusion shall not apply to capital stock in Joint Ventures or Subsidiaries acquired or created after the Closing Date unless after reasonable best efforts the relevant Borrower or Guarantor is unable either to avoid the conditions set forth in this exclusion or to obtain consents, waivers or approvals thereof.

“Collateral Agent” means Bank of America in its capacity as Collateral Agent under the Loan Documents pursuant to Section 9.10, or any successor collateral agent.

“Collateral Release Date” means the date on which Collateral has been released pursuant to Section 6.14(d).

“Collateral Release Period” means any period of time during which the Collateral Agent does not have a Lien (other than set off rights) on any Collateral pursuant to the Security Instruments.

“Collateral Re-Pledge Date” means the date on which the Loan Parties are required to pledge and grant Liens on Collateral pursuant to Section 6.14(d).

“Commitment” means, as to each Lender, its obligation to (a) make Revolving Loans to the Borrowers pursuant to Section 2.01, (b) purchase participations in L/C Obligations, and (c) purchase participations in Swing Line Loans, in an aggregate principal amount at any one time outstanding not to exceed the amount set forth opposite such Lender's name on Schedule 2.01 or in the Assignment and Assumption pursuant to which such Lender becomes a party hereto, as applicable, as such amount may be adjusted from time to time in accordance with this Agreement.

“Company” has the meaning specified in the introductory paragraph hereto.

“Compliance Certificate” means a certificate substantially in the form of Exhibit D.

“Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.

“Consolidated Cash Taxes” means, for any Subject Period, for the Company and its Subsidiaries on a consolidated basis (excluding, however, any Project Debt Entity), the aggregate of all taxes actually paid by such Persons in cash during such period.

“Consolidated EBITDA” means, for any Subject Period, for the Company and its Subsidiaries on a consolidated basis (excluding, however, any Project Debt Entity), an amount equal to Consolidated Net Income for such period plus Consolidated Cash Taxes for such period and the following to the extent deducted in calculating such Consolidated Net Income: (a) Consolidated Interest Expense for such period, (b) depreciation and amortization expense for such period, and (c) any non-cash charges for such period (excluding any such non-cash charges that represent the accrual of, or reserve for, anticipated cash charges in any future period); provided that all components of Consolidated EBITDA for such period shall include or exclude, as the case may be, without duplication, such components of Consolidated EBITDA attributable to any Investment permitted pursuant to Section 7.02(n) other than Construction JV Investments arising in the Ordinary Course of Business consummated during such period or any business or assets that have been Disposed of after the first day of such period and prior to the end of such period, in each case as determined on a pro forma basis, in accordance with Regulation S-X promulgated by the SEC.

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“Consolidated Fixed Charge Coverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated EBITDA, measured for the Subject Period ending on such date, to (b) Consolidated Fixed Charges, measured for the Subject Period ending on such date.

“Consolidated Fixed Charges” means, for any Subject Period, for the Company and its Subsidiaries on a consolidated basis, the sum of (a) Consolidated Interest Expenses paid in cash, plus (b) the aggregate amount of Federal, state, local and foreign taxes paid in cash, plus (c) the aggregate principal amount of all regularly scheduled principal payments of Consolidated Funded Indebtedness (for the avoidance of doubt, excluding all payments in respect of revolving Indebtedness and prepayments in respect of all Indebtedness), plus (d) the lesser amount of (i) the aggregate amount of all capital expenditures and (ii) $37,500,000, plus (e) the aggregate amount of all Restricted Payments made in cash.

“Consolidated Funded Indebtedness” means, as of any date of determination, for the Company and its Subsidiaries on a consolidated basis, the sum of (a) the outstanding principal amount of all obligations, whether current or long-term, for borrowed money (including Obligations hereunder) and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments, with or without recourse, but not including Project Debt, plus (b) Attributable Indebtedness in respect of capital leases, Synthetic Lease Obligations and sale-leaseback transactions, but not including Project Debt, plus (c) without duplication, all Guarantee Obligations with respect to Indebtedness of the types specified in subsections (a) and (b) above of Persons other than any Borrower or any Subsidiary.

“Consolidated Interest Coverage Ratio” means,as of any date of determination, the ratio of (a) Consolidated EBITDA, measured for the Subject Period ending on such date, to (b) Consolidated Interest Expense, measured for the Subject Period ending on such date.

“Consolidated Interest Expense” means, for any Subject Period, for the Company and its Subsidiaries on a consolidated basis, the sum of (a) all interest, premium payments, fees, charges and related expenses of the Company and its Subsidiaries in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP, plus (b) the portion of rent expense of the Company and its Subsidiaries with respect to such period under capital leases that is treated as interest in accordance with GAAP and the portion of Synthetic Lease Obligations payable by the Company and its Subsidiaries with respect to such period that would be treated as interest in accordance with GAAP if such lease were treated as a capital lease under GAAP; excluding for purposes of clause (a) and (b) hereof, such amounts in respect of Project Debt.

“Consolidated Leverage Ratio” means, as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness as of such date to (b) Consolidated EBITDA, measured for the Subject Period ending on or most recently ended prior to such date.

“Consolidated Net Income” means, for any Subject Period, for the Company and its Subsidiaries on a consolidated basis, the net income of the Company and its Subsidiaries from continuing operations, excluding extraordinary items and excluding gains and losses from Dispositions for that period; not including, however, net income in respect of or attributable to any Project Debt Entity unless and until such net income has been received by a Borrower or Subsidiary (other than a Project Debt Entity) in the form of dividends or similar distributions.

“Consolidated Stockholders' Equity” means, as of any date of determination for the Company and its Subsidiaries (excluding Project Debt Entities) on a consolidated basis, stockholders' equity as of that date, determined in accordance with GAAP.

“Consolidated Tangible Net Worth” means, as of any date of determination, the amount equal to Consolidated Stockholders' Equity on that date minus the Intangible Assets of the Company and its Subsidiaries (excluding Project Debt Entities) (determined on a consolidated basis in accordance with GAAP) on that date.

“Construction JV” means any Joint Venture entered into by the Company or any of its Subsidiaries, initially, with any one or more other Persons in the Ordinary Course of Business solely for purposes of undertaking or completing a construction project; provided that a Construction JV shall not be deemed to cease being a Construction JV after the withdrawal or buy-out of such other Person(s) from the Joint Venture or the purchase, acquisition or redemption of such other Person's interest in such Joint Venture.

“Construction JV Investments” means Investments in any Construction JV arising upon any initial capital contribution to or subsequent capital contribution in such Construction JV, and participated in ratably by all then existing co-joint venturers having an interest in such Construction JV, solely for purposes of undertaking or completing a construction project and

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Investments arising in connection with the purchase, acquisition, redemption or buy-out of another co-joint venturer's interest in such Construction JV; provided Construction JV Investments shall not include the incurrence, directly or indirectly, of any Guarantee Obligation by the Company or any of its Subsidiaries.

“Contingent Acquisition Obligation” means those contingent obligations (including, without limitation, purchase price adjustments, indemnification obligations and “earnouts”) of a Borrower or Subsidiary incurred in favor of a seller (or other third party entitled thereto) under or with respect to any Acquisition or Investment permitted hereunder.

“Contractual Obligation” means, as to any Person, any provision of any security issued by such Person or of any agreement, instrument or other undertaking to which such Person is a party or by which it or any of its property is bound.

“Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.

“Credit Extension” means each of the following: (a) a Borrowing and (b) an L/C Credit Extension.

“Debtor Relief Laws” means the Bankruptcy Code of the United States, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization, or similar debtor relief Laws of the United States or other applicable jurisdictions from time to time in effect.

“Default” means any event or condition that constitutes an Event of Default or that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

“Default Rate” means (a) when used with respect to Obligations other than Letter of Credit Fees, an interest rate equal to (i) the Base Rate plus (ii) the Applicable Rate, if any, applicable to Base Rate Loans plus (iii) 2% per annum; provided, however, that with respect to a Eurodollar Rate Loan, the Default Rate shall be an interest rate equal to the interest rate (including any Applicable Rate) otherwise applicable to such Loan plus 2% per annum, and (b) when used with respect to Letter of Credit Fees, a rate equal to the Applicable Rate plus 2% per annum.

“Defaulting Lender” means, subject to Section 2.16(b), any Lender that (a) has failed to (i) fund all or any portion of its Loans within two Business Days of the date such Loans were required to be funded hereunder unless such Lender notifies the Administrative Agent and the Company in writing that such failure is the result of such Lender's determination that one or more conditions precedent to funding (each of which conditions precedent, together with any applicable default, shall be specifically identified in such writing) has not been satisfied, or (ii) pay to the Administrative Agent, the L/C Issuer, the Swing Line Lender or any other Lender any other amount required to be paid by it hereunder (including in respect of its participation in Letters of Credit or Swing Line Loans) within two Business Days of the date when due, (b) has notified the Company, the Administrative Agent, the L/C Issuer or the Swing Line Lender in writing that it does not intend to comply with its funding obligations hereunder, or has made a public statement to that effect (unless such writing or public statement relates to such Lender's obligation to fund a Loan hereunder and states that such position is based on such Lender's determination that a condition precedent to funding (which condition precedent, together with any applicable default, shall be specifically identified in such writing or public statement) cannot be satisfied), (c) has failed, within three Business Days after written request by the Administrative Agent or the Company, to confirm in writing to the Administrative Agent and the Company that it will comply with its prospective funding obligations hereunder (provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon receipt of such written confirmation by the Administrative Agent and the Company), or (d) has, or has a direct or indirect parent company that has, (i) become the subject of a proceeding under any Debtor Relief Law, or (ii) had appointed for it a receiver, custodian, conservator, trustee, administrator, assignee for the benefit of creditors or similar Person charged with reorganization or liquidation of its business or assets, including the Federal Deposit Insurance Corporation or any other state or federal regulatory authority acting in such a capacity; provided that a Lender shall not be a Defaulting Lender solely by virtue of the ownership or acquisition of any equity interest in that Lender or any direct or indirect parent company thereof by a Governmental Authority so long as such ownership interest does not result in or provide such Lender with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Lender (or such Governmental Authority) to reject, repudiate, disavow or disaffirm any contracts or agreements made with such Lender. Any determination by the Administrative Agent that a Lender is a Defaulting Lender under any one or more of clauses (a) through (d) above, and of the effective date of such status, shall be conclusive and binding absent manifest error, and such Lender shall be deemed to be a Defaulting Lender (subject to Section 2.16(b)) as of the date established therefor by the Administrative Agent in a written notice of such determination, which shall be delivered by the Administrative Agent to the Company, the L/C Issuer, the Swing Line Lender and each other Lender promptly following such determination.

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“Designated Jurisdiction” means any country or territory to the extent that such country or territory itself is the subject of any Sanction.

“Direct Foreign Subsidiary” means a Foreign Subsidiary a majority of whose Voting Securities, or a majority of whose Subsidiary Securities, are owned by any Borrower or a Domestic Subsidiary.

“Disposition” or “Dispose” means the sale, transfer, license, lease or other disposition (including any sale and leaseback transaction) of any property by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith; provided that the term “Disposition” shall not apply to or include any lease of real property.

“Dollar” and “$” mean lawful money of the United States.

“Dollar Equivalent” means, at any time, (a) with respect to any amount denominated in Dollars, such amount, and (b) with respect to any amount denominated in any Alternative Currency, the equivalent amount thereof in Dollars as determined by the Administrative Agent or the L/C Issuer, as the case may be, at such time on the basis of the Spot Rate (determined in respect of the most recent Revaluation Date) for the purchase of Dollars with such Alternative Currency.

“Domestic Subsidiary” means any Subsidiary that is organized under the laws of any political subdivision of the United States, other than any such Subsidiary that is treated as a disregarded entity for U.S. federal income tax purposes if substantially all of the assets of such Subsidiary consist of capital stock of one or more direct or indirect Subsidiaries organized under the laws of any jurisdiction other than the United States or any political subdivision thereof.

“Eligible Assignee” means any Person that meets the requirements to be an assignee under Section 10.06(b)(iii) and (v)(subject to such consents, if any, as may be required under Section 10.06(b)(iii)).

“EMU Legislation” means the legislative measures of the European Council for the introduction of, changeover to or operation of a single or unified European currency.

“Environmental Claims” means all claims, however asserted, by any Governmental Authority or any other Person alleging potential liability or responsibility for violation of any Environmental Law or for release or injury to the environment or threat to public health, personal injury (including sickness, disease or death), property damage, natural resources damage, or otherwise alleging liability or responsibility for damages (punitive or otherwise), cleanup, removal, remedial or response costs, restitution, civil or criminal penalties, injunctive relief, or other type of relief, resulting from or based upon (a) the presence, placement, discharge, emission or release (including intentional and unintentional, negligent and non-negligent, sudden or non-sudden, accidental or non-accidental placement, spills, leaks, discharges, emissions or releases) of any Hazardous Material at, in or from property, whether or not owned by the Company or any of its Subsidiaries, or (b) any other circumstances forming the basis of any violation, or alleged violation, of any Environmental Law.

“Environmental Laws” means any and all Federal, state, local, and foreign statutes, laws, regulations, ordinances, rules, judgments, orders, decrees, permits, concessions, grants, franchises, licenses, agreements or governmental restrictions relating to pollution and the protection of the environment or the release of any materials into the environment, including those related to hazardous substances or wastes, air emissions and discharges to waste or public systems.

“Environmental Permits” has the meaning set forth in Section 5.09(b).

“ERISA” means the Employee Retirement Income Security Act of 1974.

“ERISA Affiliate” means any trade or business (whether or not incorporated) under common control with the Company within the meaning of Section 414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes of provisions relating to Section 412 of the Code).

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“ERISA Event” means (a) a Reportable Event with respect to a Pension Plan that requires the Company or an ERISA Affiliate to provide notice to the PBGC; (b) the withdrawal of the Company or any ERISA Affiliate from a Pension Plan subject to Section 4063 of ERISA during a plan year in which such entity was a “substantial employer” as defined in Section 4001(a)(2) of ERISA or a cessation of operations that is treated as such a withdrawal under Section 4062(e) of ERISA; (c) a complete or partial withdrawal by the Company or any ERISA Affiliate from a Multiemployer Plan or notification that a Multiemployer Plan is in reorganization, in either case, within the meaning of Title IV of ERISA; (d) the filing of a notice of intent to terminate, or the treatment of a Pension Plan amendment as a termination, under Section 4041 or 4041A of ERISA; (e) the institution by the PBGC of proceedings to terminate a Pension Plan; (f) any event or condition which constitutes grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (g) the determination that any Pension Plan is considered an at-risk plan or a plan in endangered or critical status within the meaning of Sections 430, 431 and 432 of the Code or Sections 303, 304 and 305 of ERISA; or (h) the imposition of any liability under Title IV of ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of ERISA, upon the Company or any ERISA Affiliate.

“Euro” means the lawful currency of the Participating Member States introduced in accordance with the EMU Legislation.

“Eurodollar Rate” means:

(a)for any Interest Period with respect to a Eurodollar Rate Loan, the rate per annum equal to (i) the British Bankers Association LIBOR Rate or the successor thereto if the British Bankers Association is no longer making a LIBOR rate available (“LIBOR”), as published by Reuters (or such other commercially available source providing quotations of LIBOR as may be designated by the Administrative Agent from time to time) at approximately 11:00 a.m., London time, two London Banking Days prior to the commencement of such Interest Period, for Dollar deposits (for delivery on the first day of such Interest Period) with a term equivalent to such Interest Period or, (ii) if such rate is not available at such time for any reason, the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the first day of such Interest Period in same day funds in the approximate amount of the Eurodollar Rate Loan being made, continued or converted and with a term equivalent to such Interest Period would be offered by Bank of America's London Branch to major banks in the London interbank eurodollar market at their request at approximately 11:00 a.m. (London time) two London Banking Days prior to the commencement of such Interest Period; and

(b)for any interest calculation with respect to a Base Rate Loan on any date, the rate per annum equal to (i) LIBOR, at approximately 11:00 a.m., London time determined two London Banking Days prior to such date for Dollar deposits being delivered in the London interbank market for a term of one month commencing that day or (ii) if such published rate is not available at such time for any reason, the rate per annum determined by the Administrative Agent to be the rate at which deposits in Dollars for delivery on the date of determination in same day funds in the approximate amount of the Base Rate Loan being made or maintained and with a term equal to one month would be offered by Bank of America's London Branch to major banks in the London interbank eurodollar market at their request at the date and time of determination.

“Eurodollar Rate Loan” means a Revolving Loan that bears interest at a rate based on clause (a) of the definition of “Eurodollar Rate.”

“Event of Default” has the meaning specified in Section 8.01.

“Excluded Taxes” means any of the following Taxes imposed on or with respect to any Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan or Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Company under Section 10.13) or (ii) such Lender changes its Lending Office, except in each case to the extent that, pursuant to Section 3.01(a)(ii) or (c), amounts with respect to such Taxes were payable either to such Lender's assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its Lending Office, (c) Taxes attributable to such Recipient's failure to comply with Section 3.01(e) and (d) any U.S. federal withholding Taxes imposed pursuant to FATCA.

“Existing Credit Agreement” has the meaning specified in the recitals hereto.

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“Existing Lenders” has the meaning specified in the recitals hereto.

“Existing Letters of Credit” means those letters of credit outstanding immediately prior to the effectiveness of this Agreement, as more particularly described on Schedule 1.01(e).

“Facility Termination Date” means the date as of which all of the following shall have occurred: (a) the Aggregate Commitments have been terminated in full, (b) all Obligations have been paid in full, other than (i) contingent indemnification obligations, (ii) the undrawn portion of Letters of Credit and (iii) all fees relating to any Letters of Credit accruing after such date (which fees shall be payable solely for the account of the L/C Issuer and shall be computed (based on interest rates and the Applicable Rate then in effect) on such undrawn amounts to the respective expiry dates of the Letters of Credit), in each case as have been fully Cash Collateralized or as to which other arrangements with respect thereto satisfactory to the Administrative Agent and the L/C Issuer shall have been made, (c) the Commitments of all Lenders, if any, shall have terminated or expired, (d) the obligations and liabilities of the Borrowers and each other Loan Party under all Secured Hedge Agreements and Secured Cash Management Agreements shall have been fully, finally and irrevocably paid and satisfied in full and the Secured Hedge Agreements and Secured Cash Management Agreements shall have expired or been terminated, or other arrangements satisfactory to the applicable Cash Management Bank or Hedge Bank shall have been made with respect thereto, (e) the obligations and liabilities of the Borrowers and each other Loan Party under all Secured Card Related Products Agreements shall have been fully, finally and irrevocably paid and satisfied in full and the Secured Card Related Products Agreements shall have expired or been terminated, or other arrangements satisfactory to the applicable Card Related Products Bank shall have been made with respect thereto, and (f) each Guarantor shall have fully, finally and irrevocably paid and satisfied in full its respective obligations and liabilities arising under the Loan Documents (except for future obligations consisting of, or arising out of, continuing indemnities and other contingent Obligations of the Borrowers or any Loan Party that may be owing to any Related Party of the Administrative Agent or any Lender pursuant to the Loan Documents and expressly survive termination of this Agreement).

“FASB ASC” means the Accounting Standards Codification of the Financial Accounting Standards Board.

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof.

“Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day; provided that (a) if such day is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day, and (b) if no such rate is so published on such next succeeding Business Day, the Federal Funds Rate for such day shall be the average rate (rounded upward, if necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on such day on such transactions as determined by the Administrative Agent.

“Fee Letter” means the letter agreement, dated June 25, 2012, among the Company, the Administrative Agent and the Arranger.

“Financial Letter of Credit” means any Letter of Credit that is a “financial standby letter of credit” as set forth in applicable Laws promulgated from time to time by the FRB.

“Foreign Lender” means any Lender that is organized under the Laws of a jurisdiction other than that in which any Borrower is resident for tax purposes (including such a Lender when acting in the capacity of the L/C Issuer). For purposes of this definition, the United States, each State thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

“Foreign Obligor” means a Loan Party that is a Foreign Subsidiary.

“Foreign Subsidiary” means any Subsidiary other than a Domestic Subsidiary.

“FRB” means the Board of Governors of the Federal Reserve System of the United States.

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“Fronting Exposure” means, at any time there is a Defaulting Lender, (a) with respect to the L/C Issuer, such Defaulting Lender's Applicable Percentage of the outstanding L/C Obligations other than L/C Obligations as to which such Defaulting Lender's participation obligation has been reallocated to other Lenders or Cash Collateralized in accordance with the terms hereof, and (b) with respect to the Swing Line Lender, such Defaulting Lender's Applicable Percentage of Swing Line Loans other than Swing Line Loans as to which such Defaulting Lender's participation obligation has been reallocated to other Lenders in accordance with the terms hereof.

“Fund” means any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of its activities.

“GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date of determination, consistently applied.

“GLC Venture” means any Joint Venture, now or hereafter formed by the Company or any of its Subsidiaries with any other Person in the Ordinary Course of Business of the Company or such Subsidiary for the purpose of engaging in the business of real estate development and/or Disposition of real estate or interests in real estate or entities owning real estate; provided that a GLC Venture shall not be deemed to cease being a GLC Venture after the withdrawal or buy-out of such other Person(s) from the Joint Venture or the purchase, acquisition or redemption of such other Person's interest in such Joint Venture.

“Governmental Authority” means the government of the United States or any other nation, or of any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

“Guarantee Obligation” means, as to any Person, (a) any obligation, contingent or otherwise, of such Person guaranteeing or having the economic effect of guaranteeing any Indebtedness or other obligation payable or performable by another Person (the “primary obligor”) in any manner, whether directly or indirectly, and including any obligation of such Person, direct or indirect, (i) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness or other obligation, (ii) to purchase or lease property, securities or services for the purpose of assuring the obligee in respect of such Indebtedness or other obligation of the payment or performance of such Indebtedness or other obligation, (iii) to maintain working capital, equity capital or any other financial statement condition or liquidity of the primary obligor so as to enable the primary obligor to pay such Indebtedness or other obligation, or (iv) entered into for the purpose of assuring in any other manner the obligee in respect of such Indebtedness or other obligation of the payment or performance thereof or to protect such obligee against loss in respect thereof (in whole or in part), or (b) any Lien on any assets of such Person securing any Indebtedness or other obligation of any other Person, whether or not such Indebtedness or other obligation is assumed by such Person (or any right, contingent or otherwise, of any holder of such Indebtedness to obtain any such Lien). The amount of any Guarantee Obligation of any guaranteeing Person shall be deemed to be the lower of (x) an amount equal to the stated or determinable amount of the primary obligation in respect of which such Guarantee Obligation is made and (y) the maximum amount for which such guaranteeing person may be liable pursuant to the terms of the instrument embodying such Guarantee Obligation, unless such primary obligation and the maximum amount for which such guaranteeing Person may be liable are not stated or determinable, in which case the amount of such Guarantee Obligation shall be such guaranteeing Person's maximum reasonably anticipated liability in respect thereof as determined by the Company in good faith.

“Guarantor Assessment Date” means each of (a) the date on which the Company delivers or is obligated to deliver to the Administrative Agent financial statements pursuant to Section 6.01(a) or (b), (b) the date on which a Borrower consummates any Acquisition of all or substantially all of the assets or capital stock of another Person, or acquires or creates any new or additional Subsidiary, (c) the date on which any Subsidiary becomes a Permitted Notes Guarantor, and (d) the date on which a Borrower sells, transfers, divests or otherwise Disposes of any Subsidiary or all or substantially of the assets of any Subsidiary.

“Guarantors” means the Company and all of the Subsidiaries listed on Schedule 1.01(g), together with all other Persons who, following the Closing Date, execute and deliver a guaranty or guaranty joinder or supplement pursuant to Section 6.14.

“Guaranty” means that certain Amended and Restated Guaranty Agreement executed by the Guarantors in favor of the Administrative Agent and for the benefit of the Secured Bank Creditors, substantially in the form attached as Exhibit F

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hereto and reasonably satisfactory to Administrative Agent, as supplemented from time to time by the execution and delivery of any Guaranty Joinder Agreements executed and delivered pursuant to Section 6.14.

“Guaranty Joinder Agreement” means each Guaranty Joinder Agreement, substantially in the form thereof attached to the Guaranty, executed and delivered by a Subsidiary to Administrative Agent pursuant to Section 6.14.

“Hazardous Materials” means, collectively, as of any date: (a) any petroleum or petroleum products, flammable explosives, radioactive materials, asbestos in any form that is or could become friable, urea formaldehyde foam insulation, and transformers or other equipment that contain dielectric fluid containing polychlorinated biphenyls (PCB's); (b) any chemicals or other materials or substances which as of such date are defined as or included in the definition of “hazardous substances,” “hazardous wastes,” “hazardous materials,” “extremely hazardous wastes,” “restricted hazardous wastes,” “toxic substances,” “toxic pollutants,” “contaminants,” “infectious wastes,” “pollutants” or words of similar import under any Environmental Law; and (c) any other chemical or other material or substance, exposure to which or use of which as of such date is prohibited, limited or regulated under any Environmental Law.

“Hedge Bank” means any Person that (a) at the time that it enters into any Swap Contract not prohibited by the terms of this Agreement, is a Lender or an Affiliate of a Lender that has executed and delivered to the Administrative Agent a letter of undertaking in the form approved by the Administrative Agent, or (b) is party to an interest rate Swap Contract on the date that such Person or its Affiliate becomes a Lender, in each case in such Person's capacity as a party to such Swap Contract.

“Honor Date” has the meaning specified in Section 2.03(c)(i).

“Increase Effective Date” has the meaning specified in Section 2.14(b)(iv).

“Incremental Loan Facilities” has the meaning specified in Section 2.14(a).

“Incremental Revolving Commitments” has the meaning specified in Section 2.14(a).

“Incremental Term Facility” has the meaning specified in Section 2.14(a).

“Incremental Term Facility Effective Date” has the meaning specified in Section 2.14(c)(iv).

“Indebtedness” means, as to any Person at a particular time, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

(a)    all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

(b)    all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), reimbursement agreements, bankers' acceptances, bank guaranties, surety bonds and similar instruments (in each case, whether or not such obligations are contingent or absolute); provided that the amount of any such contingent obligation permitted under this clause (b) shall be deemed to be equal to the maximum reasonably anticipated liability in respect thereof;

(c)    net obligations under any Swap Contract in an amount equal to the Swap Termination Value thereof;

(d)    all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the Ordinary Course of Business);

(e)    indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

(f)    capital leases and Synthetic Lease Obligations; and

(g)    all Guarantee Obligations of such Person in respect of any of the foregoing.

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For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any Joint Venture (other than a Joint Venture that is itself a corporation or limited liability company) in which such Person is a general partner or joint venturer, unless such Indebtedness is (i) expressly made non-recourse to such Person and to such Person's assets (subject only to customary exceptions acceptable to the Required Lenders) or (ii) Project Debt. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of any capital lease or Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable Indebtedness in respect thereof as of such date.

“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Loan Party under any Loan Document and (b) to the extent not otherwise described in clause (a), Other Taxes.

“Indemnitees” has the meaning specified in Section 10.04(b).

“Information” has the meaning specified in Section 10.07.

“Intangible Assets” means assets that are considered to be intangible assets under GAAP, including customer lists, goodwill, computer software, copyrights, trade names, trademarks, patents, franchises, licenses, unamortized deferred charges, unamortized debt discount and capitalized research and development costs.

“Interest Payment Date” means, (a) as to any Loan other than a Base Rate Loan, the last day of each Interest Period applicable to such Loan and the Maturity Date; provided, however, that if any Interest Period for a Eurodollar Rate Loan exceeds three months, the respective dates that fall every three months after the beginning of such Interest Period shall also be Interest Payment Dates; and (b) as to any Base Rate Loan (including a Swing Line Loan), the last Business Day of each March, June, September and December and the Maturity Date.

“Interest Period” means, as to each Eurodollar Rate Loan, the period commencing on the date such Eurodollar Rate Loan is disbursed or converted to or continued as a Eurodollar Rate Loan and ending on the date one, two, three or six months (or such other period that is twelve months or less requested by Company and consented to by all of the Lenders) thereafter, as selected by the Company in its Revolving Loan Notice; provided that:

(a)    any Interest Period that would otherwise end on a day that is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding Business Day;

(b)    any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall end on the last Business Day of the calendar month at the end of such Interest Period; and

(c)    no Interest Period shall extend beyond the Maturity Date.

“Investment” means, as to any Person, any acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of capital stock or other securities of another Person, (b) a loan, advance or capital contribution to, guaranty of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in or with such other Person, (c) the provision of goods or services to another Person for consideration other than cash payable in full upon the delivery or provision of such goods or services (other than trade accounts payable in the Ordinary Course of Business), or (d) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit of that Person. For purposes of covenant compliance, the amount of any Investment shall be the amount actually invested, without adjustment for subsequent increases or decreases in the value of such Investment, minus any dividends, distributions or other amounts returned or repaid in respect of such Investment.

“IP Rights” has the meaning specified in Section 5.16.

“IRS” means the United States Internal Revenue Service.

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“ISP” means, with respect to any Letter of Credit, the “International Standby Practices 1998” published by the Institute of International Banking Law & Practice, Inc. (or such later version thereof as may be in effect at the time of issuance).

“Issuer Documents” means with respect to any Letter of Credit, the Letter of Credit Application, and any other document, agreement and instrument entered into by the L/C Issuer and any Borrower (or any Subsidiary) or in favor of the L/C Issuer and relating to such Letter of Credit.

“Joint Venture” means a single-purpose corporation, partnership, limited liability company, joint venture or other similar legal arrangement (whether created by contract or conducted through a separate legal entity) now or hereafter formed by one Person with another Person in order to conduct a common venture or enterprise with such Person.

“Laws” means, collectively, all international, foreign, Federal, state and local statutes, treaties, rules, guidelines, regulations, ordinances, codes and administrative or judicial precedents or authorities, including the interpretation or administration thereof by any Governmental Authority charged with the enforcement, interpretation or administration thereof, and all applicable administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any Governmental Authority, in each case whether or not having the force of law.

“L/C Advance” means, with respect to each Lender, such Lender's funding of its participation in any L/C Borrowing in accordance with its Applicable Percentage. All L/C Advances shall be denominated in Dollars.

“L/C Borrowing” means an extension of credit resulting from a drawing under any Letter of Credit which has not been reimbursed on the date when made or refinanced as a Revolving Borrowing. All L/C Borrowings shall be denominated in Dollars.

“L/C Credit Extension” means, with respect to any Letter of Credit, the issuance thereof or extension of the expiry date thereof, or the increase of the amount thereof.

“L/C Issuer” means Bank of America in its capacity as issuer of Letters of Credit hereunder, or any successor issuer of Letters of Credit hereunder.

“L/C Obligations” means, as at any date of determination, the aggregate amount available to be drawn under all outstanding Letters of Credit plus the aggregate of all Unreimbursed Amounts, including all L/C Borrowings. For purposes of computing the amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.09. For all purposes of this Agreement, if on any date of determination a Letter of Credit has expired by its terms but any amount may still be drawn thereunder by reason of the operation of Rule 3.14 of the ISP, such Letter of Credit shall be deemed to be “outstanding” in the amount so remaining available to be drawn.

“Lender” has the meaning specified in the introductory paragraph hereto and, as the context requires, includes the Swing Line Lender.

“Lending Office” means, as to any Lender, the office or offices of such Lender described as such in such Lender's Administrative Questionnaire, or such other office or offices as a Lender may from time to time notify the Company and the Administrative Agent.

“Letter of Credit” means any standby letter of credit issued hereunder and shall include each Existing Letter of Credit. Letters of Credit may be issued in Dollars or in an Alternative Currency.

“Letter of Credit Application” means an application and agreement for the issuance or amendment of a Letter of Credit in the form from time to time in use by the L/C Issuer.

“Letter of Credit Expiration Date” means the day that is seven days prior to the Maturity Date then in effect (or, if such day is not a Business Day, the next preceding Business Day).

“Letter of Credit Fee” has the meaning specified in Section 2.03(h).

“Letter of Credit Sublimit” means an amount equal to the lesser or the Aggregate Commitments and $100,000,000. The Letter of Credit Sublimit is part of, and not in addition to, the Aggregate Commitments.

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“Lien” means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other), charge, or preference, priority or other security interest or preferential arrangement in the nature of a security interest of any kind or nature whatsoever (including any conditional sale or other title retention agreement, any easement, right of way or other encumbrance on title to real property, and any financing lease having substantially the same economic effect as any of the foregoing).

“Loan” means an extension of credit by a Lender to any Borrower under Article II in the form of a Revolving Loan or a Swing Line Loan. All Loans shall be denominated in Dollars.

“Loan Documents” means, collectively, this Agreement, each Note, each Issuer Document, each Security Instrument, the Post-Closing Agreement, any agreement creating or perfecting rights in Cash Collateral pursuant to the provisions of Section 2.15 of this Agreement, the Fee Letter, the Guaranty and the Permitted Notes Intercreditor Agreement.

“Loan Parties” means, collectively, the Borrowers and the Guarantors.

“London Banking Day” means any day on which dealings in Dollar deposits are conducted by and between banks in the London interbank eurodollar market.

“Material Adverse Effect” means (a) a material adverse change in, or a material adverse effect upon, the operations, business, properties, condition (financial or otherwise) of the Company or the Company and its Subsidiaries taken as a whole; (b) a material impairment of the rights and remedies of the Administrative Agent, the Collateral Agent or any Lender under any Loan Document, orthe ability of any Loan Party to perform its obligations under any Loan Document to which it is a party; or (c) a material adverse effect upon the legality, validity, binding effect or enforceability against any Loan Party of any Loan Document to which it is a party.

“Material Subsidiary” means,

(a)    as of the last day of any fiscal quarter of the Company, any Subsidiarythat meets either of the following conditions at such time: (i) such Subsidiary's consolidated total revenues for the period of the immediately preceding four fiscal quarters is equal to or greater than 10% of the consolidated total 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 or quarterly (as applicable) financial statements required to be delivered pursuant to Section 6.01; or (ii) such Subsidiary's total assets, as of the last day of the immediately preceding fiscal quarter, are equal to or greater than 10% of the consolidated total assets of the Company and its Subsidiariesas of such date, determined in accordance with GAAP, in each case as reflected in the most recent annual or quarterly (as applicable) financial statements of the Company required to be delivered pursuant to Section 6.01; and

(b)     as of any other Guarantor Assessment Date, any Subsidiary that has, on a pro forma basis, based upon the then most recently delivered financial statements delivered pursuant to Section 6.01, and after giving effect to the applicable Acquisition, divestiture or creation, as though occurring on the first day of the four fiscal quarter period ending on the effective date of such delivered financial statements, (i) total revenues for the period of the immediately preceding four fiscal quarters is equal to or greater than 10% of the consolidated total revenues of the Company and its Subsidiaries for such period, determined in accordance with GAAP, or (ii) total assets equal to or greater than 10% of the consolidated total assets of the Company and its Subsidiaries as of such date, determined in accordance with GAAP;

provided, however, that if at any time Subsidiaries qualifying as Material Subsidiaries pursuant to clause (a) or (b) above which, in the aggregate and together with the total assets and total revenues of the Company, do not represent at least 80% of the consolidated total assets and consolidated total revenues of the Company and its Subsidiaries (the “80% Threshold”), the Company shall designate additional Domestic Subsidiaries or, to the extent no material adverse tax consequences shall result, Foreign Subsidiaries as Material Subsidiaries until the 80% Threshold is satisfied collectively by all Material Subsidiaries. Once a Subsidiary qualifies as or is designated by the Company as a Material Subsidiary, it shall continue to constitute a Material Subsidiary throughout the term of this Agreement, until such time as the Company provides to the Administrative Agent a certificate in accordance with Section 6.14(b) that such Subsidiary is no longer required to be designated as such pursuant to the terms hereof.

“Maturity Date” means October 11, 2016; provided, however, that if such date is not a Business Day, the Maturity Date shall be the next preceding Business Day.

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“Minimum Collateral Amount” means, at any time, (a) with respect to Cash Collateral consisting of cash or deposit account balances provided to reduce or eliminate Fronting Exposure during the existence of a Defaulting Lender, an amount equal to 102% of the Fronting Exposure of the L/C Issuer with respect to Letters of Credit issued and outstanding at such time, (b) with respect to Cash Collateral consisting of cash or deposit account balances provided in accordance with the provisions of Section 2.15(a)(i), (a)(ii) or (a)(iii), an amount equal to 102% of the Outstanding Amount of all L/C Obligations, and (c) otherwise, an amount determined by the Administrative Agent and the L/C Issuer in their sole discretion.

“Mortgage” means any mortgage, deed of trust, trust deed or other equivalent document now or hereafter encumbering any fee-owned real property of any Loan Party in favor of the Collateral Agent, on behalf of the Secured Parties, as security for any of the Obligations, each of which shall be in form and substance reasonably acceptable to the Collateral Agent.

“Mortgaged Properties” means, collectively, the real properties owned by the Loan Parties and identified on Exhibit I, including, without limitation, all buildings, improvements, structures and fixtures now or subsequently located thereon and owned by any such Loan Party.

“Multiemployer Plan” means any employee benefit plan of the type described in Section 4001(a)(3) of ERISA, to which the Company or any ERISA Affiliate makes or is obligated to make contributions, or during the preceding five plan years, has made or been obligated to make contributions.

“Multiple Employer Plan” means a Plan which has two or more contributing sponsors (including the Company or any ERISA Affiliate) at least two of whom are not under common control, as such a plan is described in Section 4064 of ERISA.

“Non-Consenting Lender” means any Lender that does not approve any consent, waiver or amendment that (a) requires the approval of all Lenders or all affected Lenders in accordance with the terms of Section 10.01 and (b) has been approved by the Required Lenders.

“Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.

“Note” means a promissory note made by any Borrower in favor of a Lender evidencing Loans made by such Lender, substantially in the form of Exhibit C.

“Obligations” means (a) all advances to, and debts, liabilities, obligations, covenants and duties of, any Loan Party arising under any Loan Document or otherwise with respect to any Loan, or Letter of Credit and (b) all costs and expenses incurred in connection with enforcement and collection of the foregoing, including the fees, charges and disbursements of counsel, in each case whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof pursuant to any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.

“Ordinary Course of Business” means, in respect of any transaction involving the Company or any Subsidiary of the Company, (a) the ordinary course of such Person's business, substantially as conducted by any such Person prior to or as of the Closing Date, or in a manner reasonably related thereto, and undertaken by such Person in good faith and not for purposes of evading any covenant or restriction in any Loan Document, or (b) transactions outside the ordinary course of such Person's then-existing business, as long as the Company provides written notice to the Administrative Agent and the Lenders prior to such Person undertaking such business, specifically referencing this definition, provided that the Required Lenders shall not have delivered written objections to the Administrative Agent within five (5) Business Days after their receipt of such written notice.

“Organization Documents” means, (a) with respect to any corporation, the certificate or articles of incorporation and the bylaws (or equivalent or comparable constitutive documents with respect to any non-U.S. jurisdiction); (b) with respect to any limited liability company, the certificate or articles of formation or organization and operating agreement; and (c) with respect to any partnership, Joint Venture, trust or other form of business entity, the partnership, Joint Venture or other applicable agreement of formation or organization and any agreement, instrument, filing or notice with respect thereto filed in connection with its formation or organization with the applicable Governmental Authority in the jurisdiction of its formation or organization and, if applicable, any certificate or articles of formation or organization of such entity.

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“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).

“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 3.06).

“Outstanding Amount” means (a) with respect to Revolving Loans and Swing Line Loans on any date, the aggregate outstanding principal amount thereof after giving effect to any borrowings and prepayments or repayments of Revolving Loans and Swing Line Loans, as the case may be, occurring on such date; and (b) with respect to any L/C Obligations on any date, the Dollar Equivalent amount of the aggregate outstanding amount of such L/C Obligations on such date after giving effect to any L/C Credit Extension occurring on such date and any other changes in the aggregate amount of the L/C Obligations as of such date, including as a result of any reimbursements by the Borrowers of Unreimbursed Amounts.

“Overnight Rate” means, for any day, (a) with respect to any amount denominated in Dollars, the greater of (i) the Federal Funds Rate and (ii) an overnight rate determined by the Administrative Agent, the L/C Issuer, or the Swing Line Lender, as the case may be, in accordance with banking industry rules on interbank compensation, and (b) with respect to any amount denominated in an Alternative Currency, the rate of interest per annum at which overnight deposits in the applicable Alternative Currency, in an amount approximately equal to the amount with respect to which such rate is being determined, would be offered for such day by a branch or Affiliate of Bank of America in the applicable offshore interbank market for such currency to major banks in such interbank market.

“Participant” has the meaning specified in Section 10.06(d).

“Participant Register” has the meaning specified in Section 10.06(d).

“Participating Member State” means each state so described in any EMU Legislation.

“PBGC” means the Pension Benefit Guaranty Corporation.

“Pension Act” means the Pension Protection Act of 2006.

“Pension Funding Rules” means the rules of the Code and ERISA regarding minimum required contributions (including any installment payment thereof) to Pension Plans and set forth in, with respect to plan years ending prior to the effective date of the Pension Act, Section 412 of the Code and Section 302 of ERISA, each as in effect prior to the Pension Act and, thereafter, Sections 412, 430, 431, 432 and 436 of the Code and Sections 302, 303, 304 and 305 of ERISA.

“Pension Plan” means any employee pension benefit plan (including a Multiple Employer Plan or a Multiemployer Plan) that is maintained or is contributed to by the Company and any ERISA Affiliate and is either covered by Title IV of ERISA or is subject to the minimum funding standards under Section 412 of the Code.

“Performance Letter of Credit” means any Letter of Credit that is a “performance standby letter of credit” as set forth in applicable Laws promulgated from time to time by the FRB.

“Permitted Lien” means any Lien permitted by Section 7.01.

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“Permitted Notes” means, collectively, the 2013 Notes and the 2019 Notes and any Indebtedness serving to extend, renew or refinance all or a portion thereof so long as (a) the aggregate outstanding principal amount (or accreted value, if applicable) of all Permitted Notes outstanding at any time is not greater than the aggregate principal amount (or accreted value, if applicable) of the Permitted Notes as of the Closing Date, (b) such Indebtedness has a maturity that is not prior to, and a weighted average life to maturity equal to or greater than, the remaining Weighted Average Life to Maturity of the extended, renewed or refinanced 2019 Notes, (c) such Indebtedness shall have pricing, fees (including upfront fees and original issue discount), optional prepayment, redemption premiums and subordination terms as determined by the Company and the Persons providing such Indebtedness; provided that such Indebtedness does not provide for greater or additional scheduled amortization payments due prior to the Maturity Date than the extended, renewed or refinanced 2019 Notes, (d) if secured, the terms and conditions of such Indebtedness (except as otherwise provided in clauses (b) and (c) above) are (taken as a whole) no more favorable to the Persons providing such Indebtedness than those applicable to the extended, renewed or refinanced Permitted Notes (except for covenants or other provisions applicable only to periods after the then Maturity Date), and such terms and conditions shall include collateral release provisions substantially similar to those contained in the 2013 Notes and the 2019 Notes, (e) such Indebtedness is secured on a paripassu or junior basis to the Obligations or is unsecured and (f) if secured, the Persons providing such Indebtedness shall be bound by the terms of the Permitted Notes Intercreditor Agreement.

“Permitted Notes Documents” means the 2013 Notes, the 2013 Notes Agreement, the 2019 Notes, the 2019 Notes Agreement, all other Permitted Notes, and all note purchase agreements, promissory notes, guaranties and other documents evidencing or relating to or executed in connection with any such Indebtedness.

“Permitted Notes Guarantor” means, at any time, any Subsidiary that is at such time a guarantor of Indebtedness of the Company pursuant to any Permitted Notes Documents.

“Permitted Notes Intercreditor Agreement” means (a) the Intercreditor and Collateral Agency Agreement dated as of the Closing Date, among the Administrative Agent (on behalf of the Secured Bank Creditors), the Permitted Noteholders, the Collateral Agent (on behalf of the Secured Parties) and the Loan Parties, attached as Exhibit J, as modified, amended, amended and restated or supplemented from time to time and (b) any other intercreditor agreement subsequently executed among the Administrative Agent (on behalf of the Secured Bank Creditors), the Permitted Noteholders, the Collateral Agent (on behalf of the Secured Parties) and the Loan Parties (it being understood that an intercreditor agreement having terms substantially similar to the Permitted Notes Intercreditor Agreement dated as of the Closing Date is satisfactory to the extent such Indebtedness is secured on a paripassu basis with the Obligations).

“Permitted Noteholders” means, collectively, the holders from time to time of the Permitted Notes.

“Person” means any natural person, corporation, limited liability company, trust, Joint Venture, association, company, partnership, Governmental Authority or other entity.

“Plan” means any employee benefit plan within the meaning of Section 3(3) of ERISA (including a Pension Plan), maintained for employees of the Company or any ERISA Affiliate or any such Plan to which the Company or any ERISA Affiliate is required to contribute on behalf of any of its employees.

“Platform” has the meaning specified in Section 6.02.

“Pledge Agreement” means that certain Amended and Restated Securities Pledge Agreement dated as of the Closing Date among the Borrowers, certain Guarantors and the Collateral Agent, for the benefit of the Secured Parties, substantially in the form of Exhibit G, as supplemented from time to time by the execution and delivery of Pledge Joinder Agreements pursuant to Section 6.14, as the same may be otherwise supplemented (including by Pledge Agreement Supplement).

“Pledge Agreement Supplement” means, with respect to each Pledge Agreement, the Pledge Agreement Supplement in the form affixed as an Exhibit to such Pledge Agreement.

“Pledge Joinder Agreement” means each Pledge Joinder Agreement, substantially in the form thereof attached to the Pledge Agreement, executed and delivered by a Guarantor to the Administrative Agent pursuant to Section 6.14.

“Pledged Interests” means the Subsidiary Securities heretofore pledged to the Collateral Agent and the Subsidiary Securities required to be pledged as Collateral pursuant to this Agreement or the terms of any Pledge Agreement; provided that notwithstanding any contrary provision in any Loan Document, in the case of any Foreign Subsidiary, “Pledged Interests” shall be limited to a pledge of 65% of the Voting Securities and 100% of the other Subsidiary Securities issued by such Foreign Subsidiary.

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“Post-Closing Agreement” means that certain Post-Closing Agreement dated as of the Closing Date among the Borrowers and the Administrative Agent.

“Prior Loan Documents” has the meaning set forth in Section 1.10(c).

“Project Debt” means, in respect of any GLC Venture (the “obligor”), any Indebtedness of such obligor incurred in the Ordinary Course of Business of such obligor and of the Company and its Subsidiaries, which may be secured by a Lien on assets of such obligor, but as to which there is no general recourse to any Loan Party except against such obligor (a) for breach of customary representations and warranties, or (b) to the extent such obligor is a limited liability company, corporation, limited partnership or other entity as to which no Loan Party (other than obligor) is, directly or indirectly (at law, through any Guarantee Obligation or otherwise), liable to pay the debts of such obligor.

“Project Debt Entity” means at any time, any GLC Venture obligated in respect of Project Debt at such time.

“Public Lender” has the meaning specified in Section 6.02.

“Recipient” means the Administrative Agent, any Lender, the L/C Issuer or any other recipient of any payment to be made by or on account of any obligation of any Loan Party hereunder.

“Register” has the meaning specified in Section 10.06(c).

“Related Parties” means, with respect to any Person, such Person's Affiliates and the partners, directors, officers, employees, agents, trustees, administrators, managers, advisors and representatives of such Person and of such Person's Affiliates.

“Release” means any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration into the indoor or outdoor environment, including the movement of Hazardous Materials through ambient air, soil, surface water, ground water, wetlands, land or subsurface strata.

“Reportable Event” means any of the events set forth in Section 4043(c) of ERISA, other than events for which the 30 day notice period has been waived.

“Request for Credit Extension” means (a) with respect to a Borrowing, conversion or continuation of Revolving Loans, a Revolving Loan Notice, (b) with respect to an L/C Credit Extension, a Letter of Credit Application, and (c) with respect to a Swing Line Loan, a Swing Line Loan Notice.

“Required Lenders” means, as of any date of determination, (a) Lenders having more than 50% of the Aggregate Commitments and, if any term loans have been made pursuant to Section 2.14(c), Total Outstandings in respect of such term loans or, (b) if the commitment of each Lender to make Revolving Loans and Swing Line Loans and the obligation of the L/C Issuer to make L/C Credit Extensions have been terminated pursuant to Section 8.02, Lenders holding in the aggregate more than 50% of the Total Outstandings (with the aggregate amount of each Lender's risk participation and funded participation in L/C Obligations and Swing Line Loans being deemed “held” by such Lender for purposes of this definition); provided that the Commitment of, and the portion of the Total Outstandings held or deemed held by, any Defaulting Lender shall be excluded for purposes of making a determination of Required Lenders; provided, further, that the amount of any participation in any Swing Line Loan and Unreimbursed Amounts that such Defaulting Lender has failed to fund that have not been reallocated to and funded by another Lender shall be deemed to be held by the Lender that is the Swing Line Lender or L/C Issuer, as the case may be, in making such determination.

“Responsible Officer” means the president, chief operating officer, chief executive officer, chief financial officer, treasurer, secretary, assistant secretary or controller of a Loan Party and, solely for purposes of the delivery of incumbency certificates pursuant to Section 4.01, the secretary or assistant secretary of a Loan Party. Any document delivered hereunder that is signed by a Responsible Officer of a Loan Party shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Loan Party and such Responsible Officer shall be conclusively presumed to have acted on behalf of such Loan Party.

“Restatement” has the meaning specified in the recitals hereto.

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“Restricted Payment” means any dividend or other distribution (whether in cash, securities or other property) with respect to any capital stock or other equity interest of the Company or any Subsidiary, or any payment (whether in cash, securities or other property), including any sinking fund or similar deposit on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such capital stock or other equity interest or of any option, warrant or other right to acquire any such capital stock or other equity interest.

“Revaluation Date” means with respect to any Letter of Credit, each of the following: (a) each date of issuance of a Letter of Credit denominated in an Alternative Currency, (b) each date of an amendment of any such Letter of Credit having the effect of increasing the amount thereof (solely with respect to the increased amount), (c) each date of any payment by the L/C Issuer under any Letter of Credit denominated in an Alternative Currency, (d) in the case of the Existing Letters of Credit denominated in an Alternative Currency, the Closing Date, and (e) such additional dates as the Administrative Agent or the L/C Issuer shall determine or the Required Lenders shall require.

“Revolving Borrowing” means a borrowing consisting of simultaneous Revolving Loans of the same Type and having the same Interest Period made by each of the Lenders pursuant to Section 2.01.

“Revolving Loan” has the meaning specified in Section 2.01.

“Revolving Loan Notice” means a notice of (a) a Revolving Borrowing, (b) a conversion of Revolving Loans from one Type to the other, or (c) a continuation of Eurodollar Rate Loans, pursuant to Section 2.02(a), which, if in writing, shall be substantially in the form of Exhibit A.

“Sanction(s)” means any international economic sanction administered or enforced by OFAC, the United Nations Security Council, the European Union, Her Majesty's Treasury or other relevant sanctions authority.

“SEC” means the Securities and Exchange Commission, or any Governmental Authority succeeding to any of its principal functions.

“Secured Bank Creditors” means, collectively, with respect to each of the Security Instruments, the Administrative Agent, the Collateral Agent, the Lenders, the L/C Issuer, the Hedge Banks, the Cash Management Banks, the Card Related Products Banks, each co-agent or sub-agent appointed by the Administrative Agent from time to time pursuant to Section 9.05 and the other Persons the Secured Obligations owing to which are or are purported to be secured by the Collateral under the terms of the Security Instruments.

“Secured Card Related Products Agreement” means any Card Related Products Agreement permitted by Article VII that is entered into by and between any Loan Party and any Card Related Products Bank.

“Secured Cash Management Agreement” means any Cash Management Agreement permitted by Article VII that is entered into by and between any Loan Party and any Cash Management Bank.

“Secured Hedge Agreement” means any Swap Contract permitted by Article VII that is entered into by and between any Loan Party and any Hedge Bank.

“Secured Obligations” means (a) all Obligations, (b) all obligations of any Loan Party arising under Secured Card Related Products Agreements, Secured Cash Management Agreements and Secured Hedge Agreements and (c) all costs and expenses incurred in connection with enforcement and collection of the foregoing, including the fees, charges and disbursements of counsel, in each case whether direct or indirect (including those acquired by assumption), absolute or contingent, due or to become due, now existing or hereafter arising and including interest and fees that accrue after the commencement by or against any Loan Party or any Affiliate thereof of any proceeding under any Debtor Relief Laws naming such Person as the debtor in such proceeding, regardless of whether such interest and fees are allowed claims in such proceeding.

“Secured Parties” means, collectively, the Secured Bank Creditors and the Permitted Noteholders.

“Security Agreement” means that certain Amended and Restated Security Agreement dated as of theClosing Date among the Borrowers, the Guarantors and the Collateral Agent, attached as Exhibit H, as supplemented from time to time by the execution and delivery of Security Joinder Agreements pursuant to Section 6.14, and as modified, amended, amended and restated or supplemented from time to time.

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“Security Instruments” means, collectively, the Pledge Agreement, the Security Agreement, the Mortgages and all other agreements (including control agreements), instruments and other documents, whether now existing or hereafter in effect, pursuant to which any Borrower or any Subsidiary or other Person shall grant or convey to the Collateral Agent or the Lenders a Lien in, or any other Person shall acknowledge any such Lien in, property as security for all or any portion of the Secured Obligations or any other obligation under any Loan Document, as any of them has been or may be amended, amended and restated, modified or supplemented from time to time.

“Security Joinder Agreement” means each Security Joinder Agreement, substantially in the form attached to the Security Agreement, executed and delivered by a Guarantor or any other Person to the Administrative Agent pursuant to Section 6.14.

“Solvent” means, as to any Person at any time, that: (a) the fair value of the property of such Person is greater than the amount of such Person's liabilities (including disputed, contingent and unliquidated liabilities) as such value is established and liabilities evaluated for purposes of Section 101(32) of the Bankruptcy Code and, in the alternative, for purposes of the California Uniform Fraudulent Transfer Act; (b) the present fair saleable value of the property of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured; (c) such Person is able to realize upon its property and pay its debts and other liabilities (including disputed, contingent and unliquidated liabilities) as they mature in the normal course of business; (d) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person's ability to pay as such debts and liabilities mature; and (e) such Person is not engaged in business or a transaction for which such Person's property would constitute unreasonably small capital.

“Spot Rate” for a currency means the rate determined by the Administrative Agent or the L/C Issuer, as applicable, to be the rate quoted by the Person acting in such capacity as the spot rate for the purchase by such Person of such currency with another currency through its principal foreign exchange trading office at approximately 9:00 a.m. on the date two Business Days prior to the date as of which the foreign exchange computation is made; providedthat the Administrative Agent or the L/C Issuer may obtain such spot rate from another financial institution designated by the Administrative Agent or the L/C Issuer if the Person acting in such capacity does not have as of the date of determination a spot buying rate for any such currency; and providedfurther that the L/C Issuer may use such spot rate quoted on the date as of which the foreign exchange computation is made in the case of any Letter of Credit denominated in an Alternative Currency.

“Sterling” and “£” mean the lawful currency of the United Kingdom.

“Subject Period” means, as of any date of determination, the four consecutive fiscal quarter period ending on such date.

“Subsidiary” of a Person means a corporation, partnership, Joint Venture, limited liability company or other business entity of which a majority of the shares of securities or other interests having ordinary voting power for the election of directors or other governing body (other than securities or interests having such power only by reason of the happening of a contingency) are at the time beneficially owned, or the management of which is otherwise controlled, directly, or indirectly through one or more intermediaries, or both, by such Person. Unless otherwise specified, all references herein to a “Subsidiary” or to “Subsidiaries” shall refer to a Subsidiary or Subsidiaries of the Company.

“Subsidiary Securities” means the shares of capital stock or other equity interests issued by or equity participations in any Material Subsidiary, whether or not constituting a “security” under Article 8 of the Uniform Commercial Code as in effect in any jurisdiction.

“Swap Contract” means (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

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“Swap Termination Value” means, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts (which may include a Lender or any Affiliate of a Lender).

“Swing Line Borrowing” means a borrowing of a Swing Line Loan pursuant to Section 2.04.

“Swing Line Lender” means Bank of America in its capacity as provider of Swing Line Loans, or any successor swing line lender hereunder.

“Swing Line Loan” has the meaning specified in Section 2.04(a).

“Swing Line Loan Notice” means a notice of a Swing Line Borrowing pursuant to Section 2.04(b), which, if in writing, shall be substantially in the form of Exhibit B.

“Swing Line Sublimit” means, at any time, an amount equal to the lesser of (a) $15,000,000 and (b) the Aggregate Commitments. The Swing Line Sublimit is part of, and not in addition to, the Aggregate Commitments.

“Synthetic Lease Obligation” means the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

“Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.

“Total Outstandings” means the aggregate Outstanding Amount of all Loans and all L/C Obligations.

“Type” means, with respect to a Revolving Loan, its character as a Base Rate Loan or a Eurodollar Rate Loan.

“United States” and “U.S.” mean the United States of America.

“Unreimbursed Amount” has the meaning specified in Section 2.03(c)(i).

“U.S. Person” means any Person that is a “United States Person” as defined in Section 7701(a)(30) of the Code.

“U.S. Tax Compliance Certificate” has the meaning specified in Section 3.01(e)(ii)(B)(III).

“Voting Securities” means shares of capital stock issued by a corporation, or equivalent interests in any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right so to vote has been suspended by the happening of such a contingency.

“Weighted Average Life to Maturity” means, when applied to any Indebtedness, at any date, the quotient obtained by dividing: (a) the sum of the products of the number of years from the date of determination to the date of each successive scheduled principal payment of such Indebtedness multiplied by the amount of such payment by (b) the sum of all such payments.

“Yen” and “¥” mean the lawful currency of Japan.

1.02    Other Interpretive Provisions. With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document:

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(a)    The definitions of terms herein shall apply equally to the singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms. The words “include,” “includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The word “will” shall be construed to have the same meaning and effect as the word “shall.” Unless the context requires otherwise, (i) any definition of or reference to any agreement, instrument or other document (including any Organization Document) shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein or in any other Loan Document), (ii) any reference herein to any Person shall be construed to include such Person's successors and assigns, (iii) the words “hereto,” “herein,” “hereof” and “hereunder,” and words of similar import when used in any Loan Document, shall be construed to refer to such Loan Document in its entirety and not to any particular provision thereof, (iv) all references in a Loan Document to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and Exhibits and Schedules to, the Loan Document in which such references appear, (v) any reference to any law shall include all statutory and regulatory provisions consolidating, amending, replacing or interpreting such law and any reference to any law or regulation shall, unless otherwise specified, refer to such law or regulation as amended, modified or supplemented from time to time, and (vi) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including cash, securities, accounts and contract rights.

(b)    In the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until” each mean “to but excluding;” and the word “through” means “to and including.”

(c)Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the interpretation of this Agreement or any other Loan Document.

1.03    Accounting Terms.

(a)    Generally. All accounting terms not specifically or completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with, GAAP applied on a consistent basis, as in effect from time to time, applied in a manner consistent with that used in preparing the Audited Financial Statements, except as otherwise specifically prescribed herein. Notwithstanding the foregoing, for purposes of determining compliance with any covenant (including the computation of any financial covenant) contained herein, Indebtedness of the Company and its Subsidiaries shall be deemed to be carried at 100% of the outstanding principal amount thereof, and the effects of FASB ASC 825 on financial liabilities shall be disregarded.

(b)    Changes in GAAP. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the Company or the Required Lenders shall so request, the Administrative Agent, the Lenders and the Company shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval of the Required Lenders); providedthat, until so amended, (i) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (ii) the Company shall provide to the Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after giving effect to such change in GAAP.

(c)    Consolidation of Variable Interest Entities. All references herein to consolidated financial statements of the Company and its Subsidiaries or to the determination of any amount for the Company and its Subsidiaries on a consolidated basis or any similar reference shall, in each case, be deemed to include each variable interest entity that the Company is required to consolidate pursuant to FASB ASC 810 as if such variable interest entity were a Subsidiary as defined herein.

1.04    Rounding. Any financial ratios required to be maintained by the Company pursuant to this Agreement shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

1.05    Exchange Rates; Currency Equivalents.

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(a)    The Administrative Agent or the L/C Issuer, as applicable, shall determine the Spot Rates as of each Revaluation Date to be used for calculating Dollar Equivalent amounts of Credit Extensions and Outstanding Amounts denominated in Alternative Currencies. Such Spot Rates shall become effective as of such Revaluation Date and shall be the Spot Rates employed in converting any amounts between the applicable currencies until the next Revaluation Date to occur. Except for purposes of financial statements delivered by Loan Parties hereunder or calculating financial covenants hereunder or except as otherwise provided herein, the applicable amount of any currency (other than Dollars) for purposes of the Loan Documents shall be such Dollar Equivalent amount as so determined by the Administrative Agent or the L/C Issuer, as applicable.

(b)    Wherever in this Agreement in connection with the issuance, amendment or extension of a Letter of Credit, an amount, such as a required minimum or multiple amount, is expressed in Dollars, but such Letter of Credit is denominated in an Alternative Currency, such amount shall be the relevant Alternative Currency Equivalent of such Dollar amount (rounded to the nearest unit of such Alternative Currency, with 0.5 of a unit being rounded upward), as determined by the Administrative Agent or the L/C Issuer, as the case may be.

1.06    Additional Alternative Currencies.

(a)    The Company may from time to time request that Letters of Credit be issued in a currency other than those specifically listed in the definition of “Alternative Currency;” provided that such requested currency is a lawful currency (other than Dollars) that is readily available and freely transferable and convertible into Dollars. Such request shall be subject to the approval of the Administrative Agent and the L/C Issuer.

(b)    Any such request shall be made to the Administrative Agent not later than 11:00 a.m., ten Business Days prior to the date of the desired Credit Extension (or such other time or date as may be agreed by the Administrative Agent and the L/C Issuer, in its or their sole discretion). The Administrative Agent shall promptly notify the L/C Issuer thereof. The L/C Issuer shall notify the Administrative Agent, not later than 11:00 a.m., five Business Days after receipt of such request (or such other time or date as may be agreed by the Administrative Agent and the L/C Issuer, in its or their sole discretion) whether it consents, in its sole discretion, to the issuance of Letters of Credit in such requested currency.

(c)    Any failure by the L/C Issuer to respond to such request within the time period specified in the preceding sentence shall be deemed to be a refusal by the L/C Issuer to permit Letters of Credit to be issued in such requested currency. If the Administrative Agent and the L/C Issuer consent to the issuance of Letters of Credit in such requested currency, the Administrative Agent shall so notify the Company and such currency shall thereupon be deemed for all purposes to be an Alternative Currency hereunder for purposes of any Letter of Credit issuances. If the Administrative Agent shall fail to obtain consent to any request for an additional currency under this Section 1.06, the Administrative Agent shall promptly so notify the Company.

1.07    Change of Currency. (a) Each obligation of the Borrowers to make a payment denominated in the national currency unit of any member state of the European Union that adopts the Euro as its lawful currency after the date hereof shall be redenominated into Euro at the time of such adoption (in accordance with the EMU Legislation). If, in relation to the currency of any such member state, the basis of accrual of interest expressed in this Agreement in respect of that currency shall be inconsistent with any convention or practice in the London interbank market for the basis of accrual of interest in respect of the Euro, such expressed basis shall be replaced by such convention or practice with effect from the date on which such member state adopts the Euro as its lawful currency.

(b)    Each provision of this Agreement shall be subject to such reasonable changes of construction as the Administrative Agent may from time to time specify to be appropriate to reflect the adoption of the Euro by any member state of the European Union and any relevant market conventions or practices relating to the Euro.

(c)    Each provision of this Agreement also shall be subject to such reasonable changes of construction as the Administrative Agent may from time to time specify to be appropriate to reflect a change in currency of any other country and any relevant market conventions or practices relating to the change in currency.

1.08    Times of Day. Unless otherwise specified, all references herein to times of day shall be references to Pacific time (daylight or standard, as applicable).

1.09    Letter of Credit Amounts. Unless otherwise specified herein, the amount of a Letter of Credit at any time shall be deemed to be the Dollar Equivalent of the stated amount of such Letter of Credit in effect at such time; provided, however, that with respect to any Letter of Credit that, by its terms or the terms of any Issuer Document related thereto, provides for one or more automatic increases in the stated amount thereof, the amount of such Letter of Credit shall be deemed to be

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the maximum stated amount of such Letter of Credit after giving effect to all such increases, whether or not such maximum stated amount is in effect at such time.

1.10    Amendment and Restatement.In order to facilitate the Restatement and otherwise to effectuate the desires of the Borrowers, the Administrative Agent and the Lenders:

(a)    Simultaneously with the Closing Date, the parties hereby agree that the Commitments shall be as set forth in Schedule 2.01 and the portion of Loans and other Outstanding Amounts outstanding under the Existing Credit Agreement shall be reallocated in accordance with such Commitments and the requisite assignments shall be deemed to be made in such amounts by and between the Lenders and from each Lender to each other Lender, with the same force and effect as if such assignments were evidenced by applicable assignment agreements required pursuant to Section 10.06 of the Existing Credit Agreement. Notwithstanding anything to the contrary in Section 10.06 of the Existing Credit Agreement or Section 10.06 of this Agreement, no other documents or instruments, including any assignment agreements, shall be executed in connection with these assignments (all of which requirements are hereby waived), and such assignments shall be deemed to be made with all applicable representations, warranties and covenants as if evidenced by an assignment agreement. On the Closing Date, the Lenders shall make full cash settlement with each other either directly or through the Administrative Agent, as the Administrative Agent may direct or approve, with respect to all assignments, reallocations and other changes in Commitments (as such term is defined in the Existing Credit Agreement) such that after giving effect to such settlements each Lender's Applicable Percentage shall be as set forth on Schedule 2.01.

(b)    Each Borrower, the Administrative Agent, and the Lenders hereby agree that upon the effectiveness of this Agreement, the terms and provisions of the Existing Credit Agreement which in any manner govern or evidence the Obligations, the rights and interests of the Administrative Agent and the Lenders and any terms, conditions or matters related to any thereof, shall be and hereby are amended and restated in their entirety by the terms, conditions and provisions of this Agreement, and the terms and provisions of the Existing Credit Agreement, except as otherwise expressly provided herein, shall be superseded by this Agreement.

(c)    Notwithstanding this amendment and restatement of the Existing Credit Agreement, including anything in this Section 1.10, and in any related “Loan Documents” (as such term is defined in the Existing Credit Agreement and referred to herein, individually or collectively, as the “Prior Loan Documents”), (i) all of the indebtedness, liabilities and obligations owing by any Loan Party under the Existing Credit Agreement and other Prior Loan Documents shall continue as Obligations hereunder and all indebtedness, liabilities and obligations of any Person other than a Loan Party under the Existing Credit Agreement and other Prior Loan Documents shall continue as obligations of such Person hereunder, and (ii) each of this Agreement and the Notes and any other Loan Document (as defined herein) that is amended and restated in connection with this Agreement is given as a substitution of, and not as a payment of, the indebtedness, liabilities and obligations of the Borrowers under the Existing Credit Agreement or any Prior Loan Document and neither the execution and delivery of such documents nor the consummation of any other transaction contemplated hereunder is intended to constitute a novation of the Existing Credit Agreement or of any of the other Prior Loan Documents or any obligations thereunder. Upon the effectiveness of this Agreement, all Loans owing by the Borrowers and outstanding under the Existing Credit Agreement shall continue as Loans hereunder and shall constitute advances hereunder, and all Letters of Credit outstanding under the Existing Credit Agreement and any of the Prior Loan Documents shall continue as Letters of Credit hereunder. Base Rate Loans under the Existing Credit Agreement shall accrue interest at the Base Rate hereunder and the parties hereto agree that the Interest Periods for all Eurodollar Rate Loans outstanding under the Existing Credit Agreement on the Closing Date shall remain in effect without renewal, interruption or extension as Eurodollar Rate Loans under this Agreement and accrue interest at the Eurodollar Rate hereunder; provided, that on and after the Closing Date, the Applicable Rate applicable to any Loan or Letter of Credit hereunder shall be as set forth in the definition of Applicable Rate in Section 1.01, without regard to any margin applicable thereto under the Existing Credit Agreement prior to the Closing Date. Notwithstanding anything to the contrary contained herein or in any other Loan Document, the Administrative Agent and each Lender hereby agree that any “Guarantor” (as defined in the Prior Loan Documents) that is not a party to the Guaranty as of the Closing Date shall be released from its obligations under the “Guaranty” (as defined in the Prior Loan Documents) and that any Liens granted by any such “Guarantor” under all “Security Instruments” (as defined in the Prior Loan Documents) other than the Mortgages shall be released. Each Lender hereby authorizes the Administrative Agent, at the sole expense of the Borrowers, to execute and deliver all releases and other documents reasonably necessary in connection with the release of such “Guarantors”.

ARTICLE II. THE COMMITMENTS AND CREDIT EXTENSIONS

2.01     Revolving Loans. Subject to the terms and conditions set forth herein, each Lender severally agrees to make loans (each such loan, a “Revolving Loan”) to the Borrowers from time to time, on any Business Day during the Availability Period, in an aggregate amount not to exceed at any time outstanding the amount of such Lender's Commitment; provided,

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however, that after giving effect to any Revolving Borrowing, (a) the Total Outstandings shall not exceed the Aggregate Commitments, and (b) the aggregate Outstanding Amount of the Revolving Loans of any Lender, plus such Lender's Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender's Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender's Commitment. Within the limits of each Lender's Commitment, and subject to the other terms and conditions hereof, the Borrowers may borrow under this Section 2.01, prepay under Section 2.05, and reborrow under this Section 2.01. Revolving Loans may be Base Rate Loans or Eurodollar Rate Loans, as further provided herein. Revolving Loans may be made in Dollars only.

2.02    Borrowings, Conversions and Continuations of Revolving Loans.

(a)    Each Revolving Borrowing, each conversion of Revolving Loans from one Type to the other, and each continuation of Eurodollar Rate Loans shall be made upon the Company's irrevocable notice to the Administrative Agent, which may be given by telephone. Each such notice must be received by the Administrative Agent not later than 9:00 a.m. (i) three Business Days prior to the requested date of any Revolving Borrowing of, conversion to or continuation of Eurodollar Rate Loans or of any conversion of Eurodollar Rate Loans to Base Rate Loans, and (ii) on the requested date of any Revolving Borrowing of Base Rate Revolving Loans; provided, however, that if the Company wishes to request Eurodollar Rate Loans having an Interest Period other than one, two, three or six months in duration as provided in the definition of “Interest Period,” the applicable notice must be received by the Administrative Agent not later than 9:00 a.m. four Business Days prior to the requested date of such Revolving Borrowing, conversion or continuation, whereupon the Administrative Agent shall give prompt notice to the Lenders of such request and determine whether the requested Interest Period is acceptable to all of the Lenders. Not later than 9:00 a.m., three Business Days before the requested date of such Revolving Borrowing, conversion or continuation, the Administrative Agent shall notify the Company (which notice may be by telephone) whether or not the requested Interest Period has been consented to by all the Lenders. Each telephonic notice by the Company pursuant to this Section 2.02(a) must be confirmed promptly by delivery to the Administrative Agent of a written Revolving Loan Notice, appropriately completed and signed by two (2) Responsible Officers of the Company. Each Revolving Borrowing of, conversion to or continuation of Eurodollar Rate Loans shall be in a principal amount of $3,000,000 or a whole multiple of $1,000,000 in excess thereof. Except as provided in Sections 2.03(c) and 2.04(c), each Borrowing of or conversion to Base Rate Revolving Loans shall be in a principal amount of $1,000,000. Each Revolving Loan Notice (whether telephonic or written) shall specify (i) whether the Company is requesting a Revolving Borrowing, a conversion of Revolving Loans from one Type to the other, or a continuation of Eurodollar Rate Loans, (ii) the requested date of the Revolving Borrowing, conversion or continuation, as the case may be (which shall be a Business Day), (iii) the principal amount of Revolving Loans to be borrowed, converted or continued, (iv) the Type of Revolving Loans to be borrowed or to which existing Revolving Loans are to be converted, (v) if applicable, the duration of the Interest Period with respect thereto and (vi) the Borrower for which such Borrowing is requested. If the Company fails to specify a Type of Revolving Loan in a Revolving Loan Notice or if the Company fails to give a timely notice requesting a conversion or continuation, then the applicable Revolving Loans shall be made as, or converted to, Base Rate Loans. Any such automatic conversion to Base Rate Loans shall be effective as of the last day of the Interest Period then in effect with respect to the applicable Eurodollar Rate Loans. If the Company requests a Revolving Borrowing of, conversion to, or continuation of Eurodollar Rate Loans in any such Revolving Loan Notice, but fails to specify an Interest Period, it will be deemed to have specified an Interest Period of one month.

(b)    Following receipt of a Revolving Loan Notice, the Administrative Agent shall promptly notify each Lender of the amount of its Applicable Percentage of the applicable Revolving Loans, and if no timely notice of a conversion or continuation is provided by the Company, the Administrative Agent shall notify each Lender of the details of any automatic conversion to Base Rate Loans described in the preceding subsection. In the case of a Revolving Borrowing, each Lender shall make the amount of its Revolving Loan available to the Administrative Agent in immediately available funds at the Administrative Agent's Office not later than 11:00 a.m. on the Business Day specified in the applicable Revolving Loan Notice. Upon satisfaction of the applicable conditions set forth in Section 4.02 (and, if such Borrowing is the initial Credit Extension, Section 4.01), the Administrative Agent shall make all funds so received available to the Company or the applicable Borrower in like funds as received by the Administrative Agent either by (i) crediting the account of the Company or the applicable Borrower on the books of Bank of America with the amount of such funds or (ii) wire transfer of such funds, in each case in accordance with instructions provided to (and reasonably acceptable to) the Administrative Agent by the Company; provided, however, that if, on the date the Revolving Loan Notice with respect to such Borrowing is given by the Company, there are L/C Borrowings outstanding, then the proceeds of such Borrowing, first, shall be applied to the payment in full of any such L/C Borrowings, and second, shall be made available to the Borrowers as provided above.

(c)    Except as otherwise provided herein, a Eurodollar Rate Loan may be continued or converted only on the last day of an Interest Period for such Eurodollar Rate Loan. During the existence of a Default, no Loans may be requested as, converted to or continued as Eurodollar Rate Loans without the consent of the Required Lenders.

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(d)The Administrative Agent shall promptly notify the Company and the Lenders of the interest rate applicable to any Interest Period for Eurodollar Rate Loans upon determination of such interest rate. At any time that Base Rate Loans are outstanding, the Administrative Agent shall notify the Company and the Lenders of any change in Bank of America's prime rate used in determining the Base Rate promptly following the public announcement of such change.

(e)After giving effect to all Revolving Borrowings, all conversions of Revolving Loans from one Type to the other, and all continuations of Revolving Loans as the same Type, there shall not be more than ten Interest Periods in effect with respect to Revolving Loans.

(f)The Obligations of the Company and each other Borrower shall be joint and several in nature.

(g)Each Subsidiary of the Company that is a “Borrower” hereunder hereby irrevocably appoints the Company as its agent for all purposes relevant to this Agreement and each of the other Loan Documents, including (i) the giving and receipt of notices, (ii) the execution and delivery of all documents, instruments and certificates contemplated herein and all modifications hereto, and (iii) the receipt of the proceeds of any Loans made by the Lenders, to any such Borrower hereunder. Any acknowledgment, consent, direction, certification or other action which might otherwise be valid or effective only if given or taken by all Borrowers, or by each Borrower acting singly, shall be valid and effective if given or taken only by the Company, whether or not any such other Borrower joins therein. Any notice, demand, consent, acknowledgement, direction, certification or other communication delivered to the Company in accordance with the terms of this Agreement shall be deemed to have been delivered to each Borrower.

2.03     Letters of Credit.

(a)    The Letter of Credit Commitment.

(i)Subject to the terms and conditions set forth herein, (A) the L/C Issuer agrees, in reliance upon the agreements of the Lenders set forth in this Section 2.03, (1) from time to time on any Business Day during the period from the Closing Date until the Letter of Credit Expiration Date, to issue Letters of Credit for the account of any Borrower or its Subsidiaries, and to amend or extend Letters of Credit previously issued by it, in accordance with subsection (b) below, and (2) to honor drawings under the Letters of Credit; and (B) the Lenders severally agree to participate in Letters of Credit issued for the account of any Borrower or its Subsidiaries and any drawings thereunder; provided that after giving effect to any L/C Credit Extension with respect to any Letter of Credit, (x) the Total Outstandings shall not exceed the Aggregate Commitments, (y) the aggregate Outstanding Amount of the Revolving Loans of any Lender, plus such Lender's Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender's Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender's Commitment, and (z) the Outstanding Amount of the L/C Obligations shall not exceed the Letter of Credit Sublimit. Each request by the Company for the issuance or amendment of a Letter of Credit shall be deemed to be a representation by the Company that the L/C Credit Extension so requested complies with the conditions set forth in the proviso to the preceding sentence. Within the foregoing limits, and subject to the terms and conditions hereof, each Borrower's ability to obtain Letters of Credit shall be fully revolving, and accordingly any Borrower may, during the foregoing period, obtain Letters of Credit to replace Letters of Credit that have expired or that have been drawn upon and reimbursed. All Existing Letters of Credit shall be deemed to have been issued pursuant hereto, and from and after the Closing Date shall be subject to and governed by the terms and conditions hereof.

(ii)The L/C Issuer shall not issue any Letter of Credit, if:

(A)subject to Section 2.03(b)(iii), the expiry date of the requested Letter of Credit would occur more than twelve months after the date of issuance or last extension, unless the Required Lenders have approved such expiry date; or

(B)the expiry date of the requested Letter of Credit would occur after the Letter of Credit Expiration Date, unless the Borrowers shall have made arrangements acceptable to the L/C Issuer to Cash Collateralize such Letter of Credit.

(iii)The L/C Issuer shall not be under any obligation to issue any Letter of Credit if:

(A)any order, judgment or decree of any Governmental Authority or arbitrator shall by its terms purport to enjoin or restrain the L/C Issuer from issuing the Letter of Credit, or any Law applicable to the L/C Issuer or any request or directive (whether or not having the force of law) from any Governmental Authority with jurisdiction over the L/C Issuer shall prohibit, or request that the L/C Issuer refrain from, the

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issuance of letters of credit generally or the Letter of Credit in particular or shall impose upon the L/C Issuer with respect to the Letter of Credit any restriction, reserve or capital requirement (for which the L/C Issuer is not otherwise compensated hereunder) not in effect on the Closing Date, or shall impose upon the L/C Issuer any unreimbursed loss, cost or expense which was not applicable on the Closing Date and which the L/C Issuer in good faith deems material to it;

(B)the issuance of the Letter of Credit would violate one or more policies of the L/C Issuer applicable to letters of credit generally;

(C)except as otherwise agreed by the Administrative Agent and the L/C Issuer, the Letter of Credit is in an initial stated amount less than the Dollar Equivalent of $1,000,000;

(D)the Letter of Credit is to be denominated in a currency other than Dollars or an Alternative Currency; or

(E)any Lender is at that time a Defaulting Lender, unless (a) the L/C Issuer has entered into arrangements, including the delivery of Cash Collateral, satisfactory to the L/C Issuer (in its sole discretion) with such Lender to eliminate the L/C Issuer's actual or potential Fronting Exposure (after giving effect to Section 2.16(a)(iv)) with respect to the Defaulting Lender arising from either the Letter of Credit then proposed to be issued or that Letter of Credit and all other L/C Obligations as to which the L/C Issuer has actual or potential Fronting Exposure, as it may elect in its sole discretion or (b) the Borrowers have delivered Cash Collateral as required pursuant to Section 2.15(a).

(iv)The L/C Issuer shall not amend any Letter of Credit if the L/C Issuer would not be permitted at such time to issue the Letter of Credit in its amended form under the terms hereof.

(v)The L/C Issuer shall be under no obligation to amend any Letter of Credit if (A) the L/C Issuer would have no obligation at such time to issue the Letter of Credit in its amended form under the terms hereof, or (B) the beneficiary of the Letter of Credit does not accept the proposed amendment to the Letter of Credit.

(vi)The L/C Issuer shall act on behalf of the Lenders with respect to any Letters of Credit issued by it and the documents associated therewith, and the L/C Issuer shall have all of the benefits and immunities (A) provided to the Administrative Agent in Article IX with respect to any acts taken or omissions suffered by the L/C Issuer in connection with Letters of Credit issued by it or proposed to be issued by it and Issuer Documents pertaining to such Letters of Credit as fully as if the term “Administrative Agent” as used in Article IX included the L/C Issuer with respect to such acts or omissions, and (B) as additionally provided herein with respect to the L/C Issuer.

(b)    Procedures for Issuance and Amendment of Letters of Credit; Auto-Extension Letters of Credit.

(i)    Each Letter of Credit shall be issued or amended, as the case may be, upon the request of the Company delivered to the L/C Issuer (with a copy to the Administrative Agent) in the form of a Letter of Credit Application, appropriately completed and signed by two (2) Responsible Officers of the Company. Such Letter of Credit Application may be sent by facsimile, by United States mail, by overnight courier, by electronic transmission using the system provided by the L/C Issuer, by personal delivery or by any other means acceptable to the L/C Issuer. Such Letter of Credit Application must be received by the L/C Issuer and the Administrative Agent not later than 9:00 a.m. at least two Business Days (or such later date and time as the Administrative Agent and the L/C Issuer may agree in a particular instance in their sole discretion) prior to the proposed issuance date or date of amendment, as the case may be. In the case of a request for an initial issuance of a Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the L/C Issuer: (A) the proposed issuance date of the requested Letter of Credit (which shall be a Business Day); (B) the amount and currency thereof; (C) the expiry date thereof; (D) the name and address of the beneficiary thereof; (E) the documents to be presented by such beneficiary in case of any drawing thereunder; (F) the full text of any certificate to be presented by such beneficiary in case of any drawing thereunder; (G) the purpose and nature of the requested Letter of Credit; and (H) such other matters as the L/C Issuer may require. In the case of a request for an amendment of any outstanding Letter of Credit, such Letter of Credit Application shall specify in form and detail satisfactory to the L/C Issuer (A) the Letter of Credit to be amended; (B) the proposed date of amendment thereof (which shall be a Business Day); (C) the nature of the proposed amendment; and (D) such other matters as the L/C Issuer may require. Additionally, the Company shall furnish to the L/C Issuer and the Administrative Agent such other documents and information pertaining to such requested Letter of Credit issuance or amendment, including any Issuer Documents, as the L/C Issuer or the Administrative Agent may require.

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(ii)    Promptly after receipt of any Letter of Credit Application, the L/C Issuer will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has received a copy of such Letter of Credit Application from the Company and, if not, the L/C Issuer will provide the Administrative Agent with a copy thereof. Unless the L/C Issuer has received written notice from any Lender, the Administrative Agent or any Loan Party, at least one Business Day prior to the requested date of issuance or amendment of the applicable Letter of Credit, that one or more applicable conditions contained in Article IV shall not then be satisfied, then, subject to the terms and conditions hereof, the L/C Issuer shall, on the requested date, issue a Letter of Credit for the account of the Company (or the applicable Borrower or Subsidiary) or enter into the applicable amendment, as the case may be, in each case in accordance with the L/C Issuer's usual and customary business practices. Immediately upon the issuance of each Letter of Credit, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the L/C Issuer a risk participation in such Letter of Credit in an amount equal to the product of such Lender's Applicable Percentage times the amount of such Letter of Credit.

(iii)    If the Company so requests in any applicable Letter of Credit Application, the L/C Issuer may, in its sole discretion, agree to issue a Letter of Credit that has automatic extension provisions (each, an “Auto-Extension Letter of Credit”); provided that any such Auto-Extension Letter of Credit must permit the L/C Issuer to prevent any such extension at least once in each twelve-month period (commencing with the date of issuance of such Letter of Credit) by giving prior notice to the beneficiary thereof not later than a day (the “Non-Extension Notice Date”) in each such twelve-month period to be agreed upon at the time such Letter of Credit is issued. Unless otherwise directed by the L/C Issuer, the Company shall not be required to make a specific request to the L/C Issuer for any such extension. Once an Auto-Extension Letter of Credit has been issued, the Lenders shall be deemed to have authorized (but may not require) the L/C Issuer to permit the extension of such Letter of Credit at any time to an expiry date not later than the Letter of Credit Expiration Date; provided, however, that the L/C Issuer shall not permit any such extension if (A) the L/C Issuer has determined that it would not be permitted, or would have no obligation, at such time to issue such Letter of Credit in its revised form (as extended) under the terms hereof (by reason of the provisions of clause (ii) or (iii) of Section 2.03(a) or otherwise), or (B) it has received notice (which may be by telephone or in writing) on or before the day that is seven Business Days before the Non-Extension Notice Date (1) from the Administrative Agent that the Required Lenders have elected not to permit such extension or (2) from the Administrative Agent, any Lender or the Company that one or more of the applicable conditions specified in Section 4.02 is not then satisfied, and in each such case directing the L/C Issuer not to permit such extension.

(iv)    Promptly after its delivery of any Letter of Credit or any amendment to a Letter of Credit to an advising bank with respect thereto or to the beneficiary thereof, the L/C Issuer will also deliver to the Company and the Administrative Agent a true and complete copy of such Letter of Credit or amendment.

(c)    Drawings and Reimbursements; Funding of Participations.

(i)    Upon receipt from the beneficiary of any Letter of Credit of any notice of a drawing under such Letter of Credit, the L/C Issuer shall notify the Company and the Administrative Agent thereof. In the case of a Letter of Credit denominated in Dollars or a Letter of Credit denominated in an Alternative Currency, the Company shall reimburse the L/C Issuer in Dollars. In the case of a Letter of Credit denominated in an Alternative Currency, the L/C Issuer shall notify the Company of the Dollar Equivalent of amount of the drawing promptly following the determination thereof. In the case of any such reimbursement in Dollars of a drawing under a Letter of Credit denominated in an Alternative Currency, the L/C Issuer shall notify the Company of the Dollar Equivalent of the amount of the drawing promptly following the determination thereof. Not later than 11:00 a.m. on the date of any payment by the L/C Issuer under a Letter of Credit (each such date, an “Honor Date”), the Company shall reimburse the L/C Issuer through the Administrative Agent in the Dollar Equivalent of the amount of such drawing and in the applicable currency; provided that if such notice is not provided to such Borrower prior to 11:00 a.m. on the Honor Date, then the Company shall reimburse the L/C Issuer through the Administrative Agent in an amount equal to the amount of such drawing by 10:00 a.m. on the next succeeding Business Day and such extension of time shall be reflected in computing fees in respect of any Letter of Credit. If the Company fails to so reimburse the L/C Issuer by such time, the Administrative Agent shall promptly notify each Lender of the Honor Date, the amount of the unreimbursed drawing (expressed in Dollars in the amount of the Dollar Equivalent thereof in the case of a Letter of Credit denominated in an Alternative Currency) (the “Unreimbursed Amount”), and the amount of such Lender's Applicable Percentage thereof. In such event, the Company shall be deemed to have requested a Revolving Borrowing of Base Rate Loans to be disbursed on the Honor Date in an amount equal to the Unreimbursed Amount, without regard to the minimum and multiples specified in Section 2.02 for the principal amount of Base Rate Loans, but subject to the amount of the unutilized portion of the Aggregate Commitments and the conditions set forth in Section 4.02

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(other than the delivery of a Revolving Loan Notice). Any notice given by the L/C Issuer or the Administrative Agent pursuant to this Section 2.03(c)(i) may be given by telephone if immediately confirmed in writing; provided that the lack of such an immediate confirmation shall not affect the conclusiveness or binding effect of such notice.

(ii)    Each Lender shall upon any notice pursuant to Section 2.03(c)(i) make funds available (and the Administrative Agent may apply Cash Collateral provided for this purpose) for the account of the L/C Issuer, in Dollars, at the Administrative Agent's Office in an amount equal to its Applicable Percentage of the Unreimbursed Amount not later than 11:00 a.m. on the Business Day specified in such notice by the Administrative Agent, whereupon, subject to the provisions of Section 2.03(c)(iii), each Lender that so makes funds available shall be deemed to have made a Base Rate Revolving Loan to the Company in such amount. The Administrative Agent shall remit the funds so received to the L/C Issuer in Dollars.

(iii)    With respect to any Unreimbursed Amount that is not fully refinanced by a Revolving Borrowing of Base Rate Loans because the conditions set forth in Section 4.02 cannot be satisfied or for any other reason, the Company shall be deemed to have incurred from the L/C Issuer an L/C Borrowing in the amount of the Unreimbursed Amount that is not so refinanced, which L/C Borrowing shall be due and payable on demand (together with interest) and shall bear interest at the Default Rate. In such event, each Lender's payment to the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(ii) shall be deemed payment in respect of its participation in such L/C Borrowing and shall constitute an L/C Advance from such Lender in satisfaction of its participation obligation under this Section 2.03.

(iv)    Until each Lender funds its Revolving Loan or L/C Advance pursuant to this Section 2.03(c) to reimburse the L/C Issuer for any amount drawn under any Letter of Credit, interest in respect of such Lender's Applicable Percentage of such amount shall be solely for the account of the L/C Issuer.

(v)    Each Lender's obligation to make Revolving Loans or L/C Advances to reimburse the L/C Issuer for amounts drawn under Letters of Credit, as contemplated by this Section 2.03(c), shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the L/C Issuer, any Borrower or any other Person for any reason whatsoever; (B) the occurrence or continuance of a Default; or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Lender's obligation to make Revolving Loans pursuant to this Section 2.03(c) is subject to the conditions set forth in Section 4.02 (other than delivery by the Company of a Revolving Loan Notice). No such making of an L/C Advance shall relieve or otherwise impair the obligation of the Company or any other Borrower to reimburse the L/C Issuer for the amount of any payment made by the L/C Issuer under any Letter of Credit, together with interest as provided herein.

(vi)    If any Lender fails to make available to the Administrative Agent for the account of the L/C Issuer any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.03(c) by the time specified in Section 2.03(c)(ii), then, without limiting the other provisions of this Agreement, the L/C Issuer shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the L/C Issuer at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by the L/C Issuer in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the L/C Issuer in connection with the foregoing. If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender's Revolving Loan included in the relevant Revolving Borrowing or L/C Advance in respect of the relevant L/C Borrowing, as the case may be. A certificate of the L/C Issuer submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (vi) shall be conclusive absent manifest error.

(d)    Repayment of Participations.

(i)    At any time after the L/C Issuer has made a payment under any Letter of Credit and has received from any Lender such Lender's L/C Advance in respect of such payment in accordance with Section 2.03(c), if the Administrative Agent receives for the account of the L/C Issuer any payment in respect of the related Unreimbursed Amount or interest thereon (whether directly from the Company, any Borrower or otherwise, including proceeds of Cash Collateral applied thereto by the Administrative Agent), the Administrative Agent will distribute to such Lender its Applicable Percentage thereof in the same funds as those received by the Administrative Agent.

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(ii)    If any payment received by the Administrative Agent for the account of the L/C Issuer pursuant to Section 2.03(c)(i) is required to be returned under any of the circumstances described in Section 10.05 (including pursuant to any settlement entered into by the L/C Issuer in its discretion), each Lender shall pay to the Administrative Agent for the account of the L/C Issuer its Applicable Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned by such Lender, at a rate per annum equal to the applicable Overnight Rate from time to time in effect. The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.

(e)    Obligations Absolute.The obligation of the Company and any other Borrower to reimburse the L/C Issuer for each drawing under each Letter of Credit and to repay each L/C Borrowing shall be absolute, unconditional and irrevocable, and shall be paid strictly in accordance with the terms of this Agreement under all circumstances, including the following:

(i)    any lack of validity or enforceability of such Letter of Credit, this Agreement, or any other Loan Document;

(ii)    the existence of any claim, counterclaim, setoff, defense or other right that any Borrower or any Subsidiary may have at any time against any beneficiary or any transferee of such Letter of Credit (or any Person for whom any such beneficiary or any such transferee may be acting), the L/C Issuer or any other Person, whether in connection with this Agreement, the transactions contemplated hereby or by such Letter of Credit or any agreement or instrument relating thereto, or any unrelated transaction;

(iii)    any draft, demand, certificate or other document presented under such Letter of Credit proving to be forged, fraudulent, invalid or insufficient in any respect or any statement therein being untrue or inaccurate in any respect; or any loss or delay in the transmission or otherwise of any document required in order to make a drawing under such Letter of Credit;

(iv)    waiver by the L/C Issuer of any requirement that exists for the L/C Issuer's protection and not the protection of the Borrowers or any waiver by the L/C Issuer which does not in fact materially prejudice the Borrowers;

(v)    honor of a demand for payment presented electronically even if such Letter of Credit requires that demand be in the form of a draft;

(vi)    any payment made by the L/C Issuer in respect of an otherwise complying item presented after the date specified as the expiration date of, or the date by which documents must be received under such Letter of Credit if presentation after such date is authorized by the Uniform Commercial Code as in effect in the State of California or the ISP, as applicable;

(vii)any payment by the L/C Issuer under such Letter of Credit against presentation of a draft or certificate that does not strictly comply with the terms of such Letter of Credit; or any payment made by the L/C Issuer under such Letter of Credit to any Person purporting to be a trustee in bankruptcy, debtor-in-possession, assignee for the benefit of creditors, liquidator, receiver or other representative of or successor to any beneficiary or any transferee of such Letter of Credit, including any arising in connection with any proceeding under any Debtor Relief Law;

(viii)any adverse change in the relevant exchange rates or in the availability of the relevant Alternative Currency to any Borrower or any Subsidiary or in the relevant currency markets generally; or

(ix)any other circumstance or happening whatsoever, whether or not similar to any of the foregoing, including any other circumstance that might otherwise constitute a defense available to, or a discharge of, any Borrower or any Subsidiary.

The Company shall promptly examine a copy of each Letter of Credit and each amendment thereto that is delivered to it and, in the event of any claim of noncompliance with the Company's instructions or other irregularity, the Company will immediately notify the L/C Issuer. The Company shall be conclusively deemed to have waived any such claim against the L/C Issuer and its correspondents unless such notice is given as aforesaid.

(f)    Role of L/C Issuer.Each Lender and the Company agree that, in paying any drawing under a Letter of Credit, the L/C Issuer shall not have any responsibility to obtain any document (other than any sight draft, certificates and documents expressly required by the Letter of Credit) or to ascertain or inquire as to the validity or accuracy of any such document or the authority of the Person executing or delivering any such document. None of the L/C Issuer, the Administrative Agent, any of

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their respective Related Parties nor any correspondent, participant or assignee of the L/C Issuer shall be liable to any Lender for (i) any action taken or omitted in connection herewith at the request or with the approval of the Lenders or the Required Lenders, as applicable; (ii) any action taken or omitted in the absence of gross negligence or willful misconduct; or (iii) the due execution, effectiveness, validity or enforceability of any document or instrument related to any Letter of Credit or Issuer Document. The Company hereby assumes all risks of the acts or omissions of any beneficiary or transferee with respect to its use of any Letter of Credit; provided, however, that this assumption is not intended to, and shall not, preclude the Company's pursuing such rights and remedies as it may have against the beneficiary or transferee at law or under any other agreement. None of the L/C Issuer, the Administrative Agent, any of their respective Related Parties nor any correspondent, participant or assignee of the L/C Issuer shall be liable or responsible for any of the matters described in clauses (i) through (ix) of Section 2.03(e); provided, however, that anything in such clauses to the contrary notwithstanding, the Company may have a claim against the L/C Issuer, and the L/C Issuer may be liable to the Company, to the extent, but only to the extent, of any direct, as opposed to consequential or exemplary, damages suffered by the Company which the Company proves were caused by the L/C Issuer's willful misconduct or gross negligence or the L/C Issuer's willful failure to pay under any Letter of Credit after the presentation to it by the beneficiary of a sight draft and certificate(s) strictly complying with the terms and conditions of a Letter of Credit. In furtherance and not in limitation of the foregoing, the L/C Issuer may accept documents that appear on their face to be in order, without responsibility for further investigation, regardless of any notice or information to the contrary, and the L/C Issuer shall not be responsible for the validity or sufficiency of any instrument transferring or assigning or purporting to transfer or assign a Letter of Credit or the rights or benefits thereunder or proceeds thereof, in whole or in part, which may prove to be invalid or ineffective for any reason. The L/C Issuer may send a Letter of Credit or conduct any communication to or from the beneficiary via the Society for Worldwide Interbank Financial Telecommunication (“SWIFT”) message or overnight courier, or any other commercially reasonable means of communicating with a beneficiary.

(g)    Applicability of ISP; Limitation of Liability.Unless otherwise expressly agreed by the L/C Issuer and the Company when a Letter of Credit is issued (including any such agreement applicable to an Existing Letter of Credit), the rules of the ISP shall apply to each standby Letter of Credit. Notwithstanding the foregoing, the L/C Issuer shall not be responsible to any Borrower or any Subsidiary for, and the L/C Issuer's rights and remedies against any Borrower or any Subsidiary shall not be impaired by, any action or inaction of the L/C Issuer required or permitted under any law, order, or practice that is required or permitted to be applied to any Letter of Credit or this Agreement, including the Law or any order of a jurisdiction where the L/C Issuer or the beneficiary is located, the practice stated in the ISP or in the decisions, opinions, practice statements, or official commentary of the ICC Banking Commission, the Bankers Association for Finance and Trade - International Financial Services Association (BAFT-IFSA), or the Institute of International Banking Law & Practice, whether or not any Letter of Credit chooses such law or practice.

(h)    Letter of Credit Fees. The Company shall pay to the Administrative Agent for the account of each Lender in accordance, subject to Section 2.16, with its Applicable Percentage, in Dollars, a Letter of Credit fee (the “Letter of Credit Fee”)(i) for each Performance Letter of Credit equal to the Applicable Rate (for Performance Letters of Credit) times the Dollar Equivalent of the daily amount available to be drawn under each such Performance Letter of Credit and (ii) for each Financial Letter of Credit equal to the Applicable Rate (for Financial Letters of Credit) times the Dollar Equivalent of the daily amount available to be drawn under each such Financial Letter of Credit. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.09. Letter of Credit Fees shall be (i) due and payable on the first Business Day after the end of each March, June, September and December, commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand and (ii) computed on a quarterly basis in arrears. If there is any change in the Applicable Rate (or in the characterization of such Letter of Credit as a Performance Letter of Credit or Financial Letter of Credit) during any quarter, the daily amount available to be drawn under each Letter of Credit shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate (or characterization thereof) was in effect. Notwithstanding anything to the contrary contained herein, upon the request of the Required Lenders, while any Event of Default exists, all Letter of Credit Fees shall accrue at the Default Rate.

(i)    Fronting Fee and Documentary and Processing Charges Payable to L/C Issuer.The Company shall pay directly to the L/C Issuer for its own account, in Dollars, a fronting fee,with respect to each Letter of Credit, at the rate per annum specified in the Fee Letter, computed on the Dollar Equivalent of the daily amount available to be drawn under such Letter of Credit on a quarterly basis in arrears. Such fronting fee shall be due and payable on the tenth Business Day after the end of each March, June, September and December in respect of the most recently-ended quarterly period (or portion thereof, in the case of the first payment), commencing with the first such date to occur after the issuance of such Letter of Credit, on the Letter of Credit Expiration Date and thereafter on demand. For purposes of computing the daily amount available to be drawn under any Letter of Credit, the amount of such Letter of Credit shall be determined in accordance with Section 1.09. In addition, the Company shall pay directly to the L/C Issuer for its own account, in Dollars, the customary issuance, presentation, amendment and other processing fees, and other standard costs and charges, of the L/C Issuer relating to letters of credit as

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from time to time in effect. Such customary fees and standard costs and charges are due and payable on demand and are nonrefundable.

(j)    Conflict with Issuer Documents. In the event of any conflict between the terms hereof and the terms of any Issuer Document, the terms hereof shall control.

(k)    Letters of Credit Issued for Subsidiaries. Notwithstanding that a Letter of Credit issued or outstanding hereunder is in support of any obligations of, or is for the account of, a Subsidiary, the Company shall be obligated to reimburse the L/C Issuer hereunder for any and all drawings under such Letter of Credit. The Company hereby acknowledges that the issuance of Letters of Credit for the account of Subsidiaries inures to the benefit of the Company, and that the Company's business derives substantial benefits from the businesses of such Subsidiaries.

2.04    Swing Line Loans.

(a)    The Swing Line. Subject to the terms and conditions set forth herein, the Swing Line Lender, in reliance upon the agreements of the other Lenders set forth in this Section 2.04, may in its sole discretion make loans in Dollars (each such loan, a “Swing Line Loan”) to the Company from time to time on any Business Day during the Availability Period in an aggregate amount not to exceed at any time outstanding the amount of the Swing Line Sublimit, notwithstanding the fact that such Swing Line Loans, when aggregated with the Applicable Percentage of the Outstanding Amount of Revolving Loans and L/C Obligations of the Lender acting as Swing Line Lender, may exceed the amount of such Lender's Commitment; provided, however, that (x) after giving effect to any Swing Line Loan, (i) the Total Outstandings shall not exceed the Aggregate Commitments, and (ii) the aggregate Outstanding Amount of the Revolving Loans of any Lender, plus such Lender's Applicable Percentage of the Outstanding Amount of all L/C Obligations, plus such Lender's Applicable Percentage of the Outstanding Amount of all Swing Line Loans shall not exceed such Lender's Commitment; (y) the Company shall not use the proceeds of any Swing Line Loan to refinance any outstanding Swing Line Loan; and (z) if any Lender is a Defaulting Lender, the Swing Line Lender shall not be under any obligation to make any Swing Line Loan if it shall reasonably determine that, after giving effect to Section 2.16(a)(iv), it has, or by such Credit Extension may have, Fronting Exposure. Within the foregoing limits, and subject to the other terms and conditions hereof, the Company may borrow under this Section 2.04, prepay under Section 2.05, and reborrow under this Section 2.04. Each Swing Line Loan shall be a Base Rate Loan. Immediately upon the making of a Swing Line Loan, each Lender shall be deemed to, and hereby irrevocably and unconditionally agrees to, purchase from the Swing Line Lender a risk participation in such Swing Line Loan in an amount equal to the product of such Lender's Applicable Percentage times the amount of such Swing Line Loan.

(b)    Borrowing Procedures. Each Swing Line Borrowing shall be made upon the Company's irrevocable notice to the Swing Line Lender and the Administrative Agent, which may be given by telephone. Each such notice must be received by the Swing Line Lender and the Administrative Agent not later than 10:00 a.m. on the requested borrowing date, and shall specify (i) the amount to be borrowed, which shall be a minimum of $1,000,000, and (ii) the requested borrowing date, which shall be a Business Day. Each such telephonic notice must be confirmed promptly by delivery to the Swing Line Lender and the Administrative Agent of a written Swing Line Loan Notice, appropriately completed and signed by two (2) Responsible Officers of the Company. Promptly after receipt by the Swing Line Lender of any telephonic Swing Line Loan Notice, the Swing Line Lender will confirm with the Administrative Agent (by telephone or in writing) that the Administrative Agent has also received such Swing Line Loan Notice and, if not, the Swing Line Lender will notify the Administrative Agent (by telephone or in writing) of the contents thereof. Unless the Swing Line Lender has received notice (by telephone or in writing) from the Administrative Agent (including at the request of any Lender) prior to 11:00 a.m. on the date of the proposed Swing Line Borrowing (A) directing the Swing Line Lender not to make such Swing Line Loan as a result of the limitations set forth in the first proviso to the first sentence of Section 2.04(a), or (B) that one or more of the applicable conditions specified in Article IV is not then satisfied, then, subject to the terms and conditions hereof, the Swing Line Lender will, not later than 12:00 noon on the borrowing date specified in such Swing Line Loan Notice, make the amount of its Swing Line Loan available to the Company at its office by crediting the account of the Company on the books of the Swing Line Lender in immediately available funds.

(c)    Refinancing of Swing Line Loans.

(i)    The Swing Line Lender at any time in its sole discretion may request, on behalf of the Company (which hereby irrevocably authorizes the Swing Line Lender to so request on its behalf), that each Lender make a Base Rate Revolving Loan in an amount equal to such Lender's Applicable Percentage of the amount of Swing Line Loans then outstanding. Such request shall be made in writing (which written request shall be deemed to be a Revolving Loan Notice for purposes hereof) and in accordance with the requirements of Section 2.02, without regard to the minimum and multiples specified therein for the principal amount of Base Rate Loans, but subject to the unutilized

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portion of the Aggregate Commitments and the conditions set forth in Section 4.02. The Swing Line Lender shall furnish the Company with a copy of the applicable Revolving Loan Notice promptly after delivering such notice to the Administrative Agent. Each Lender shall make an amount equal to its Applicable Percentage of the amount specified in such Revolving Loan Notice available to the Administrative Agent in immediately available funds (and the Administrative Agent may apply Cash Collateral available with respect to the applicable Swing Line Loan) for the account of the Swing Line Lender at the Administrative Agent's Office not later than 1:00 p.m. on the day specified in such Revolving Loan Notice, whereupon, subject to Section 2.04(c)(ii), each Lender that so makes funds available shall be deemed to have made a Base Rate Revolving Loan to the Company in such amount. The Administrative Agent shall remit the funds so received to the Swing Line Lender.

(ii)    If for any reason any Swing Line Loan cannot be refinanced by such a Revolving Borrowing in accordance with Section 2.04(c)(i), the request for Base Rate Revolving Loans submitted by the Swing Line Lender as set forth herein shall be deemed to be a request by the Swing Line Lender that each of the Lenders fund its risk participation in the relevant Swing Line Loan and each Lender's payment to the Administrative Agent for the account of the Swing Line Lender pursuant to Section 2.04(c)(i) shall be deemed payment in respect of such participation.

(iii)    If any Lender fails to make available to the Administrative Agent for the account of the Swing Line Lender any amount required to be paid by such Lender pursuant to the foregoing provisions of this Section 2.04(c) by the time specified in Section 2.04(c)(i), the Swing Line Lender shall be entitled to recover from such Lender (acting through the Administrative Agent), on demand, such amount with interest thereon for the period from the date such payment is required to the date on which such payment is immediately available to the Swing Line Lender at a rate per annum equal to the greater of the Federal Funds Rate and a rate determined by the Swing Line Lender in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Swing Line Lender in connection with the foregoing. If such Lender pays such amount (with interest and fees as aforesaid), the amount so paid shall constitute such Lender's Revolving Loan included in the relevant Revolving Borrowing or funded participation in the relevant Swing Line Loan, as the case may be. A certificate of the Swing Line Lender submitted to any Lender (through the Administrative Agent) with respect to any amounts owing under this clause (iii) shall be conclusive absent manifest error.

(iv)    Each Lender's obligation to make Revolving Loans or to purchase and fund risk participations in Swing Line Loans pursuant to this Section 2.04(c) shall be absolute and unconditional and shall not be affected by any circumstance, including (A) any setoff, counterclaim, recoupment, defense or other right which such Lender may have against the Swing Line Lender, the Company or any other Person for any reason whatsoever, (B) the occurrence or continuance of a Default, or (C) any other occurrence, event or condition, whether or not similar to any of the foregoing; provided, however, that each Lender's obligation to make Revolving Loans pursuant to this Section 2.04(c) is subject to the conditions set forth in Section 4.02. No such funding of risk participations shall relieve or otherwise impair the obligation of the Company to repay Swing Line Loans, together with interest as provided herein.

(d)    Repayment of Participations.

(i)    At any time after any Lender has purchased and funded a risk participation in a Swing Line Loan, if the Swing Line Lender receives any payment on account of such Swing Line Loan, the Swing Line Lender will distribute to such Lender its Applicable Percentage thereof in the same funds as those received by the Swing Line Lender.

(ii)    If any payment received by the Swing Line Lender in respect of principal or interest on any Swing Line Loan is required to be returned by the Swing Line Lender under any of the circumstances described in Section 10.05 (including pursuant to any settlement entered into by the Swing Line Lender in its discretion), each Lender shall pay to the Swing Line Lender its Applicable Percentage thereof on demand of the Administrative Agent, plus interest thereon from the date of such demand to the date such amount is returned, at a rate per annum equal to the Federal Funds Rate. The Administrative Agent will make such demand upon the request of the Swing Line Lender. The obligations of the Lenders under this clause shall survive the payment in full of the Obligations and the termination of this Agreement.

(e)    Interest for Account of Swing Line Lender. The Swing Line Lender shall be responsible for invoicing the Company for interest on the Swing Line Loans. Until each Lender funds its Base Rate Revolving Loan or risk participation pursuant to this Section 2.04 to refinance such Lender's Applicable Percentage of any Swing Line Loan, interest in respect of such Applicable Percentage shall be solely for the account of the Swing Line Lender.

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(f)    Payments Directly to Swing Line Lender. The Company shall make all payments of principal and interest in respect of the Swing Line Loans directly to the Swing Line Lender.

2.05    Prepayments.

(a)    The Borrowers may, upon notice from the Company to the Administrative Agent, at any time or from time to time voluntarily prepay Revolving Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the Administrative Agent not later than 9:00 a.m. (A) three Business Days prior to any date of prepayment of Eurodollar Rate Loans and (B) on the date of prepayment of Base Rate Revolving Loans; (ii) any prepayment of Eurodollar Rate Loans shall be in a principal amount of $3,000,000 or a whole multiple of $1,000,000 in excess thereof; and (iii) any prepayment of Base Rate Revolving Loans shall be in a principal amount of $1,000,000 or a whole multiple of $100,000 in excess thereof or, in each case, if less, the entire principal amount thereof then outstanding. Each such notice shall specify the date and amount of such prepayment and the Type(s) of Revolving Loans to be prepaid and, if Eurodollar Rate Loans are to be prepaid, the Interest Period(s) of such Loans. The Administrative Agent will promptly notify each Lender of its receipt of each such notice, and of the amount of such Lender's Applicable Percentage of such prepayment. If such notice is given by the Company, the Borrowers shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein. Any prepayment of a Eurodollar Rate Loan shall be accompanied by all accrued interest on the amount prepaid, together with any additional amounts required pursuant to Section 3.05. Subject to Section 2.16, each such prepayment shall be applied to the Revolving Loans of the Lenders in accordance with their respective Applicable Percentages. Any notice of prepayment given pursuant to this Section 2.05(a) may be conditioned upon the consummation of other financing, and may be rescinded or extended for a reasonable period upon written notice to the Administrative Agent if such other financing is not consummated on the anticipated date.

(b)    The Borrowers may, upon notice from the Company to the Swing Line Lender (with a copy to the Administrative Agent), at any time or from time to time, voluntarily prepay Swing Line Loans in whole or in part without premium or penalty; provided that (i) such notice must be received by the Swing Line Lender and the Administrative Agent not later than 10:00 a.m. on the date of the prepayment, and (ii) any such partial prepayment shall be in a minimum principal amount of $100,000. Each such notice shall specify the date and amount of such prepayment. If such notice is given by the Company, the Borrowers shall make such prepayment and the payment amount specified in such notice shall be due and payable on the date specified therein.

(c)    If the Administrative Agent notifies the Company at any time that the Total Outstandings at such time exceed the Aggregate Commitments then in effect, then, within two Business Days after receipt of such notice, the Borrowers shall prepay Loans and/or Cash Collateralize the L/C Obligations in an aggregate amount sufficient to reduce such Outstanding Amount as of such date of payment to an amount not to exceed the difference of 100% of the Aggregate Commitments then in effect less $250,000; provided, however, that the Borrowers shall not be required to Cash Collateralize the L/C Obligations pursuant to this Section 2.05(c) unless after the prepayment in full of the Loans the Total Outstandings exceed the Aggregate Commitments then in effect. The Administrative Agent may, at any time and from time to time after the initial deposit of such Cash Collateral, request that additional Cash Collateral be provided in order to reasonably protect against the results of further exchange rate fluctuations.

(d)    If the Administrative Agent notifies the Company at any time that the Outstanding Amount of all Letters of Credit at such time exceeds (as a result of fluctuations in exchange rates or for any other reason) an amount equal to 105% of the Letter of Credit Sublimit then in effect, then, within two Business Days after receipt of such notice, the Borrowers shall Cash Collateralize L/C Obligations in an aggregate amount sufficient to reduce such Outstanding Amount as of such date of paymentto an amount not to exceed 100% of the Letter of Credit Sublimit then in effect.

2.06    Termination or Reduction of Commitments.The Borrowers may, upon notice from the Company to the Administrative Agent, terminate the Aggregate Commitments, or from time to time permanently reduce the Aggregate Commitments; provided that (a) any such notice shall be received by the Administrative Agent not later than 9:00 a.m. five Business Days prior to the date of termination or reduction, (b) any such partial reduction shall be in an aggregate amount of $10,000,000 or any whole multiple of $1,000,000 in excess thereof, (c) the Borrowers shall not terminate or reduce (i) the Aggregate Commitments if, after giving effect thereto and to any concurrent prepayments hereunder, the Total Outstandings would exceed the Aggregate Commitments, (ii) the Letter of Credit Sublimit if, after giving effect thereto, the Outstanding Amount of L/C Obligations not fully Cash Collateralized hereunder would exceed the Letter of Credit Sublimit, or (iii) the Swing Line Sublimit if, after giving effect thereto and to any concurrent prepayments hereunder, the Outstanding Amount of Swing Line Loans would exceed the Swing Line Sublimit, and (d) if, after giving effect to any termination or reduction of the Aggregate Commitments, the Letter of Credit Sublimit or the Swing Line Sublimit exceeds the amount of the Aggregate Commitments, such Sublimit shall be automatically reduced by the amount of such excess. The Administrative Agent will

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promptly notify the Lenders of any such notice of termination or reduction of the Aggregate Commitments. Any reduction of the Aggregate Commitments shall be applied to the Commitment of each Lender according to its Applicable Percentage. All fees accrued until the effective date of any termination of the Aggregate Commitments shall be paid on the effective date of such termination. Any notice of termination or reduction given pursuant to this Section 2.06 may be conditioned upon the consummation of other financing, and may be rescinded or extended for a reasonable period upon written notice to the Administrative Agent if such other financing is not consummated on the anticipated date.

2.07    Repayment of Loans.

(a)    The Borrowers shall repay to the Lenders on the Maturity Date the aggregate principal amount of Revolving Loans outstanding on such date.

(b)    The Borrowers shall repay each Swing Line Loan on the earlier to occur of (i) the date ten Business Days after such Loan is made and (ii) the Maturity Date.

2.08    Interest.

(a)    Subject to the provisions of subsection (b) below, (i) each Eurodollar Rate Loan shall bear interest on the outstanding principal amount thereof for each Interest Period at a rate per annum equal to the Eurodollar Rate for such Interest Period plus the Applicable Rate; (ii) each Base Rate Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate; and (iii) each Swing Line Loan shall bear interest on the outstanding principal amount thereof from the applicable borrowing date at a rate per annum equal to the Base Rate plus the Applicable Rate.

(b)    (i)    If any amount of principal of any Loan is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

(ii)    If any amount (other than principal of any Loan) payable by the Borrowers under any Loan Document is not paid when due (without regard to any applicable grace periods), whether at stated maturity, by acceleration or otherwise, then upon the request of the Required Lenders, such amount shall thereafter bear interest at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

(iii)    Upon the request of the Required Lenders and after written notice to the Company, while any Event of Default exists (other than as set forth in clauses (b)(i) and (b)(ii) above), the Borrowers shall pay interest on the principal amount of all outstanding Obligations hereunder at a fluctuating interest rate per annum at all times equal to the Default Rate to the fullest extent permitted by applicable Laws.

(iv)    Accrued and unpaid interest on past due amounts (including interest on past due interest) shall be due and payable upon demand.

(c)    Interest on each Loan shall be due and payable in arrears on each Interest Payment Date applicable thereto and at such other times as may be specified herein. Interest hereunder shall be due and payable in accordance with the terms hereof before and after judgment, and before and after the commencement of any proceeding under any Debtor Relief Law.

2.09    Fees. In addition to certain fees described in subsections (h) and (i) of Section 2.03:

(a)    Commitment Fee.The Borrowers shall pay to the Administrative Agent for the account of each Lender in accordance with its Applicable Percentage, a commitment fee in Dollars equal to the Applicable Rate times the actual daily amount by which the Aggregate Commitments exceed the sum of (i) the Outstanding Amount of Revolving Loans and (ii) the Outstanding Amount of L/C Obligations, subject to adjustment as provided in Section 2.16. For the avoidance of doubt, the Outstanding Amount of Swing Line Loans shall not be counted towards or considered usage of the Aggregate Commitments for purposes of determining the commitment fee. The commitment fee shall accrue at all times during the Availability Period, including at any time during which one or more of the conditions in Article IV is not met, and shall be due and payable quarterly in arrears on the last Business Day of each March, June, September and December, commencing with the first such date to occur after the Closing Date, and on the last day of the Availability Period. The commitment fee shall be calculated quarterly in arrears, and if there is any change in the Applicable Rate during any quarter, the actual daily amount shall be computed and multiplied by the Applicable Rate separately for each period during such quarter that such Applicable Rate was in effect.

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(b)    Other Fees.(i)The Borrowers shall pay to the Arranger and the Administrative Agent for their own respective accounts, in Dollars, fees in the amounts and at the times specified in the Fee Letter. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

(ii)The Borrowers shall pay to the Lenders, in Dollars, such fees as shall have been separately agreed upon in writing in the amounts and at the times so specified. Such fees shall be fully earned when paid and shall not be refundable for any reason whatsoever.

2.10    Computation of Interest and Fees; Retroactive Adjustments of Applicable Rate.

(a)    All computations of interest for Base Rate Loans (including Base Rate Loans determined by reference to the Eurodollar Rate) shall be made on the basis of a year of 365 or 366 days, as the case may be, and actual days elapsed. All other computations of fees and interest shall be made on the basis of a 360-day year and actual days elapsed (which results in more fees or interest, as applicable, being paid than if computed on the basis of a 365-day year). Interest shall accrue on each Loan for the day on which the Loan is made, and shall not accrue on a Loan, or any portion thereof, for the day on which the Loan or such portion is paid, provided that any Loan that is repaid on the same day on which it is made shall, subject to Section 2.12(a), bear interest for one day. Each determination by the Administrative Agent of an interest rate or fee hereunder shall be conclusive and binding for all purposes, absent manifest error.

(b)    If, as a result of any restatement of or other adjustment to the financial statements of the Company or for any other reason, the Company or the Lenders determine that (i) the Consolidated Leverage Ratio as calculated by the Borrowers as of any applicable date was inaccurate and (ii) a proper calculation of the Consolidated Leverage Ratio would have resulted in higher pricing for such period, the Borrowers shall promptly and retroactively be obligated to pay to the Administrative Agent for the account of the applicable Lenders or the L/C Issuer, as the case may be, promptly on demand by the Administrative Agent (or, after the occurrence of an actual or deemed entry of an order for relief with respect to any Borrower under the Bankruptcy Code of the United States, automatically and without further action by the Administrative Agent, any Lender or the L/C Issuer), an amount equal to the excess of the amount of interest and fees that should have been paid for such period over the amount of interest and fees actually paid for such period. This paragraph shall not limit the rights of the Administrative Agent, any Lender or the L/C Issuer, as the case may be, under Section 2.03(c)(iii), 2.03(h) or 2.08(b) or under Article VIII. The Borrowers' obligations under this paragraph shall survive the termination of the Aggregate Commitments and the repayment of all other Obligations hereunder for a period of twelve (12) months following the date of such termination and repayment.

2.11    Evidence of Debt.

(a)    The Credit Extensions made by each Lender shall be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent manifest error of the amount of the Credit Extensions made by the Lenders to the Borrowers and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of any Borrower hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Borrowers shall execute and deliver to such Lender (through the Administrative Agent) a Note, which shall evidence such Lender's Loans in addition to such accounts or records. Each Lender may attach schedules to its Note and endorse thereon the date, Type (if applicable), amount and maturity of its Loans and payments with respect thereto.

(b)    In addition to the accounts and records referred to in subsection (a), each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or records evidencing the purchases and sales by such Lender of participations in Letters of Credit and Swing Line Loans. In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error.

2.12    Payments Generally; Administrative Agent's Clawback.

(a)    General. All payments to be made by the Borrowers shall be made without condition or deduction for any counterclaim, defense, recoupment or setoff. Except as otherwise expressly provided herein, all payments by the Borrowers hereunder shall be made to the Administrative Agent, for the account of the respective Lenders to which such payment is owed, at the Administrative Agent's Office in Dollars and in immediately available funds not later than 11:00 a.m. on the date specified herein. The Administrative Agent will promptly distribute to each Lender its Applicable Percentage (or other applicable share

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as provided herein) of such payment in like funds as received by wire transfer to such Lender's Lending Office. All payments received by the Administrative Agent after 11:00 a.m. shall be deemed received on the next succeeding Business Day and any applicable interest or fee shall continue to accrue. If any payment to be made by the Borrowers shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.

(b)    (i) Funding by Lenders; Presumption by Administrative Agent. Unless the Administrative Agent shall have received notice from a Lender prior to the proposed date of any Revolving Borrowing of Eurodollar Rate Loans (or, in the case of any Revolving Borrowing of Base Rate Loans, prior to 10:00 a.m. on the date of such Revolving Borrowing) that such Lender will not make available to the Administrative Agent such Lender's share of such Revolving Borrowing, the Administrative Agent may assume that such Lender has made such share available on such date in accordance with Section 2.02 (or, in the case of a Revolving Borrowing of Base Rate Loans, that such Lender has made such share available in accordance with and at the time required by Section 2.02) and may, in reliance upon such assumption, make available to the Borrowers a corresponding amount. In such event, if a Lender has not in fact made its share of the applicable Revolving Borrowing available to the Administrative Agent, then the applicable Lender and the Borrowers severally agree to pay to the Administrative Agent forthwith on demand such corresponding amount in immediately available funds with interest thereon, for each day from and including the date such amount is made available to the Borrowers to but excluding the date of payment to the Administrative Agent, at (A) in the case of a payment to be made by such Lender, the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation, plus any administrative, processing or similar fees customarily charged by the Administrative Agent in connection with the foregoing, and (B) in the case of a payment to be made by the Borrowers, the interest rate applicable to Base Rate Loans. If the Borrowers and such Lender shall pay such interest to the Administrative Agent for the same or an overlapping period, the Administrative Agent shall promptly remit to the Borrowers the amount of such interest paid by the Borrowers for such period. If such Lender pays its share of the applicable Revolving Borrowing to the Administrative Agent, then the amount so paid shall constitute such Lender's Revolving Loan included in such Revolving Borrowing. Any payment by the Borrowers shall be without prejudice to any claim the Borrowers may have against a Lender that shall have failed to make such payment to the Administrative Agent.

(ii)    Payments by Borrowers; Presumptions by Administrative Agent. Unless the Administrative Agent shall have received notice from the Company prior to the date on which any payment is due to the Administrative Agent for the account of the Lenders or the L/C Issuer hereunder that the Borrowers will not make such payment, the Administrative Agent may assume that the Borrowers have made such payment on such date in accordance herewith and may, in reliance upon such assumption, distribute to the Lenders or the L/C Issuer, as the case may be, the amount due. In such event, if the Borrowers have not in fact made such payment, then each of the Lenders or the L/C Issuer, as the case may be, severally agrees to repay to the Administrative Agent forthwith on demand the amount so distributed to such Lender or the L/C Issuer, in immediately available funds with interest thereon, for each day from and including the date such amount is distributed to it to but excluding the date of payment to the Administrative Agent, at the greater of the Federal Funds Rate and a rate determined by the Administrative Agent in accordance with banking industry rules on interbank compensation.

A notice of the Administrative Agent to any Lender or the Company with respect to any amount owing under this subsection (b) shall be conclusive, absent manifest error.

(c)    Failure to Satisfy Conditions Precedent. If any Lender makes available to the Administrative Agent funds for any Loan to be made by such Lender as provided in the foregoing provisions of this Article II, and such funds are not made available to the Borrowers by the Administrative Agent because the conditions to the applicable Credit Extension set forth in Article IV are not satisfied or waived in accordance with the terms hereof, the Administrative Agent shall return such funds (in like funds as received from such Lender) to such Lender, without interest.

(d)    Obligations of Lenders Several. The obligations of the Lenders hereunder to make Revolving Loans, to fund participations in Letters of Credit and Swing Line Loans and to make payments pursuant to Section 10.04(c) are several and not joint. The failure of any Lender to make any Revolving Loan, to fund any such participation or to make any payment under Section 10.04(c) on any date required hereunder shall not relieve any other Lender of its corresponding obligation to do so on such date, and no Lender shall be responsible for the failure of any other Lender to so make its Revolving Loan, to purchase its participation or to make its payment under Section 10.04(c).

(e)    Funding Source. Nothing herein shall be deemed to obligate any Lender to obtain the funds for any Loan in any particular place or manner or to constitute a representation by any Lender that it has obtained or will obtain the funds for any Loan in any particular place or manner.

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2.13    Sharing of Payments by Lenders. If any Lender shall, by exercising any right of setoff or counterclaim or otherwise, obtain payment in respect of Obligations due and payable to such Lender hereunder and under the other Loan Documents at such time in excess of its ratable share (according to the proportion of (x) the amount of such Obligations due and payable to such Lender at such time to (b) the aggregate amount of the Obligations due and payable to all Lenders hereunder and under the other Loan Documents at such time) of payments on account of the Obligations due and payable to all Lenders hereunder and under the other Loan Documents at such time obtained by all the Lenders at such time, then the Lender receiving such greater proportion shall (y) notify the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Revolving Loans and subparticipations in L/C Obligations and Swing Line Loans of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Revolving Loans and other amounts owing them, provided that:

(i)    if any such participations or subparticipations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations or subparticipations shall be rescinded and the purchase price restored to the extent of such recovery, without interest; and

(ii)    the provisions of this Section shall not be construed to apply to (x) any payment made by or on behalf of the Borrowers pursuant to and in accordance with the express terms of this Agreement (including the application of funds arising from the existence of a Defaulting Lender), (y) the application of Cash Collateral provided for in Section 2.15, or (z) any payment obtained by a Lender as consideration for the assignment of or sale of a participation in any of its Revolving Loans or subparticipations in L/C Obligations or Swing Line Loans to any assignee or participant, other than an assignment to any Borrower or any Subsidiary thereof (as to which the provisions of this Section shall apply).

Each Borrower consents to the foregoing and agrees, to the extent it may effectively do so under applicable law, that any Lender acquiring a participation pursuant to the foregoing arrangements may exercise against such Borrower rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of such Borrower in the amount of such participation.

2.14    Increase in Aggregate Commitments; Incremental Term Facility.

(a)    At any time after the Closing Date, the Borrowers may, subject to Sections 2.14(b) and (c), establish additional credit facilities of the Borrowers (collectively, the “Incremental Loan Facilities”) by increasing the Aggregate Commitments under this Agreement as provided in Section 2.14(b) (the “Incremental Revolving Commitments”) or establishing new term loans under this Agreement as provided in Section 2.14(c) (the “Incremental Term Facilities”); provided that:

(i)    no Default or Event of Default shall have occurred and be continuing or shall result after giving effect to any such Incremental Loan Facility;

(ii)    each such Incremental Loan Facility shall be in a minimum amount of $20,000,000 and in increments of $5,000,000 in excess thereof (or such less amount as may be acceptable to the Administrative Agent);

(x)the Borrowers may make a maximum of four such requests; and

(xi)the aggregate amount of all such Incremental Revolving Commitments and Incremental Term Facilities shall not exceed, collectively, $35,000,000.

(b)    Incremental Revolving Commitments.

(i)    Request for Increase. Subject to Section 2.14(a), upon notice to the Administrative Agent (which shall promptly notify the Lenders), the Company may from time to time request an Incremental Revolving Commitment. At the time of sending such notice, the Company (in consultation with the Administrative Agent) shall specify the time period within which each Lender is requested to respond (which shall in no event be less than ten Business Days from the date of delivery of such notice to the Lenders).

(ii)    Lender Elections to Increase. Each Lender shall notify the Administrative Agent within such time period whether or not it agrees to increase its Commitment and, if so, whether by an amount equal to, greater than, or less than its Applicable Percentage of such requested increase. Any Lender not responding within such time period shall be deemed to have declined to increase its Commitment.

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(iii)    Notification by Administrative Agent; Additional Lenders. The Administrative Agent shall notify the Company and each Lender of the Lenders' responses to each request made hereunder. To achieve the full amount of a requested Incremental Revolving Commitment and subject to the approval of the Administrative Agent, the L/C Issuer and the Swing Line Lender (which approvals shall not be unreasonably withheld), the Company may also invite additional Eligible Assignees to become Lenders pursuant to a joinder agreement in form and substance satisfactory to the Administrative Agent and its counsel.

(iv)    Effective Date and Allocations. If the Aggregate Commitments are increased in accordance with this Section 2.14(b), the Administrative Agent and the Company shall determine the effective date (the “Increase Effective Date”) and the final allocation of such Incremental Revolving Commitment. The Administrative Agent shall promptly notify the Company and the Lenders of the final allocation of such Incremental Revolving Commitment and the Increase Effective Date.

(xii)Conditions to Effectiveness of Increase. In addition to the conditions set forth in Section 2.14(a), as a condition precedent to such Incremental Revolving Commitment, the Company shall deliver to the Administrative Agent a certificate of each Loan Party dated as of the Increase Effective Date (in sufficient copies for each Lender) signed by a Responsible Officer of such Loan Party (x) certifying and attaching the resolutions adopted by such Loan Party approving or consenting to such increase, and (y) in the case of each Borrower, certifying that, before and after giving effect to such Incremental Revolving Commitment, (A) the representations and warranties contained in Article V and the other Loan Documents are true and correct in all material respects on and as of the Increase Effective Date, except to the extent that such representations and warranties are qualified by materiality, in which case such representations and warranties and true and correct in all respects, and except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, and except that for purposes of this Section 2.14, the representations and warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to subsections (a) and (b), respectively, of Section 6.01, and (B) no Default or Event of Default exists. The Borrowers shall prepay any Revolving Loans outstanding on the Increase Effective Date (and pay any additional amounts required pursuant to Section 3.05) to the extent necessary to keep the outstanding Revolving Loans ratable with any revised Applicable Percentages arising from any nonratable increase in the Commitments under this Section; provided that the notice and minimum amount requirements of Section 2.05(a) shall not apply to prepayments made pursuant to Section 2.14(b)(v).

(xiii)Terms of Increase. Any Incremental Revolving Commitment established hereunder shall have terms identical to the Commitments existing on the Increase Effective Date. No Incremental Revolving Commitment shall increase (A) the Letter of Credit Sublimit without the consent of the L/C Issuer or (B) the Swing Line Sublimit without the consent of the Swing Line Lender.

(c)    Incremental Term Facilities.

(i)    Request for Incremental Term Facilities. Subject to Section 2.14(a), upon notice to the Administrative Agent (which shall promptly notify the Lenders), the Company may from time to time request an Incremental Term Facility. At the time of sending such notice, the Company (in consultation with the Administrative Agent) shall specify the time period within which each Lender is requested to respond (which shall in no event be less than ten Business Days from the date of delivery of such notice to the Lenders). Each Incremental Term Facility (A) shall rank paripassu or junior in right of payment, prepayment and of security with the Revolving Loans (and any Incremental Term Facility which is junior in right of payment shall have customary second lien, prepayment, subordination, standstill and other provisions reasonably acceptable to the Administrative Agent) and shall contain provisions as to the requirement that any Lien thereunder on any property also granted to or held by the Collateral Agent under any Loan Document shall be released on any Collateral Release Date as provided herein, (B) shall not mature earlier than the Maturity Date or the maturity date of any prior Incremental Term Facility, (C) shall contain terms as to prepayments and amortization (limited, in the case of any Incremental Term Facility other than the initial Incremental Term Facility, to prepayments and amortization prior to the latest maturity date of any existing Incremental Term Facility) and pricing that are reasonably acceptable to the Administrative Agent and the relevant Lenders (it being understood that terms that are no less favorable to the Borrowers than those of any existing Incremental Term Facility shall be acceptable to the Administrative Agent), and (D) shall not contain additional or different covenants or financial covenants which are more restrictive in any material respect than the covenants in the Loan Documents at the time of the incurrence of such Incremental Term Facility unless either (1) such covenants benefit all of the Lenders or are otherwise consented to by the Administrative Agent or (2) such covenants apply only after the Facility Termination Date.

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(ii)    Lender Elections to Commit. Each Lender shall notify the Administrative Agent within such time period whether or not it agrees to provide a commitment under the Incremental Term Facility and, if so, whether by an amount equal to, greater than, or less than its ratable portion (based on such Lender's Applicable Percentage) of such requested Incremental Term Facility. Any Lender not responding within such time period shall be deemed to have declined to provide a commitment under the Incremental Term Facility.

(iii)    Notification by Administrative Agent; Additional Term Loan Lenders. The Administrative Agent shall notify the Company and each Lender of the Lenders' responses to each request made hereunder. To achieve the full amount of a requested Incremental Term Facility, and subject to the approval of the Administrative Agent (which approval shall not be unreasonably withheld), the Company may also invite additional Eligible Assignees to become Lenders pursuant to a joinder agreement in form and substance satisfactory to the Administrative Agent and its counsel.

(iv)    Effective Date and Allocations. If an Incremental Term Facility is established in accordance with this Section 2.14(c), the Administrative Agent and the Company shall determine the effective date (the “Incremental Term Facility Effective Date”) and the final allocation of such facility. The Administrative Agent shall promptly notify the Company and the Lenders of the final allocation of such Incremental Term Facility and the Incremental Term Facility Effective Date.

(v)    Conditions to Effectiveness of Incremental Term Facility. In addition to the conditions set forth in Section 2.14(a), as a condition precedent to such Incremental Term Facility, the Company shall deliver to the Administrative Agent a certificate of each Loan Party dated as of the Incremental Term Facility Effective Date (in sufficient copies for each Lender) signed by a Responsible Officer of such Loan Party (x) certifying and attaching the resolutions adopted by such Loan Party approving or consenting to such facility, and (y) in the case of each Borrower, certifying that, before and after giving effect to such Incremental Term Facility, (A) the representations and warranties contained in Article V and the other Loan Documents are true and correct in all material respects on and as of the Incremental Term Facility Effective Date, except to the extent that such representations and warranties are qualified by materiality, in which case such representations and warranties and true and correct in all respects, and except to the extent that such representations and warranties specifically refer to an earlier date, in which case they are true and correct as of such earlier date, and except that for purposes of this Section 2.14, the representations and warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to subsections (a) and (b), respectively, of Section 6.01, and (B) no Default or Event of Default exists.

(vi)    Terms of Incremental Term Facility. Any Incremental Term Facility established hereunder shall be on terms and pursuant to documentation to be determined by the Borrowers, the Lenders thereunder and the Administrative Agent (and the Borrowers and the Administrative Agent may, without the consent of any other Lender, enter into an amendment to this Agreement to appropriately include the Incremental Term Facility hereunder as determined by the Administrative Agent to be reasonably necessary to effect such Incremental Term Facility).

(d)    Conflicting Provisions. This Section shall supersede any provisions in Section 2.13 or 10.01 to the contrary.

2.15    Cash Collateral.

(a)    Certain Credit Support Events. If (i) the L/C Issuer has honored any full or partial drawing request under any Letter of Credit and such drawing has resulted in an L/C Borrowing, (ii) as of the Letter of Credit Expiration Date, any L/C Obligation for any reason remains outstanding, (iii) the Borrowers shall be required to provide Cash Collateral pursuant to Section 8.02(c), or (iv) there shall exist a Defaulting Lender, the Borrowers shall immediately (in the case of clause (iii) above) or within one Business Day (in all other cases) following any request by the Administrative Agent or the L/C Issuer, provide Cash Collateral in an amount not less than the applicable Minimum Collateral Amount (determined in the case of Cash Collateral provided pursuant to clause (iv) above, after giving effect to Section 2.16(a)(iv) and any Cash Collateral provided by the Defaulting Lender).

(b)    Grant of Security Interest. Each Borrower, and to the extent provided by any Defaulting Lender, such Defaulting Lender, hereby grants to (and subjects to the control of) the Administrative Agent, for the benefit of the Administrative Agent, the L/C Issuer and the Lenders, and agrees to maintain, a first priority security interest in all such cash, deposit accounts and all balances therein, and all other property so provided as collateral pursuant hereto, and in all proceeds of the foregoing, all as security for the obligations to which such Cash Collateral may be applied pursuant to Section 2.15(c). If at any time the Administrative Agent determines that Cash Collateral is subject to any right or claim of any Person other than the Administrative Agent or the L/C Issuer as herein provided, or that the total amount of such Cash Collateral is less than the Minimum Collateral

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Amount, the Borrowers will, promptly upon demand by the Administrative Agent, pay or provide to the Administrative Agent additional Cash Collateral in an amount sufficient to eliminate such deficiency. All Cash Collateral (other than credit support not constituting funds subject to deposit) shall be maintained in blocked, non-interest bearing deposit accounts at Bank of America. The Borrowers shall pay on demand therefor from time to time all customary account opening, activity and other administrative fees and charges in connection with the maintenance and disbursement of Cash Collateral.

(c)    Application. Notwithstanding anything to the contrary contained in this Agreement, Cash Collateral provided under any of this Section 2.15 or Sections 2.03, 2.04, 2.05, 2.16 or 8.02 in respect of Letters of Credit shall be held and applied to the satisfaction of the specific L/C Obligations, obligations to fund participations therein (including, as to Cash Collateral provided by a Defaulting Lender, any interest accrued on such obligation) and other obligations for which the Cash Collateral was so provided, prior to any other application of such property as may otherwise be provided for herein.

(d)    Release. Cash Collateral (or the appropriate portion thereof) provided to reduce Fronting Exposure or to secure other obligations shall be released promptly following (i) the elimination of the applicable Fronting Exposure or other obligations giving rise thereto (including by the termination of Defaulting Lender status of the applicable Lender (or, as appropriate, its assignee following compliance with Section 10.06(b)(vi))) or (ii) the determination by the Administrative Agent and the L/C Issuer that there exists excess Cash Collateral; provided, however, (x) any such release shall be without prejudice to, and any disbursement or other transfer of Cash Collateral shall be and remain subject to, any other Lien conferred under the Loan Documents and the other applicable provisions of the Loan Documents, and (y) the Person providing Cash Collateral and the L/C Issuer may agree that Cash Collateral shall not be released but instead held to support future anticipated Fronting Exposure or other obligations.

2.16    Defaulting Lenders.

(a)    Adjustments. Notwithstanding anything to the contrary contained in this Agreement, if any Lender becomes a Defaulting Lender, then, until such time as that Lender is no longer a Defaulting Lender, to the extent permitted by applicable Law:

(i)    Waivers and Amendments. Such Defaulting Lender's right to approve or disapprove any amendment, waiver or consent with respect to this Agreement shall be restricted as set forth in the definition of “Required Lenders” and Section 10.01.

(ii)    Reallocation of Payments. Any payment of principal, interest, fees or other amounts received by the Administrative Agent for the account of such Defaulting Lender (whether voluntary or mandatory, at maturity, pursuant to Article VIII or otherwise) or received by the Administrative Agent from a Defaulting Lender pursuant to Section 10.08 shall be applied at such time or times as may be determined by the Administrative Agent as follows: first, to the payment of any amounts owing by such Defaulting Lender to the Administrative Agent hereunder; second, to the payment on a pro rata basis of any amounts owing by such Defaulting Lender to the L/C Issuer or Swing Line Lender hereunder; third, to Cash Collateralize the L/C Issuer's Fronting Exposure with respect to such Defaulting Lender in accordance with Section 2.15; fourth, as the Borrowers may request (so long as no Default or Event of Default exists), to the funding of any Loan in respect of which such Defaulting Lender has failed to fund its portion thereof as required by this Agreement, as determined by the Administrative Agent; fifth, if so determined by the Administrative Agent and the Company, to be held in a deposit account and released pro ratain order to (x) satisfy such Defaulting Lender's potential future funding obligations with respect to Loans under this Agreement and (y) Cash Collateralize the L/C Issuer's future Fronting Exposure with respect to such Defaulting Lender with respect to future Letters of Credit issued under this Agreement, in accordance with Section 2.15; sixth, to the payment of any amounts owing to the Lenders, the L/C Issuer or Swing Line Lender as a result of any judgment of a court of competent jurisdiction obtained by any Lender, the L/C Issuer or the Swing Line Lender against that Defaulting Lender as a result of that Defaulting Lender's breach of its obligations under this Agreement; seventh, so long as no Default or Event of Default exists, to the payment of any amounts owing to the Borrowers as a result of any judgment of a court of competent jurisdiction obtained by the Borrowers against that Defaulting Lender as a result of that Defaulting Lender's breach of its obligations under this Agreement; and eighth, to that Defaulting Lender or as otherwise directed by a court of competent jurisdiction; provided that if (x) such payment is a payment of the principal amount of any Loans or L/C Borrowings in respect of which that Defaulting Lender has not fully funded its appropriate share, and (y) such Loans were made or the related Letters of Credit were issued at a time when the conditions set forth in Section 4.02 were satisfied or waived, such payment shall be applied solely to pay the Loans of, and L/C Obligations owed to, all Non-Defaulting Lenders on a pro rata basis prior to being applied to the payment of any Loans of, or L/C Obligations owed to, that Defaulting Lender until such time as all Loans and funded and unfunded participations in L/C Obligations and Swing Line Loans are held by the Lenders pro rata in accordance with the Commitments hereunder without giving

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effect to Section 2.16(a)(iv). Any payments, prepayments or other amounts paid or payable to a Defaulting Lender that are applied (or held) to pay amounts owed by a Defaulting Lender or to post Cash Collateral pursuant to this Section 2.16(a)(ii) shall be deemed paid to and redirected by that Defaulting Lender, and each Lender irrevocably consents hereto.

(iii)    Certain Fees.

(A)No Defaulting Lender shallbe entitled to receive any commitment fee pursuant to Section 2.09(a) for any period during which that Lender is a Defaulting Lender (and the Borrowers shall not be required to pay any such fee that otherwise would have been required to have been paid to that Defaulting Lender).

(B)Subject to Section 2.16(a)(ii), each Defaulting Lender shall be entitled to receive Letter of Credit Fees for any period during which that Lender is a Defaulting Lender only to the extent allocable to its Applicable Percentage of the stated amount of Letters of Credit for which it has provided Cash Collateral pursuant to Section 2.15.

(C)With respect to any Letter of Credit Fee not required to be paid to any Defaulting Lender pursuant to clause (A) or (B) above, the Borrowers shall (x) pay to each Non-Defaulting Lender that portion of any such fee otherwise payable to such Defaulting Lender with respect to such Defaulting Lender's participation in L/C Obligations that has been reallocated to such Non-Defaulting Lender pursuant to clause (iv) below, (y) pay to the L/C Issuer the amount of any such fee otherwise payable to such Defaulting Lender to the extent allocable to such L/C Issuer's Fronting Exposure to such Defaulting Lender, and (z) not be required to pay the remaining amount of any such fee.

(iv)    Reallocation of Applicable Percentages to Reduce Fronting Exposure. All or any part of such Defaulting Lender's participation in L/C Obligations and Swing Line Loans shall be reallocated among the Non-Defaulting Lenders in accordance with their respective Applicable Percentages (calculated without regard to such Defaulting Lender's Commitment) upon prior notice to the Company and such Non-Defaulting Lenders, but only to the extent that (x) the conditions set forth in Section 4.02 are satisfied at the time of such reallocation (and, unless the Company shall have otherwise notified the Administrative Agent promptly after receipt of notice of such reallocation, the Borrowers shall be deemed to have represented and warranted that such conditions are satisfied at such time), and (y) such reallocation does not cause the aggregate principal amount at such time of any Non-Defaulting Lender's outstanding Revolving Loans and such Non-Defaulting Lender's participation in L/C Obligations and Swing Line Loans at such time to exceed such Non-Defaulting Lender's Commitment. No reallocation hereunder shall constitute a waiver or release of any claim of any party hereunder against a Defaulting Lender arising from that Lender having become a Defaulting Lender, including any claim of a Non-Defaulting Lender as a result of such Non-Defaulting Lender's increased exposure following such reallocation.

(v)    Cash Collateral, Repayment of Swing Line Loans. If the reallocation described in clause (a)(iv) above cannot, or can only partially, be effected, the Borrowers shall, without prejudice to any right or remedy available to it hereunder or under applicable Law, (x) first, prepay Swing Line Loans in an amount equal to the Swing Line Lender's Fronting Exposure and (y) second, Cash Collateralize the L/C Issuers' Fronting Exposure in accordance with the procedures set forth in Section 2.15. The notice and minimum amount provisions of Section 2.05(b) shall not apply to any prepayments made pursuant to this Section 2.16(a)(v).

(b)Defaulting Lender Cure.If the Company, the Administrative Agent, Swing Line Lender and the L/C Issuer agree in writing that a Lender is no longer a Defaulting Lender, the Administrative Agent will so notify the parties hereto, whereupon as of the effective date specified in such notice and subject to any conditions set forth therein (which may include arrangements with respect to any Cash Collateral), that Lender will, to the extent applicable, purchase at par that portion of outstanding Loans of the other Lenders or take such other actions as the Administrative Agent may determine to be necessary to cause the Revolving Loans and funded and unfunded participations in Letters of Credit and Swing Line Loans to be held on a pro rata basis by the Lenders in accordance with their Applicable Percentages (without giving effect to Section 2.16(a)(iv)), whereupon that Lender will cease to be a Defaulting Lender; provided that no adjustments will be made retroactively with respect to fees accrued or payments made by or on behalf of the Borrowers while that Lender was a Defaulting Lender; and provided, further, that except to the extent otherwise expressly agreed by the affected parties, no change hereunder from Defaulting Lender to Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender's having been a Defaulting Lender.

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ARTICLE III. TAXES, YIELD PROTECTION AND ILLEGALITY

3.01    Taxes.

(a)    Payments Free of Taxes; Obligation to Withhold; Payments on Account of Taxes. (i) Any and all payments by or on account of any obligation of any Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by applicable Laws. If any applicable Laws (as determined in the good faith discretion of the Administrative Agent) require the deduction or withholding of any Tax from any such payment by the Administrative Agent or a Loan Party, then the Administrative Agent or such Loan Party shall be entitled to make such deduction or withholding, upon the basis of the information and documentation to be delivered pursuant to subsection (e) below.

(ii)    If any Loan Party or the Administrative Agent shall be required by the Code to withhold ordeduct any Taxes, including both United States Federal backup withholding and withholding taxes, from any payment, then (A) the Administrative Agent shall withhold or make such deductions as are determined by the Administrative Agent to be required based upon the information and documentation it has received pursuant to subsection (e) below, (B) the Administrative Agent shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with the Code, and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the applicable Loan Party shall be increased as necessary so that after any required withholding or the making of all required deductions (including deductions applicable to additional sums payable under this Section 3.01) the applicable Recipient receives an amount equal to the sum it would have received had no such withholding or deduction been made.

(iii)    If any Loan Party or the Administrative Agent shall be required by any applicable Laws other than the Code to withhold ordeduct any Taxes from any payment, then (A) such Loan Party or the Administrative Agent, as required by such Laws, shall withhold or make such deductions as are determined by it to be required based upon the information and documentation it has received pursuant to subsection (e) below, (B) such Loan Party or the Administrative Agent, to the extent required by such Laws, shall timely pay the full amount withheld or deducted to the relevant Governmental Authority in accordance with such Laws, and (C) to the extent that the withholding or deduction is made on account of Indemnified Taxes, the sum payable by the applicable Loan Party shall be increased as necessary so that after any required withholding or the making of all required deductions (including deductions applicable to additional sums payable under this Section 3.01) the applicable Recipient receives an amount equal to the sum it would have received had no such withholding or deduction been made.

(b)    Payment of Other Taxes by the Borrowers. Without limiting the provisions of subsection (a) above, the Borrowers shall timely pay to the relevant Governmental Authority in accordance with applicable law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.

(c)    Tax Indemnifications. (i) Each Borrower shall, and does hereby, indemnify each Recipient, and shall make payment in respect thereof within 10 days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section 3.01) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment or liability delivered to the Company by a Lender or the L/C Issuer (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or the L/C Issuer, shall be conclusive absent manifest error. Each Borrower shall, and does hereby, indemnify the Administrative Agent, and shall make payment in respect thereof within 10 days after demand therefor, for any amount which a Lender or the L/C Issuer for any reason fails to pay indefeasibly to the Administrative Agent as required pursuant to Section 3.01(c)(ii) below.

(ii)    Each Lender and the L/C Issuer shall, and does hereby, severally indemnify, and shall make payment in respect thereof within 10 days after demand therefor, (x) the Administrative Agent against any Indemnified Taxes attributable to such Lender or the L/C Issuer (but only to the extent that the Borrowers have not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrowers to do so), (y) the Administrative Agent and the Borrowers, as applicable, against any Taxes attributable to such Lender's failure to comply with the provisions of Section 10.06(d) relating to the maintenance of a Participant Register and (z) the Administrative Agent and the Borrowers, as applicable, against any Excluded Taxes attributable to such Lender or the L/C Issuer, in each case, that are payable or paid by the Administrative Agent or the Borrowers in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount

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of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error. Each Lender and the L/C Issuer hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender or the L/C Issuer, as the case may be, under this Agreement or any other Loan Document against any amount due to the Administrative Agent under this clause (ii).

(d)    Evidence of Payments. Upon request by the Company or the Administrative Agent, as the case may be, after any payment of Taxes by the Borrowers or by the Administrative Agent to a Governmental Authority as provided in this Section 3.01, the Company shall deliver to the Administrative Agent or the Administrative Agent shall deliver to the Company, as the case may be, the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of any return required by Laws to report such payment or other evidence of such payment reasonably satisfactory to the Company or the Administrative Agent, as the case may be.

(e)    Status of Lenders; Tax Documentation. (i) Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Company and the Administrative Agent, at the time or times reasonably requested by the Company or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Company or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if reasonably requested by the Company or the Administrative Agent, shall deliver such other documentation prescribed by applicable law or reasonably requested by the Company or the Administrative Agent as will enable the Company or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements. Notwithstanding anything to the contrary in the preceding two sentences, the completion, execution and submission of such documentation (other than such documentation set forth in Section 3.01(e)(ii)(A), (ii)(B) and (ii)(D) below) shall not be required if in the Lender's reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.

(ii)    Without limiting the generality of the foregoing, in the event that any Borrower is a U.S. Person,

(A)    any Lender that is a U.S. Person shall deliver to the Company and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Company or the Administrative Agent), executed originals of IRS Form W-9 certifying that such Lender is exempt from U.S. federal backup withholding tax;

(B)    any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Company and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Company or the Administrative Agent), whichever of the following is applicable:

(I)    in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed originals of IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;

(II)    executed originals of IRS Form W-8ECI;

(III)    in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Code, (x) a certificate substantially in the form of Exhibit K-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Code, a “10 percent shareholder” of any Borrower within the meaning of Section 881(c)(3)(B) of the Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Code (a “U.S. Tax Compliance Certificate”) and (y) executed originals of IRS Form W-8BEN; or

(IV)    to the extent a Foreign Lender is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a U.S. Tax Compliance Certificate substantially in the form of Exhibit K-2 or Exhibit K-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign

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Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit K-4 on behalf of each such direct and indirect partner;

(C)    any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Company and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Company or the Administrative Agent), executed originals of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by applicable law to permit the Company or the Administrative Agent to determine the withholding or deduction required to be made; and

(D)if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as applicable), such Lender shall deliver to the Company and the Administrative Agent at the time or times prescribed by law and at such time or times reasonably requested by the Company or the Administrative Agent such documentation prescribed by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the Code) and such additional documentation reasonably requested by the Company or the Administrative Agent as may be necessary for the Company and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender's obligations under FATCA or to determine the amount to deduct and withhold from such payment. Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.

(iii)    Each Lender agrees that if any form or certification it previously delivered pursuant to this Section 3.01 expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Company and the Administrative Agent in writing of its legal inability to do so.

(f)    Treatment of Certain Refunds. Unless required by applicable Laws, at no time shall the Administrative Agent have any obligation to file for or otherwise pursue on behalf of a Lender or the L/C Issuer, or have any obligation to pay to any Lender or the L/C Issuer, any refund of Taxes withheld or deducted from funds paid for the account of such Lender or the L/C Issuer, as the case may be. If any Recipient determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified by the Borrowers or with respect to which the Borrowers have paid additional amounts pursuant to this Section, it shall pay to the Borrowers an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrowers under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) incurred by such Recipient, and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund), provided that each Borrower, upon the request of the Recipient, agrees to repay the amount paid over to such Borrower (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) to the Recipient in the event the Recipient is required to repay such refund to such Governmental Authority. Notwithstanding anything to the contrary in this subsection, in no event will the applicable Recipient be required to pay any amount to the Borrowers pursuant to this subsection the payment of which would place the Recipient in a less favorable net after-Tax position than such Recipient would have been in if the indemnification payments or additional amounts giving rise to such refund had never been paid. This subsection shall not be construed to require any Recipient to make available its tax returns (or any other information relating to its taxes that it deems confidential) to any Borrower or any other Person.

(g)    Survival. Each party's obligations under this Section 3.01 shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender or the L/C Issuer, the termination of the Commitments and the repayment, satisfaction or discharge of all other Obligations.

3.02    Illegality. If any Lender determines that any Law has made it unlawful, or that any Governmental Authority has asserted that it is unlawful, for any Lender or its applicable Lending Office to make, maintain or fund Loans whose interest is determined by reference to the Eurodollar Rate, or to determine or charge interest rates based upon the Eurodollar Rate, or any Governmental Authority has imposed material restrictions on the authority of such Lender to purchase or sell, or to take deposits of, Dollars in the London interbank market, then, on notice thereof by such Lender to the Company through the Administrative Agent, (i) any obligation of such Lender to make or continue Eurodollar Rate Loans or to convert Base Rate Revolving Loans to Eurodollar Rate Loans shall be suspended, and (ii) if such notice asserts the illegality of such Lender making or maintaining Base Rate Loans the interest rate on which is determined by reference to the Eurodollar Rate component

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of the Base Rate, the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Eurodollar Rate component of the Base Rate, in each case until such Lender notifies the Administrative Agent and the Company that the circumstances giving rise to such determination no longer exist. Upon receipt of such notice, (x) the Borrowers shall, upon demand from such Lender (with a copy to the Administrative Agent), prepay or, if applicable, convert all Eurodollar Rate Loans of such Lender to Base Rate Loans (the interest rate on which Base Rate Loans of such Lender shall, if necessary to avoid such illegality, be determined by the Administrative Agent without reference to the Eurodollar Rate component of the Base Rate), either on the last day of the Interest Period therefor, if such Lender may lawfully continue to maintain such Eurodollar Rate Loans to such day, or immediately, if such Lender may not lawfully continue to maintain such Eurodollar Rate Loans and (y) if such notice asserts the illegality of such Lender determining or charging interest rates based upon the Eurodollar Rate, the Administrative Agent shall during the period of such suspension compute the Base Rate applicable to such Lender without reference to the Eurodollar Rate component thereof until the Administrative Agent is advised in writing by such Lender that it is no longer illegal for such Lender to determine or charge interest rates based upon the Eurodollar Rate. Upon any such prepayment or conversion, the Borrowers shall also pay accrued interest on the amount so prepaid or converted.

3.03    Inability to Determine Rates. If the Required Lenders determine that for any reason in connection with any request for a Eurodollar Rate Loan or a conversion to or continuation thereof that (a) Dollar deposits are not being offered to banks in the London interbank eurodollar market for the applicable amount and Interest Period of such Eurodollar Rate Loan, (b) adequate and reasonable means do not exist for determining the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan or in connection with an existing or proposed Base Rate Loan, or (c) the Eurodollar Rate for any requested Interest Period with respect to a proposed Eurodollar Rate Loan does not adequately and fairly reflect the cost to such Lenders of funding such Loan, the Administrative Agent will promptly so notify the Company and each Lender. Thereafter, (x) the obligation of the Lenders to make or maintain Eurodollar Rate Loans shall be suspended, and (y) in the event of a determination described in the preceding sentence with respect to the Eurodollar Rate component of the Base Rate, the utilization of the Eurodollar Rate component in determining the Base Rate shall be suspended, in each case until the Administrative Agent (upon the instruction of the Required Lenders) revokes such notice. Upon receipt of such notice, the Borrowers may revoke any pending request for a Borrowing of, conversion to or continuation of Eurodollar Rate Loans or, failing that, will be deemed to have converted such request into a request for a Revolving Borrowing of Base Rate Loans in the amount specified therein.

3.04    Increased Costs; Reserves on Eurodollar Rate Loans.

(a)    Increased Costs Generally. If any Change in Law shall:

(i)    impose, modify or deem applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or credit extended or participated in by, any Lender (except any reserve requirement contemplated by Section 3.04(e)) or the L/C Issuer;

(ii)    subject any Recipient to any Taxes (other than (A) Indemnified Taxes, (B) Taxes described in clauses (b) through (d) of the definition of Excluded Taxes and (C) Connection Income Taxes) on its loans, loan principal, letters of credit, commitments, or other obligations, or its deposits, reserves, other liabilities or capital attributable thereto; or

(iii)    impose on any Lender or the L/C Issuer or the London interbank market any other condition, cost or expense affecting this Agreement or Eurodollar Rate Loans made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such Lender of making, converting to, continuing or maintaining any Loan the interest on which is determined by reference to the Eurodollar Rate (or of maintaining its obligation to make any such Loan), or to increase the cost to such Lender or the L/C Issuer of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable by such Lender or the L/C Issuer hereunder (whether of principal, interest or any other amount) then, upon request of such Lender or the L/C Issuer, the Borrowers will pay to such Lender or the L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or the L/C Issuer, as the case may be, for such additional costs incurred or reduction suffered.

(b)    Capital Requirements. If any Lender or the L/C Issuer determines that any Change in Law affecting such Lender or the L/C Issuer or any Lending Office of such Lender or such Lender's or the L/C Issuer's holding company, if any, regarding capital or liquidity requirements has or would have the effect of reducing the rate of return on such Lender's or the

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L/C Issuer's capital or on the capital of such Lender's or the L/C Issuer's holding company, if any, as a consequence of this Agreement, the Commitments of such Lender or the Loans made by, or participations in Letters of Credit or Swing Line Loans held by, such Lender, or the Letters of Credit issued by the L/C Issuer, to a level below that which such Lender or the L/C Issuer or such Lender's or the L/C Issuer's holding company could have achieved but for such Change in Law (taking into consideration such Lender's or the L/C Issuer's policies and the policies of such Lender's or the L/C Issuer's holding company with respect to capital adequacy), then from time to time the Borrowers will pay to such Lender or the L/C Issuer, as the case may be, such additional amount or amounts as will compensate such Lender or the L/C Issuer or such Lender's or the L/C Issuer's holding company for any such reduction suffered.

(c)    Certificates for Reimbursement. A certificate of a Lender or the L/C Issuer setting forth the amount or amounts necessary to compensate such Lender or the L/C Issuer or its holding company, as the case may be, as specified in subsection (a) or (b) of this Section containing a certification of a responsible officer of such Lender or the L/C Issuer that such costs have not been imposed on the Borrowers disproportionately with other similarly situated borrowers and delivered to the Company shall be conclusive absent manifest error. The Borrowers shall pay such Lender or the L/C Issuer, as the case may be, the amount shown as due on any such certificate within 10 days after receipt thereof.

(d)    Delay in Requests. Failure or delay on the part of any Lender or the L/C Issuer to demand compensation pursuant to the foregoing provisions of this Section shall not constitute a waiver of such Lender's or the L/C Issuer's right to demand such compensation, provided that the Borrowers shall not be required to compensate a Lender or the L/C Issuer pursuant to the foregoing provisions of this Section for any increased costs incurred or reductions suffered more than nine months prior to the date that such Lender or the L/C Issuer, as the case may be, notifies the Company of the Change in Law giving rise to such increased costs or reductions and of such Lender's or the L/C Issuer's intention to claim compensation therefor (except that, if the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof).

(e)    Reserves on Eurodollar Rate Loans. The Borrowers shall pay to each Lender, as long as such Lender shall be required to maintain reserves with respect to liabilities or assets consisting of or including Eurocurrency funds or deposits (currently known as “Eurocurrency liabilities”), additional interest on the unpaid principal amount of each Eurodollar Rate Loan equal to the actual costs of such reserves allocated to such Loan by such Lender (as determined by such Lender in good faith, which determination shall be conclusive), which shall be due and payable on each date on which interest is payable on such Loan, provided the Company shall have received at least 10 days' prior notice (with a copy to the Administrative Agent) of such additional interest from such Lender. If a Lender fails to give notice 10 days prior to the relevant Interest Payment Date, such additional interest shall be due and payable 10 days from receipt of such notice.

3.05    Compensation for Losses. Upon demand of any Lender (with a copy to the Administrative Agent) from time to time, the Borrowers shall promptly compensate such Lender for and hold such Lender harmless from any loss, cost or expense incurred by it as a result of:

(a)    any continuation, conversion, payment or prepayment of any Loan other than a Base Rate Loan on a day other than the last day of the Interest Period for such Loan (whether voluntary, mandatory, automatic, by reason of acceleration, or otherwise);

(b)    any failure by the Borrowers (for a reason other than the failure of such Lender to make a Loan) to prepay, borrow, continue or convert any Loan other than a Base Rate Loan on the date or in the amount notified by the Borrowers;

(c)    any failure by the Borrowers to make payment of any drawing under any Letter of Credit (or interest due thereon) denominated in an Alternative Currency on its scheduled due date or any payment thereof in a different currency; or

(d)    any assignment of a Eurodollar Rate Loan on a day other than the last day of the Interest Period therefor as a result of a request by the Company pursuant to Section 10.13;

including any loss of anticipated profits and any loss or expense arising from the liquidation or reemployment of funds obtained by it to maintain such Loan or from fees payable to terminate the deposits from which such funds were obtained. The Borrowers shall also pay any customary administrative fees charged by such Lender in connection with the foregoing.

For purposes of calculating amounts payable by the Borrowers to the Lenders under this Section 3.05, each Lender shall be deemed to have funded each Eurodollar Rate Loan made by it at the Eurodollar Rate for such Loan by a matching deposit or other borrowing in the London interbank eurodollar market for a comparable amount and for a comparable period, whether or not such Eurodollar Rate Revolving Loan was in fact so funded.

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3.06    Mitigation Obligations; Replacement of Lenders.

(a)    Designation of a Different Lending Office. If any Lender requests compensation under Section 3.04, or the Borrowers are required to pay any Indemnified Taxes or additional amount to any Lender, the L/C Issuer, or any Governmental Authority for the account of any Lender or the L/C Issuer pursuant to Section 3.01, or if any Lender gives a notice pursuant to Section 3.02, then at the request of the Company such Lender or the L/C Issuer shall, as applicable, use reasonable efforts to designate a different Lending Office for funding or booking its Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender or the L/C Issuer, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to Section 3.01 or 3.04, as the case may be, in the future, or eliminate the need for the notice pursuant to Section 3.02, as applicable, and (ii) in each case, would not subject such Lender or the L/C Issuer, as the case may be, to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender or the L/C Issuer, as the case may be. Each Borrower hereby agrees to pay all reasonable costs and expenses incurred by any Lender or the L/C Issuer in connection with any such designation or assignment.

(b)    Replacement of Lenders. If any Lender requests compensation under Section 3.04, or if any Borrower is required to pay Indemnified Taxes or any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 3.01 and, in each case, such Lender has declined or is unable to designate a different lending office in accordance with Section 3.06(a), the Borrowers may replace such Lender in accordance with Section 10.13.

3.07    Survival. All of the Borrowers' obligations under this Article III shall survive termination of the Aggregate Commitments, repayment of all other Obligations hereunder, and resignation of the Administrative Agent.

ARTICLE IV.    CONDITIONS PRECEDENT TO CREDIT EXTENSIONS

4.01    Conditions to Effectiveness and Initial Credit Extension. The effectiveness of this Agreement as an amendment and restatement of the Existing Credit Agreement and the obligation of the L/C Issuer and each Lender to make its initial Credit Extension hereunder or to continue its Credit Extensions hereunder, as applicable, are subject to satisfaction of the following conditions precedent:

(a)    Unless waived by all the Lenders (or by the Administrative Agent with respect to items specified in clause (vi) below with respect to which the Borrowers have given assurances satisfactory to the Administrative Agent that such items shall be delivered promptly following the Closing Date), the Administrative Agent's receipt of the following, each of which shall be originals or telecopies (followed promptly by originals) unless otherwise specified, each properly executed by a Responsible Officer of the signing Loan Party, each dated the Closing Date (or, in the case of certificates of governmental officials, a recent date before the Closing Date) and each in form and substance satisfactory to the Administrative Agent, the Collateral Agent and each of the Lenders:

(i)    executed counterparts of this Agreement and the Guaranty, sufficient in number for distribution to the Administrative Agent, each Lender and each Borrower;

(ii)    a Note executed by each Borrower in favor of each Lender requesting a Note;

(iii)    executed counterparts of the Security Agreement and Pledge Agreement, sufficient in number for distribution to the Collateral Agent and each Borrower, together with:

(A)    Uniform Commercial Code financing statements suitable in form and substance for filing in all places required by applicable Law to perfect the Liens of the Collateral Agent under the Security Instruments as a first priority Lien as to items of Collateral in which a security interest may be perfected by the filing of financing statements, and such other documents and/or evidence of other actions as may be reasonably necessary under applicable Law to perfect the Liens of the Collateral Agent under such Security Instruments as a first priority Lien in and to such other Collateral as the Collateral Agent may require, including without limitation the delivery by any Borrower or any other Loan Party of all certificates evidencing pledged interests, accompanied in each case by duly executed stock powers (or other appropriate transfer documents) in blank affixed thereto;

(B)    the originals of all promissory notes issued in connection with Indebtedness permitted by Section 7.03(e), together with duly executed undated endorsements in blank affixed thereto;

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(C)    except with the express prior written consent of the Collateral Agent in each instance, with respect to the Investment Property (as defined in the Security Agreement) listed on Schedule 9(e) of the Security Agreement, Qualifying Control Agreements (as defined in the Security Agreement) from the applicable securities intermediary;

(D)    except with the express prior written consent of the Collateral Agent in each instance, with respect to the Deposit Accounts (as defined in the Security Agreement) listed on Schedule 9(f) of the Security Agreement, Qualifying Control Agreements (as defined in the Security Agreement) from the applicable depositary institutions; and

(E)evidence that all insurance required to be maintained pursuant to the Loan Documents has been obtained and is in effect, together with the certificates of insurance and endorsements, naming the Collateral Agent, on behalf of the Secured Parties, as an additional insured or lender's loss payee, as the case may be, under all insurance policies maintained with respect to the assets and properties of the Loan Parties that constitute Collateral;

(iv)    an executed Mortgage with respect to each Mortgaged Property listed on Exhibit I in recordable form, and, to the extent not previously delivered to the Administrative Agent or the Collateral Agent, together with:

(A)    to the extent necessary under applicable Law, for filing in the appropriate county land office(s), Uniform Commercial Code financing statements covering fixtures, if required, in each case appropriately completed;

(B)    mortgage policies of title insurance (which, if satisfactory to the Collateral Agent, may be in the form of a mark-up of pro forma mortgage policies which are satisfactory to the Collateral Agent subsequently to be followed by mortgage policies) relating to each Mortgage of the Mortgaged Property referred to above, issued by a title insurer reasonably satisfactory to the Collateral Agent (the “Title Company”), in an insured amount satisfactory to the Collateral Agent and insuring the Collateral Agent that the Mortgage on each such Mortgaged Property is a valid and enforceable first priority mortgage lien on such Mortgaged Property, free and clear of all defects and encumbrances except Liens permitted by Section 7.01, with each such mortgage policy (i) to be in form and substance satisfactory to the Collateral Agent, (ii) to include a reference to the relevant survey with no survey exceptions except those theretofore approved by the Collateral Agent (such approval not to be unreasonably withheld or delayed), (iii) not to include any exception(s) for mechanic's liens, and (iv) to provide for affirmative insurance and endorsements (to the extent applicable and available in the relevant jurisdiction) as the Collateral Agent may reasonably request;

(C)    if requested by the Administrative Agent, (i) surveys for each Mortgaged Property sufficient for the Title Company to remove the standard survey exceptions from the title insurance policies and issue the endorsements required in clause (B)(iv) above, or (ii) affidavits delivered to the title insurer sufficient for the Title Company to remove the standard survey exceptions from the title policies and issue the endorsements referenced in clause (B)(iv) above;

(D)    evidence (which may be satisfied by appropriate instructions in the funds flow memorandum) of payment to the title insurer of all expenses and premiums of the title insurer in connection with the issuance of such policies and endorsements and payment to the Title Company of an amount equal to any fees or taxes, including recording, mortgage, intangible and stamp taxes payable in connection with recording the Mortgages and Uniform Commercial Code financing statements covering fixtures, if applicable, in the appropriate county or state land office(s);

(E)    in connection with any Mortgage, customary opinions of counsel in the jurisdiction where each Mortgaged Property is located; and

(F)evidence of flood insurance coverage satisfactory to the Collateral Agent for each Mortgaged Property located in a specified flood hazard zone pursuant to a Standard Flood Hazard Determination;

(v)    such certificates of resolutions or other action, incumbency certificates and/or other certificates (including specimen signatures) of Responsible Officers of each Loan Party as the Administrative Agent may require

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evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Agreement and the other Loan Documents to which such Loan Party is a party;

(vi)    such documents and certifications as the Administrative Agent may reasonably require to evidence that each Loan Party is duly organized or formed, and that each Loan Party is validly existing, in good standing and qualified to engage in business in each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; provided that at the discretion of the Administrative Agent, the delivery of any tax clearance certificates with respect to any such jurisdictions shall not be a condition to the effectiveness of this Agreement and the initial Credit Extension hereunder, but shall be delivered as required under Section 6.13;

(vii)    a customary opinion, addressed to the Administrative Agent, Collateral Agent and each Lender, of Jones Day, counsel for the Borrowers and the Loan Parties, and the general counsel or assistant general counsel for the Borrowers and the Loan Parties, in each case in form and substance satisfactory to the Administrative Agent concerning the Loan Parties and the Loan Documents (which may include some or all of the Mortgages) and as to such matters as the Administrative Agent, Collateral Agent and the Required Lenders may reasonably request;

(viii)    a certificate of a Responsible Officer of each Loan Party either (A) attaching copies of all consents, licenses and approvals required in connection with the execution, delivery and performance by such Loan Party and the validity against such Loan Party of the Loan Documents to which it is a party, and such consents, licenses and approvals shall be in full force and effect, or (B) stating that no such consents, licenses or approvals are so required;

(ix)    a certificate signed by a Responsible Officer of each Borrower certifying (A) that the conditions specified in Sections 4.02(a) and (b) have been satisfied, (B) that there has been no event or circumstance since the date of the Audited Financial Statements that has had or could be reasonably expected to have, either individually or in the aggregate, a Material Adverse Effect, and (C)a calculation of the Consolidated Leverage Ratio as of the last day of the fiscal quarter of the Company most recently ended prior to the Closing Date for which financial statements have been filed with the SEC;

(x)    executed counterparts of the Post-Closing Agreement;

(xi)    executed counterparts of the Permitted Notes Intercreditor Agreement, sufficient in number for distribution to the Administrative Agent, the Collateral Agent, the Permitted Noteholders and the Borrowers, and evidence satisfactory to the Administrative Agent that no default or event of default under the Permitted Notes Documents exists, or would result from the effectiveness of this Agreement or any Credit Extension hereunder or from the application of the proceeds thereof on the Closing Date;

(xii)    to the extent not previously delivered, copies of (A) the audited consolidated balance sheet of the Company and its Subsidiaries for the fiscal years ended December 31, 2009 and 2010, and the related consolidated statements of income or operations, shareholders' equity and cash flows for such fiscal years of the Company and its Subsidiaries, including the notes thereto, and (B) the Audited Financial Statements and interim financial statements of the Company and its Subsidiaries for the fiscal quarter ended June 30, 2012;

(xiii)    a certificate signed by the chief financial officer of the Company certifying that, after giving effect to this Agreement and the Credit Extensions made or continued on the Closing Date, (A) each Borrower, individually, is Solvent and (B) each Guarantor, together with the other Loan Parties, is Solvent.

(xiv)such other assurances, certificates, documents, consents or opinions as the Administrative Agent, the Collateral Agent, the L/C Issuer, the Swing Line Lender or the Required Lenders reasonably may require.

(b)    Any fees required to be paid on or before the Closing Date shall have been paid.

(c)    Unless waived by the Administrative Agent, the Borrowers shall have paid all reasonable fees, charges and disbursements of counsel to the Administrative Agent (directly to such counsel if requested by the Administrative Agent) to the extent invoiced at least two Business Days prior to or on the Closing Date, plus such additional amounts of such fees, charges and disbursements as shall constitute its reasonable estimate of such fees, charges and disbursements incurred or to be incurred by it through the closing proceedings (provided that such estimate shall not thereafter preclude a final settling of accounts between the Borrowers and the Administrative Agent).

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Without limiting the generality of the provisions of the last paragraph of Section 9.03, for purposes of determining compliance with the conditions specified in this Section 4.01, each Lender that has signed this Agreement shall be deemed to have consented to, approved or accepted or to be satisfied with, each document or other matter required thereunder to be consented to or approved by or acceptable or satisfactory to a Lender unless the Administrative Agent shall have received notice from such Lender prior to the proposed Closing Date specifying its objection thereto.

4.02    Conditions to all Credit Extensions. The obligation of each Lender to honor any Request for Credit Extension (other than a Revolving Loan Notice requesting only a conversion of Revolving Loans to the other Type, or a continuation of Eurodollar Rate Loans) is subject to the following conditions precedent:

(a)    The representations and warranties of each Borrower and each other Loan Party contained in Article V or any other Loan Document, or which are contained in any document furnished at any time under or in connection herewith or therewith, shall be true and correct in all material respects on and as of the date of such Credit Extension, except to the extent that such representations and warranties are qualified by materiality, in which case such representations and warranties shall be true and correct in all respects, and except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct as of such earlier date, and except that for purposes of this Section 4.02, the representations and warranties contained in subsections (a) and (b) of Section 5.05 shall be deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b), respectively, of Section 6.01.

(b)    No Default shall exist, or would result from such proposed Credit Extension or from the application of the proceeds thereof.

(c)    The Administrative Agent and, if applicable, the L/C Issuer or the Swing Line Lender shall have received a Request for Credit Extension in accordance with the requirements hereof (except in the case of Credit Extensions made or deemed to be made under Sections 2.14(b)(v) and 2.16(a)(iv).

(d)    In the case of a Letter of Credit to be denominated in an Alternative Currency, there shall not have occurred any change in national or international financial, political or economic conditions or currency exchange rates or exchange controls which in the reasonable opinion of the Administrative Agent or the L/C Issuer would make it impracticable for such Letter of Credit to be denominated in the relevant Alternative Currency.

Each Request for Credit Extension (other than a Revolving Loan Notice requesting only a conversion of Revolving Loans to the other Type or a continuation of Eurodollar Rate Loans) submitted by the Company shall be deemed to be a representation and warranty that the conditions specified in Sections 4.02(a) and (b) have been satisfied on and as of the date of the applicable Credit Extension.

ARTICLE V. REPRESENTATIONS AND WARRANTIES

The Company represents and warrants to the Administrative Agent and the Lenders that:

5.01    Existence, Qualification and Power. Each Borrower and each of its Subsidiaries (a) is a corporation, partnership or limited liability company, duly organized or formed, validly existing and in good standing under the Laws of the jurisdiction of its incorporation or organization, (b) has all requisite power and authority and all governmental licenses, authorizations, consents and approvals (i) to own its assets, carry on its business and (ii) to execute, deliver, and perform its obligations under the Loan Documents to which it is a party, (c) is duly qualified and is licensed and in good standing under the Laws of each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification or license, and (d) is in compliance with all Laws, except in each case referred to in subsection (b)(i), (c) or (d) of this Section, to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect.

5.02    Authorization; No Contravention. The execution, delivery and performance by each Loan Party of each Loan Document to which such Person is party, have been duly authorized by all necessary corporate or other organizational action, and do not and will not (a) contravene the terms of any of such Person's Organization Documents; (b) conflict with or result in any breach or contravention of, or the creation of any Lien under, (i) any Contractual Obligation to which such Person is a party or (ii) any material order, injunction, writ or decree of any Governmental Authority to which such Person or its property is subject, except to the extent that the failure to do so could not reasonably be expected to have a Material Adverse Effect; or (c) to the knowledge of any Responsible Officer of any Loan Party, violate any Law. Each Loan Party and each Subsidiary thereof is in compliance with all Contractual Obligations referred to in clause (b)(i), except to the extent that any such conflict, breach, contravention, creation or violation could not reasonably be expected to have a Material Adverse Effect.

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5.03    Governmental Authorization; Other Consents. No approval, consent, exemption, authorization, or other action by, or notice to, or filing with, any Governmental Authority or any other Person is necessary or required in connection with the execution, delivery or performance by, or enforcement against, any Loan Party of this Agreement or any other Loan Document, except for (a) the authorizations, approvals, actions, notices and filings which have been duly obtained, taken, given or made and are in full force and effect or (b) the filing of Uniform Commercial Code financing statements and the recording of Mortgages pursuant to the Loan Documents.

5.04    Binding Effect. This Agreement has been, and each other Loan Document, when delivered hereunder, will have been, duly executed and delivered by each Loan Party that is party thereto. This Agreement constitutes, and each other Loan Document when so delivered will constitute, a legal, valid and binding obligation of such Loan Party, enforceable against each Loan Party that is party thereto in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws generally affecting the rights of creditors, and subject to equitable principles of general application.

5.05    Financial Statements; No Material Adverse Effect.

(a)    The Audited Financial Statements (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; (ii) fairly present in all material respects the financial condition of the Company and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein; and (iii) show all material indebtedness and other liabilities, direct or contingent, of the Company and its Subsidiaries as of the date thereof, including liabilities for taxes, material commitments and Indebtedness.

(b)    The unaudited consolidated financial statements of the Company and its Subsidiaries, datedJune 30, 2012, contained in the related quarterly report on Form 10-Q filed with the SEC (i) were prepared in accordance with GAAP consistently applied throughout the period covered thereby, except as otherwise expressly noted therein, and subject to the absence of footnotes and ordinary, good faith year end audit adjustments; (ii) fairly present in all material respects the financial condition of the Company and its Subsidiaries as of the date thereof and their results of operations for the period covered thereby; and (iii) show all material indebtedness and other liabilities, direct or contingent, of the Company and its consolidated Subsidiaries as of the date thereof, including liabilities for taxes, material commitments and Indebtedness.

(c)    Since the date of the Audited Financial Statements, there has been no event or circumstance, either individually or in the aggregate, that has had or could reasonably be expected to have a Material Adverse Effect.

(d)    As of the Closing Date, there exists no Project Debt, other than as specifically identified on Schedule 5.05(d).

5.06    Litigation. Except as specifically disclosed on Schedule 5.06, there are no actions, suits, proceedings, claims or disputes pending or, to the knowledge of any Borrower after due and diligent investigation, threatened or contemplated, at law, in equity, in arbitration or before any Governmental Authority, by or against any Borrower or any of its Subsidiaries or against any of their properties or revenues that (a) purport to adversely affect this Agreement or any other Loan Document, or any of the transactions contemplated hereby, or (b) if determined adversely, could reasonably be expected to have a Material Adverse Effect.

5.07    No Default. Neither any Borrower nor any Subsidiary is in default under or with respect to (a) any Permitted Notes Documents or (b) any Contractual Obligation, in each case that could be reasonably expected to have a Material Adverse Effect. No Default or Event of Default has occurred and is continuing or would result from the consummation of the transactions contemplated by this Agreement or any other Loan Document.

5.08    Ownership of Property; Liens. Each of the Borrowers and their respective Subsidiaries has good record and marketable title in fee simple to, or valid leasehold interests in, all real property necessary or used in the ordinary conduct of its business, except for such defects in title as could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. As of the Closing Date, the property of each Borrower and its Subsidiaries is not subject to any Lien, other than Liens permitted by Section 7.01. The Mortgaged Properties listed on Exhibit I constitute all of the material real properties owned by the Loan Parties as of the Closing Date.

5.09    Environmental Compliance.

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(a)    The on-going operations of each Borrower and each of its Subsidiaries, after the Closing Date, comply in all respects with all Environmental Laws, except such non-compliance that, individually or in the aggregate, would not reasonably be expected to result in a Material Adverse Effect.

(b)    Except as specifically identified on Schedule 5.09, or except to the extent that noncompliance would not reasonably be expected to result in a Material Adverse Effect, each Borrower and each of its Subsidiaries have obtained all licenses, permits, authorizations and registrations required under any Environmental Law (“Environmental Permits”) necessary for their respective operations, and all such Environmental Permits are in good standing, and each Borrower and each of its Subsidiaries are in compliance with all terms and conditions of such Environmental Permits.

(c)    Except as specifically identified on Schedule 5.09, none of any Borrower or any of its Subsidiaries or any of their present property or operations is subject to any (i) outstanding written order from or agreement with any Governmental Authority or other Person, or (ii) judicial or docketed administrative proceeding respecting any Environmental Law, Environmental Claim or Hazardous Material., other than, in the case of clause (i), any such order or agreement the breach or violation of which would not reasonably be expected to result in a Material Adverse Effect and, in the case of clause (ii), any such proceeding that if determined adversely to the Company or any of its Subsidiaries would not reasonably be expected to result in a Material Adverse Effect.

(d)    There are no conditions or circumstances relating to any property of any Borrower or its Subsidiaries, or arising from operations of any Borrower or its Subsidiaries conducted prior to the Closing Date that, together with all other such conditions and circumstances relating to all other properties and operations, may give rise to Environmental Claims with a potential liability as to the Company and its Subsidiaries together that, individually or in the aggregate, would reasonably be expected to have a Material Adverse Effect.

(e)    Except as specifically identified on Schedule 5.09, as of the Closing Date, no Borrower has knowledge of any oral or written notification of a Release of a Hazardous Material has been filed by or on behalf of such Borrower or any of its Subsidiaries and no site, facility or vessel now or previously owned, operated or leased by such Borrower or any of its Subsidiaries is listed or to the knowledge of such Borrower or any of its Subsidiaries proposed for listing on any federal or state list of sites requiring investigation or clean-up.

5.10    Insurance. The properties of each Borrower and its Subsidiaries are insured with financially sound and reputable insurance companies not Affiliates of any Borrower, in such amounts, with such deductibles and covering such risks as are customarily carried by companies engaged in similar businesses and owning similar properties in localities where such Borrower or the applicable Subsidiary operates.

5.11    Taxes. Each Borrower and its Subsidiaries have filed (or have obtained appropriate extensions in respect of) all Federal, all material state and other material tax returns and reports required to be filed, and have paid (or have obtained appropriate extensions in respect of) all Federal, all material state and other material taxes, assessments, fees and other governmental charges levied or imposed upon them or their properties, income or assets otherwise due and payable, except those which are being contested in good faith by appropriate proceedings and for which adequate reserves have been provided in accordance with GAAP. To the Borrowers' knowledge, there is no proposed (in writing) tax assessment against any Borrower or any Subsidiary that would, if made, have a Material Adverse Effect. Neither any Borrower nor any of its Subsidiaries is party to any tax sharing agreement.

5.12    ERISA Compliance.

(a)    To the Borrowers' knowledge, each Plan that is maintained or sponsored by the Company or an ERISA Affiliate is in compliance in all material respects with the applicable provisions of ERISA, the Code and other Federal or state laws, except where failure to comply could not reasonably be expected to have a Material Adverse Effect. To the Borrowers' knowledge, each Pension Plan that is maintained or sponsored by the Company or an ERISA Affiliate and that is intended to be a qualified plan under Section 401(a) of the Code has received a favorable determination letter from the Internal Revenue Service to the effect that the form of such Plan is qualified under Section 401(a) of the Code and the trust related thereto has been determined by the Internal Revenue Service to be exempt from federal income tax under Section 501(a) of the Code, or an application for such a letter is either currently being processed by the Internal Revenue Service or is not yet due under the Internal Revenue Service's determination letter filing program. To the knowledge of the Borrowers, nothing has occurred that would reasonably be expected to prevent or cause the loss of such tax-qualified status.

(b)    There are no pending or, to the knowledge of the Borrowers, threatened claims, actions or lawsuits, or action by any Governmental Authority, with respect to any Plan that could reasonably be expected to have a Material Adverse Effect.

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There has been no prohibited transaction or violation of the fiduciary responsibility rules with respect to any Plan that has resulted or could reasonably be expected to result in a Material Adverse Effect.

(c)    Except as could not reasonably be expected to have a Material Adverse Effect, (i) no ERISA Event has occurred, and neither the Company nor any ERISA Affiliate is aware of any fact, event or circumstance that could reasonably be expected to constitute or result in an ERISA Event with respect to any Pension Plan; (ii) the Company and each ERISA Affiliate has met all applicable requirements under the Pension Funding Rules in respect of each Pension Plan, and no waiver of the minimum funding standards under the Pension Funding Rules has been applied for or obtained; (iii) as of the most recent valuation date for any Pension Plan, the funding target attainment percentage (as defined in Section 430(d)(2) of the Code) is 60% or higher and neither the Company nor any ERISA Affiliate knows of any facts or circumstances that could reasonably be expected to cause the funding target attainment percentage for any such plan to drop below 60% as of the most recent valuation date; (iv) neither the Company nor any ERISA Affiliate has incurred any liability to the PBGC other than for the payment of premiums, and there are no premium payments which have become due that are unpaid; (v) neither the Company nor any ERISA Affiliate has engaged in a transaction that could be subject to Section 4069 or Section 4212(c) of ERISA; and (vi) no Pension Plan has been terminated within the preceding five years by the plan administrator thereof nor by the PBGC, and to the knowledge of the Borrowers, no event or circumstance has occurred or exists that could reasonably be expected to cause the PBGC to institute proceedings under Title IV of ERISA to terminate any Pension Plan.

5.13    Subsidiaries; Equity Interests.

(a)    As of the Closing Date, the Company has no Subsidiaries other than those specifically disclosed in Part (1) of Schedule 5.13(a), and has no equity investments in any other corporation or entity (including GLC Ventures and Construction JVs) other than those specifically disclosed in Part (2) of Schedule 5.13(a) and investments held in securities accounts.

(b)    As of the Closing Date, there exist no Permitted Notes Guarantors, other than as listed on Schedule 5.13(b).

5.14    Margin Regulations; Investment Company Act.

(a)    No Borrower is engaged and no Borrower will engage, principally or as one of its important activities, in the business of purchasing or carrying margin stock (within the meaning of Regulation U issued by the FRB), or extending credit for the purpose of purchasing or carrying margin stock.

(b)    None of any Borrower, any Person Controlling any Borrower, or any Subsidiary is or is required to be registered as an “investment company” under the Investment Company Act of 1940, the Federal Power Act, the Interstate Commerce Act, any state public utilities code or any other federal or state statute or regulation limiting its ability to incur Indebtedness.

5.15    Disclosure. The documents, certificates and written statements (including the Loan Documents) furnished to the Administrative Agent and the Lenders by any Borrower or any Subsidiary for use in connection with the transactions contemplated by this Agreement, taken as a whole and in light of the circumstances under which they were made, do not contain any untrue statement of a material fact or omit to state a material fact (known to any Borrower in the case of any document not furnished by it) necessary in order to make the statements contained herein or therein not misleading (it being recognized by the Administrative Agent and the Lenders that projections and forecasts provided to them by any Borrower are not to be viewed as facts and that actual results during the period or periods covered by any such projections and forecasts may differ materially from the projected or forecasted results).

5.16    Intellectual Property; Licenses, Etc. To the Borrowers' knowledge, each Borrower and its Subsidiaries own, or possess the right to use, all of the trademarks, service marks, trade names, copyrights, patents, patent rights, franchises, licenses and other intellectual property rights (collectively, “IP Rights”) that are reasonably necessary for the operation of their respective businesses, taken as a whole, except as could not reasonably be expected to have a Material Adverse Effect. To the best knowledge of the Borrowers, no slogan or other advertising device, product, process, method, substance, part or other material employed or contemplated to be employed by any Borrower or any Subsidiary infringes upon any rights held by any other Person, except as could not reasonably be expected to have a Material Adverse Effect. Except as specifically disclosed in Schedule 5.16, no claim or litigation regarding any of the foregoing is pending or, to the knowledge of the Borrowers, threatened in writing, and no patent, invention, device, application, principle or any statute, law, rule, regulation, standard or code is pending or, to the knowledge of the Borrowers, proposed, which, in either case, could reasonably be expected to have a Material Adverse Effect.

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5.17    Swap Contracts. Each Borrower and its Subsidiaries have each voluntarily entered into each Swap Contract to which it is a party based upon its own independent assessment of its consolidated assets, liabilities and commitments in each case as an appropriate means of mitigating and managing risks associated with such matters.

5.18    Labor Relations. There are no strikes, lockouts or other labor disputes against any Borrower or any of its Subsidiaries, or, to the Borrowers' knowledge, threatened against or affecting any Borrower or any of its Subsidiaries, and no significant unfair labor practice complaint is pending against any Borrower or any of its Subsidiaries or, to the best knowledge of the Borrowers, threatened in writing against any of them before any Governmental Authority, which could reasonably be expected to result in a Material Adverse Effect.

5.19    Solvency. Each Borrower and each of the Loan Parties is Solvent.

5.20    Taxpayer Identification Number. As of the Closing Date, each Borrower's true and correct taxpayer identification number is set forth on Schedule 10.02.

5.21    Representations as to Foreign Obligors. Each Borrower and each Foreign Obligor represents and warrants to the Administrative Agent and the Lenders that:

(a)    Applicable Foreign Obligor Documents”), and the execution, delivery and performance by such Foreign Obligor of the Applicable Foreign Obligor Documents constitute and will constitute private and commercial acts and not public or governmental acts. Neither such Foreign Obligor nor any of its property has any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) under the laws of the jurisdiction in which such Foreign Obligor is organized and existing in respect of its obligations under the Applicable Foreign Obligor Documents.

(b)    The Applicable Foreign Obligor Documents are in proper legal form under the Laws of the jurisdiction in which such Foreign Obligor is organized and existing for the enforcement thereof against such Foreign Obligor under the Laws of such jurisdiction, and to ensure the legality, validity, enforceability, priority or admissibility in evidence of the Applicable Foreign Obligor Documents. Except as disclosed to the Administrative Agent from time to time, it is not necessary to ensure the legality, validity, enforceability, priority or admissibility in evidence of the Applicable Foreign Obligor Documents that the Applicable Foreign Obligor Documents be filed, registered or recorded with, or executed or notarized before, any court or other authority in the jurisdiction in which such Foreign Obligor is organized and existing or that any registration charge or stamp or similar tax be paid on or in respect of the Applicable Foreign Obligor Documents or any other document, except for (i) any such filing, registration, recording, execution or notarization as has been made or is not required to be made until the Applicable Foreign Obligor Document or any other document is sought to be enforced and (ii) any charge or tax as has been timely paid.

(c)    Except as disclosed to the Administrative Agent from time to time, there is no tax, levy, impost, duty, fee, assessment or other governmental charge, or any deduction or withholding, imposed by any Governmental Authority in or of the jurisdiction in which such Foreign Obligor is organized and existing either (i) on or by virtue of the execution or delivery of the Applicable Foreign Obligor Documents or (ii) on any payment to be made by such Foreign Obligor pursuant to the Applicable Foreign Obligor Documents, except as has been disclosed to the Administrative Agent.

(d)    Except as disclosed to the Administrative Agent from time to time, the execution, delivery and performance of the Applicable Foreign Obligor Documents executed by such Foreign Obligor are, under applicable foreign exchange control regulations of the jurisdiction in which such Foreign Obligor is organized and existing, not subject to any notification or authorization except (i) such as have been made or obtained or (ii) such as cannot be made or obtained until a later date (provided that any notification or authorization described in clause (ii) shall be made or obtained as soon as is reasonably practicable).

5.22    OFAC. Neither the Company nor, to the knowledge of a Responsible Officer of any Loan Party, any Related Party, (a) is currently the subject of any Sanctions, (b) is located, organized or residing in any Designated Jurisdiction, or (c) is or has been (within the previous five (5) years) engaged in any transaction in violations of any Sanctions with any Person who is now or was then the subject of Sanctions or who is located, organized or residing in any Designated Jurisdiction. No Loan, nor the proceeds from any Loan, has been used by any Borrower or its Subsidiaries to lend, contribute, provide or otherwise made available by any Borrower or its Subsidiaries to fund any activity or business in any Designated Jurisdiction or to fund any activity or business of any Person located, organized or residing in any Designated Jurisdiction or who is the subject of any Sanctions, or in any other manner that will result in any violation by any Person (including any Lender, the Arranger, the Administrative Agent, the Collateral Agent the L/C Issuer or the Swing Line Lender) of Sanctions.

5.23    Security Instruments. The provisions of the Security Instruments are effective to create in favor of the

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Collateral Agent for the benefit of the Secured Parties a legal, valid and enforceable first priority Lien (subject to Liens permitted by Section 7.01) on all right, title and interest of the respective Loan Parties in the Collateral described therein. Except for filings and actions contemplated hereby and by the Security Instruments, no filing or other action will be necessary to perfect or protect such Liens.

ARTICLE VI. AFFIRMATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied (other than contingent indemnification obligations and other obligations that purport to survive termination of this Agreement), or any Letter of Credit shall remain outstanding (unless Cash Collateralized to the reasonable satisfaction of the Administrative Agent), the Company shall, and shall (except in the case of the covenants set forth in Sections 6.01, 6.02, 6.03 and 6.14) cause each Subsidiary to:

6.01    Financial Statements. Deliver to the Administrative Agent and each Lender, in form and detail satisfactory to the Administrative Agent and the Required Lenders:

(a)    as soon as available, but in any event within 90 days after the end of each fiscal year of the Company (i) a consolidated balance sheet of the Company and its Subsidiaries as at the end of such fiscal year, and the related consolidated statements of income or operations, shareholders' equity and cash flows for such fiscal year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail and prepared in accordance with GAAP, audited and accompanied by a report and opinion of an independent certified public accountant of nationally recognized standing reasonably acceptable to the Required Lenders, which report and opinion shall be prepared in accordance with GAAP and shall not be subject to any qualifications or exceptions as to the scope of the audit nor to any qualifications or exceptions not reasonably acceptable to the Required Lenders, or (ii) an SEC Form 10-K for the Company (excluding the exhibits thereto) relating to such fiscal year;

(b)    as soon as available, but in any event within 45 days after the end of each of the first three fiscal quarters of each fiscal year of the Company (i) a consolidated balance sheet of the Company and its Subsidiaries as at the end of such fiscal quarter, the related consolidated statements of income or operations, shareholders' equity and cash flows for such fiscal quarter and for the portion of the Company's fiscal year then ended, setting forth in comparative form, as applicable, the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail and certified by a Responsible Officer of the Company as fairly presenting the financial condition, results of operations, shareholders' equity and cash flows of the Company and its Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes, or (ii) an SEC Form 10-Q for the Company (excluding the exhibits thereto) relating to such fiscal quarter; and

(c)    as soon as available, but in any event within 120 days after the end of each fiscal year of the Company, a consolidated operating budget (to include, without limitation, a balance sheet and the related statements of income or operations, shareholders' equity and cash flows for such fiscal year) for the Company and its Subsidiaries for such fiscal year, in each case prepared in accordance with GAAP on a consistent basis (it being recognized by the Administrative Agent and the Lenders that projections and forecasts provided to them by any Borrower are not to be viewed as facts and that actual results during the period or periods covered by any such projections and forecasts may differ materially from the projected or forecasted results).

6.02    Certificates; Other Information. Deliver to the Administrative Agent and each Lender, in form and detail satisfactory to the Administrative Agent and the Required Lenders:

(a)    concurrently with the delivery of the financial statements referred to in Section 6.01(a) (unless included in the applicable SEC Form 10-K), a certificate of its independent certified public accountants certifying such financial statements;

(b)    concurrently with the delivery of the financial statements referred to in Sections 6.01(a) and (b), a duly completed Compliance Certificate signed by a Responsible Officer of the Company (which delivery may, unless the Administrative Agent, or a Lender requests executed originals, be by electronic communication including fax or email and shall be deemed to be an original authentic counterpart thereof for all purposes);

(c)    promptly after the same are available, copies of each annual report, proxy or financial statement or other report or communication sent to the stockholders of the Company, and copies of all annual, regular, periodic and special reports and registration statements which the Company may file or be required to file with the SEC under Section 13 or 15(d) of the Securities Exchange Act of 1934, and not otherwise required to be delivered to the Administrative Agent pursuant hereto; and

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(d)    promptly, such additional information regarding the business, financial or corporate affairs of the Company or any Subsidiary, or compliance with the terms of the Loan Documents, as the Administrative Agent or any Lender may from time to time reasonably request.

Documents required to be delivered pursuant to Section 6.01(a) or (b) or Section 6.02(c) (to the extent any such documents are included in materials otherwise filed with the SEC) may be delivered electronically and if so delivered, shall be deemed to have been delivered on the date (i) on which the Company posts such documents, or provides a link thereto on the Company's website on the Internet at the website address listed on Schedule 10.02; or (ii) on which such documents are posted on the Company's behalf on an Internet or intranet website, if any, to which each Lender and the Administrative Agent have access (whether a commercial, third-party website or whether sponsored by the Administrative Agent); provided that: (i) the Company shall deliver paper copies of such documents to the Administrative Agent or any Lender upon its request to the Company to deliver such paper copies until a written request to cease delivering paper copies is given by the Administrative Agent or such Lender and (ii) the Company shall notify the Administrative Agent (by telecopier or electronic mail) of the posting of any such documents and, upon the Administrative Agent's request, provide to the Administrative Agent by electronic mail electronic versions (i.e., soft copies) of such documents. The Administrative Agent shall have no obligation to request the delivery of or to maintain paper copies of the documents referred to above, and in any event shall have no responsibility to monitor compliance by the Company with any such request by a Lender for delivery, and each Lender shall be solely responsible for requesting delivery to it or maintaining its copies of such documents.

Each Borrower hereby acknowledges that (a) the Administrative Agent and/or the Arranger may, but shall not be obligated to, make available to the Lenders and the L/C Issuer materials and/or information provided by or on behalf of the Borrowers hereunder (collectively, “Borrower Materials”) by posting the Borrower Materials on IntraLinks, Syndtrak or another similar electronic system (the “Platform”) and (b) certain of the Lenders (each, a “Public Lender”) may have personnel who do not wish to receive material non-public information with respect to the Borrowers or their Affiliates, or the respective securities of any of the foregoing, and who may be engaged in investment and other market-related activities with respect to such Persons' securities. Each Borrower hereby agrees that so long as any Borrower is the issuer of any outstanding debt or equity securities that are registered or issued pursuant to a private offering or is actively contemplating issuing any such securities (w) all Borrower Materials that are to be made available to Public Lenders shall be clearly and conspicuously marked “PUBLIC” which, at a minimum, shall mean that the word “PUBLIC” shall appear prominently on the first page thereof; (x) by marking Borrower Materials “PUBLIC,” such Borrower shall be deemed to have authorized the Administrative Agent, the Arranger, the L/C Issuer and the Lenders to treat such Borrower Materials as not containing any material non-public information with respect to any Borrower or its securities for purposes of United States Federal and state securities laws (provided, however, that to the extent such Borrower Materials constitute Information, they shall be treated as set forth in Section 10.07); (y) all Borrower Materials marked “PUBLIC” are permitted to be made available through a portion of the Platform designated “Public Side Information;” and (z) the Administrative Agent and the Arranger shall be entitled to treat any Borrower Materials that are not marked “PUBLIC” as being suitable only for posting on a portion of the Platform not designated “Public Side Information.”

6.03    Notices. Promptly notify the Administrative Agent:

(a)    of the occurrence of any Default or Event of Default;

(b)    of any matter that has resulted or could reasonably be expected to result in a Material Adverse Effect, including (i) breach or non-performance of, or any default under, a Contractual Obligation of any Borrower or any Subsidiary; (ii) any dispute, litigation, investigation, proceeding or suspension between any Borrower or any Subsidiary and any Governmental Authority; (iii) the commencement of, or any material development in, any litigation or proceeding affecting any Borrower or any Subsidiary, including pursuant to any applicable Environmental Laws; or (iv) any labor controversy resulting in or reasonably expected to result in, any strike, work stoppage, boycott, shutdown or other labor disruption against or involving any Borrower or any Subsidiary that would materially impact the operations of any Borrower or any Subsidiary;

(c)    of the occurrence of any ERISA Event that has resulted or could reasonably be expected to result in a Material Adverse Effect;

(d)    of any material change in accounting policies or financial reporting practices by any Borrower or any Subsidiary, including any determination by any Borrower referred to in Section 2.10;

(e)    if applicable, upon the request from time to time of the Administrative Agent, of the Swap Termination Values, together with a description of the method by which such values were determined, relating to any Swap Contracts then outstanding to which any Borrower or any of its Subsidiaries is a party;

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(f)    upon, but in no event later than ten days after, receiving written notice of (i) any and all enforcement, cleanup, removal or other governmental or regulatory actions involving a potential liability in excess of $25,000,000 in the aggregate instituted, completed or threatened against any Borrower or any Subsidiary or any of their properties pursuant to any applicable Environmental Laws, (ii) all other Environmental Claims involving any Borrower or a Subsidiary with a potential liability in excess of $25,000,000 in the aggregate, and (iii) any environmental or similar condition on any real property adjoining or in the vicinity of the property of any Borrower or any Subsidiary that could reasonably be anticipated to cause such property or any part thereof to be subject to any restrictions on the ownership, occupancy, transferability or use of such property under any Environmental Laws and involving a potential liability in excess of $25,000,000 in the aggregate; and

(g)     of any amendment or other change to any covenant, default or event of default in any Permitted Notes Document (including the addition of any covenant, default or event of default not contained in the Permitted Notes Documents as of the date hereof) that makes such covenant, default or event of default more restrictive as to any Loan Party.

Each notice pursuant to this Section 6.03 shall be accompanied by a statement of a Responsible Officer of the Company setting forth details of the occurrence referred to therein and stating what action, if any, the Borrowers have taken and propose to take with respect thereto. Each notice pursuant to Section 6.03(a) shall describe with particularity any and all provisions of this Agreement and any other Loan Document that have been breached.

6.04    Payment of Obligations. Pay and discharge as the same shall become due and payable (a) all material Federal and state tax liabilities, assessments and governmental charges or levies upon it or its properties or assets, unless the same are being contested in good faith by appropriate proceedings and adequate reserves in accordance with GAAP are being maintained by the Company or such Subsidiary; (b) all lawful claims which, if unpaid, would by law become a Lien (other than a Permitted Lien) upon its property; and (c) all Indebtedness (other than Indebtedness the non-payment of which would not violate Section 8.01(e)), as and when due and payable, but subject to any subordination provisions contained in any instrument or agreement evidencing such Indebtedness, in the case of each of clauses (a), (b) and (c) where the failure to pay or discharge could reasonably be expected to have a Material Adverse Effect.

6.05    Preservation of Existence, Etc. (a) Preserve, renew and maintain in full force and effect its legal existence and good standing under the Laws of the jurisdiction of its organization except in a transaction permitted by Section 7.04 or 7.05, except to the extent a failure by a Subsidiary that is not a Loan Party to maintain good standing could not reasonably be expected to have a Material Adverse Effect; (b) take all reasonable action to maintain all rights, privileges, permits, licenses and franchises necessary or desirable in the normal conduct of its business, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) preserve or renew all of its registered patents, trademarks, trade names and service marks, the non-preservation of which could reasonably be expected to have a Material Adverse Effect.

6.06    Maintenance of Properties. (a) Maintain, preserve and protect all of its material properties and equipment necessary in the operation of its business in good working order and condition, ordinary wear and tear excepted except where the failure by a Subsidiary that is not a Loan Party to do so could not reasonably be expected to have a Material Adverse Effect; (b) make all necessary repairs thereto and renewals and replacements thereof except where the failure to do so could not reasonably be expected to have a Material Adverse Effect; and (c) use the standard of care typical in the industry in the operation and maintenance of its facilities.

6.07    Maintenance of Insurance. (a) Maintain with financially sound and reputable insurance companies not Affiliates of any Borrower, insurance with respect to its properties and business against loss or damage of the kinds customarily insured against by Persons engaged in the same or similar business, of such types and in such amounts as are customarily carried under similar circumstances by such other Persons; and (b) without limiting the foregoing, at all times other than during any Collateral Release Period, (i) maintain, if available, fully paid flood hazard insurance with respect to each Mortgaged Property containing a Building (as defined in Section 208.25 of Regulation H of the FRB) that is located in a special flood hazard area, as designated by the Federal Emergency Management Agency of the United States Department of Homeland Security (“FEMA”), on such terms and in such amounts as required by The National Flood Insurance Reform Act of 1994 or as otherwise reasonably required by the Collateral Agent, (ii) upon request, furnish to the Collateral Agent evidence of the renewal of all such policies, and (iii) furnish to the Collateral Agent written notice of any redesignation by FEMA of any such Building into or out of a special flood hazard area promptly upon obtaining knowledge of such redesignation.

6.08    Compliance with Laws. Comply in all material respects with the requirements of all Laws and all orders, writs, injunctions and decrees applicable to it or to its business or property, except in such instances in which (a) such requirement of Law or order, writ, injunction or decree is being contested in good faith or a bona fide dispute exists with respect thereto; or (b) the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.

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6.09    Books and Records.

(a)    Maintain (i) proper financial records in conformity with GAAP and presented fairly in all material respects, and (ii) properly, all other books and records, in which full, true and correct in all material respects entries in conformity with GAAP consistently applied shall be made of all transactions and matters involving the assets and business of the Company or such Subsidiary, as the case may be; and

(b)    Maintain all books of record and accounts in material conformity with all applicable requirements of any Governmental Authority having regulatory jurisdiction over the Company or such Subsidiary, as the case may be.

6.10    Inspection Rights. Permit representatives and independent contractors of the Administrative Agent to visit and inspect any of its properties, to examine its corporate, financial and operating records, and make copies thereof or abstracts therefrom, and to discuss its affairs, finances and accounts with its directors, officers, and independent public accountants, all at the expense of the Borrowers and at such reasonable times during normal business hours and as often as may be reasonably desired, upon reasonable advance notice to the Company and with representatives of the Company afforded reasonable opportunity to be present; provided, however, that (i) the Loan Parties shall not be obligated to reimburse the expenses associated with more than one (1) visit and inspection per calendar year (subject to clause (ii) below) and (ii) when an Event of Default exists the Administrative Agent or any Lender (or any of their respective representatives or independent contractors) may do any of the foregoing at the expense of the Borrowers at any time during normal business hours and without advance notice.

6.11    Environmental Laws.

(a)    Each Borrower shall, and shall cause each of its Subsidiaries to, conduct its operations and keep and maintain its property in compliance in all material respects with all Environmental Laws, except to the extent that the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.

(b)    Upon written request of the Administrative Agent, each Borrower shall submit and cause each of its Subsidiaries to submit, to the Administrative Agent, at the Borrowers' sole cost and expense and at reasonable intervals, a report providing an update of the status of any environmental, health or safety compliance, hazard or liability issue identified in any notice or report required pursuant to Section 6.03(f) and any other environmental, health or safety compliance obligation, remedial obligation or liability, that could, individually or in the aggregate, result in liability in excess of $25,000,000.

6.12    Use of Proceeds. Use the proceeds of the Credit Extensions (a) for working capital, capital expenditures and other general corporate purposes of the Company and its Subsidiaries not in contravention of any Law or of any Loan Document, (b) to finance acquisitions permitted hereunder, and (c) if applicable, to refinance the Indebtedness of the Borrowers under the Existing Credit Agreement.

6.13    Tax Clearance Certificates. On or before the date that is 30 calendar days following the Closing Date, the Company shall provide to the Administrative Agent all tax clearance certificates not delivered to the Administrative Agent under Section 4.01(a)(vi) and permitted by such section to be delivered under this Section 6.13; provided that, if the Company is unable to deliver any such certificate by virtue of a delay in the ability of any applicable Governmental Authority to provide such certificate in the ordinary course (and not by virtue of any Loan Party not being in tax good standing) and the Company has provided to the Administrative Agent reasonable evidence of such inability, then the Company shall have such additional time to deliver such certificate(s) as the Administrative Agent shall reasonably determine.

6.14    New Material Subsidiaries; Additional Guarantors; After-Acquired Real Property; Release of Collateral.

(a)    On each Guarantor Assessment Date, the Company shall determine whether there exists any new or additional Material Subsidiaries (whether as a result of a Person becoming a Material Subsidiary or being designated as a Material Subsidiary for purposes of satisfying the 80% Threshold), and if so, promptly notify the Administrative Agent of such fact andpromptly thereafter (and in any event, with respect to Domestic Subsidiaries, within forty-five (45) days, with respect to Foreign Subsidiaries, within seventy-five (75) days, and solely with respect to Section 6.14(a)(iv), within sixty (60) days, or, in any case, such longer period requested by the Company and approved by the Administrative Agent), cause such Person to deliver to the Administrative Agent, as the Administrative Agent shall deem appropriate:

(i)    a Guaranty Joinder Agreement duly executed by such Subsidiary;

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(ii)    documents of the types referred to in clauses (v) and (vi) of Section 4.01(a) and, if requested by the Administrative Agent, customary opinions of counsel to such Person (which shall cover, among other things, the legality, validity, binding effect and enforceability of the documentation referred to in clause (a)), all in form, content and scope reasonably satisfactory to the Administrative Agent;

(iii)    at all times other than during a Collateral Release Period, a Security Joinder Agreement of such Subsidiary, together with such Uniform Commercial Code financing statements naming such Subsidiary as “Debtor” and naming the Collateral Agent for the benefit of the Secured Parties as “Secured Party,” in form, substance and number sufficient in the reasonable opinion of the Collateral Agent and its special counsel to be filed in all Uniform Commercial Code filing offices in all jurisdictions in which filing is necessary or advisable to perfect in favor of the Collateral Agent for the benefit of the Secured Parties the Lien on Collateral conferred under such Security Instrument to the extent such Lien may be perfected by Uniform Commercial Code filing;

(iv)    at all times other than during a Collateral Release Period, Mortgages, title insurance, appraisals and such other real property support documentation with respect to all real property (and related improvements) with a fair market value in excess of $1,000,000 owned by such Subsidiary;

(v)    at all times other than during a Collateral Release Period, if the Subsidiary Securities issued by such Subsidiary that are, or are required to become, Pledged Interests are owned by a Subsidiary who has not then executed and delivered to the Collateral Agent a Pledge Agreement granting a Lien to the Collateral Agent, for the benefit of the Secured Parties, in such equity interests, a Pledge Joinder Agreement executed by the Subsidiary that directly owns such Subsidiary Securities (or, as to the Pledged Interests issued by any Direct Foreign Subsidiary, in a form acceptable to the Administrative Agent), and if such Subsidiary Securities shall be owned by any Borrower or a Subsidiary who has previously executed a Pledge Agreement, a Pledge Agreement Supplement in the form required by such Pledge Agreement pertaining to such Subsidiary Securities;

(vi)    at all times other than during a Collateral Release Period, if the Pledged Interests issued by such Subsidiary constitute securities under Article 8 of the Uniform Commercial Code (a) the certificates representing 100% of such Subsidiary Securities and (b) duly executed, undated stock powers or other appropriate powers of assignment in blank affixed thereto;

(vii)    at all times other than during a Collateral Release Period, Uniform Commercial Code financing statements naming the pledgor as “Debtor” and naming the Collateral Agent for the benefit of the Secured Parties as “Secured Party,” in form, substance and number sufficient in the reasonable opinion of the Collateral Agent and its special counsel to be filed in all Uniform Commercial Code filing offices and in all jurisdictions in which filing is necessary or advisable to perfect in favor of the Collateral Agent for the benefit of the Secured Parties the Lien on such Subsidiary Securities;

(vii)    at all times other than during a Collateral Release Period, a supplement to the appropriate schedule attached to the appropriate Security Instruments listing the additional Collateral, certified as true, correct and complete by the Responsible Officer (provided that the failure to deliver such supplement shall not impair the rights conferred under the Security Instruments in after acquired Collateral); and

(ix)    such other assurances, certificates, documents, consents or opinions as the Administrative Agent or Collateral Agent reasonably may require.

Notwithstanding anything to the contrary herein, the Company shall at all times (subject to the 45 or 90 day period noted above or such longer period approved by the Administrative Agent) cause such of its Subsidiaries necessary to meet the 80% Threshold to be Guarantors and to be bound by the terms of a Guaranty.

(b)If the Company shall determine on any Guarantor Assessment Date in respect of any Subsidiary that is, at such time, a Guarantor, that such Subsidiary is no longer a Material Subsidiary, is no longer a Permitted Notes Guarantor, or is no longer required to be deemed or designated as a Material Subsidiary for purposes of satisfying the 80% Threshold, the Company may deliver to the Administrative Agent a certificate to such effect, certifying also the absence of any Default or Event of Default, whereupon the Administrative Agent, the Collateral Agent and the Lenders shall execute such documents and instruments of release as shall be reasonably satisfactory to the parties, confirming the release of such Subsidiary from the Guaranty.

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(c)    At all times other than during a Collateral Release Period, the Company shall cause to be delivered to the Collateral Agent upon the Collateral Agent's reasonable request, as soon as practicable and in any event within thirty (30) days of the acquisition thereof, a Mortgage on any fee owned real property (and related improvements) with a fair market value in excess of $1,000,000 acquired by any Loan Party after the Closing Date as security for the Secured Obligations, together with the Uniform Commercial Code financing statements covering fixtures, mortgage policies of title insurance, surveys, opinions, evidence of flood insurance coverage and other documents in connection with such Mortgage as the Collateral Agent may reasonably request.

(d)    Notwithstanding any other provision of this Agreement or any other Loan Document, any Lien on the Collateral of any Loan Party granted to or held by the Collateral Agent (on behalf of the Secured Parties) under any Loan Document shall be released and any Loan Party that is a party to any Security Instrument shall be released from its respective obligations thereunder (collectively, the “Release”), including after any re-pledge of the Collateral pursuant to the second proviso of this clause (d), upon the written request of the Company delivered to the Collateral Agent at any time on or after June 30, 2013, provided that (i) no Default or Event of Default shall have occurred and be continuing at such time or would occur immediately after giving effect to such Release, (ii) the Consolidated Fixed Charge Coverage Ratio (calculated as of the last day of each of the four most recently ended fiscal quarters of the Company) is greater than or equal to 1.25 to 1.00 for each of such four most recently ended fiscal quarters, (iii) the Consolidated Leverage Ratio (calculated as of the last day of the most recently ended fiscal quarter of the Company) is equal to or less than 2.50 to 1.00, and (iv) the Loan Parties bear the cost of the Release; providedfurther, that if any Release has occurred and subsequent to the date on which such Release occurred the Company delivers a Compliance Certificate demonstrating that (A) the Consolidated Fixed Charge Coverage Ratio (calculated as of the last day of the most recently ended fiscal quarter of the Company) is less than 1.25 to 1.00 or (B) the Consolidated Leverage Ratio (calculated as of the last day of the most recently ended fiscal quarter of the Company) is greater than 2.50 to 1.00, then promptly (and in any event within 30 days or such longer period of time as the Collateral Agent determines in its reasonable discretion) after such Compliance Certificate is delivered, or sooner if the Company shall otherwise elect to do so, each Loan Party shall at the cost of the Loan Parties, (1) take action (including the filing of Uniform Commercial Code and other financing statements) that may be necessary or advisable in the reasonable opinion of the Collateral Agent to vest in the Collateral Agent (for the benefit of the Secured Parties) valid and subsisting Liens on the Collateral other than real property consistent in all material respects in scope, perfection and priority as those in effect prior to such Release and pursuant to documentation substantially similar to such documentation in place on or after the Closing Date in accordance with this Section 6.14 and, in the case of any real property previously pledged pursuant to a Mortgage or real property acquired on or after the Collateral Release Date as to which a Lien would have been required to have been granted pursuant to Section 6.14(c) had it not been acquired during the Collateral Release Period, Liens of record consistent with the requirements of Section 6.14(c), and (2) upon the Collateral Agent's request, deliver to the Collateral Agent customary opinions of counsel in connection therewith.

6.15    Appraisals. The Administrative Agent and the Lenders may obtain from time to time an appraisal of all or any part of any Collateral, prepared in accordance with written instructions from the Administrative Agent and the Lenders, from a third-party appraiser satisfactory to, and engaged directly by, the Administrative Agent and the Lenders. The cost of any appraisal after the occurrence and during the continuance of a Default shall be borne by the Borrowers and such cost shall be part of the Indebtedness, and constitute an Obligation, hereunder and shall be payable by the Borrowers to the Administrative Agent on demand (which obligation the Borrowers hereby promise to pay); provided that the cost of any appraisal obtained by the Administrative Agent or Lenders at any time other than after the occurrence and during the continuance of a Default shall not constitute an Obligation hereunder and shall not be required to be reimbursed by the Borrowers.

ARTICLE VII. NEGATIVE COVENANTS

So long as any Lender shall have any Commitment hereunder, any Loan or other Obligation hereunder shall remain unpaid or unsatisfied (other than contingent indemnification obligations and other obligations that purport to survive termination of this Agreement), or any Letter of Credit shall remain outstanding (unless Cash Collateralized to the reasonable satisfaction of the Administrative Agent), the Company shall not, nor shall it permit any Subsidiary to, directly or indirectly:

7.01    Liens. Create, incur, assume or suffer to exist any Lien upon any of its property, assets or revenues, whether now owned or hereafter acquired, other than the following:

(a)    Liens securing the (i) Secured Obligations and (ii) so long as the Permitted Notes Intercreditor Agreement is in effect, Permitted Notesand/or any other obligations under the Permitted Notes Documents;

(b)    Liens existing on the date hereof and listed on Schedule 7.01 and any renewals or extensions thereof; provided that the property covered thereby is not increased (except that assets the purchase or lease of which is financed by a counterparty

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or its affiliates may be cross-collateralized to secure other assets the purchase or lease of which is financed by the same counterparty or its affiliates) and any renewal or extension of the obligations secured or benefited thereby is permitted by Section 7.03(b);

(c)    Liens for taxes not yet past due or which are being contested in good faith and by appropriate proceedings, if adequate reserves with respect thereto are maintained on the books of the applicable Person in accordance with GAAP;

(d)    carriers', landlords', warehousemen's, mechanics', materialmen's, repairmen's or other like Liens arising in the Ordinary Course of Business in respect of the Company and its Subsidiaries, which are not overdue for a period of more than 45 days or which are being contested in good faith and by appropriate proceedings, if adequate reserves with respect thereto are maintained on the books of the applicable Person;

(e)    pledges or deposits in the Ordinary Course of Business in connection with obligations of the Company or its Subsidiaries arising under workers' compensation, unemployment insurance and other social security legislation, other than any Lien imposed by ERISA;

(f)    deposits to secure the performance of tenders, bids, trade contracts (other than for borrowed money), leases, statutory obligations, bankers' acceptances, surety and appeal bonds, government contracts, performance bonds and other obligations of a like nature, in each case, incurred by the Company or its Subsidiaries in the Ordinary Course of Business, provided that all such deposits in the aggregate could not reasonably be expected to result in a Material Adverse Effect;

(g)    easements, rights-of-way, restrictions, municipal and zoning ordinances and other similar encumbrances affecting real property which, in the aggregate, are not substantial in amount, and which do not in any case materially detract from the value of the property subject thereto or materially interfere with the ordinary conduct of the business of the applicable Person;

(h)Liens securing or arising from judgments, decrees or attachments in respect of the Company and its Subsidiaries, in circumstances not constituting an Event of Default under Section 8.01(h);

(i)Liens securing Indebtedness of the Company or its Subsidiaries permitted under Section 7.03(d), provided that (i) such Liens do not at any time encumber any property other than the property financed by such Indebtedness (and other property financed by the same counterparty or its affiliates); (ii) such Liens attach to the subject property within 30 days after the acquisition thereof; and (iii) the Indebtedness secured thereby does not exceed the cost or fair market value as of the time such Indebtedness was incurred, whichever is lower, of the property being acquired on the date of acquisition; or Liens on assets of any Project Debt Entity securing Indebtedness of such entity permitted under Section 7.03(m);

(j)Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods by the Company or its Subsidiaries;

(k)Liens securing reimbursement obligations of the Company or its Subsidiaries with respect to commercial letters of credit obtained in the Ordinary Course of Business and not prohibited hereby, provided that such Liens shall attach only to documents or other property relating to such letters of credit and products and proceeds thereof;

(l)Liens arising solely by virtue of any statutory or common law provision relating to banker's liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a creditor depository institution, provided that (i) such deposit account is not a dedicated cash collateral account and is not subject to restrictions against access by any Borrower in excess of those set forth by regulations promulgated by the FRB, and (ii) such deposit account is not intended by any Borrower or any Subsidiary to provide collateral to the depository institution;

(m)Liens on insurance policies and proceeds securing the payment of financed insurance premiums not in excess of $25,000,000 at any time;

(n)Liens not otherwise permitted hereunder (other than Subsidiary Securities or the proceeds thereof) securing obligations not in excess of $15,000,000 at any time;

(o)leases or subleases granted to others that do not materially interfere with the ordinary course of business of the Company and its Subsidiaries, taken as a whole;

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(p)Liens of lessors in any property subject to any operating lease, including Liens arising from precautionary UCC financing statements or similar filings made in respect of such leases;

(q)Liens on property of a Person existing at the time such Person is merged into or consolidated with the Company or any Subsidiary or becomes a Subsidiary of the Company; provided that such Liens were not created in contemplation of such merger, consolidation or Investment and do not extend to any assets other than those of the Person merged into or consolidated with the Company or such Subsidiary or acquired by the Company or such Subsidiary, and the applicable Indebtedness secured by such Lien is permitted under Section 7.03(d);

(r)Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into by the Company or any of its Subsidiaries in the ordinary course of business;

(s)any encumbrance or restriction (including put and call arrangements) with respect to capital stock of any Joint Venture or similar arrangement pursuant to any joint venture or similar agreement; provided that such encumbrance or restriction does not prohibit the granting of a Lien by a Loan Party on any Collateral and any entity formed as part of such Joint Venture remains subject to the provisions of this Agreement to the extent provided herein;

(t)Liens on the assets and capital stock or other equity interests of Foreign Subsidiaries not constituting Collateral securing Indebtedness permitted under Section 7.03(j);

(u)Liens solely on cash earnest money deposits made in connection with any letter of intent or purchase agreement in connection with an Investment permitted hereunder; and

(v)Liens, if any, in favor of a surety granted by the Company and/or its Subsidiaries arising by operation of law or under any indemnity agreement or surety agreement entered into in the Ordinary Course of Business in connection with construction-related performance bonds, provided that such Lien does not at any time encumber any property other than the accounts receivable, material and equipment under the applicable bonded contractual obligation.

7.02    Investments. Make any Investments, except:

(a)    Investments, other than those permitted by subsections (b) through (n), that are existing on the date hereof and listed on Schedule 7.02(a);

(b)    Investments held by the Company or any of its Subsidiaries (i) in the form of cash and cash equivalents, and (ii) Investments permitted under the Company's investment policy attached hereto as Schedule 7.02(b), other than Investments of any type requiring any special or further approval under such policy;

(c)    Investments consisting of (i) equity investments or extensions of credit by the Company to any of its wholly-owned Subsidiaries, or by any of its wholly-owned Subsidiaries to the Company or to another of its wholly-owned Subsidiaries, so long as such extensions of credit are, in each case, represented by a written promissory note and pledged to the Administrative Agent pursuant to the Security Instruments (except to the extent occurring during any Collateral Release Period) and (ii) equity investments and extensions of credit in non-wholly-owned Subsidiaries in an amount not in excess of $10,000,000 at any time outstanding;

(d)    Investments consisting of extensions of credit in the nature of accounts receivable or notes receivable arising from the sale or lease of goods or services in the Ordinary Course of Business, and Investments received in satisfaction or partial satisfaction thereof from financially troubled account debtors to the extent reasonably necessary in order to prevent or limit loss;

(e)    Guarantee Obligations permitted by Section 7.03;

(f)    Investments resulting by virtue of transactions otherwise permitted by Section 7.07;

(g)    Investments (including Construction JV Investments) by any GLC Venture, or any Subsidiary thereof, that are existing on the date hereof and listed on Schedule 7.02(g) (“Existing Investments”), and any necessary additional Investments in such Existing Investments only, in an aggregate amount not to exceed for all such additional Investments in such Existing Investments together at any time, $25,000,000;

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(h)    Investments of a Person or any of its Subsidiaries existing at the time such Person becomes a Subsidiary of the Company or at the time such Person merges or consolidates with the Company or any of its Subsidiaries, in either case, in compliance with this Agreement; provided that such Investments were not made by such Person in connection with, or in anticipation or contemplation of, such Person becoming a Subsidiary of the Company or such merger or consolidation;

(i)    Investments deemed to arise under Swap Contracts permitted hereunder;

(j)    Guarantee Obligations permitted under Section 7.03;

(k)    Construction JV Investments occurring after the date hereof arising in the Ordinary Course of Business and the purchase or other acquisition of all of the equity, common stock in, or all or substantially all of the property of, any Person (or division or other business unit of such Person) that, upon the consummation thereof, will be wholly-owned directly by the Company or one or more of its wholly-owned Subsidiaries (including as a result of a merger or consolidation); provided that, with respect to each Construction JV Investment, purchase or other acquisition made pursuant to this Section 7.02(k):

(i)in the case of a purchase or other acquisition, the lines of business of the Person to be (or the property of which is to be) so purchased or otherwise acquired shall be similar, complementary, or ancillary to (or a related line of) the lines of business as one or more of the principal businesses of the Company and its Subsidiaries engaged in currently or subsequently in the Ordinary Course of Businesses;

(ii)in the case of the purchase or other acquisition of common stock of or other equity in another Person, the board of directors (or other comparable governing body) of such other Person shall have duly approved such purchase or acquisition;

(iii)immediately before and immediately after giving effect to any such Construction JV Investment, purchase or other acquisition, (A) no Default shall have occurred and be continuing and (B) the Consolidated Leverage Ratio shall be less than or equal to 2.75 to 1.00 (or, during any Collateral Release Period, 2.50 to 1.00), such calculation to be determined on the basis of the financial information most recently delivered to the Administrative Agent pursuant to Section 6.01(a) or (b) (together with such pro forma expense adjustments as are reasonably supportable by the Company) as though such acquisition had been consummated as of the first day of the four consecutive fiscal-quarter period covered thereby; and

(iv)the total cash consideration, including Contingent Acquisition Obligations and other contingent consideration,paid by or on behalf of the Company and its Subsidiaries for any such Construction JV Investment, purchase or other acquisition, when aggregated with the total cash consideration paid by or on behalf of the Company and its Subsidiaries for all other Construction JV Investments, purchases and other acquisitions made by the Company and its Subsidiaries pursuant to this Section 7.02(k), shall not exceed $250,000,000 in the aggregate;

(l)    to the extent constituting Investments, Indebtedness otherwise permitted under Section 7.03;

(m)    to the extent constituting Investments, Contingent Acquisition Obligations in respect of any Acquisition, Investment or Disposition otherwise permitted hereunder;

(n)    Investments not otherwise permitted under clauses (a) through (m) above in an amount not to exceed $25,000,000 at any time outstanding; and

(o)    the Acquisition disclosed to the Administrative Agent and the Lenders prior to the Closing Datefor total cash consideration, including Contingent Acquisition Obligations and other contingent consideration, not to exceed the amount reasonably anticipated for such Acquisition at the time such Acquisition was disclosed); provided that (i) the lines of business of the Person to be (or the property of which is to be) purchased or otherwise acquired shall be similar, complementary, or ancillary to (or a related line of)the lines of business as one or more of the principal businesses of the Company and its Subsidiaries engaged in currently or subsequently in the Ordinary Course of Businesses and (ii) immediately before and immediately after giving effect to such Acquisition, (A) no Default shall have occurred and be continuing and (B) the Consolidated Leverage Ratio shall be less than or equal to 2.75 to 1.00, such calculation to be determined on the basis of the financial information most recently delivered to the Administrative Agent pursuant to Section 6.01(a) or (b) (together with such pro forma expense adjustments as are reasonably supportable by the Company) as though such acquisition had been consummated as of the first day of the four consecutive fiscal-quarter period covered thereby.

7.03    Indebtedness. Create, incur, assume or suffer to exist any Indebtedness, except:

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(a)    Indebtedness under the (i) Loan Documents and (ii) Permitted Notes and Permitted Notes Documents;

(b)    Indebtedness of the Company and its Subsidiaries outstanding on the date hereof and listed on Schedule 7.03 and any refinancings, refundings, renewals or extensions thereof, provided that the amount of such Indebtedness is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder;

(c)    obligations (contingent or otherwise) of any Borrower or any Subsidiary existing or arising under any Swap Contract entered into by such Person (or in respect of any Guarantee Obligation of any such Person to the extent supporting obligations arising under Swap Contracts to which any Borrower or any Subsidiary is party), provided that (i) such Swap Contract obligations are (or were) entered into by such Person in the Ordinary Course of Business for the purpose of directly mitigating risks associated with liabilities, commitments, investments, assets, or property held or reasonably anticipated by such Person, or changes in the value of securities issued by such Person and not for purposes of speculation or taking a “market view;” and (ii) such Swap Contract does not contain any provision exonerating the non-defaulting party from its obligation to make payments on outstanding transactions to the defaulting party;

(d)    Indebtedness in respect of capital leases, Synthetic Lease Obligations, sale-leaseback transactions and purchase money Indebtedness for fixed or capital assets acquired by any Borrower or any Subsidiary; provided that the aggregate principal amount of (i) all purchase money Indebtedness for fixed or capital assets that may be incurred by the Company or any of its then-existing Subsidiaries in any fiscal year of the Company shall not exceed $25,000,000; (ii) all Indebtedness in respect of capital leases, Synthetic Lease Obligations and sale-leaseback transactions to finance the acquisition of fixed or capital assets incurred by the Company or any of its Subsidiaries in any fiscal year of the Company shall not exceed $25,000,000; and (iii) all Indebtedness in respect of capital leases, Synthetic Lease Obligations, sale-leaseback transactions and purchase money Indebtedness for fixed or capital assets of Persons immediately prior to such Persons becoming Subsidiaries or being merged with or into (or otherwise becoming acquired by) the Company or any of its Subsidiaries following the Closing Date shall not exceed an amount equal to $65,000,000; provided that none of such Indebtedness was incurred in anticipation of any such merger or acquisition;

(e)    Indebtedness arising as a consequence of Investments permitted pursuant to Section 7.02(c);

(f)    Indebtedness in respect of (i) letters of credit (other than Letters of Credit) issued solely for the account and benefit of any Borrower or any Subsidiary in the Ordinary Course of Business in an aggregate outstanding amount not to exceed at any time an amount equal to $25,000,000; and (ii) the obligation of a subcontractor of any Borrower or its Subsidiaries on a construction project, provided that such Borrower or such Subsidiary determines in good faith that such financial arrangement best serves such Borrower's or such Subsidiary's financial interests;

(g)    Indebtedness incurred in the Ordinary Course of Business in connection with (i) securing the performance of bids, trade contracts (other than for borrowed money), and statutory obligations, in each case, solely for the account and benefit of any Borrower, its Subsidiaries, any GLC Venture or Construction JV, (ii) obligations on surety and appeal bonds solely for the account and benefit of any Borrower, its Subsidiaries, any GLC Venture or Construction JV (other than in relation to borrowed money debt), and (iii) other obligations of a like nature incurred in the Ordinary Course of Business solely for the account and benefit of any Borrower, its Subsidiaries, any GLC Venture or Construction JV (other than in relation to borrowed money debt), in each of the foregoing cases to the extent not otherwise prohibited by the terms of any Loan Document;

(h)    Indebtedness of a Loan Party comprised solely of (i) the outstanding principal amount of unsecured obligations, whether current or long-term, for borrowed money and all obligations evidenced by bonds (other than performance, surety and appeal bonds), debentures, notes, loan agreements or other similar instruments, (ii) Attributable Indebtedness in respect of capital leases and Synthetic Lease Obligations, (iii) Contingent Acquisition Obligations in respect of any Acquisition or Investment otherwise permitted hereunder, or (iv) without duplication, Guarantee Obligations with respect to Indebtedness of the types specified in the immediately preceding clauses (i) and (iii); provided that, (x) the aggregate principal amount of outstanding Indebtedness of the types permitted by the immediately preceding clauses (i) through (iv) shall not exceed $150,000,000; (y) the aggregate principal amount of outstanding Indebtedness of the types permitted by the immediately preceding clauses (i) through (iv) that is subject to amortization or payment at maturity prior to the Maturity Date shall not exceed $100,000,000; and (z) no such Indebtedness shall be permitted under this clause (h) if such Indebtedness represents Indebtedness of any co-joint venturer in any Joint Venture, to which the Company or any Subsidiary is a party, that is assumed by the Company or any Subsidiary, if such Indebtedness was not originally incurred by such co-joint venturer in connection with (and relate solely to) the subject Joint Venture;

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(i)    Guarantee Obligations of a Loan Party in respect of Indebtedness otherwise permitted hereunder of the Company or any other Loan Party;

(j)    Indebtedness (which may be secured or unsecured) of any Subsidiaries; provided that the aggregate amount of all such outstanding Indebtedness shall not exceed $15,000,000 at any time;

(k)    Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within five Business Days of incurrence;

(l)    customer deposits and advance payments received in the ordinary course of business; and

(m)    (i) Project Debt outstanding on the Closing Date as set forth on Schedule 7.03(m)(i) (“Existing Project Debt”), and (ii) in addition thereto, an additional amount of Project Debt not to exceed $10,000,000 at any time outstanding.

7.04    Fundamental Changes. Merge, consolidate with or into, or convey, transfer, lease or otherwise Dispose of (whether in one transaction or in a series of transactions) all or substantially all of its assets (whether now owned or hereafter acquired) to or in favor of any Person other than Dispositions permitted under Section 7.05 and, so long as no Default or Event of Default exists at the time or would occur as a result thereof:

(a)    any Subsidiary may merge with (i) a Borrower, provided that a Borrower shall be the continuing or surviving Person, (ii) any one or more Subsidiaries, provided that, when any wholly-owned Subsidiary is merging with another Subsidiary, the continuing or surviving Person shall be a wholly-owned Subsidiary, or (iii) any other Person, provided that such Subsidiary shall be the continuing or surviving Person or immediately upon such merger, consolidation or combination, the continuing or surviving Person shall be a wholly-owned Subsidiary;

(b)    any Subsidiary may sell all or substantially all of its assets (upon voluntary liquidation or otherwise), to a Borrower or to another Subsidiary; provided that if the seller in such a transaction is a wholly-owned Subsidiary, then the purchaser must either be a Borrower or a wholly-owned Subsidiary; and

(c)    any Borrower may merge, consolidate or combine with any entity if a Borrower is the continuing or surviving Person (and, if the Company is a party to such merger, the Company is the surviving Person or the continuing or surviving Person assumes the duties and obligations of the Company hereunder and under the other Loan Documents).

7.05    Dispositions. Make any Disposition or enter into any agreement to make any Disposition, except:

(a)    Dispositions of obsolete, unneeded, unproductive or worn out property, whether now owned or hereafter acquired, in the Ordinary Course of Business to Persons;

(b)    Dispositions of inventory and leases of property, in each case in the Ordinary Course of Business;

(c)    Dispositions of equipment or real property to the extent that (i) such property is exchanged for credit against the purchase price of similar replacement property for use in the Ordinary Course of Business, (ii) the proceeds of such Disposition are reasonably promptly applied to the purchase price of such replacement property for use in the Ordinary Course of Business or (iii) the board of directors or senior management of the Company or such Subsidiary has determined in good faith that the failure to replace such property will not be detrimental to the business of the Borrower or such Subsidiary;

(d)    Dispositions of property by any Subsidiary to the Borrower or to a wholly-owned Subsidiary of the Borrower;

(e)    Dispositions comprising transactions expressly permitted by Section 7.04(a) through (c);

(f)    non-exclusive licenses or sublicenses of IP Rights in the Ordinary Course of Business and substantially consistent with past practice for terms not exceeding five years and leases and subleases granted to others that do not materially interfere with the Ordinary Course of Business of the Company and its Subsidiaries;

(g)    the sale, without recourse and in the Ordinary Course or Business, of accounts receivable due from Federal, state or other Governmental Authority arising in the Ordinary Course of Business (and not as part of any bulk sale or financing

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of receivables) in an amount not to exceed $25,000,000 in any fiscal year or $50,000,000 in the aggregate after the date of this Agreement;

(h)    Dispositions of non-core assets acquired in a permitted Acquisition by the Company or any of its Subsidiaries within 12 months of such Acquisition;

(i)    Dispositions of property constituting (i) the making of Investments permitted under Section 7.02, (ii) Indebtedness permitted under Section 7.03 and/or (iii) the making of Restricted Payments permitted by Section 7.07;

(j)    the Disposition of equity interests in, or assets of, any GLC Venture or any Project Debt Entity; and

(k)    Dispositions after the date of this Agreement not otherwise permitted under clauses (a) through (j) above in an aggregate amount not to exceed 5% of the consolidated total assets of the Company and its Subsidiaries as of the date of such Disposition, determined in accordance with GAAP;

provided that any Disposition pursuant to subsections (a) through (k) of this Section 7.05 shall be for fair market value.

7.06    [Intentionally Omitted.]

7.07    Restricted Payments. Declare or make, directly or indirectly, any Restricted Payment (including, but not limited to, dividends, redemptions and repurchases of common stock), or incur any obligation (contingent or otherwise) to do so, except that:

(a)    each Subsidiary may make Restricted Payments to the Company and to wholly-owned Subsidiaries (and, in the case of a Restricted Payment by a non-wholly-owned Subsidiary, to the Company and any Subsidiary and to each other owner of capital stock of such Subsidiary on a pro rata basis based on their relative ownership interests);

(b)    the Company and each Subsidiary may declare and make dividend payments or other distributions payable solely in the common stock or other common equity interests of such Person;

(c)    so long as no Default or Event of Default exists or would result by virtue thereof, the Company and each Subsidiary may purchase, redeem or otherwise acquire shares of its common stock or warrants or options to acquire any such shares with the proceeds received from the substantially concurrent issue of new shares of its common stock;

(d)    so long as no Default or Event of Default exists or would result by virtue thereof, the Company may purchase, redeem or otherwise acquire shares of common stock for cash in order to contribute such shares to the Company's employee stock ownership plan, provided the aggregate amount paid by the Company in connection with such transactions does not exceed in any fiscal year an amount equal to 15% of plan compensation (as such term is interpreted for purposes of Section 401(a)(17) of the Code) paid by the Company in such fiscal year, and such shares are promptly so contributed;

(e)    so long as no Default or Event of Default exists or would result by virtue thereof, the Company may purchase, redeem or otherwise acquire shares of its capital stock, or warrants, rights or options to acquire any such shares for cash (i) if immediately before and immediately after giving pro forma effect to such purchase, redemption or acquisition, the Consolidated Leverage Ratio is greater than or equal to 2.00 to 1.00, in an aggregate amount not to exceed $64,800,000 computed on a cumulative basis during the term of this Agreement, and (ii) if immediately before and immediately after giving pro forma effect to such purchase, redemption or acquisition, the Consolidated Leverage Ratio is less than 2.00 to 1.00, in an unlimited amount; provided that, in each case of clauses (i) and (ii), immediately before and immediately after giving pro forma effect to any such purchase, redemption or acquisition, the unencumbered cash and cash equivalents and marketable securities (both short- and long-term) of the Company and its Subsidiaries (without giving effect to encumbrances pursuant to the Loan Documents (including Liens securing the Permitted Notes)), on a consolidated basis, shall be at least $150,000,000;

(f)    the Company may make Restricted Payments to pay for the repurchase, retirement or other acquisition or retirement for value of the capital stock or other equity interests of the Company held by any future, present or former director, officer, employee, member of management or consultant of the Company or any of its Subsidiaries and their respective estates, heirs, family members, spouses, former spouses, domestic partners and former domestic partners, and any tax related thereto, in each case, to the extent required under any equity compensation plan; provided that the amount of Restricted Payments made in cash pursuant to this clause (f)plus Restricted Payments made in cash pursuant to Section 7.07(g) and Section 7.07(h) shall not exceed $10,000,000 in the aggregate in any fiscal year;

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(g)    repurchases of the capital stock or other equity interests deemed to occur upon exercise of stock options or warrants if such capital stock or other equity interests represent a portion of the exercise price of such options or warrants are permitted; provided that the amount of Restricted Payments made in cash pursuant to this clause (g)plus Restricted Payments made in cash pursuant to Section 7.07(f) and Section 7.07(h) shall not exceed $10,000,000 in the aggregate in any fiscal year;

(h)    the Company may make cash payments in lieu of issuing fractional shares in connection with the exercise of warrants, options or other securities convertible into or exchangeable for the capital stock or other equity interests of the Company; provided that the amount of Restricted Payments made in cash pursuant to this clause (h)plus Restricted Payments made in cash pursuant to Section 7.07(f) and Section 7.07(g) shall not exceed $10,000,000 in the aggregate in any fiscal year; and

(i)    so long as no Default or Event of Default exists or would result by virtue thereof, the Company may declare and make dividend payments in cash; provided that, immediately before and immediately after giving pro forma effect to any such dividend payments in cash, the unencumbered cash and cash equivalents and marketable securities (both short- and long-term) of the Company and its Subsidiaries (without giving effect to encumbrances pursuant to the Loan Documents (including Liens securing the Permitted Notes)), on a consolidated basis, shall be at least $150,000,000.

7.08    Change in Nature of Business.

(a)    Engage in any material line of business substantially different from those lines of business conducted by the Company and its Subsidiaries on the date hereof and other lines of business reasonably similar, related, or incidental thereto; or

(b)    Except as otherwise permitted under Section 7.04, make any change in any Borrower's capital structure (including in the terms of its outstanding capital stock) or amend its certificate of incorporation or bylaws that could reasonably be expected to result in a Material Adverse Effect.

7.09    Transactions with Affiliates. Enter into any transaction of any kind with any Affiliate of a Borrower or the Company (other than between or among Loan Parties, in each case to the extent not prohibited under the Loan Documents), whether or not in the Ordinary Course of Business, other than (a) the transactions contemplated by the Loan Documents; (b) payment of customary directors' fees and indemnities (including equity compensation arrangements); (c) arm's length transactions with Affiliates that were consummated prior to the Closing Date and are set forth on Schedule 7.09; (d) transactions with Affiliates upon fair and reasonable terms that are substantially as favorable to such Borrower or Subsidiary than such Borrower or Subsidiary would obtain in a comparable arm's length transaction with a Person that is not an Affiliate of the Company; (e) any employment agreement entered into by the Company or any of its Subsidiaries in the Ordinary Course of Business and consistent with the past practices of the Company and its Subsidiaries; or (f) transactions otherwise explicitly permitted hereunder.

7.10    Burdensome Agreements.

(a)    Restricted Payment Prohibitions. Enter into, assume or suffer to exist any Contractual Obligation that limits the ability of any Subsidiary to make Restricted Payments to any Borrower or to otherwise transfer property to any Borrower other than (i) provisions contained in the terms of any agreement governing Indebtedness permitted under Section 7.03 and provisions contained in the terms of any agreement governing Liens permitted under Section 7.01 that impose restrictions on the property subject to such Liens; and (ii) agreements restricting assignments, subletting or other transfers contained in leases, licenses, joint venture agreements and similar agreements entered into in the ordinary course of business, in each case relating solely to the assets subject to such lease or license or assets relating solely to such joint venture agreement; or

(b)    Other Negative Pledges. Enter into, assume or otherwise become subject to any Contractual Obligation (other than this Agreement or any other Loan Document) that directly or indirectly (i) prohibits any Borrower or any of its Subsidiaries from granting any Lien on property or assets of such Persons or (ii) requires the grant of a Lien to secure an obligation of such Person if a Lien is granted to secure another obligation of such Person, provided that the Company and its Subsidiaries may enter into, assume or otherwise become subject to any such Contractual Obligation solely to the extent (A) incurred pursuant to the acquisition by such Persons of businesses, properties or assets of other Persons otherwise permitted hereunder if such restrictions affect only such businesses, assets and property so acquired, and are not entered into in contemplation of such acquisition, (B) incurred in connection with a transaction creating Liens permitted by Section 7.01(i), provided that such restriction is limited to the assets or properties subject to such Liens, or (C) incurred in connection with the Permitted Notes or any senior secured notes containing negative pledge provisions not more restrictive than those in the 2013 Notes Agreement.

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7.11    Use of Proceeds. Use the proceeds of any Credit Extension, whether directly or indirectly, and whether immediately, incidentally or ultimately, to purchase or carry margin stock (within the meaning of Regulation U of the FRB), to extend credit to others for the purpose of purchasing or carrying margin stock or to refund indebtedness originally incurred for such purpose, or to acquire any security in any transaction that is subject to Section 13 or 14 of the Exchange Act if, following the application of the proceeds of such Credit Extension, more than 25% of the value of the assets (either of a Borrower only or of the Company and its Subsidiaries on a consolidated basis) subject to the provisions of Section 7.01 or Section 7.05 or subject to any restriction contained in any agreement or instrument within the scope of Section 8.01(e) will be margin stock.

7.12    Financial Covenants.

(a)    Consolidated Tangible Net Worth. Permit Consolidated Tangible Net Worth at any time to be less than the sum of 85% of the Consolidated Tangible Net Worth as of December 31, 2011, plus (a) an amount equal to 50% of the Consolidated Net Income earned in each fiscal quarter ending after December 31, 2011 (with no deduction for a net loss in any such fiscal quarter) plus (b) an amount equal to 50% of the aggregate increases in Consolidated Stockholders' Equity after the Closing Date by reason of the issuance and sale of capital stock of the Company.

(b)    Consolidated Interest Coverage Ratio. Permit the Consolidated Interest Coverage Ratio, as of the last day of any fiscal quarter, to be less than 4.00 to 1.00.

(c)    Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio at any time to be greater than the ratios set forth below opposite such period:

Four Fiscal Quarters Ending	Maximum Consolidated Leverage Ratio
September 30, 2012 through and including the fiscal quarter ending September 30, 2013	3.25 to 1.00
December 31, 2013 and each fiscal quarter thereafter	3.00 to 1.00

; provided that during any Collateral Release Period, the Company shall not permit the Consolidated Leverage Ratio at any time to be greater than 2.50 to 1.00.

ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES

8.01    Events of Default. Any of the following shall constitute an Event of Default:

(a)    Non-Payment. Any Borrower or any other Loan Party fails to pay (i) when and as required to be paid herein, and in the currency required hereunder, any amount of principal of any Loan or any L/C Obligation, or (ii) within three (3) Business Days after the same becomes due, any interest on any Loan or on any L/C Obligation, any commitment fee or other fee due hereunder, or any other amount payable hereunder or under any other Loan Document; or

(b)    Specific Covenants. Any Borrower fails to perform or observe any term, covenant or agreement contained in any of Section 6.01, 6.02, 6.03, 6.05, 6.10, 6.12, 6.13, 6.14, 6.15, 7.12 (for the avoidance of doubt, the failure to comply with the proviso in clause (c) thereof shall not result in an Event of Default under Section 7.12(c) but instead shall be governed by Section 6.14(d)) or any other Section of Article VII or any term, covenant or agreement contained in the Post-Closing Agreement, or any Guarantor fails to perform or observe any term, covenant or agreement contained in the Guaranty; or

(c)    Other Defaults. Any Loan Party fails to perform or observe any other covenant or agreement (not specified in subsection (a) or (b) above) contained in any Loan Document on its part to be performed or observed and such failure continues for 30 days; or

(d)    Representations and Warranties. Any representation or warranty made or deemed made by any Loan Party herein, in any other Loan Document, or in any document delivered in connection herewith or therewith proves to have been incorrect in any material respect when made or deemed made, except to the extent that such representations and warranties are qualified by materiality, in which case such representations and warranties shall be true and correct in all respects; or

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(e)    Cross-Default. (i) Any Borrower or any Material Subsidiary (A) fails to make any payment when due (whether by scheduled maturity, required prepayment, acceleration, demand, or otherwise) in respect of any Indebtedness (other than Project Debt) or Guarantee Obligation (other than Indebtedness hereunder and Indebtedness under Swap Contracts) having an aggregate principal amount (including undrawn committed or available amounts and including amounts owing to all creditors under any combined or syndicated credit arrangement) of more than $10,000,000, or (B) fails to observe or perform any other agreement or condition relating to any such Indebtedness or Guarantee Obligation or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event occurs, the effect of which default or other event is to cause, or to permit the holder or holders of such Indebtedness or the beneficiary or beneficiaries of such Guarantee Obligation (or a trustee or agent on behalf of such holder or holders or beneficiary or beneficiaries) to cause, with the giving of notice if required, such Indebtedness to be demanded or to become due or to be repurchased or redeemed (automatically or otherwise) prior to its stated maturity (excluding prepayments required upon the refinancing of such Indebtedness or the Disposition of an asset), or such Guarantee Obligation to become payable or cash collateral in respect thereof to be demanded; or (ii) there occurs under any Swap Contract an Early Termination Date (as defined in such Swap Contract) resulting from (A) any event of default under such Swap Contract as to which any Borrower or any Material Subsidiary is the Defaulting Party (as defined in such Swap Contract) or (B) any Termination Event (as so defined) under such Swap Contract as to which any Borrower or any Material Subsidiary is an Affected Party (as so defined) and, in either event, the Swap Termination Value owed by such Person as a result thereof is greater than $10,000,000; or

(f)    Insolvency Proceedings, Etc. Any Borrower or any of Material Subsidiary institutes or consents to the institution of any proceeding under any Debtor Relief Law, or makes an assignment for the benefit of creditors; or applies for or consents to the appointment of any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer for it or for all or any material part of its property; or any receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar officer is appointed without the application or consent of such Person and the appointment continues undischarged or unstayed for 60 calendar days; or any proceeding under any Debtor Relief Law relating to any such Person or to all or any part of its property is instituted without the consent of such Person and continues undismissed or unstayed for 60 calendar days, or an order for relief is entered in any such proceeding; or

(g)    Inability to Pay Debts; Attachment. (i) Any Loan Party or any of its Material Subsidiaries becomes unable or admits in writing its inability or fails generally to pay its debts as they become due (other than the failure of any Project Debt Entity to pay any Project Debt), or (ii) any writ or warrant of attachment or execution or similar process is issued or levied against all or any material part of the property of any such Person and is not released, vacated or fully bonded within 30 days after its issue or levy; or

(h)    Judgments. There is entered against any Loan Party (i) one or more final judgments or orders for the payment of money in an aggregate amount (as to all such judgments or orders) exceeding $10,000,000 (to the extent not covered by independent third-party insurance as to which the insurer does not dispute coverage), or (ii) any one or more non-monetary final judgments that have, or could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect and, in either case, (A) enforcement proceedings are commenced by any creditor upon such judgment or order, or (B) there is a period of 10 consecutive days during which a stay of enforcement of such judgment, by reason of a pending appeal or otherwise, is not in effect; or

(i)    ERISA. (i) An ERISA Event occurs with respect to a Pension Plan or Multiemployer Plan which has resulted or could reasonably be expected to result in liability of the Company under Title IV of ERISA to the Pension Plan, Multiemployer Plan or the PBGC in an aggregate amount in excess of $10,000,000, or (ii) the Company or any ERISA Affiliate fails to pay when due, after the expiration of any applicable grace period, any installment payment with respect to its withdrawal liability under Section 4201 of ERISA under a Multiemployer Plan in an aggregate amount in excess of the $10,000,000; or

(j)    Invalidity of Loan Documents. Any Loan Document (other than any Security Instrument during a Collateral Release Period) at any time after its execution and delivery and for any reason other than the agreement of all the Lenders, as permitted hereunder or thereunder, or satisfaction in full of all the Obligations (other than contingent indemnification obligations or other obligations that purport to survive termination of this Agreement), (i) ceases to be in full force and effect, or is declared by a court of competent jurisdiction to be null and void, invalid or unenforceable in any respect; (ii) any Loan Party denies that it has any or further liability or obligation under any Loan Document, or purports to revoke, terminate or rescind any Loan Document in writing; (iii) ceases to secure or guaranty the Secured Obligations in respect of the Secured Bank Creditors at any time amounts owing to the Permitted Noteholders are secured or guaranteed; or (iv) at any time other than during a Collateral Release Period, any Security Instrument after delivery thereof pursuant to Section 4.01 or 6.14 shall for any reason (other than pursuant to the terms thereof) cease to create a valid and perfected first priority Lien (subject to Liens permitted by Section 7.01) on the Collateral purported to be covered thereby; or

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(k)    Loss of Material Licenses, Permits or Intellectual Property. There occurs any of the following events the result of which has, or could reasonably be expected to have, a Material Adverse Effect: (i) any Governmental Authority revokes or fails to renew any license, permit or franchise of any Borrower or any of its Subsidiaries, (ii) any Borrower or any of its Subsidiaries for any reason loses any license, permit or franchise, or (iii) any Borrower or any of its Subsidiaries suffers the imposition of any restraining order, escrow, suspension or impound of funds in connection with any proceeding (judicial or administrative) with respect to any license, permit or franchise; or

(l)    Additional Guarantee and Collateral. (i) Any Subsidiary that is not a Guarantor provides a guarantee or (ii) the Company or any Subsidiary grants a Lien on any of its assets that are not Collateral, in each case, in favor of the Permitted Noteholders and fails to concurrently provide a guarantee or grant a Lien on such assets, as applicable, in favor the Administrative Agent or the Collateral Agent, as applicable, for the benefit of the other Secured Bank Creditors to secure the Secured Obligations; or

(m)    Change of Control. There occurs any Change of Control.

8.02    Remedies Upon Event of Default. If any Event of Default occurs and is continuing, the Administrative Agent shall, at the request of, or may, with the consent of, the Required Lenders, take any or all of the following actions:

(a)    upon written notice to the Borrowers, declare the commitment of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions to be terminated, whereupon such commitments and obligation shall be terminated;

(b)    declare the unpaid principal amount of all outstanding Loans, all interest accrued and unpaid thereon, and all other amounts owing or payable hereunder or under any other Loan Document to be immediately due and payable, without presentment, demand, protest or other notice of any kind, all of which are hereby expressly waived by each Borrower;

(c)    require that the Borrowers Cash Collateralize the L/C Obligations (in an amount equal to the Minimum Collateral Amount with respect thereto);

(d)    exercise on behalf of itself, the Lenders and the L/C Issuer all rights and remedies available to it, the Lenders and the L/C Issuer under the Loan Documents; and

(e)    direct the Collateral Agent in accordance with the Permitted Notes Intercreditor Agreement to exercise on behalf of the Secured Bank Creditors all rights and remedies available to the Secured Bank Creditors under the Security Instruments;

provided, however, that upon the occurrence of an actual or deemed entry of an order for relief with respect to any Borrower under the Bankruptcy Code of the United States, the obligation of each Lender to make Loans and any obligation of the L/C Issuer to make L/C Credit Extensions shall automatically terminate, the unpaid principal amount of all outstanding Loans and all interest and other amounts as aforesaid shall automatically become due and payable, the obligation of the Borrowers to Cash Collateralize the L/C Obligations as aforesaid shall automatically become effective, and all payment obligations under the Guaranty of each Guarantor shall automatically become due and payable, in each case without further act of the Administrative Agent or any Lender.

8.03    Application of Funds. At any time after the exercise of remedies provided for in Section 8.02 (or after the Loans have automatically become immediately due and payable and the L/C Obligations have automatically been required to be Cash Collateralized as set forth in the proviso to Section 8.02), any amounts received on account of the Secured Obligations shall, subject to the provisions of Sections 2.15 and 2.16 and, to the extent a Collateral Release Period is not in effect at such time, the terms of the Permitted Notes Intercreditor Agreement then in effect, be applied by the Administrative Agent in the following order:

First, to payment of that portion of the Secured Obligations constituting fees, indemnities, expenses and other amounts (including fees, charges and disbursements of counsel to the Administrative Agent and amounts payable under Article III) payable to the Administrative Agent in its capacity as such;

Second, to payment of that portion of the Secured Obligations constituting fees, indemnities and other amounts (other than principal, interest and Letter of Credit Fees and amounts payable in respect of Secured Hedge Agreements, Secured Cash Management Agreements and Secured Card Related Products Agreements) payable to the Lenders and the L/C Issuer (including fees, charges and disbursements of counsel to the respective Lenders and the L/C Issuer (including fees and time charges for

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attorneys who may be employees of any Lender or the L/C Issuer) and amounts payable under Article III), ratably among them in proportion to the respective amounts described in this clause Second payable to them;

Third, to payment of that portion of the Secured Obligations constituting accrued and unpaid Letter of Credit Fees and interest on the Loans, L/C Borrowings and other Secured Obligations, ratably among the Lenders and the L/C Issuer in proportion to the respective amounts described in this clause Third payable to them;

Fourth, to payment of that portion of the Secured Obligations constituting unpaid principal of the Loans, L/C Borrowings and Secured Obligations then owing under Secured Hedge Agreements, Secured Cash Management Agreements and Secured Card Related Products Agreements, ratably among the Lenders, the L/C Issuer, the Existing L/C Issuers, the Hedge Banks, the Cash Management Banks and the Card Related Products Banks in proportion to the respective amounts described in this clause Fourth held by them;

Fifth, to the Administrative Agent for the account of the L/C Issuer, to Cash Collateralize that portion of L/C Obligations comprised of the aggregate undrawn amount of Letters of Credit to the extent not otherwise Cash Collateralized by the Borrowers pursuant to Sections 2.03 and 2.15; and

Last, the balance, if any, after all of the Secured Obligations have been indefeasibly paid in full, to the Borrowers or as otherwise required by Law.

Subject to Sections 2.03(c) and 2.15, amounts used to Cash Collateralize the aggregate undrawn amount of Letters of Credit pursuant to clause Fifth above shall be applied to satisfy drawings under such Letters of Credit as they occur. If any amount remains on deposit as Cash Collateral after all Letters of Credit have either been fully drawn or expired, such remaining amount shall be applied to the other Secured Obligations, if any, in the order set forth above.

Notwithstanding the foregoing, Secured Obligations arising under Secured Cash Management Agreements, Secured Hedge Agreements and Secured Card Related Products Agreements shall be excluded from the application described above if the Administrative Agent has not received written notice thereof, together with such supporting documentation as the Administrative Agent may request, from the applicable Cash Management Bank, Hedge Bank or Card Related Products Bank, as the case may be. Each Cash Management Bank, Hedge Bank or Card Related Products Bank not a party to this Agreement that has given the notice contemplated by the preceding sentence shall, by such notice, be deemed to have acknowledged and accepted the appointment of the Administrative Agent pursuant to the terms of Article IX for itself and its Affiliates as if a “Lender” party hereto.

ARTICLE IX. ADMINISTRATIVE AGENT

9.01    Appointment and Authority. Each of the Lenders and the L/C Issuer hereby irrevocably appoints Bank of America to act on its behalf as the Administrative Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the L/C Issuer, and no Borrower shall have rights as a third party beneficiary of any of such provisions. It is understood and agreed that the use of the term “agent” herein or in any other Loan Documents (or any other similar term) with reference to the Administrative Agent is not intended to connote any fiduciary or other implied (or express) obligations arising under agency doctrine of any applicable Law. Instead such term is used as a matter of market custom, and is intended to create or reflect only an administrative relationship between contracting parties.

9.02    Rights as a Lender. The Person serving as the Administrative Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, own securities of, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with any Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to account therefor to the Lenders.

9.03    Exculpatory Provisions. The Administrative Agent shall not have any duties or obligations except those expressly set forth herein and in the other Loan Documents, and its duties hereunder shall be administrative in nature. Without limiting the generality of the foregoing, the Administrative Agent:

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(a)    shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing;

(b)    shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the Administrative Agent is required to exercise as directed in writing by the Required Lenders (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or applicable law, including for the avoidance of doubt any action that may be in violation of the automatic stay under any Debtor Relief Law or that may effect a forfeiture, modification or termination of property of a Defaulting Lender in violation of any Debtor Relief Law; and

(c)    shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and shall not be liable for the failure to disclose, any information relating to any Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in any capacity.

The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the Required Lenders (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as provided in Sections 10.01 and 8.02) or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final and nonappealable judgment. The Administrative Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given in writing to the Administrative Agent by the Company, a Lender or the L/C Issuer.

The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document, or the creation, perfection or priority of any Lien purported to be created by the Security Instruments, (v) the value or the sufficiency of any Collateral, or (vi) the satisfaction of any condition set forth in Article IV or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to the Administrative Agent.

9.04    Reliance by Administrative Agent. The Administrative Agent shall be entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance, extension, renewal or increase of a Letter of Credit, that by its terms must be fulfilled to the satisfaction of a Lender or the L/C Issuer, the Administrative Agent may presume that such condition is satisfactory to such Lender or the L/C Issuer unless the Administrative Agent shall have received notice to the contrary from such Lender or the L/C Issuer prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the Borrowers), independent accountants and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts.

9.05    Delegation of Duties. The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub‑agent, and shall apply to their respective activities in connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent. The Administrative Agent shall not be responsible for the negligence or misconduct of any sub-agents except to the extent that a court of competent jurisdiction determines in a final and non appealable judgment that the Administrative Agent acted with gross negligence or willful misconduct in the selection of such sub-agents.

9.06    Resignation of Administrative Agent.

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(a)    The Administrative Agent may at any time give notice of its resignation to the Lenders, the L/C Issuer and the Company. Upon receipt of any such notice of resignation, the Required Lenders shall have the right, in consultation with the Company and, so long as no Event of Default has occurred and is continuing, the consent of the Company (not to be unreasonably withheld), to appoint a successor, which shall be a bank with an office in the United States, or an Affiliate of any such bank with an office in the United States. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives notice of its resignation (or such earlier day as shall be agreed by the Required Lenders) (the “Resignation Effective Date”), then the retiring Administrative Agent may (but shall not be obligated to) on behalf of the Lenders and the L/C Issuer, appoint a successor Administrative Agent meeting the qualifications set forth above. Whether or not a successor has been appointed, such resignation shall become effective in accordance with such notice on the Resignation Effective Date.

(b)    If the Person serving as Administrative Agent is a Defaulting Lender pursuant to clause (d) of the definition thereof, the Required Lenders may, to the extent permitted by applicable law, by notice in writing to the Company and such Person remove such Person as Administrative Agent and, in consultation with the Company, appoint a successor. If no such successor shall have been so appointed by the Required Lenders and shall have accepted such appointment within 30 days (or such earlier day as shall be agreed by the Required Lenders) (the “Removal Effective Date”), then such removal shall nonetheless become effective in accordance with such notice on the Removal Effective Date.

(c)    With effect from the Resignation Effective Date or the Removal Effective Date (as applicable) (1) the retiring or removed Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the Administrative Agent on behalf of the Lenders or the L/C Issuer under any of the Loan Documents, the retiring or removed Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed) and (2) except for any indemnity payments or other amounts then owed to the retiring or removed Administrative Agent, all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and the L/C Issuer directly, until such time, if any, as the Required Lenders appoint a successor Administrative Agent as provided for above. Upon the acceptance of a successor's appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring (or removed) Administrative Agent (other than as provided in Section 3.01(g) and other than any rights to indemnity payments or other amounts owed to the retiring or removed Administrative Agent as of the Resignation Effective Date or the Removal Effective Date, as applicable), and the retiring or removed Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already discharged therefrom as provided above in this Section). The fees payable by the Borrowers to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrowers and such successor. After the retiring or removed Administrative Agent's resignation or removal hereunder and under the other Loan Documents, the provisions of this Article and Section 10.04 shall continue in effect for the benefit of such retiring or removed Administrative Agent, its sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring or removed Administrative Agent was acting as Administrative Agent.

(d)    Any resignation by Bank of America as Administrative Agent pursuant to this Section shall also constitute its resignation as L/C Issuer and Swing Line Lender. If Bank of America resigns as an L/C Issuer, it shall retain all the rights, powers, privileges and duties of the L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as L/C Issuer and all L/C Obligations with respect thereto, including the right to require the Lenders to make Base Rate Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c).  If Bank of America resigns as Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Loans or fund risk participations in outstanding Swing Line Loans pursuant to Section 2.04(c). Upon the appointment by the Company of a successor L/C Issuer or Swing Line Lender hereunder (which successor shall in all cases be a Lender other than a Defaulting Lender), (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer or Swing Line Lender, as applicable, (b) the retiring L/C Issuer and Swing Line Lender shall be discharged from all of their respective duties and obligations hereunder or under the other Loan Documents, and (c) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to Bank of America to effectively assume the obligations of Bank of America with respect to such Letters of Credit.

9.07    Non-Reliance on Administrative Agent and Other Lenders. Each Lender and the L/C Issuer acknowledges that it has, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Agreement. Each Lender and the L/C Issuer also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as

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it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

9.08    No Other Duties, Etc. Anything herein to the contrary notwithstanding, none of the Bookrunners, Arrangersor Co-Syndication Agents listed on the cover page hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or the L/C Issuer hereunder.

9.09    Administrative Agent May File Proofs of Claim.In case of the pendency of any proceeding under any Debtor Relief Law or any other judicial proceeding relative to any Loan Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on any Borrower) shall be entitled and empowered, by intervention in such proceeding or otherwise:

(a)    to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of the Loans, L/C Obligations and all other Secured Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders, the L/C Issuer and the Administrative Agent (including any claim for the reasonable compensation, expenses, disbursements and advances of the Lenders, the L/C Issuer and theAdministrative Agent and their respective agents and counsel and all other amounts due the Lenders, the L/C Issuer and the Administrative Agent under Sections 2.03(h) and (i), 2.09 and 10.04) allowed in such judicial proceeding; and

(b)    to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same;

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender and the L/C Issuer to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments directly to the Lenders and the L/C Issuer, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative Agent under Sections 2.09 and 10.04.

Nothing contained herein shall be deemed to authorize the Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender or the L/C Issuer any plan of reorganization, arrangement, adjustment or composition affecting the Secured Obligations or the rights of any Lender or the L/C Issuer to authorize the Administrative Agent to vote in respect of the claim of any Lender or the L/C Issuer in any such proceeding.

9.10    Collateral and Guaranty Matters.

(a)    Guaranty Matters. Without limiting the provisions of Section 9.09, each of the Lenders (including in its capacities as a potential Cash Management Bank, a potential Hedge Bank and a potential Card Related Products Bank), the L/C Issuer and the Swing Line Lender irrevocably authorize the Administrative Agent, at its option and in its discretion to release any Guarantor from its obligations under the Guaranty if such Person ceases to be a Subsidiary as a result of a transaction permitted under the Loan Documents. Upon request by the Administrative Agent at any time, the Required Lenders will confirm in writing the Administrative Agent's authority to release any Guarantor from its obligations under the Guaranty pursuant to this Section 9.10.

(b)    Collateral Matters.

(i)    The Administrative Agent, each of the Lenders (including in its capacities as a potential Cash Management Bank, a potential Hedge Bank and a potential Card Related Products Bank) and the L/C Issuer hereby irrevocably appoints and authorizes Bank of America to act as the collateral agent (in such capacity, the “Collateral Agent”) under the Loan Documents for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by any of the Loan Parties to secure any of the Secured Obligations, together with such powers and discretion as are reasonably incidental thereto. In this connection, the Collateral Agent and any co-agents, sub-agents and attorneys-in-fact appointed by the Collateral Agent for purposes of holding or enforcing any Lien on the Collateral (or any portion thereof) granted under the Security Instruments, or for exercising any rights and remedies thereunder at the direction of the Collateral Agent, shall be entitled to the benefits of all provisions of this Article IX and Article X (including Section 10.04(c), as though such co-agents, sub-agents and attorneys-in-fact were the Collateral Agent under the Loan Documents) as if set forth in full herein with respect thereto.

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(ii)    Each of the Lenders (including in its capacities as a potential Cash Management Bank, a potential Hedge Bank and a potential Card Related Products Bank) and the L/C Issuer hereby (A) consent to the terms of the Permitted Notes Intercreditor Agreement, (B) authorize the Administrative Agent to enter into the Permitted Notes Intercreditor Agreement on behalf of the Secured Bank Creditors, and (C) authorize the Collateral Agent to enter into the Permitted Notes Intercreditor Agreement on behalf of the Secured Parties.

(iii)    Without limiting the provisions of Section 9.09, the Administrative Agent, each of the Lenders (including in its capacities as a potential Cash Management Bank, a potential Hedge Bank and a potential Card Related Products Bank), the L/C Issuer and the Swing Line Lender irrevocably authorize the Collateral Agent, at its option and in its discretion:

(A)to release any Pledged Interest and any Lien on any property granted to or held by the Collateral Agent under any Loan Document (i) upon the occurrence of the Facility Termination Date subject to the Permitted Notes Intercreditor Agreement, (ii) that is sold or to be sold or otherwise disposed of as part of or in connection with any sale or disposition permitted hereunder or under any other Loan Document, (iii) as contemplated under Section 6.14(d) or (iv) subject to Section 10.01, if approved, authorized or ratified in writing by the Required Lenders subject to the Permitted Notes Intercreditor Agreement;

(B)to subordinate any Lien on any property granted to or held by the Collateral Agent under any Loan Document to the holder of any Lien on such property that is permitted by Section 7.01(i); and

(C)to acknowledge in writing, in form and substance satisfactory to the Collateral Agent, the priority of any Lien granted under any indemnity agreement or surety agreement in favor of a surety providing a bond to the Company and/or its Subsidiaries as permitted by Section 7.01(t) of this Agreement.

Upon request by the Collateral Agent at any time, the Required Lenders will confirm in writing the Collateral Agent's authority to release or subordinate its interest in particular types or items of property pursuant to this Section 9.10.

9.11    Secured Cash Management Agreements, Secured Hedge Agreements and Secured Card Related Products Agreements. Except as otherwise set forth herein, no Cash Management Bank, Hedge Bank or Card Related Products Bank who obtains the benefit of the provisions of Section 8.03, the Guaranty or any Collateral by virtue of the provisions hereof or any Security Instrument shall have any right to notice of any action or to consent to, direct or object to any action hereunder or under any other Loan Document or otherwise in respect of the Collateral (including the release or impairment of any Collateral) (or to notice of or to consent to any amendment, waiver or modification of the provisions hereof or of the Guaranty or any Security Instrument) other than in its capacity as a Lender and, in such case, only to the extent expressly provided in the Loan Documents. Notwithstanding any other provision of this Article IX to the contrary, the Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Secured Obligations arising under Secured Cash Management Agreements, Secured Hedge Agreements and Secured Card Related Products Agreements except to the extent expressly provided herein and unless the Administrative Agent has received written notice of such Secured Obligations, together with such supporting documentation as the Administrative Agent may request, from the applicable Cash Management Bank, Hedge Bank or Card Related Products Bank, as the case may be. The Administrative Agent shall not be required to verify the payment of, or that other satisfactory arrangements have been made with respect to, Secured Obligations arising under Secured Cash Management Agreements, Secured Hedge Agreements and Secured Card Related Products Agreements in the case of a Facility Termination Date.

ARTICLE X. MISCELLANEOUS

10.01    Amendments, Etc. Except as provided in Sections 1.07(b) and (c) and Section 2.14(b)(vi), no amendment or waiver of any provision of this Agreement or any other Loan Document, and no consent to any departure by any Borrower or any other Loan Party therefrom, shall be effective unless in writing signed by the Required Lenders and the Borrowers or the applicable Loan Party, as the case may be, and acknowledged by the Administrative Agent, and each such waiver or consent shall be effective only in the specific instance and for the specific purpose for which given; provided, however, that no such amendment, waiver or consent shall:

(a)    waive any condition set forth in Section 4.01(a) without the written consent of each Lender;

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(b)    extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 8.02) without the written consent of such Lender;

(c)    postpone any date fixed by this Agreement or any other Loan Document for any payment of principal, interest, fees or other amounts due to the Lenders (or any of them) hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby;

(d)    release any Borrower from its obligations hereunder or reduce the principal of, or the rate of interest specified herein on, any Loan or L/C Borrowing, or (subject to clause (iv) of the second proviso to this Section 10.01) any fees or other amounts payable hereunder or under any other Loan Document, or change the manner of computation of any financial ratio (including any change in any applicable defined term) used in determining the Applicable Rate that would result in a reduction of any interest rate on any Loan or any fee payable hereunder without the written consent of each Lender directly affected thereby; provided, however, that only the consent of the Required Lenders shall be necessary to amend the definition of “Default Rate” or to waive any obligation of the Borrowers to pay interest or Letter of Credit Fees at the Default Rate;

(e)    change Section 2.13 or Section 8.03 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender;

(f)    amend Section 1.06 or the definition of “Alternative Currency” without the written consent of each Lender;

(g)    change any provision of this Section or the definition of “Required Lenders” or any other provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender;

(h)    release all or substantially all of the value of the Guaranty without the written consent of each Lender, except to the extent the release of any Guarantor is permitted pursuant to Section 9.10 (in which case such release may be made by the Administrative Agent acting alone) or release the Company as a Guarantor of the Obligations of GCC or GILC; or

(i)    release all or substantially all of the Collateral in any transaction or series of related transactions without the written consent of each Lender, except to the extent the release of any Collateral is permitted pursuant to Section 9.10 (in which case such release may be made by the Collateral Agent acting alone);

and, providedfurther, that (i) no amendment, waiver or consent shall, unless in writing and signed by the L/C Issuer in addition to the Lenders required above, affect the rights or duties of the L/C Issuer under this Agreement or any Issuer Document relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Swing Line Lender in addition to the Lenders required above, affect the rights or duties of the Swing Line Lender under this Agreement; (iii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; and (iv) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto. Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder (and any amendment, waiver or consent which by its terms requires the consent of all Lenders or each affected Lender may be effected with the consent of the applicable Lenders other than Defaulting Lenders), except that (x) the Commitment of any Defaulting Lender may not be increased or extended without the consent of such Lender and (y) any waiver, amendment or modification requiring the consent of all Lenders or each affected Lender that by its terms affects any Defaulting Lender disproportionately adversely relative to other affected Lenders shall require the consent of such Defaulting Lender.

10.02    Notices; Effectiveness; Electronic Communication.

(a)    Notices Generally. Except in the case of notices and other communications expressly permitted to be given by telephone (and except as provided in subsection (b) below), all notices and other communications provided for herein shall be in writing and shall be delivered by hand or overnight courier service, mailed by certified or registered mail or sent by telecopier as follows, and all notices and other communications expressly permitted hereunder to be given by telephone shall be made to the applicable telephone number, as follows:

(i)     if to any Borrower or any other Loan Party to the address, telecopier number, electronic mail address or telephone number specified for the Company on Schedule 10.02, and if to the Administrative Agent, the Collateral

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Agent, the L/C Issuer or the Swing Line Lender, to the address, telecopier number, electronic mail address or telephone number specified for such Person on Schedule 10.02; and

(ii)    if to any other Lender, to the address, telecopier number, electronic mail address or telephone number specified in its Administrative Questionnaire (including, as appropriate, notices delivered solely to the Person designated by a Lender on its Administrative Questionnaire then in effect for the delivery of notices that may contain material non-public information relating to the Borrowers).

Notices and other communications sent by hand or overnight courier service, or mailed by certified or registered mail, shall be deemed to have been given when received; notices and other communications sent by telecopier shall be deemed to have been given when sent (except that, if not given during normal business hours for the recipient, shall be deemed to have been given at the opening of business on the next Business Day for the recipient). Notices and other communications delivered through electronic communications to the extent provided in subsection (b) below, shall be effective as provided in such subsection (b).

(b)    Electronic Communications. Notices and other communications to the Lenders and the L/C Issuer hereunder may be delivered or furnished by electronic communication (including e-mail and Internet or intranet websites) pursuant to procedures approved by the Administrative Agent, provided that the foregoing shall not apply to notices to any Lender or the L/C Issuer pursuant to Article II if such Lender or the L/C Issuer, as applicable, has notified the Administrative Agent that it is incapable of receiving notices under such Article by electronic communication. The Administrative Agent, the Swing Line Lender, the L/C Issuer or the Company may each, in its discretion, agree to accept notices and other communications to it hereunder by electronic communications pursuant to procedures approved by it, provided that approval of such procedures may be limited to particular notices or communications.

Unless the Administrative Agent otherwise prescribes, (i) notices and other communications sent to an e-mail address shall be deemed received upon the sender's receipt of an acknowledgement from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgement), and (ii) notices or communications posted to an Internet or intranet website shall be deemed received upon the deemed receipt by the intended recipient at its e-mail address as described in the foregoing clause (i) of notification that such notice or communication is available and identifying the website address therefor; provided that, for both clauses (i) and (ii), if such notice or other communication is not sent during the normal business hours of the recipient, such notice, email or communication shall be deemed to have been sent at the opening of business on the next business day for the recipient.

(c)    The Platform. THE PLATFORM IS PROVIDED “AS IS” AND “AS AVAILABLE.” THE AGENT PARTIES (AS DEFINED BELOW) DO NOT WARRANT THE ACCURACY OR COMPLETENESS OF THE BORROWER MATERIALS OR THE ADEQUACY OF THE PLATFORM, AND EXPRESSLY DISCLAIM LIABILITY FOR ERRORS IN OR OMISSIONS FROM THE BORROWER MATERIALS. NO WARRANTY OF ANY KIND, EXPRESS, IMPLIED OR STATUTORY, INCLUDING ANY WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT OF THIRD PARTY RIGHTS OR FREEDOM FROM VIRUSES OR OTHER CODE DEFECTS, IS MADE BY ANY AGENT PARTY IN CONNECTION WITH THE BORROWER MATERIALS OR THE PLATFORM. In no event shall the Administrative Agent or any of its Related Parties (collectively, the “Agent Parties”) have any liability to any Borrower, any Lender, the L/C Issuer or any other Person for losses, claims, damages, liabilities or expenses of any kind (whether in tort, contract or otherwise) arising out of any Borrower's, any Loan Party's or the Administrative Agent's transmission of Borrower Materials through the Internet, except to the extent that such losses, claims, damages, liabilities or expenses are determined by a court of competent jurisdiction by a final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Agent Party; provided, however, that in no event shall any Agent Party have any liability to any Borrower, any Lender, the L/C Issuer or any other Person for indirect, special, incidental, consequential or punitive damages (as opposed to direct or actual damages).

(d)    Change of Address, Etc. Each of the Company, the Administrative Agent, the L/C Issuer and the Swing Line Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the other parties hereto. Each other Lender may change its address, telecopier or telephone number for notices and other communications hereunder by notice to the Company, the Administrative Agent, the L/C Issuer and the Swing Line Lender. In addition, each Lender agrees to notify the Administrative Agent from time to time to ensure that the Administrative Agent has on record (i) an effective address, contact name, telephone number, telecopier number and electronic mail address to which notices and other communications may be sent and (ii) accurate wire instructions for such Lender. Furthermore, each Public Lender agrees to cause at least one individual at or on behalf of such Public Lender to at all times have selected the “Private Side Information” or similar designation on the content declaration screen of the Platform in order to enable such Public Lender or its delegate, in accordance with such Public Lender's compliance procedures and applicable Law, including United States

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Federal and state securities Laws, to make reference to Borrower Materials that are not made available through the “Public Side Information” portion of the Platform and that may contain material non-public information with respect to a Borrower or its securities for purposes of United States Federal or state securities laws.

(e)    Reliance by Administrative Agent, L/C Issuer and Lenders.The Administrative Agent, the L/C Issuer and the Lenders shall be entitled to rely and act upon any notices (including telephonic or electronic Revolving Loan Notices, Letter of Credit Applications and Swing Line Loan Notices) purportedly given by or on behalf of the Company or the Borrowers even if (i) such notices were not made in a manner specified herein, were incomplete or were not preceded or followed by any other form of notice specified herein, or (ii) the terms thereof, as understood by the recipient, varied from any confirmation thereof. Each Borrower shall indemnify the Administrative Agent, the L/C Issuer, each Lender and the Related Parties of each of them from all losses, costs, expenses and liabilities resulting from the reliance by such Person on each notice purportedly given by or on behalf of the Company or the Borrowers. All telephonic notices to and other telephonic communications with the Administrative Agent may be recorded by the Administrative Agent, and each of the parties hereto hereby consents to such recording.

10.03    No Waiver; Cumulative Remedies; Enforcement. No failure by any Lender, the L/C Issuer or the Administrative Agent to exercise, and no delay by any such Person in exercising, any right, remedy, power or privilege hereunder or under any other Loan Document shall operate as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege. The rights, remedies, powers and privileges herein provided, and provided under each other Loan Document, are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.

Notwithstanding anything to the contrary contained herein or in any other Loan Document, the authority to enforce rights and remedies hereunder and under the other Loan Documents against the Loan Parties or any of them shall be vested exclusively in, and all actions and proceedings at law in connection with such enforcement shall be instituted and maintained exclusively by, the Administrative Agent in accordance with Section 8.02 for the benefit of all the Lenders and the L/C Issuer; provided, however, that the foregoing shall not prohibit (a) the Administrative Agent from exercising on its own behalf the rights and remedies that inure to its benefit (solely in its capacity as Administrative Agent) hereunder and under the other Loan Documents, (b) the L/C Issuer or the Swing Line Lender from exercising the rights and remedies that inure to its benefit (solely in its capacity as L/C Issuer or Swing Line Lender, as the case may be) hereunder and under the other Loan Documents, (c) any Lender from exercising setoff rights in accordance with Section 10.08 (subject to the terms of Section 2.13), or (d) any Lender from filing proofs of claim or appearing and filing pleadings on its own behalf during the pendency of a proceeding relative to any Loan Party under any Debtor Relief Law; and provided, further, that if at any time there is no Person acting as Administrative Agent hereunder and under the other Loan Documents, then (i) the Required Lenders shall have the rights otherwise ascribed to the Administrative Agent pursuant to Section 8.02 and (ii) in addition to the matters set forth in clauses (b), (c) and (d) of the preceding proviso and subject to Section 2.13, any Lender may, with the consent of the Required Lenders, enforce any rights and remedies available to it and as authorized by the Required Lenders.

10.04    Expenses; Indemnity; Damage Waiver.

(a)    Costs and Expenses. The Company shall pay (i) all reasonable out-of-pocket expenses incurred by the Administrative Agent and its Affiliates (including the reasonable fees, charges and disbursements of one firm of counsel for the Administrative Agent, the Collateral Agent and Arranger, taken as a whole, and of such local and special counsel as reasonably required), in connection with the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by the L/C Issuer in connection with the issuance, amendment, renewal or extension of any Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred by the Administrative Agent, the Collateral Agent, any Lender or the L/C Issuer (including the fees, charges and disbursements of (x) one firm of counsel for the Administrative Agent, the Collateral Agent, the Lenders and the L/C Issuer, taken as a whole, and, in the event of a conflict or perceived conflict of interest, one additional firm of counsel to all Persons affected thereby, taken as a whole, and of special and local counsel as reasonably required, and (y) any financial advisor for the Administrative Agent, any Lender or the L/C Issuer), in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its rights under this Section, or (B) in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters of Credit.

(b)    Indemnification by the Borrowers. Each Borrower shall indemnify the Administrative Agent (and any sub-agent thereof), each Lender and the L/C Issuer, and each Related Party of any of the foregoing Persons (each such Person being

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called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (including the fees, charges and disbursements of one firm of counsel for all Indemnitees, taken as a whole, and, in the event of a conflict or perceived conflict of interest, one additional firm of counsel to all persons affected thereby, taken as a whole, and of special and local counsel as reasonably required), incurred by any Indemnitee or asserted against any Indemnitee by any Person (including any Borrower or any other Loan Party) other than such Indemnitee and its Related Parties arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder, the consummation of the transactions contemplated hereby or thereby, or, in the case of the Administrative Agent (and any sub-agent thereof) and its Related Parties only, the administration of this Agreement and the other Loan Documents (including in respect of any matters addressed in Section 3.01), (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by the L/C Issuer to honor a demand for payment under a Letter of Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or release of Hazardous Materials on or from any property owned or operated by any Borrower or any of its Subsidiaries, or any Environmental Liability related in any way to any Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by any Borrower or any other Loan Party, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence, willful misconduct or breach in bad faith of its obligations hereunder or under any other Loan Document of such Indemnitee or (y) result from a claim of any Indemnitee solely against one or more other Indemnitees (and not by one or more Indemnitees against the Administrative Agent, Collateral Agent or Arranger in such capacity) that have not resulted from the action, inaction, participation or contribution of the Company or any of its Subsidiaries or any of its or their respective Affiliates, officers, directors, employees, agents, advisors or other representatives. Without limiting the provisions of Section 3.01(c), this Section 10.04(b) shall not apply with respect to Taxes other than any Taxes that represent losses, claims, damages, etc. arising from any non-Tax claim.

(c)    Reimbursement by Lenders. To the extent that the Borrowers for any reason fail to indefeasibly pay any amount required under subsection (a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof), the L/C Issuer, the Swing Line Lender or any Related Party of any of the foregoing, each Lender severally agrees to pay to the Administrative Agent (or any such sub-agent), the L/C Issuer, the Swing Line Lender or such Related Party, as the case may be, such Lender's pro rata share (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought based on each Lender's share of the unused Commitments, aggregate principal amount of outstanding Revolving Loans and participations in L/C Obligations and Swing Line Loans at such time) of such unpaid amount (including any such unpaid amount in respect of a claim asserted by such Lender), such payment to be made severally among them based on such Lender's Applicable Percentage (determined as of the time that the applicable unreimbursed expense or indemnity payment is sought), provided, further that, the unreimbursed expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent (or any such sub-agent), the L/C Issuer or the Swing Line Lender in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent), the L/C Issuer or the Swing Line Lender in connection with such capacity. The obligations of the Lenders under this subsection (c) are subject to the provisions of Section 2.12(d).

(d)    Waiver of Consequential Damages, Etc. To the fullest extent permitted by applicable law, the Borrowers shall not assert, and hereby waive, and acknowledge that no other Person shall have, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee referred to in subsection (b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed to such unintended recipients by such Indemnitee through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby other than for direct or actual damages resulting from the gross negligence or willful misconduct of such Indemnitee as determined by a final and nonappealable judgment of a court of competent jurisdiction.

(e)    Payments. All amounts due under this Section shall be payable not later than ten Business Days after demand therefor.

(f)    Survival. The agreements in this Section and the indemnity provisions of Section 10.02(e) shall survive the resignation of the Administrative Agent, the L/C Issuer and the Swing Line Lender, the replacement of any Lender, the termination of the Aggregate Commitments and the repayment, satisfaction or discharge of all the other Obligations.

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10.05    Payments Set Aside. To the extent that any payment by or on behalf of the Borrowers is made to the Administrative Agent, the L/C Issuer or any Lender, or the Administrative Agent, the L/C Issuer or any Lender exercises its right of setoff, and such payment or the proceeds of such setoff or any part thereof is subsequently invalidated, declared to be fraudulent or preferential, set aside or required (including pursuant to any settlement entered into by the Administrative Agent, the L/C Issuer or such Lender in its discretion) to be repaid to a trustee, receiver or any other party, in connection with any proceeding under any Debtor Relief Law or otherwise, then (a) to the extent of such recovery, the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such setoff had not occurred, and (b) each Lender and the L/C Issuer severally agrees to pay to the Administrative Agent upon demand its applicable share (without duplication) of any amount so recovered from or repaid by the Administrative Agent, plus interest thereon from the date of such demand to the date such payment is made at a rate per annum equal to the applicable Overnight Rate from time to time in effect, in the applicable currency of such recovery or payment. The obligations of the Lenders and the L/C Issuer under clause (b) of the preceding sentence shall survive the payment in full of the Obligations and the termination of this Agreement.

10.06    Successors and Assigns.

(a)    Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted hereby, except that no Borrower may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an Eligible Assignee in accordance with the provisions of subsection (b) of this Section, (ii) by way of participation in accordance with the provisions of subsection (d) of this Section, or (iii) by way of pledge or assignment of a security interest subject to the restrictions of subsection (f) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in subsection (d) of this Section and, to the extent expressly contemplated hereby, the Related Parties of each of the Administrative Agent, the L/C Issuer and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement.

(b)    Assignments by Lenders. Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans (including for purposes of this subsection (b), participations in L/C Obligations and in Swing Line Loans) at the time owing to it); provided that any such assignment shall be subject to the following conditions:

(i)    Minimum Amounts.

(A)    in the case of an assignment of the entire remaining amount of the assigning Lender's Commitment and the Loans at the time owing to it or contemporaneous assignments to related Approved Funds that equal at least the amount specified in paragraph (b)(i)(B) of this Section in the aggregate in the case of an assignment to a Lender, an Affiliate of a Lender or an Approved Fund, no minimum amount need be assigned; and

(B)    in any case not described in subsection (b)(i)(A) of this Section, the aggregate amount of the Commitment (which for this purpose includes Loans outstanding thereunder) or, if the Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment, determined as of the date the Assignment and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date, shall not be less than $5,000,000unless the Administrative Agent otherwise consents (such consent not to be unreasonably withheld or delayed).

(ii)    Proportionate Amounts. Each partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender's rights and obligations under this Agreement with respect to the Loans or the Commitment assigned, except that this clause (ii) shall not apply to rights in respect of the Swing Line Lender's rights and obligations in respect of Swing Line Loans;

(iii)    Required Consents. No consent shall be required for any assignment except to the extent required by subsection (b)(i)(B) of this Section and, in addition:

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(A)    the consent of the Company (such consent not to be unreasonably withheld or delayed) shall be required (1) if such assignment is to a Person that is engaged in similar lines of business of the Company (as reasonably determined by the Company) and (2) for all other assignments unless (x) an Event of Default has occurred and is continuing at the time of such assignment or (y) such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund; provided that the Company shall be deemed to have consented to any such assignment unless it shall object thereto by written notice to the Administrative Agent within five (5) Business Days after having received written notice thereof;

(B)    the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required if such assignment is to a Person that is not a Lender, an Affiliate of such Lender or an Approved Fund with respect to such Lender;

(C)    the consent of the L/C Issuer (such consent not to be unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the assignee to participate in exposure under one or more Letters of Credit (whether or not then outstanding); and

(D)the consent of the Swing Line Lender (such consent not to be unreasonably withheld or delayed) shall be required for any assignment.

(iv)    Assignment and Assumption. The parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee in the amount of $3,500; provided, however, that the Administrative Agent may, in its sole discretion, elect to waive such processing and recordation fee in the case of any assignment. The assignee, if it is not a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire.

(v)No Assignment to Certain Persons. No such assignment shall be made (A) to any Borrower or any of any Borrower's Affiliates or Subsidiaries, or (B) to any Defaulting Lender or any of its Subsidiaries, or any Person who, upon becoming a Lender hereunder, would constitute any of the foregoing Persons described in this clause (B), or (C) to a natural person.

(vi)Certain Additional Payments. In connection with any assignment of rights and obligations of any Defaulting Lender hereunder, no such assignment shall be effective unless and until, in addition to the other conditions thereto set forth herein, the parties to the assignment shall make such additional payments to the Administrative Agent in an aggregate amount sufficient, upon distribution thereof as appropriate (which may be outright payment, purchases by the assignee of participations or subparticipations, or other compensating actions, including funding, with the consent of the Company and the Administrative Agent, the applicable pro rata share of Loans previously requested but not funded by the Defaulting Lender, to each of which the applicable assignee and assignor hereby irrevocably consent), to (x) pay and satisfy in full all payment liabilities then owed by such Defaulting Lender to the Administrative Agent, the L/C Issuer or any Lender hereunder (and interest accrued thereon) and (y) acquire (and fund as appropriate) its full pro rata share of all Loans and participations in Letters of Credit and Swing Line Loans in accordance with its Applicable Percentage. Notwithstanding the foregoing, in the event that any assignment of rights and obligations of any Defaulting Lender hereunder shall become effective under applicable Law without compliance with the provisions of this paragraph, then the assignee of such interest shall be deemed to be a Defaulting Lender for all purposes of this Agreement until such compliance occurs.

Subject to acceptance and recording thereof by the Administrative Agent pursuant to subsection (c) of this Section, from and after the effective date specified in each Assignment and Assumption, the assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an Assignment and Assumption covering all of the assigning Lender's rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Sections 3.01, 3.04, 3.05, and 10.04 with respect to facts and circumstances occurring prior to the effective date of such assignment; provided, that except to the extent otherwise expressly agreed by the affected parties, no assignment by a Defaulting Lender will constitute a waiver or release of any claim of any party hereunder arising from that Lender's having been a Defaulting Lender. Upon request, the Borrowers (at their expense) shall execute and deliver a Note to the assignee Lender. Any assignment or transfer by a Lender of rights or obligations under this Agreement that does not comply with this subsection shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with subsection (d) of this Section.

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(c)    Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrowers (and such agency being solely for tax purposes), shall maintain at the Administrative Agent's Office a copy of each Assignment and Assumption delivered to it (or the equivalent thereof in electronic form) and a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts (and stated interest) of the Loans and L/C Obligations owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive absent manifest error, and the Borrowers, the Administrative Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. In addition, the Administrative Agent shall maintain on the Register information regarding the designation, and revocation of any designation, of any Lender as a Defaulting Lender. The Register shall be available for inspection by the Borrowers and any Lender, at any reasonable time and from time to time upon reasonable prior notice.

(d)    Participations. Any Lender may at any time, without the consent of, or notice to, the Company or the Administrative Agent, sell participations to any Person (other than a natural Person, a Defaulting Lender or any Borrower or any Borrower's Affiliates or Subsidiaries) (each, a “Participant”) in all or a portion of such Lender's rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans (including such Lender's participations in L/C Obligations and/or Swing Line Loans) owing to it); provided that (i) such Lender's obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrowers, the Administrative Agent, the Lenders and the L/C Issuer shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations under this Agreement. For the avoidance of doubt, each Lender shall be responsible for the indemnity under Section 10.04(c) without regard to the existence of any participation.

Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, waiver or other modification described in the first proviso to Section 10.01 that affects such Participant. Each Borrower agrees that each Participant shall be entitled to the benefits of Sections 3.01, 3.04 and 3.05to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to subsection (b) of this Section (it being understood that the documentation required under Section 3.01(e) shall be delivered to the Lender who sells the participation) to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to paragraph (b) of this Section; provided that such Participant (A) agrees to be subject to the provisions of Sections 3.06 and 10.13 as if it were an assignee under paragraph (b) of this Section and (B) shall not be entitled to receive any greater payment under Sections 3.01 or 3.04, with respect to any participation, than the Lender from whom it acquired the applicable participation would have been entitled to receive, except to the extent such entitlement to receive a greater payment results from a Change in Law that occurs after the Participant acquired the applicable participation. Each Lender that sells a participation agrees, at the Borrowers' request and expense, to use reasonable efforts to cooperate with the Borrowers to effectuate the provisions of Section 3.06 with respect to any Participant. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 10.08as though it were a Lender; provided that such Participant agrees to be subject to Section 2.13as though it were a Lender. Each Lender that sells a participation shall, acting solely for this purpose as a non-fiduciary agent of the Borrowers, maintain a register on which it enters the name and address of each Participant and the principal amounts (and stated interest) of each Participant's interest in the Loans or other obligations under the Loan Documents (the “Participant Register”); provided that no Lender shall have any obligation to disclose all or any portion of the Participant Register (including the identity of any Participant or any information relating to a Participant's interest in any commitments, loans, letters of credit or its other obligations under any Loan Document) to any Person except to the extent that such disclosure is necessary to establish that such commitment, loan, letter of credit or other obligation is in registered form under Section 5f.103-1(c) of the United States Treasury Regulations. The entries in the Participant Register shall be conclusive absent manifest error, and such Lender shall treat each Person whose name is recorded in the Participant Register as the owner of such participation for all purposes of this Agreement notwithstanding any notice to the contrary. For the avoidance of doubt, the Administrative Agent (in its capacity as Administrative Agent) shall have no responsibility for maintaining a Participant Register.

(e)    Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement (including under its Note, if any) to secure obligations of such Lender, including any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations hereunder or substitute any such pledgee or assignee for such Lender as a party hereto.

(f)    Resignation as L/C Issuer or Swing Line Lender after Assignment. Notwithstanding anything to the contrary contained herein, if at any time Bank of America assigns all of its Commitment and Loans pursuant to subsection (b) above, Bank of America may, (i) upon 30 days' notice to the Company and the Lenders, resign as L/C Issuer and/or (ii) upon 30 days' notice to the Company, resign as Swing Line Lender. In the event of any such resignation as L/C Issuer or Swing Line Lender,

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the Borrowers shall be entitled to appoint from among the Lenders a successor L/C Issuer or Swing Line Lender hereunder; provided, however, that no failure by the Borrower to appoint any such successor shall affect the resignation of Bank of America as L/C Issuer or Swing Line Lender, as the case may be. If Bank of America resigns as L/C Issuer, it shall retain all the rights, powers, privileges and duties of the L/C Issuer hereunder with respect to all Letters of Credit outstanding as of the effective date of its resignation as L/C Issuer and all L/C Obligations with respect thereto (including the right to require the Lenders to make Base Rate Revolving Loans or fund risk participations in Unreimbursed Amounts pursuant to Section 2.03(c)). If Bank of America resigns as Swing Line Lender, it shall retain all the rights of the Swing Line Lender provided for hereunder with respect to Swing Line Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Lenders to make Base Rate Revolving Loans or fund risk participations in outstanding Swing Line Loans pursuant to Section 2.04(c). Upon the appointment of a successor L/C Issuer and/or Swing Line Lender, (a) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring L/C Issuer or Swing Line Lender, as the case may be, and (b) the successor L/C Issuer shall issue letters of credit in substitution for the Letters of Credit, if any, outstanding at the time of such succession or make other arrangements satisfactory to Bank of America to effectively assume the obligations of Bank of America with respect to such Letters of Credit.

10.07    Treatment of Certain Information; Confidentiality. Each of the Administrative Agent, the Lenders and the L/C Issuer agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its Affiliates and to its Related Parties (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to the extent required or requested by any regulatory authority purporting to have jurisdiction over such Person or its Related Parties (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by applicable laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies hereunder or under any other Loan Document or any action or proceeding relating to this Agreement or any other Loan Document or the enforcement of rights hereunder or thereunder, (f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any assignee of or Participant in, or any prospective assignee of or Participant in, any of its rights and obligations under this Agreement or any Eligible Assignee invited to be a Lender pursuant to Section 2.14(b)(iii) or 2.14(c)(iii) or (ii) any actual or prospective party (or its Related Parties) to any swap, derivative or other transaction under which payments are to be made by reference to any Borrower and its obligations, this Agreement or payments hereunder, (g) on a confidential basis to (i) any rating agency in connection with rating any Borrower or its Subsidiaries or the credit facilities provided hereunder or (ii) the CUSIP Service Bureau or any similar agency in connection with the issuance and monitoring of CUSIP numbers or other market identifiers with respect to the credit facilities provided hereunder, (h) with the consent of the Borrowers or (i) to the extent such Information (x) becomes publicly available other than as a result of a breach of this Section or (y) becomes available to the Administrative Agent, any Lender, the L/C Issuer or any of their respective Affiliates on a nonconfidential basis from a source other than a Borrower. For purposes of this Section, “Information” means all information received from any Borrower or any Subsidiary relating to any Borrower or any Subsidiary or any of their respective businesses, other than any such information that is available to the Administrative Agent, any Lender or the L/C Issuer on a nonconfidential basis prior to disclosure by any Borrower or any Subsidiary, provided that, in the case of information received from any Borrower or any Subsidiary after the date hereof, such information is clearly identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information.

Each of the Administrative Agent, the Lenders and the L/C Issuer acknowledges that (a) the Information may include material non-public information concerning a Borrower or a Subsidiary, as the case may be, (b) it has developed compliance procedures regarding the use of material non-public information and (c) it will handle such material non-public information in accordance with applicable Law, including United States Federal and state securities Laws.

10.08    Right of Setoff. If an Event of Default shall have occurred and be continuing, each Lender, the L/C Issuer and each of their respective Affiliates is hereby authorized at any time and from time to time, after obtaining the prior written consent of the Administrative Agent, to the fullest extent permitted by applicable law, to set off and apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, the L/C Issuer or any such Affiliate to or for the credit or the account of the Borrowers against any and all of the obligations of the Borrowers now or hereafter existing under this Agreement or any other Loan Document to such Lender or the L/C Issuer or their respective Affiliates, irrespective of whether or not such Lender, the L/C Issuer or Affiliate shall have made any demand under this Agreement or any other Loan Document and although such obligations of the Borrowers may be contingent or unmatured or are owed to a branch, office or Affiliate of such Lender or the L/C Issuer different from the branch, office or Affiliate holding such deposit or obligated on such indebtedness; provided, that in the event that any Defaulting Lender shall exercise any such right of setoff, (x) all amounts so set off shall be paid over immediately to the Administrative Agent for further application in accordance with the provisions of Section 2.16 and, pending

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such payment, shall be segregated by such Defaulting Lender from its other funds and deemed held in trust for the benefit of the Administrative Agent, the L/C Issuer and the Lenders, and (y) the Defaulting Lender shall provide promptly to the Administrative Agent a statement describing in reasonable detail the Secured Obligations owing to such Defaulting Lender as to which it exercised such right of setoff. The rights of each Lender, the L/C Issuer and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, the L/C Issuer or their respective Affiliates may have. Each Lender and the L/C Issuer agrees to notify the Company and the Administrative Agent promptly after any such setoff and application, provided that the failure to give such notice shall not affect the validity of such setoff and application.

10.09    Interest Rate Limitation. Notwithstanding anything to the contrary contained in any Loan Document, the interest paid or agreed to be paid under the Loan Documents shall not exceed the maximum rate of non-usurious interest permitted by applicable Law (the “Maximum Rate”). If the Administrative Agent or any Lender shall receive interest in an amount that exceeds the Maximum Rate, the excess interest shall be applied to the principal of the Loans or, if it exceeds such unpaid principal, refunded to the Borrowers. In determining whether the interest contracted for, charged, or received by the Administrative Agent or a Lender exceeds the Maximum Rate, such Person may, to the extent permitted by applicable Law, (a) characterize any payment that is not principal as an expense, fee, or premium rather than interest, (b) exclude voluntary prepayments and the effects thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal parts the total amount of interest throughout the contemplated term of the Obligations hereunder.

10.10    Counterparts; Integration; Effectiveness. This Agreement may be executed in counterparts (and by different parties hereto in different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. This Agreement and the other Loan Documents constitute the entire contract among the parties relating to the subject matter hereof and supersede any and all previous agreements and understandings, oral or written, relating to the subject matter hereof. Except as provided in Section 4.01, this Agreement shall become effective when it shall have been executed by the Administrative Agent and when the Administrative Agent shall have received counterparts hereof that, when taken together, bear the signatures of each of the other parties hereto. Delivery of an executed counterpart of a signature page of this Agreement by telecopy or other electronic imaging means shall be effective as delivery of a manually executed counterpart of this Agreement.

10.11    Survival of Representations and Warranties.All representations and warranties made hereunder and in any other Loan Document or other document delivered pursuant hereto or thereto or in connection herewith or therewith shall survive the execution and delivery hereof and thereof. Such representations and warranties have been or will be relied upon by the Administrative Agent and each Lender, regardless of any investigation made by the Administrative Agent or any Lender or on their behalf and notwithstanding that the Administrative Agent or any Lender may have had notice or knowledge of any Default at the time of any Credit Extension, and shall continue in full force and effect as long as any Loan or any other Obligation hereunder shall remain unpaid or unsatisfied or any Letter of Credit shall remain outstanding.

10.12    Severability. If any provision of this Agreement or the other Loan Documents is held to be illegal, invalid or unenforceable, (a) the legality, validity and enforceability of the remaining provisions of this Agreement and the other Loan Documents shall not be affected or impaired thereby and (b) the parties shall endeavor in good faith negotiations to replace the illegal, invalid or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the illegal, invalid or unenforceable provisions. The invalidity of a provision in a particular jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. Without limiting the foregoing provisions of this Section 10.12, if and to the extent that the enforceability of any provisions in this Agreement relating to Defaulting Lenders shall be limited by Debtor Relief Laws, as determined in good faith by the Administrative Agent, the L/C Issuer or the Swing Line Lender, as applicable, then such provisions shall be deemed to be in effect only to the extent not so limited.

10.13    Replacement of Lenders. If the Borrowers are entitled to replace a Lender pursuant to the provisions of Section 3.06, orif any Lender is a Defaulting Lender or a Non-Consenting Lender, then the Company may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 10.06), all of its interests, rights (other than its existing rights to payments pursuant to Sections 3.01 and 3.04) and obligations under this Agreement and the related Loan Documents to an Eligible Assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment), provided that:

(a)    the Borrowers shall have paid to the Administrative Agent the assignment fee (if any) specified in Section 10.06(b);

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(b)    such Lender shall have received payment of an amount equal to 100% of the outstanding principal of its Loans and L/C Advances, accrued interest thereon, accrued fees and all other amounts payable to it hereunder and under the other Loan Documents (including any amounts under Section 3.05) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrowers (in the case of all other amounts);

(c)    in the case of any such assignment resulting from a claim for compensation under Section 3.04 or payments required to be made pursuant to Section 3.01, such assignment will result in a reduction in such compensation or payments thereafter;

(d)    such assignment does not conflict with applicable Laws; and

(e)    in the case of an assignment resulting from a Lender becoming a Non-Consenting Lender, the applicable assignee shall have consented to the applicable amendment, waiver or consent.

A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrowers to require such assignment and delegation cease to apply.

10.14    Governing Law; Jurisdiction; Etc.

(a)    GOVERNING LAW. This Agreement and the other Loan Documents and any claims, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Agreement or any other Loan Document (except, as to any other Loan Document, as expressly set forth therein) and the transactions contemplated hereby and thereby shall be governed by, and construed in accordance with, the law of the State of CALIFORNIA.

(b)    SUBMISSION TO JURISDICTION. EACH BORROWER IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE NONEXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF CALIFORNIASITTING IN THE CITY AND COUNTY OF SAN FRANCISCO AND OF THE UNITED STATES DISTRICT COURT OF THE NORTHERN DISTRICT OF CALIFORNIA, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH CALIFORNIA STATE COURT OR, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. NOTHING IN THIS AGREEMENT OR IN ANY OTHER LOAN DOCUMENT SHALL AFFECT ANY RIGHT THAT THE ADMINISTRATIVE AGENT, ANY LENDER OR THE L/C ISSUER MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AGAINST ANY BORROWER OR ITS PROPERTIES IN THE COURTS OF ANY JURISDICTION.

(c)    WAIVER OF VENUE. EACH BORROWER IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY COURT REFERRED TO IN PARAGRAPH (b) OF THIS SECTION. EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR PROCEEDING IN ANY SUCH COURT.

(d)    SERVICE OF PROCESS. EACH PARTY HERETO IRREVOCABLY CONSENTS TO SERVICE OF PROCESS IN THE MANNER PROVIDED FOR NOTICES IN SECTION 10.02. NOTHING IN THIS AGREEMENT WILL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY APPLICABLE LAW.

10.15    Arbitration and Waiver of Jury Trial.

(a)    This Section concerns the resolution of any controversies or claims between the parties, whether arising in contract, tort or by statute, including but not limited to controversies or claims that arise out of or relate to: (i) this Agreement (including any renewals, extensions or modifications); or (ii) any document related to this Agreement (collectively a “Claim”). For the purposes of this arbitration provision only, the term “parties” shall include any parent corporation, subsidiary or affiliate

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of the Lender involved in the servicing, management or administration of the Obligations or any other obligation described in this Agreement.

(b)    At the request of any party to this Agreement, any Claim shall be resolved by binding arbitration in accordance with the Federal Arbitration Act (Title 9, U.S. Code) (the “Act”). The Act will apply even though this Agreement provides that it is governed by the law of a specified state. The arbitration will take place on an individual basis without resort to any form of class action.

(c)    Arbitration proceedings will be determined in accordance with the Act, the then-current rules and procedures for the arbitration of financial services disputes of the American Arbitration Association or any successor thereof (“AAA”), and the terms of this Section. In the event of any inconsistency, the terms of this Section shall control. If AAA is unwilling or unable to (i) serve as the provider of arbitration or (ii) enforce any provision of this arbitration clause, the Lender may designate another arbitration organization with similar procedures to serve as the provider of arbitration.

(d)    The arbitration shall be administered by AAA and conducted, unless otherwise required by law, in the State of California. All Claims shall be determined by one arbitrator; however, if Claims exceed $5,000,000, upon the request of any party, the Claims shall be decided by three arbitrators. All arbitration hearings shall commence within ninety (90) days of the demand for arbitration and close within ninety (90) days of commencement and the award of the arbitrator(s) shall be issued within thirty (30) days of the close of the hearing. However, the arbitrator(s), upon a showing of good cause, may extend the commencement of the hearing for up to an additional sixty (60) days. The arbitrator(s) shall provide a concise written statement of reasons for the award. The arbitration award may be submitted to any court having jurisdiction to be confirmed, judgment entered and enforced.

(e)    The arbitrator(s) will give effect to statutes of limitation in determining any Claim and may dismiss the arbitration on the basis that the Claim is barred. For purposes of the application of the statute of limitations, the service on AAA under applicable AAA rules of a notice of Claim is the equivalent of the filing of a lawsuit. Any dispute concerning this arbitration provision or whether a Claim is arbitrable shall be determined by the arbitrator(s). The arbitrator(s) shall have the power to award legal fees pursuant to the terms of this Agreement.

(f)    This Section does not limit the right of any party to: (i) exercise self-help remedies, such as but not limited to, setoff; (ii) initiate judicial or non-judicial foreclosure against any real or personal property collateral; (iii) exercise any judicial or power of sale rights; or (iv) act in a court of law to obtain an interim remedy, such as but not limited to, injunctive relief, writ of possession or appointment of a receiver, or additional or supplementary remedies.

(g)    The filing of a court action is not intended to constitute a waiver of the right of any party, including the suing party, thereafter to require submittal of the Claim to arbitration.

(h)    BY AGREEING TO BINDING ARBITRATION, THE PARTIES IRREVOCABLY AND VOLUNTARILY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM. FURTHERMORE, WITHOUT INTENDING IN ANY WAY TO LIMIT THIS AGREEMENT TO ARBITRATE, TO THE EXTENT ANY CLAIM IS NOT ARBITRATED, THE PARTIES IRREVOCABLY AND VOLUNTARILY WAIVE ANY RIGHT THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF SUCH CLAIM. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES ENTERING INTO THIS AGREEMENT.

10.16    California Judicial Reference. If any action or proceeding is filed in a court of the State of California by or against any party hereto in connection with any of the transactions contemplated by this Agreement or any other Loan Document, (a) the court shall, and is hereby directed to, make a general reference pursuant to California Code of Civil Procedure Section 638 to a referee (who shall be a single active or retired judge) to hear and determine all of the issues in such action or proceeding (whether of fact or of law) and to report a statement of decision; provided that at the option of any party to such proceeding, any such issues pertaining to a “provisional remedy” as defined in California Code of Civil Procedure Section 1281.8 shall be heard and determined by the court, and (b) without limiting the generality of Section 10.04, the Borrowers shall be solely responsible to pay all fees and expenses of any referee appointed in such action or proceeding.

10.17    No Advisory or Fiduciary Responsibility.In connection with all aspects of each transaction contemplated hereby (including in connection with any amendment, waiver or other modification hereof or of any other Loan Document), each Borrower acknowledges and agrees, and acknowledges its Affiliates' understanding, that: (i) (A) the arranging and other services regarding this Agreement provided by the Administrative Agent, the Arranger and the Lenders are arm's-length commercial transactions between each Borrower and itsAffiliates, on the one hand, and the Administrative Agent, the Arranger and the Lenders, on the other hand, (B) each Borrower has consulted its own legal, accounting, regulatory and tax advisors to

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the extent it has deemed appropriate, and (C) each Borrower is capable of evaluating, and understands and accepts, the terms, risks and conditions of the transactions contemplated hereby and by the other Loan Documents; (ii) (A) the Administrative Agent, the Arranger and each Lender is and has been acting solely as a principal and, except as expressly agreed in writing by the relevant parties, has not been, is not, and will not be acting as an advisor, agent or fiduciary for any Borrower or any of its Affiliates, or any other Person and (B) neither the Administrative Agent, the Arranger nor any Lender has any obligation to any Borroweror any of its Affiliates with respect to the transactions contemplated hereby except those obligations expressly set forth herein and in the other Loan Documents; and (iii) the Administrative Agent, the Arranger and the Lenders and their respective Affiliates may be engaged in a broad range of transactions that involve interests that differ from those of each Borrower and its Affiliates, and neither the Administrative Agent, the Arranger nor any Lender has any obligation to disclose any of such interests to any Borrower or its Affiliates. To the fullest extent permitted by law, each Borrower hereby waives and releases any claims that it may have against the Administrative Agent, the Arranger or any Lender with respect to any breach or alleged breach of agency or fiduciary duty in connection with any aspect of any transaction contemplated hereby; provided that the foregoing shall not be deemed to release Bank of America from any obligations expressly set forth herein.

10.18    Electronic Execution of Assignments and Certain Other Documents.The words “execute,” “execution,” “signed,” “signature,” and words of like import in any Assignment and Assumption or in any amendment or other modification hereof (including waivers and consents) shall be deemed to include electronic signatures, the electronic matching of assignment terms and contract formations on electronic platforms approved by the Administrative Agent, or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.

10.19    USA PATRIOT Act. Each Lender that is subject to the Act (as hereinafter defined) and the Administrative Agent (for itself and not on behalf of any Lender) hereby notifies each Borrower that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies each Borrower, which information includes the name and address of such Borrower and other information that will allow such Lender or the Administrative Agent, as applicable, to identify such Borrower in accordance with the Act. Each Borrower shall, promptly following a request by the Administrative Agent or any Lender, provide all documentation and other information that the Administrative Agent or such Lender requests in order to comply with its ongoing obligations under applicable “know your customer” and anti-money laundering rules and regulations, including the Act.

10.20    Judgment Currency. If, for the purposes of obtaining judgment in any court, it is necessary to convert a sum due hereunder or any other Loan Document in one currency into another currency, the rate of exchange used shall be that at which in accordance with normal banking procedures the Administrative Agent could purchase the first currency with such other currency on the Business Day preceding that on which final judgment is given. The obligation of the Borrowers in respect of any such sum due from it to the Administrative Agent or the L/C Issuer hereunder or under the other Loan Documents shall, notwithstanding any judgment in a currency (the “Judgment Currency”) other than that in which such sum is denominated in accordance with the applicable provisions of this Agreement (the “Agreement Currency”), be discharged only to the extent that on the Business Day following receipt by the Administrative Agent or the L/C Issuer, as the case may be, of any sum adjudged to be so due in the Judgment Currency, the Administrative Agent or the L/C Issuer, as the case may be, may in accordance with normal banking procedures purchase the Agreement Currency with the Judgment Currency. If the amount of the Agreement Currency so purchased is less than the sum originally due to the Administrative Agent or the L/C Issuer from the Borrowers in the Agreement Currency, each Borrower agrees, as a separate obligation and notwithstanding any such judgment, to indemnify the Administrative Agent or the L/C Issuer, as the case may be, against such loss. If the amount of the Agreement Currency so purchased is greater than the sum originally due to the Administrative Agent or the L/C Issuer in such currency, the Administrative Agent or the L/C Issuer, as the case may be, agrees to return the amount of any excess to the Borrowers (or to any other Person who may be entitled thereto under applicable law).

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above written.

GRANITE CONSTRUCTION INCORPORATED

By: /s/ Laurel J. Krzeminski

Name: Laurel J. Krzeminski

Title: VP and CFO

By: /s/ Jigisha Desai

Name: Jigisha Desai

Title: VP Treasurer

GRANITE CONSTRUCTION COMPANY

By: /s/ Laurel J. Krzeminski

Name: Laurel J. Krzeminski

Title: VP and CFO

By: /s/ Jigisha Desai

Name: Jigisha Desai

Title: VP Treasurer

GILC INCORPORATED

By: /s/ Laurel J. Krzeminski

Name: Laurel J. Krzeminski

Title: President and CEO

By: /s/ Jigisha Desai

Name: Jigisha Desai

Title: VP and CFO

Granite Construction Incorporated

Amended and Restated Credit Agreement

Signature Page

BANK OF AMERICA, N.A., as

Administrative Agent and Collateral Agent

By: /s/ Bridgett J. Manduk

Name: Bridgett J. Manduk

Title: Assistant Vice President

Granite Construction Incorporated

Amended and Restated Credit Agreement

Signature Page

BANK OF AMERICA, N.A., as a Lender, Swing Line Lender and L/

C Issuer

By: /s/ G Scott Lambert

Name: G Scott Lambert

Title: Vice President

Granite Construction Incorporated

Amended and Restated Credit Agreement

Signature Page

BANK OF THE WEST

By: /s/ Kathy Rosner-Galitz

Name: Kathy Rosner-Galitz

Title: Senior Vice President

Granite Construction Incorporated

Amended and Restated Credit Agreement

Signature Page

BMO HARRIS BANK N.A.

By: /s/ Jennifer Guidi

Name: Jennifer Guidi

Title: Director

Granite Construction Incorporated

Amended and Restated Credit Agreement

Signature Page

COMPASS BANK

By: /s/ Mark Sunderland

Name: Mark Sunderland

Title: Senior Vice President

Granite Construction Incorporated

Amended and Restated Credit Agreement

Signature Page

COMERICA BANK

By: /s/ Steve Clear

Name: Steve Clear

Title: Vice President

Granite Construction Incorporated

Amended and Restated Credit Agreement

Signature Page

UNION BANK, N.A.

By: /s/ J. William Bloore

Name: J. William Bloore

Title: Senior Vice President

Granite Construction Incorporated

Amended and Restated Credit Agreement

Signature Page

U.S. BANK NATIONAL ASSOCIATION

By: /s/ Mark D. Rogers

Name: Mark D. Rogers

Title: Assistant Vice President

Granite Construction Incorporated

Amended and Restated Credit Agreement

Signature Page

1.01(e)

EXISTING LETTERS OF CREDIT

L/C NO.	ORIGINAL ISSUE DATE	BENEFICIARY	EXPIRY DATE	AMOUNT
1171	6/29/1996	State of California Self Insurance Plans State of California Worker's Compensation	3/15/2013	$	220,000.00
3114971	11/17/2010	Valley Forge Insurance Company and/or Transportation Insurance Co. Paid Loss Deduction Program	10/1/2012	$	3,990,400.00

S-1

SCHEDULE 1.01(g)

GUARANTORS

Granite Construction Company, a California corporation

GILC Incorporated, a California corporation

Granite Construction Northeast, Inc., a New York corporation

Intermountain Slurry Seal, Inc., a Wyoming corporation

S-2

SCHEDULE 2.01

COMMITMENTS

AND APPLICABLE PERCENTAGES

Lender	Commitment	Applicable Percentage
Bank of America, N.A.	$35,000,000.00	16.27906977%
Bank of the West	$32,500,000.00	15.11627907%
Compass Bank	$32,500,000.00	15.11627907%
BMO Harris Bank N.A.	$30,000,000.00	13.95448837%
Comerica Bank	$30,000,000.00	13.95448837%
U.S. Bank National Association	$30,000,000.00	13.95448837%
Union Bank, N.A.	$25,000,000.00	11.62790698%
Total:	$215,000,000.00	100%

S-3

SCHEDULE 5.05(d)

PROJECT DEBT

Entity's Name	Lender	Interest	Terms	Maturity	Balance as of 6/30/12
McCormick Woods	Washington Federal	4.5%	Development Loan, interest accrued to principal, due on maturity	2/28/2013	10,439,163
Summer Sycamore	Preston State Bank	6%	Interest only, payable monthly, principal due at maturity	1/6/2014	921,492
GLC-Lake Goodwin Assemblage	Whidbey Island Bank	7%	Monthly Interest plus quarterly amortized payments	1/30/2015	4,284,128
GLC-Lake Goodwin Assemblage	Washington Federal	3.75%	Interest only. Paid to 12/31/2012	12/31/2012	3,769,275
GLC-Lake Goodwin Assemblage	Washington Federal	4%	Interest only. Paid to 12/31/2012	12/31/2012	1,593,475
Subtotal - Consolidated Entities Project Debt					$	21,007,533
Realty Capital Belmont	Park Cities Bank	4.25%	2014 maturity with 3 1-yr ext. options (to 2017) with cumulative principal reduction requirements to extend. Monthly interest payments required	12/28/2014	16,731,206
Realty Capital Argyle	Northstar Bank	6.5%	Interest pre-funded and scheduled principal payment required each year	7/27/2016	2,460,894
Realty Capital Argyle	Northstar Bank	6.5%	Interest pre-funded and scheduled principal payment required each year	7/27/2016	1,414,895
Highpoint Oaks	First United Bank	6%	Interest pre-funded and scheduled principal payment required each year	5/26/2014	4,176,433
Granite Regional Park	Rabobank	6.04%	Principal & interest payable monthly, fully amortized	1/5/2018	14,060,391
Granite Regional Park	Bank of Sacramento	7%	Principal & interest payable monthly, fully amortized	10/6/2012	20,445
Granite Regional Park	ING	4.85%	Principal & interest payable monthly, fully amortized	1/1/2023	14,381,747
Granite Regional Park	SAC County	6.19%	Semi-annual principal and interest (BOND)	9/1/2022	3,085,117
XS Ranch	Steiner Family	7%	Interest only, payable quarterly, principal due at maturity	12/19/2014	10,000,000
Subtotal - Nonconsolidated Limited Partnerships Project Debt					$	66,331,118
Total Debt, GLC Investees					$	87,338,651

S-4

SCHEDULE 5.06

LITIGATION

• Grand Avenue Project DBE Issues: On March 6, 2009, the U.S. Department of Transportation, Office of Inspector General (“OIG”) served upon our wholly-owned subsidiary, Granite Construction Northeast, Inc. (“Granite Northeast”), a United States District Court Eastern District of New York subpoena to testify before a grand jury by producing documents. The subpoena seeks all documents pertaining to the use of a DBE firm (the “Subcontractor”), and the Subcontractor's use of a non-DBE lower tier subcontractor/consultant, on the Grand Avenue Bus Depot and Central Maintenance Facility for the Borough of Queens Project, a Granite Northeast project.  The subpoena also seeks any documents regarding the use of the Subcontractor as a DBE on any other projects and any other documents related to the Subcontractor or to the lower-tier subcontractor/consultant.  We have received two follow-up requests from the USDOJ for additional information and documents.  We have complied with the subpoena and the requests, and are fully cooperating with the OIG's investigation. To date, Granite Northeast has not been notified that it is either a subject or target of the OIG's investigation. Accordingly, we do not know whether any criminal charges or civil lawsuits will be brought against any party as a result of the investigation. We cannot, however, rule out the possibility of civil or criminal actions or administrative sanctions being brought against Granite Northeast.

S-5

SCHEDULE 5.09

ENVIRONMENTAL MATTERS

Granite Construction in the normal course of business utilizes petroleum (hydrocarbon) products which maybe 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 ofoperations have the potential of creating exposure to environmental clean up requirements. All undergroundtanks meet current requirements. There are no pending governmental ordered clean up requirements.However, the following represents estimates based on construction industry housekeeping practices asencountered during our normal course of business.

Locations	Amount
4115 E Illinois, Tucson AZ	$	10,000
401 East Railroad, Huacuca City, AZ	25,000
9301 S. Swan Road, Tucson AZ	25,000
10000 W. Tangerine Road, Marana AZ	25,000
21541 Highway 223, Arvin CA	25,000
Five Bridges Road, Bishop CA	25,000
3000 James Road, Bakersfield CA	25,000
Highway 120 East 3 miles, Lee Vining CA	25,000
7010 East Ave "T" ,Littlerock CA	25,000
213 E. Avenue M, Lancaster, CA 93535	10,000
999 Mission Rock Road, Santa Paula, CA 93060	25,000
10000 Brown Road, Inyokern CA	25,000
715 Comstock Street, Santa Clara, CA	25,000
200 Via De Mercados, Concord, CA	35,000
1544 Stanley Blvd, Pleasanton, CA	25,000
2829 Monterey Road, San Jose CA 95111	25,000
3800 Bassett Street, Santa Clara, CA 95054	25,000
Baker Flats Industrial Park, 5497 Enterprise Dr. East, Lot 1 of Douglas County, Wenatchee, WA	25,000
41921 Best Frontage Rd., Baker City, OR 97814	25,000
135 Tidyman Road, Dallesport, WA	25,000
1430 Dell Avenue, Walla Walla, WA	25,000
1073 Hwy 97, Ellensburg, WA	25,000
18208A SE 1st, Camas Vancouver, WA	25,000
2090 Robertson Dr., Richland, WA	10,000
81500 Lind Rd., Hermiston, OR	25,000
5665 Nelpar Drive, E. Wenatchee, WA	10,000
5278 Hwy 17 N, Moses Lake, WA	25,000
3819 NW Westgate Drive, Pendleton, OR	10,000
1080 N. Oregon Street, Pasco, WA	25,000
249-B Rodeo Trail Road, Omak, WA	25,000
60 Pond Road, Yakima, WA 0r 80 Pond Road	25,000
38940 Highway 33, Coalinga CA	25,000
Fresno, CA	10,000
Ducor, CA	25,000
22101 Sunset Avenue, Los Banos CA	25,000
66th Street, Lubbock, TX	25,000
1418 Route 9D, Fishkill NY (Wappinger Falls)	10,000
1800 Felton Quarry Road, Felton, CA	35,000
1161 Abbott Street, Salinas CA	200,000
721 Work Street, Salinas, CA	25,000

S-6

600 W. Beach Street, Watsonville, CA	35,000
Arcata, 1540 Giuntoli Lane, Arcata CA	265,000
Kelseyville Plant, 3550 Big Valley, Rd. Kelseyville CA	1,208,792
North State Street, 4201 N State Street, Ukiah CA (No Further Action Letter Received - Working on Deed Restriction to close property)	—
Capital City, NV	10,000
I-80 Exit 21, Lockwood NV	35,000
1900 Glendale Avenue, Sparks NV	25,000
555 Highland Ranch Parkway, Sparks, NV	15,000
440 East Axton Rd., Bellingham, WA 98226	125,000
3876 Hannegan Road, Bellingham, WA 989226	25,000
4001 Bradshaw Road, Sacramento CA	25,000
15560 County Road 87, Esparto, CA	35,000
Elkhorn Asphalt Plant - 900 W. Elkhorn Road, Rio Linda CA	25,000
12300 White Rock Road, Sacramento CA	10,000
4714 Pacific Heights Road, Oroville, CA	25,000
5335 Debbie Road - Santa Barbara Ca	25,000
400 South Hwy 1010, Buellton CA	25,000
2095 Hwy 111, El Centro CA	25,000
38155 Monroe Street , Indio CA	25,000
Jimenez, CA	25,000
7451 Mojave Road, 29 Palms CA	25,000
10500 S. Harlan Road, French Camp CA	25,000
Tracy Pit - 30909 S. Tracy Blvd., Tracy CA	25,000
900 N to 1100 N Warm Springs Rd, Salt Lake City UT	35,000
6901 Wasatch Blvd., Salt Lake City UT	25,000
HWY 89, Wasatch County UT	10,000
1123 N. Warm Springs Rd, Salt Lake City	10,000
South of 31st Street, Ogden, UT	772,200
Willard County UT	10,000
1555 South 1900 W, West Haven UT	25,000
	$	4,340,992

S-7

SCHEDULE 5.13(a)

SUBSIDIARIES AND OTHER EQUITY INVESTMENTS

Granite Construction Company (“GCC”)	California	C Corp	GCI	100%	Investor
ABC Marine L.L.C.	LA	LLC	GCC	41%	Manager
Ames-Granite Joint Venture	MN	JV	GCC	50%	Partner
Audubon Bridge Constructors, a Joint Venture	LA	JV	GCC .	25%	Partner
California Corridor Constructors, a Joint Venture	CA	JV	GCC	30%	Partner
Copper Hills Constructors, a Joint Venture	DE	JV	GCC	45%	Manager
Eastside Corridor Constructors	WA	JV	GCC	60%	Sponsor
FCI Constructors/Granite, A Joint Venture	CA	JV	GCC	60%	Partner
Gateway Constructors	CA	JV	GCC	50%	Sponsor
GCC/MCM, A Joint Venture	CA	JV	GCC	70.4%	Sponsor
Granite-Archer Western, a Joint Venture	MS	JV	GCC	60%	Manager
Granite-McCrossan	MN	JV	GCC	60%	Manager
Granite-Myers-Rados, A Joint Venture	CA	JV	GCC	55%	Sponsor
Granite Northwest, Inc.	WA	C Corp	GCC	100%	Investor
Granite/PCL, A Joint Venture	FL	JV	GCC	60%	Manager
Granite/Rizzani de Eccher, A Joint Venture	FL	JV	GCC	60%	Sponsor
Granite Hensel Phelps JV (Prison Hospitals)	DE	JV	GCC	24.2	Partner
Hensel Phelps-Granite JV (Mamizu)	DE	JV	GCCG	49	Partner
Hensel Phelps Granite Hangar Joint Venture        (Hangar Project - Miramar Naval Air Station)	DE	JV	GCC	25	Partner
Hill Country Constructors	TX	JV	GCC	70%	Sponsor
Houston Rapid Transit, a Joint Venture	TX	JV	GCC	33%	Manager
Intercounty Constructors	MD	JV	GCC	55%	Manager
Largo Constructors (LGS), A Joint Venture	MD	JV	GCC	30%	Partner
Las Vegas Monorail Team	NV	JV	GCC	44.8%	Partner
Market Street Constructors	PA	JV	GCC	69%	Sponsor
Minnesota Transit Constructors	MN	JV	GCC	56.5%	Sponsor
Old Pueblo Trackworks (ARRA - Tucson Modern Streetcar Project)	CA	JV	GCC .	80%	Managing
Pulice-Granite JV	AZ	JV	GCC	25%	Member
Raleigh-Durham Roadbuilders	SC	JV	GCC	40%	Partner
Riverside Motorsports Park, LLC		LLC	GCC	2.5%	Member
South Corridor Constructors, (A Joint Venture)	OR	JV	GCC	25%	Partner
SSP Holding LLC	DE	LLC	GCC	Variable	Member
TGM Constructors	KY	JV	GCC	25%	Partner
Thermwest Development, LLC		LLC	GCC	9.8%	Member
Tri-County Rail Constructors, A Joint Venture	FL	JV	GCC	30%	Partner
Virginia Approach Constructors	VA	JV	GCC	79%	Sponsor
Wasatch Constructors, A Joint Venture	UT	JV	GCC	57%	Partner
Washington County Constructors	UT	JV	GCC	40%	Partner
Weber County Constructors	UT	JV	GCC	75%	Manager
Yaquina River Constructors, A Joint Venture	OR	JV	GCC	99%	Manager
Granite Construction International	CA	C Corp	GCI	100%	Investor
Granite Construction Company Guam	GU	C Corp	GC Int'l	100%	Investor
Granite Construction Northeast, Inc.	NY	C Corp	GCI	100%	Investor
Granite Halmar-Fujitec America A Joint Venture	NY	JV	GNE	44.9%	Manager
Granite-Traylor-Frontier Joint Venture	NY	JV	GNE	42.5%	Manager
Phoenix Constructors	NY	JV	GNE	20%	Partner
Schiavone-Granite Halmar, A Joint Venture	NY	JV	GNE	40%	Partner
Skanska/Granite/Skanska JV	NY	JV	GNE	20%	Partner
Granite Land Company	CA	C Corp	GCI	100%	Investor
GGV Greenwood, LLC	CA	LLC	GLC	91.98%	Manager
GGV Missouri Flat, LLC	CA	LLC	GLC	91.22%	Manager

S-8

GLC Argyle 114, Ltd.	TX	LP	GLC	99.8%	Class A LP
Realty Capital Argyle 114, Ltd.	TX	LP	GLC Argyle 114, Ltd	48%	LP
GLC Belmont, Ltd.	TX	LP	GLC	99.8%	Class A LP
Realty Capital Belmont, Ltd.	TX	LP	GLC Belmont, Ltd.	41.67%	LP
Belmont 407, LLC	TX	LLC	Realty capital Belmont, Ltd.	95.39%	Member
GLC/EPC McCormick Woods, LLC	WA	LLC	GLC	99.9%	Manager
GEM1, LLC	WA	LLC	GLC/EPC M	70%	Manager
GLC/Foothill Monterey, LLC	CA	LLC	GLC	99%	Manager
GLC/Foothill Monterey II, LLC	CA	LLC	GLC	99%	Manager
GLC Fort Worth, LLC	TX	LLC	GLC	100%	Sole Member
Presidio Vista I, Ltd.	TX	LP	GLC Fort Worth, LLC	89%	LP
GLC Hometown Apartments, Ltd.	TX	LP	GLC	99.89%	Class A LP
Hometown Urban Partners, Ltd.	TX	LP	GLC Hometown Apts., Ltd.	49.9%	LP
GLC-LGA, LLC	WA	LLC	GLC	100%	Sole Member
LGAJV, LLC	WA	LLC	GLC-LGA, LLC	64.38%	Manager
GLC/LP Rancho Road, LLC	CA	LLC	GLC	99%	Manager
GLC Summer Creek, LLC	TX	LLC	GLC	100%	Sole Member
Summer Sycamore I, Ltd.	TX	LP	GLC	89%	LP
GLC Vista Crossroads, LLC	TX	LLC	GLC	100%	LP
Vista Crossroads I, Ltd.	TX	LP	GLC	89%	LP
Granite Grado Ventures, LLC	CA	LLC	GLC	100%	Sole Member
Granite Grado Ventures Project I, LLC	CA	LLC	Granite Grado Vent's, LLC	100%	Manager
Granite Grado Ventures Project II, LLC	CA	LLC	GLC	89.4%	Manager
Granite/PBC Pajaro, LLC	CA	LLC	GLC	62.26%	Manager
Highpoint Oaks, Ltd.	TX	LP	GLC	76.2	LP
Lodi Victor Ventures, LLC	CA	LLC	GLC	91.1%	Manager
Main Street Ventures, LLC	CA	LLC	GLC	99.9%	Manager
Main Street Ventures-Project II, LLC	CA	LLC	Main Street Ventures, LLC	100%	Sole Member
RCP Belmont, Ltd.       (Note: Entity has interest in Realty Capital Belmont, Ltd. - See listing under GLC Belmont, Ltd., above)	TX	LP	GLC	17.8%	Class A LP
Regional Park Limited Partnership	CA	LP	GLC	25%	LP
XS Ranch Fund VI, L.P.	DE	LP	GLC	5.58%	LP
Granite SR 91 Corporation	CA	C Corp	GCI	100%
Granite SR 91, LP	CA	LP	GCI	99%
Intermountain Slurry Seal, Inc.	WY	C Corp	GCI	100%
Paramount-Nevada Asphalt Company, LLC	NV	LLC	GCI	50%
Pozzolan Products Company (P.P.C.)	UT	C Corp	GCI	100%

S-9

SCHEDULE 5.13(b)

PERMITTED NOTES GUARANTORS

Granite Construction Company, a California corporation

Intermountain Slurry Seal, Inc., a Wyoming corporation

GILC Incorporated, a California corporation

Granite Construction Northeast, Inc., a New York corporation

S-10

SCHEDULE 5.16

INTELLECTUAL PROPERTY MATTERS

None.

S-11

SCHEDULE 7.01

EXISTING LIENS

Debtor	Lien Holder	Property	Maturity	Balance as of
				July 31, 2012
Granite Construction Company	Anderson/Watson	Williard UT Property	12/15/2019	$	114,864.32
Granite Construction Company	Linda Watson	Williard UT Property	12/22/2019	71,092.14
Granite Construction Company	Anchorage Sand & Gravel Co.	Hot Plant	9/30/2012	750,000.00
				$	935,956
				June 30, 2012
McCormick Woods	Washington Federal	Project Debt Property	2/28/2013	10,439,163
Summer Sycamore	Preston State Bank	Project Debt Property	1/6/2014	921,492
GLC-Lake Goodwin Assemblage	Whidbey Island Bank	Project Debt Property	1/30/2015	4,284,128
GLC-Lake Goodwin Assemblage	Washington Federal	Project Debt Property	12/31/2012	3,769,275
GLC-Lake Goodwin Assemblage	Washington Federal	Project Debt Property	12/31/2012	1,593,475
Realty Capital Belmont	Park Cities Bank	Project Debt Property	7/18/2011	16,731,206
Realty Capital Argyle	Northstar Bank	Project Debt Property	7/27/2016	2,460,894
Realty Capital Argyle	Northstar Bank	Project Debt Property	7/27/2016	1,414,895
Highpoint Oaks	First United Bank	Project Debt Property	5/26/2014	4,176,433
Granite Regional Park	Rabobank	Project Debt Property	1/5/2018	14,060,381
Granite Regional Park	Bank of Sacramento	Project Debt Property	10/6/2012	20,445
Granite Regional Park	ING	Project Debt Property	1/1/2023	14,381,747
Granite Regional Park	SAC County	Project Debt Property (Bond)	9/1/2022	3,085,117
XS Ranch	Steiner Family	Project Debt Property	12/19/2014	10,000,000
				$	87,338,651
Granite Construction Incorporated, Granite Construction Company, Granite Land Company, Intermountain Slurry Seal, Inc., GILC, L.P., Granite Construction Northeast, Inc., Granite Northwest, Inc., Pozzolan Products Company (P.P.C.)	Federal Insurance Company, Travelers Casualty and Surety Company, Zurich American Insurance Company	Liens and other security interests granted by the Borrower and/or its Subsidiaries in favor of a surety arising under any Indemnity Agreement or surety agreement entered into in the Ordinary Course of Business in connection with construction-related performance bonds	As provided in Surety Agreement
				$	88,274,607

S-12

SCHEDULE 7.02(a)

EXISTING INVESTMENTS

Company	Descriptions	Book
		July 31, 2012
Paramount-Nevada Asphalt	LLP	$	10,005,781
		$	10,005,781
		July 31, 2012
ABC Marine	Joint Venture	209,100
Halmar/Egis	Joint Venture	12,770,626
Market Street	Joint Venture	5,576,643
Vaginia Approach	Joint Venture	4,902,778
Granite Myers/Rados	Joint Venture	19,313,625
Hill Country Constructors	Joint Venture	9,310,000
Audubon Bridge Constructors	Joint Venture	6,250,000
Skanska, GCN, Skanska Builders	Joint Venture	4,000,000
Eastside Corridor Constructors	Joint Venture	7,500,000
SSP Holdings	Joint Venture	2,416,335
Hensel Phelps - Granite Miramar Hangars	Joint Venture	50,000
Hensel Phelps - Granite Guam (Mamizu)	Joint Venture	241,793
		$	72,540,900
Granite Land Company	Descriptions	Book
		May 31, 2012
Granite Grado II	LLC	371,335
McCormick Woods	LLC	18,658,468
Summer Creek	LLC	5,438,892
Rancho Road	LLC	570,293
GGV Greenwood	LLC	405,517
Missouri Flat Road	LLC	1,006,795
LGAJV, LLC	LLC	(1,168,817		)
Highpoint Oaks	LP	1,914,853
Belmont - Including Investment II in RCP Belmont	LP	7,089,382
Argyle 114	LP	2,329,408
GLC Hometown Apartments	LP	88,600
XS Ranch	LP	2,130,484
		$	38,835,210

S-13

SCHEDULE 7.02(b)

INVESTMENT POLICY

Purpose

This Policy establishes the guidelines for the investment of Company funds. These investments provide earnings on Company funds, while maintaining liquidity and working capital for present and future operations. This Policy does not cover investments held in deferred compensation or in other retirement plans.

Scope

The scope of this Policy pertains to Granite Construction Incorporated and its managed entities (“Granite”).

Definitions/Background

N/A

Responsibilities

The Audit Committee must approve any changes to this Policy. The Policy will be reviewed by the Treasury annually and revised as needed.

Policy

1. The following Investment Objectives have been established (in order of preference) when making Working Capital and Escrow Portfolio Investments.

1.1    Safety - The primary objective is the protection of capital. Each investment transaction shall seek to first ensure

that capital losses are avoided, whether they are from securities defaults or erosion of market value.

1.2    Liquidity - The investment portfolio must be structured in a manner that will provide sufficient liquidity to pay

the obligations of the Company. Any excess cash above the aforementioned requirements may be invested in

nstruments with longer maturities.

1.3    Diversification - The investment activity must ensure diversification of investments to minimize risk in any one

security and/or issuer.

1.4    Investment Return - The Company seeks to maximize the return on all investments.

2. Duration

2.1      The duration of the portfolio shall be consistent with the cash needs of Granite.

2.2      All working capital investments are limited to an average maturity of one (1) year from date of settlement.

2.3    Any investment with maturities longer than one year must be invested in instruments issued, guaranteed, or

insured by the U.S. Government or any of its Agencies, Municipal Bonds, and/or Corporate Bonds as specified

in the attached Investment Matrix for Working Capital and Escrow Portfolios.

2.4     The average maturity of the escrow portfolio and escrow deposit agreements shall not exceed five (5) years.

3. Marketability

3.1    Holdings should be of sufficient size and held in issues which are traded actively to facilitate transactions at

minimum cost and provide accurate market valuations.

4. Authorized Traders

4.1 The following individuals are authorized traders:

4.1.1    Jigisha Desai, V.P. /Treasurer

4.1.2    Kathleen Schreckengost, Treasury Manager

4.1.3    Sandra Anderson, Senior Treasury Analyst

4.1.4    Kim Parker, Senior Treasury Analyst

5. Authorized Dealers and Banks for Trading

5.1 The following institutions are authorized dealers:

5.1.1        Comerica Bank

5.1.2        Bank of America

5.1.3        Bank of the West

5.1.4        BBVA Compass Bank

5.1.5        U.S. Bank

5.1.6        Merrill Lynch (a subsidiary of Bank of America)

5.1.7        Morgan Stanley (a subsidiary of Citigroup)

5.1.8        Wells Fargo Bank

S-14

5.1.9        Union Banc (a subsidiary of Union Bank)

6. Custody of Securities

6.1     All working capital fixed income investments will be delivered to Union Bank for safekeeping.

6.2    All money market funds are authorized to hold investments in custody on behalf of the Company.

6.3    The Company will not take physical possession of investment securities.

6.4    Each financial institution must provide timely confirmation/safekeeping receipts on all transactions and provide

monthly transaction reports.

7. Escrow Portfolio (Securities held in escrow in lieu of retention)

7.1 Escrows in lieu of retention are allowed at the following institutions:

7.1.1        Comerica Bank

7.1.2        Bank of America

7.1.3        Bank of the West

7.1.4        Nevada Highway Fund (State of Nevada Treasury)

7.1.5        Union Bank

7.1.6        U.S. Bank Trust

7.1.7        Wells Fargo Bank

7.1.8        Sun Trust Bank

7.2 The types of investments will be guided by the terms of the escrow and the owners' requirements, but in all cases the investment will be governed by this Policy.

7.3 Money Market investments for escrows are determined and funded by the owners.

7.4 Banks not listed, but required by the escrow agreement and deemed creditworthy, will also be acceptable.

8.    Approvals

8.1 Any individual transaction conforming to the Policy shall be approved by the CFO or Treasurer.

8.2 Any exception to the Policy must be reviewed and approved by the (any two of) CEO, CFO or Treasurer.

8.3 Any individual investment that is down-graded, causing the portfolio to fall out of compliance, shall be approved by the CFO and the Treasurer.

8.4 All new Securities Issuers must pass a through credit review process that evaluates all related risks to ensure that it conforms to this Policy.

9.    Reporting

9.1 Daily - The (Senior) Treasury Analyst will prepare an investment transaction sheet, sequentially numbered for approval by the Treasurer or CFO.

9.2 Weekly - An investment position report is provided to the Treasurer and the Treasury Manager.

References

GMS-P-001    Control of Documents and Records Policy

GMS-SP-001    Control of Documents and Records Procedure

TCAM-GD-001 Investment Matrix for Working Capital and Escrow Portfolios

Forms

TCAM-F-007 Investment Transaction

Appendix

N/A

S-15

AT TIME OF PURCHASE

Eligible Investments	Rating Agency	Minimum Rating Quality	Max. Maturity Limit	Limit by Security Type	Other Investment Limits
U.S. Treasury Obligations	N/A	N/A	5 Years	Up to 100% of Total Portfolio	No limit
Federal Agency Obligations of the U.S. Government	N/A	N/A	5 Years	Up to 40% of Total Portfolio	Per issuer limit - of $50,000,000
Commercial Bank interest bearing deposit account	N/A	N/A	N/A	Up to 30% of Total Portfolio	Per institution limit - of $50,000,000 Credit Bank Relationship
Obligations issued by U.S. owned domestic commercial banks limited to: Banker's Acceptance Certificate of Deposit	S&P, & Moody's	A-1/P-1 (for BA's) A-1/P-1 (for CD's)	1 Year	50% of Total Portfolio	Per issuer limit - the greater of 10% of portfolio OR $5,000,000
Obligations issued by U.S. bank subsidiaries of Non U.S. Banks limited to: Yankee Banker's Acceptance Yankee/Eurodollar Certificates of Deposit (all securities U.S. dollar denominated)	S&P & Moody's	A-1/P-1 (for BA's) A-1/P-1 (for CD's) .	1 Year	40% of Total Portfolio	Per issuer limit - the greater of 10% of portfolio OR $5,000,000
Commercial Paper - Top Tier	S&P & Moody's	A-1/P-1	270 Days	75% of Total Portfolio	Per issuer limit - the greater of 10% of portfolio OR $5,000,000
Commercial Paper - Split Rated	S&P & Moody's	A-1/P-2 or A2-P1 Must be publicly traded and have at least $10B in Market Capitalization at the time of purchase.	270 Days	30% of Overall Commercial Paper Portfolio OR 22.5% of Total Portfolio	Per issuer limit - the greater of 10% of Commercial Paper Portfolio OR $5,000,000
Commercial Paper - Second Tier	S&P, & Moody's	A-2/P-2 Must be publicly traded Corporation and have at least $15B in Market Capitalization at the time of purchase.	270 Days	20% of Overall Commercial Paper Portfolio OR 15% of Total Portfolio	Per issuer limit - the greater of 10% of Commercial Paper Portfolio OR $5,000,000
Municipal Securities (Taxable and Tax-Exempt)	S&P & Moody's,	AA-/Aa3 or better Ratings have to be on a stand-alone basis without credit support.	3 Years	25% of Total Portfolio	Per issuer limit - the greater of 10% of Muni Portfolio OR $5,000,000
Money Market Funds (Taxable and Tax-Exempt) - Including the passive sweep accounts offered by commercial banks	S&P & Moody's	AAAm/Aaa	Average Maturity of 90 Days or Less	75% of Total Portfolio	Up to $50 million may be invested in any single well-diversified money market fund that invests primarily in securities authorized under this investment policy.
Corporate Bonds	S&P & Moody's	AA-/Aa3 Must be publicly traded Corporation and have at least $15B in Market Capitalization at the time of purchase. Issue size must be $150M	2 years	20% of Total Portfolio	Per issuer limit of $5,000,000

Note: The credit rating of issuer will be superseded by that of the guarantor where applicable.

S-16

SCHEDULE 7.02(g)

INVESTMENTS BY ANY GLC VENTURE

Granite Land Company	Descriptions	May 31, 2012
Granite Grado II	LLC	371,335
McCormick Woods	LLC	18,658,468
Summer Creek	LLC	5,438,892
Rancho Road	LLC	570,293
GGV Greenwood	LLC	405,517
Missouri Flat Road	LLC	1,006,795
LGAJV, LLC	LLC	(1,168,817		)
Highpoint Oaks	LP	1,914,853
Belmont - Including Investment II in RCP Belmont	LP	7,089,382
Argyle 114	LP	2,329,408
GLC Hometown Apartments	LP	88,600
XS Ranch	LP	2,130,484
	Total	$	38,835,210

S-17

SCHEDULE 7.03

EXISTING INDEBTNESS

Borrower	Lender	Interest Rate	Maturity	Balance		Description
Granite Construction Incorporated	Private Placement Note Holders	6.96%	5/13/2013	$	8,333,337	Notes issued to refinance debt and for general corporate purposes
Granite Construction Incorporated	Private Placement Note Holders	6.11%	12/12/2019	200,000,000		Notes issued to refinance debt and for general corporate purposes
Granite Construction Company	Anderson/Watson	6.50%	12/15/2019	114,864		Real estate property
Granite Construction Company	Linda Watson	6.50%	12/22/2019	71,092		Real estate property
Granite Construction Company	Anchorage Sand & Gravel Co.	6.00%	9/30/2012	750,000		Hot Plant
				$	209,269,293
McCormick Woods	Washington Federal	4.50%	2/28/2013	10,439,163		Project Debt
Summer Sycamore	Preston State Bank	6.00%	1/6/2014	921,492		Project Debt
GLC-Lake Goodwin Assemblage	Whidbey Island Bank	7.00%	1/30/2015	4,284,128		Project Debt
GLC-Lake Goodwin Assemblage	Washington Federal	3.75%	12/31/2012	3,769,275		Project Debt
GLC-Lake Goodwin Assemblage	Washington Federal	4.00%	12/31/2012	1,593,475		Project Debt
Subtotal - Consolidated Entities Project Debt				$	21,007,533
Realty Capital Belmont	Park Cities Bank	4.25%	12/28/2014	16,731,206		Project Debt
Realty Capital Argyle	Northstar Bank	5.75%	7/27/2016	2,460,894		Project Debt
Realty Capital Argyle	Northstar Bank	5.75%	7/27/2016	1,414,895		Project Debt
Highpoint Oaks	First United Bank	6.00%	5/26/2014	4,176,433		Project Debt
Granite Regional Park	Rabobank	6.04%	1/5/2018	14,060,381		Project Debt
Granite Regional Park	Bank of Sacramento	7.00%	10/6/2012	20,445		Project Debt
Granite Regional Park	ING	4.85%	1/1/2023	14,381,747		Project Debt
Granite Regional Park	SAC County (Bond)	6.19%	9/1/2022	3,085,117		Project Debt
XS Ranch	Steiner Family	7.00%	12/19/2014	10,000,000		Project Debt
Subtotal - Nonconsolidated Limited Partnerships Project Debt				$	66,331,118

S-18

Principal	Insurer	Description	Penal Sum		Cost to complete		Maturity
Granite Construction Incorporated and Subsidiaries	Federal Insurance Company, Travelers Casualty and Surety Company, Zurich American Insurance Company	Payment and Performance Bonds for Construction Projects	$	8,714,666,497	$	1,789,690,000	Various
Granite Construction Incorporated and Subsidiaries	Federal Insurance Company	Miscellaneous bonds in support of permitting, reclamation and licensing	$	51,736,480	$	51,736,480	Various

S-19

SCHEDULE 7.03(m)(i)

PROJECT DEBT OUTSTANDING

Borrower	Lender	Interest Rate	Maturity	Balance
McCormick Woods	Washington Federal	4.50%	2/28/2013	10,439,163
Summer Sycamore	Preston State Bank	6.00%	1/6/2014	921,492
GLC-Lake Goodwin Assemblage	Whidbey Island Bank	7.00%	1/30/2015	4,284,128
GLC-Lake Goodwin Assemblage	Washington Federal	3.75%	12/31/2012	3,769,275
GLC-Lake Goodwin Assemblage	Washington Federal	4.00%	12/31/2012	1,593,475
Subtotal - Consolidated Entities Project Debt				$	21,007,533
Realty Capital Belmont	Park Cities Bank	4.25%	12/28/2014	16,731,206
Realty Capital Argyle	Northstar Bank	5.75%	7/27/2016	2,460,894
Realty Capital Argyle	Northstar Bank	5.75%	7/27/2016	1,414,895
Highpoint Oaks	First United Bank	6.00%	5/26/2014	4,176,433
Granite Regional Park	Rabobank	6.04%	1/5/2018	14,060,381
Granite Regional Park	Bank of Sacramento	7.00%	10/6/2012	20,445
Granite Regional Park	ING	4.85%	1/1/2023	14,381,747
Granite Regional Park	SAC County (Bond)	6.19%	9/1/2022	3,085,117
XS Ranch	Steiner Family	7.00%	12/19/2014	10,000,000
Subtotal - Nonconsolidated Limited Partnerships Project Debt				$	66,331,118

Total Debt $87,338,651

S-20

SCHEDULE 7.09

TRANSACTIONS WITH AFFILIATES

None.

S-21

SCHEDULE 10.02

ADMINISTRATIVE AGENT'S OFFICE;

CERTAIN ADDRESSES FOR NOTICES

BORROWERS:

Granite Construction Incorporated

585 West Beach Street

Watsonville, California 95076

Attention: Jigisha Desai, Treasurer

Telephone: 831.761.4784

Telecopier:    831.768.4065

Electronic Mail: jigisha.desai@gcinc.com

Website Address: www.graniteconstruction.com

U.S. Taxpayer Identification Number: 77-0239383

Granite Construction Company

U.S. Taxpayer Identification Number: ****

GILC Incorporated

U.S. Taxpayer Identification Number: ****

ADMINISTRATIVE AGENT:

Administrative Agent's Office

(for payments and Requests for Credit Extensions):

Bank of America, N.A.

2001 Clayton Road, Building B

Mail Code: CA4-702-02-25

Concord, California 94520

Attention: Sue Pfohl

Telephone: 925.675.8783

Telecopier: 888.969.9267

Electronic Mail: sue.pfohl@baml.com

Account No. (for Dollars): ****

Ref: Granite Construction Incorporated, Attn: Credit Services

ABA# ****

Account No. (for Euro): ****

Ref: Granite Construction Incorporated, Attn: Credit Services

Swift Address: ****

Account No. (for Sterling): ****

Ref: Granite Construction Incorporated, Attn: Credit Services

London Sort Code: ****

Swift Address: ****

Account No. (for Canadian Dollars): ****

Ref: Granite Construction Incorporated, Attn: Credit Services

Swift Address: ****

Other Notices as Administrative Agent:

Bank of America, N.A.

Agency Management

1455 Market Street

S-22

Mail Code: CA5-701-05-19

San Francisco, California 94103

Attention: Bridgett Manduk

Telephone: 415.436.1097

Telecopier: 415.503.5011

Electronic Mail: bridgett.manduk@baml.com

L/C ISSUER:

Bank of America, N.A.

Trade Operations

1000 W. Temple Street

Mail Code: CA9-705-07-05

Los Angeles, California 90017-1466

Attention: Tai Anh Lu

Telephone: 213.481.7840

Telecopier: 213.457.8841

Electronic Mail: tai_anh.lu@baml.com

SWING LINE LENDER:

Bank of America, N.A.

2001 Clayton Road, Building B

Mail Code: CA4-702-02-25

Concord, California 94520

Attention: Sue Pfohl

Telephone: 925.675.8783

Telecopier: 888.969.9267

Electronic Mail: sue.pfohl@baml.com

Account No. ****

Ref: Granite Construction Incorporated

ABA#****

S-23

EXHIBIT A

FORM OF REVOLVING LOAN NOTICE

Date: ___________, _____

To: Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain Amended and Restated Credit Agreement, dated as of September 28, 2012(as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement”, the terms defined therein being used herein as therein defined), among Granite Construction Incorporated, a Delaware corporation (the “Company” and a “Borrower”), Granite Construction Company, a California corporation (“GCC” and a “Borrower”), and GILC Incorporated, a California corporation (“GILC” and a “Borrower”, and together with Company and GCC, collectively, the “Borrowers”), the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, Collateral Agent, Swing Line Lender and L/C Issuer.

The undersigned hereby requests (select one):

o A Borrowing of Revolving Loans    

oA conversion or continuation of Revolving Loans

1.    On ________________________ (a Business Day).

2.    In the amount of $___________________.

3.    Comprised of _______________________.

[Type of Revolving Loan requested]

4.    For Eurodollar Rate Loans: with an Interest Period of      months.

5.    For the following Borrower: ________________________.

The Borrowing, if any, requested herein complies with the provisos to the first sentence of Section 2.01 of the Agreement.

GRANITE CONSTRUCTION INCORPORATED

By: ________________________________    

Name: ______________________________    

Title: ________________________________     

By: _________________________________    

Name: _______________________________     

Title: ________________________________     

S-24

EXHIBIT B

FORM OF SWING LINE LOAN NOTICE

Date: ___________, _____

To: Bank of America, N.A., as Swing Line Lender

Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

Reference is made to that certain Amended and Restated Credit Agreement, dated as of September 28, 2012 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement”, the terms defined therein being used herein as therein defined), Granite Construction Incorporated, a Delaware corporation (the “Company” and a “Borrower”), Granite Construction Company, a California corporation (“GCC” and a “Borrower”), and GILC Incorporated, a California corporation (“GILC” and a “Borrower”, and together with Company and GCC, collectively, the “Borrowers”), the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, Collateral Agent, Swing Line Lender and L/C Issuer.

The undersigned hereby requests a Swing Line Loan:

1.    On _______________________________ (a Business Day).

2.    In the amount of $___________________.

The Swing Line Borrowing requested herein complies with the requirements of the provisos to the first sentence of Section 2.04(a) of the Agreement.

GRANITE CONSTRUCTION INCORPORATED

By: _______________________________________     

Name: ____________________________________    

Title: ______________________________________     

By: _______________________________________     

Name: _____________________________________     

Title: ______________________________________     

S-25

EXHIBIT C

FORM OF NOTE

FOR VALUE RECEIVED, each of the undersigned (each, a “Borrower” and collectively, the “Borrowers”), hereby, jointly and severally, promises to pay to _____________________ or registered assigns (the “Lender”), in accordance with the provisions of the Agreement (as hereinafter defined), the principal amount of each Loan from time to time made by the Lender to the Borrowers under that certain Amended and Restated Credit Agreement, dated as of September 28, 2012 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement”, the terms defined therein being used herein as therein defined), among Granite Construction Incorporated, a Delaware corporation (the “Company”), Granite Construction Company, a California corporation (“GCC”), and GILC Incorporated, a California corporation (“GILC”), the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, Collateral Agent, Swing Line Lender and L/C Issuer.

Each Borrower, jointly and severally, promises to pay interest on the unpaid principal amount of each Loan from the date of such Loan until such principal amount is paid in full, at such interest rates and at such times as provided in the Agreement. Except as otherwise provided in Section 2.04(f) of the Agreement with respect to Swing Line Loans, all payments of principal and interest shall be made to the Administrative Agent for the account of the Lender in Dollars in immediately available funds at the Administrative Agent's Office. If any amount is not paid in full when due hereunder, such unpaid amount shall bear interest, to be paid upon demand, from the due date thereof until the date of actual payment (and before as well as after judgment) computed at the per annum rate set forth in the Agreement.

[This Note is issued pursuant to the Agreement in replacement of (a) a Note dated June 22, 2010 issued by the Company to the Lender, (b) a Note dated December 23, 2010 issued by GCC to the Lender and (c) a Note dated December 23, 2010 issued by GILC to the Lender (collectively, the “Original Notes”) and does not effect any refinancing or extinguishment of the indebtedness and obligations of such Original Notes, and is not a novation but is a replacement of such Original Notes.]¹

This Note is one of the Notes referred to in the Agreement, is entitled to the benefits thereof and may be prepaid in whole or in part subject to the terms and conditions provided therein. This Note is also entitled to the benefits of the Guaranty and is secured by the Collateral. Upon the occurrence and continuation of one or more of the Events of Default specified in the Agreement, all amounts then remaining unpaid on this Note shall become, or may be declared to be, immediately due and payable all as provided in the Agreement. Loans made by the Lender shall be evidenced by one or more loan accounts or records maintained by the Lender in the ordinary course of business. The Lender may also attach schedules to this Note and endorse thereon the date, amount and maturity of its Loans and payments with respect thereto.

Each Borrower, for itself, its successors and assigns, hereby waives diligence, presentment, protest and demand and notice of protest, demand, dishonor and non-payment of this Note.

________________________________

¹Include this sentence in any Note issued to any Existing Lender.

[Remainder of page intentionally left blank.]

S-26

THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.

GRANITE CONSTRUCTION INCORPORATED

By: _______________________________________     

Name: _____________________________________     

Title: ______________________________________    

GRANITE CONSTRUCTION COMPANY

By: ________________________________________     

Name: ______________________________________     

Title: _______________________________________    

By: _________________________________________     

Name: _______________________________________     

Title: ________________________________________    

GILC INCORPORATED

By: _________________________________________    

Name: _______________________________________     

Title: ________________________________________    

By: _________________________________________    

Name: _______________________________________     

Title: ________________________________________

S-27

LOANS AND PAYMENTS WITH RESPECT THERETO

Date Type of Loan Made Amount of Loan Made End of Interest Period Amount of Principal or Interest Paid This Date Outstanding Principal Balance This Date Notation Made By

S-28

EXHIBIT D

FORM OF COMPLIANCE CERTIFICATE

Financial Statement Date: ,

To: Bank of America, N.A., as Administrative Agent

Ladies and Gentlemen:

The undersigned refers to that certain Amended and Restated Credit Agreement, dated as of September 28, 2012 (as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Credit Agreement”), among Granite Construction Incorporated, a Delaware corporation (the “Company” and a “Borrower”), Granite Construction Company, a California corporation (“GCC” and a “Borrower”), and GILC Incorporated, a California corporation (“GILC” and a “Borrower”, and together with Company and GCC, collectively, the “Borrowers”), the financial institutions from time to time party thereto (collectively, the “Lenders”) and Bank of America, N.A., as Administrative Agent, Collateral Agent, Swing Line Lender and L/C Issuer (the “Administrative Agent”). Unless otherwise defined herein, each capitalized term used herein has the meaning assigned thereto in the Credit Agreement.

The undersigned Responsible Officer of the Company hereby certifies, on behalf of the Company and not individually, as of the date hereof that s/he holds the office of ________________ with the Company, that, as such, s/he is authorized to execute and deliver this Certificate to the Administrative Agent on behalf of the Company and its Subsidiaries, and that:

1.    Attached hereto or posted on the Company's website or posted on the website of the Securities and Exchange Commission at www.sec.gov is:

(a)    a consolidated balance sheet of the Company and its Subsidiaries as at the end of the fiscal year ended [_______________, 20__] (the “Subject Fiscal Year”), and the related consolidated statements of income or operations, shareholders' equity and cash flows for the Subject Fiscal Year, setting forth in each case in comparative form the figures for the previous fiscal year, all in reasonable detail, prepared in accordance with GAAP and are not subject to any qualifications or exceptions as to the scope of the audit nor to any qualifications and exceptions that are not reasonably acceptable to the Required Lenders; or

(b)    an SEC Form 10-K for the Company (excluding the exhibits thereto) relating to the fiscal year ended [___________, 20__]; or

(c)    a consolidated balance sheet of the Company and its Subsidiaries as at the end of the fiscal quarter ended [_______________, 201_] (the “Subject Fiscal Quarter”), and the related consolidated statements of income or operations, shareholders' equity and cash flows for the Subject Fiscal Quarter and for the portion of the Company's fiscal year then ended, setting forth in each case in comparative form the figures for the corresponding fiscal quarter of the previous fiscal year and the corresponding portion of the previous fiscal year, all in reasonable detail and certified by a Responsible Officer of the Company as fairly presenting the financial condition, results of operations, shareholders' equity and cash flows of the Company and its Subsidiaries in accordance with GAAP, subject only to normal year-end audit adjustments and the absence of footnotes; or

(d)    an SEC Form 10-Q for the Company (excluding the exhibits thereto) relating to the fiscal quarter ended [___________, 20__].

2.    The financial statements referred to in Paragraph 1 fairly present, in all material respects, the consolidated financial position and the results of operations of the Company and its Subsidiaries.

3.    The undersigned has reviewed and is familiar with the terms of the Credit Agreement and the other Loan Documents and has made, or has caused to be made under my supervision, a detailed review of the transactions and conditions (financial or otherwise) of the Company and its Subsidiaries during the accounting period covered by the attached financial statements.

4.    To the best of the undersigned's knowledge, the Company and each of its Subsidiaries have, during such period, observed, performed and/or satisfied and/or have caused to be observed, performed and/or satisfied all of their respective covenants and other agreements contained in the Loan Documents to which they are a party, and have satisfied every condition in the Loan

S-29

Documents to which they are a party to be observed, performed and/or satisfied by them, and the undersigned has no knowledge of any condition, event or occurrence, which constitutes a Default or Event of Default, except as set forth below:

[Describe below (or in a separate attachment to this Certificate) the exceptions, if any, to paragraph 4 above by listing, in detail and with reference to specific sections of the Credit Agreement, the nature of the condition, event or occurrence, the period during which it has existed and the actions that the Company has taken, is taking or proposes to take with respect to such condition, event or occurrence.]

5.    The financial covenant and other compliance analyses and information set forth on Schedule 1 attached hereto are true, complete and accurate on and as of the date of this Certificate.

The foregoing certifications, together with the computations set forth in Schedule 1 hereto, are made and delivered, and the financial statements referenced above are made or posted, as applicable, this ___ day of _______, 20__, pursuant to the provisions of the Credit Agreement.

GRANITE CONSTRUCTION INCORPORATED

By: ________________________________________     

Name: ______________________________________     

Title: _______________________________________     

S-30

Schedule 1

to Compliance Certificate

1. Investments - Construction JV Investments and Permitted Purchases and Other Acquisitions.Section 7.02(k)

A. The aggregate amount of total cash consideration, including Contingent Acquisition Obligations and other contingent obligations, paid by or on behalf of the Company and its Subsidiaries for any Investment under Section 7.02(h), when aggregated with the total cash consideration paid by or on behalf of the Company and its Subsidiaries for all such Investments consisting of Construction JV Investments, purchases and acquisitions: $_________________

Requirement: The amount in (A) may not exceed $250,000,000.

2.    Indebtedness - Other Indebtedness.Section 7.03(h)

A.    Indebtedness of the Company and its Subsidiaries, comprised solely of

(i) the outstanding principal amount of unsecured obligations, whether current or long-term, for borrowed money and all obligations evidenced by bonds (other than performance, surety and appeal bonds), debentures, notes, loan agreements or other similar instruments: $____________________

(ii) Attributable Indebtedness in respect of capital leases and Synthetic Lease Obligations: $____________________

(iii) Contingent Acquisition Obligations in respect of any Acquisition or Investment otherwise permitted hereunder: $____________________

(iv) without duplication, Guarantee Obligations with respect to Indebtedness of the types specified in the immediately preceding clauses (i), (ii) and (iii): $____________________

provided that none of the foregoing includes Indebtedness of any co-joint venturer in any Joint Venture to which the Company or any Subsidiary is a party that has been assumed by the Company or any Subsidiary if such Indebtedness was not originally incurred by such co-joint venturer in connection with (and relates solely to) the subject Joint Venture:

B.    (A)(i) plus (A)(ii) plus (A)(iii) plus (A)(iv): $                

C. (A)(i) plus (A)(ii) plus (A)(iii) plus (A)(iv) to the extent subject to amortization or prepayment at maturity prior to the Maturity Date: $            

Requirement:    The amount in (B) may not exceed $150,000,000 and the amount in (C) may not exceed $100,000,000.

3.    Restricted Payments.Section 7.07(e)

A. The aggregate amount of shares of the Company's capital stock, or warrants, rights or options to acquire any such shares for cash, purchased, redeemed or otherwise acquired by the Company: $                

Requirement: If the Consolidated Leverage Ratio on a pro forma basis is greater than or equal to 2.00 to 1.00, the amount in (A) may not exceed [$64,800,000].

4.    Minimum Consolidated Tangible Net Worth.Section 7.12(a)

A.    Consolidated Tangible Net Worth ((A)(i) minus A(ii)): $            

(i) Consolidated Stockholders' Equity for the Company and its consolidated Subsidiaries (excluding Project Debt Entities) (determined in accordance with GAAP): $___________________

S-31

(ii) Intangible Assets of the Company and its consolidated Subsidiaries (excluding Project Debt Entities) (determined on a consolidated basis in accordance with GAAP): $_____________________

B. Consolidated Net Income. Net income, on a consolidated basis, of the Company and its consolidated Subsidiaries from continuing operations, excluding extraordinary items and excluding gains and losses from Dispositions earned in each fiscal quarter ending after the date of the Audited Financial Statements (not including net income in respect of or attributable to any Project Debt Entity unless and until such net income has been received by a Borrower or Subsidiary (other than a Project Debt Entity) in the form of dividends or similar distributions) with no deduction for a net loss in any such fiscal quarter: $                

C. Calculation of Minimum Consolidated Tangible Net Worth:

((C)(i) + (C)(ii) + (C)(iii)) below): $            

(i) $[] Pursuant to Section 7.12(a) of the Credit Agreement, insert amount equal to 85% of the Consolidated Net Worth as of December 31, 2011.

plus

(ii) 50% of Consolidated Net Income (line (B) above) earned in each fiscal quarter ending after December 31, 2011: $            

plus

(iii) 50% of the aggregate increases in Consolidated Stockholders' Equity for the Company and its Subsidiaries (line (A)(i) above) after the Closing Date by reason of the issuance and sale of the capital stock of the Company: $________________

Requirement:    The amount in (A) may not be less than the amount in (C).

5.    Minimum Consolidated Interest Coverage Ratio.Section 7.12(b)

A. Consolidated EBITDA for the Company and its consolidated Subsidiaries ((A)(i) plus (A)(ii) plus (A)(iii) plus (A)(iv)): $            

(i) Net income, on a consolidated basis, of Company and its Subsidiaries (excluding any Project Debt Entity) from continuing operations, excluding extraordinary items and excluding gains and losses from Dispositions plus Consolidated Cash Taxes for such period and the following to the extent deducted in calculating such Consolidated Net Income for such Subject Period: $            

(ii) Consolidated Interest Expense for such Subject Period to the extent deducted in calculating Consolidated Net Income: $            

(iii) Depreciation and amortization expense for such Subject Period to the extent deducted in calculating Consolidated Net Income: $            

(iv) Non-cash charges for such period (excluding any such non-cash charges that represent the accrual of, or reserve for, anticipated cash charges in any future period) for such Subject Period to the extent deducted in calculating Consolidated Net Income: $             All components of Consolidated EBITDA for such period shall include or exclude, as the case may be, without duplication, such components of Consolidated EBITDA attributable to any Investment permitted pursuant to Section 7.02(n) of the Credit Agreement other than Construction JV Investments arising in the Ordinary Course of Business consummated during such period or any business or assets that have been Disposed of after the first day of such period and prior to the end of such period, in each case as determined on a pro forma basis, in accordance with Regulation S-X promulgated by the SEC.

B. Consolidated Interest Expense for the Company and its consolidated Subsidiaries ((B)(i) plus (B)(ii)): $                

S-32

(i) All interest, premium payments, fees, charges and related expenses of the Company and its consolidated Subsidiaries in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP (excluding such amounts in respect of Project Debt): $        

(ii) The portion of rent expense of the Company and its Subsidiaries with respect to such Subject Period under capital leases that is treated as interest in accordance with GAAP and the portion of Synthetic Lease Obligations payable by the Company and its Subsidiaries with respect to such Subject Period that would be treated as interest in accordance with GAAP if such lease were treated as a capital lease under GAAP (excluding such amounts in respect of Project Debt): $        

C.    Ratio of (A) to (B):            to 1.00

Requirement: The ratio in (C) (i.e., the ratio of (A) to (B)) may not be less than 4.00 to 1.00 as of the last day of any fiscal quarter of the Company.

6.    Maximum ConsolidatedLeverage Ratio. Section 7.12(c)

A. Consolidated Funded Indebtedness for the Company and its consolidated Subsidiaries ((A)(i) plus (A)(ii)): $            

(i) On a consolidated basis, the outstanding principal amount of all obligations, whether current or long-term, for borrowed money (including Obligations under the Credit Agreement) and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments of Company and its consolidated Subsidiaries (not including Project Debt):

$        

(ii) Attributable Indebtedness in respect of capital leases, Synthetic Lease Obligations and sale-leaseback transactions of Company and its consolidated Subsidiaries (not including Project Debt): $            

(iii) Without duplication, Guarantee Obligations with respect to Indebtedness of the types specified in the immediately preceding clauses (i) and (ii) of Persons other than the Company or any Subsidiary: $____________________

B. Consolidated EBITDA for the Company and its consolidated Subsidiaries (line (5)(A) above): $            

C.    Ratio of (A) to (B):             to 1.00

Requirement: The ratio in (C) (i.e., the ratio of (A) to (B)) may not exceed, as of the last day of any fiscal quarter of the Company, the ratios set forth below opposite such period:

Four Fiscal Quarters Ending	Maximum Consolidated Leverage Ratio
September 30, 2012 through and including the fiscal quarter ending September 30, 2013	3.25 to 1.00
December 31, 2013 and each fiscal quarter thereafter	3.00 to 1.00

; provided that during any Collateral Release Period, the ratio in (C) may not exceed, as of the last day of such fiscal quarter, 2.50 to 1.00.

Applicable Rate: Pricing Level ____

S-33

Pricing Level	Consolidated Leverage Ratio
1	Less than 0.50 to 1.00
2	Greater than or equal to 0.50 to 1.00 but less than 1.00 to 1.00
3	Greater than or equal to 1.00 to 1.00 but less than 2.00 to 1.00
4	Greater than or equal to 2.00 to 1.00 but less than 2.50 to 1.00
5	Greater than or equal to 2.50to 1.00

7.    ConsolidatedFixed Charge Coverage Ratio. For purposes of determining whether the Company may request a Collateral Release (commencing with the fiscal quarter ending June 30, 2013)

A. Consolidated EBITDA for the Company and its consolidated Subsidiaries (line (5)(A) above): $            

B. Consolidated Fixed Charges for the Company and its consolidated Subsidiaries ((B)(i) plus (B)(ii) plus (B)(iii) plus (B)(iv) plus (B)(v)): $_________________    

(i) Consolidated Interest Expense for the Company and its consolidated Subsidiaries (line 5(B) above): $________________    

(ii) The aggregate amount of Federal, state, local and foreign taxes paid in cash by the Company and its consolidated Subsidiaries: $_______________            

(iii) The aggregate principal amount of all regularly scheduled principal payments of Consolidated Funded Indebtedness (for the avoidance of doubt, excluding all payments in respect of revolving Indebtedness and prepayments in respect of all Indebtedness) for the Company and its consolidated Subsidiaries: $_________________            

(iv) the lesser amount of (x) the aggregate amount of all capital expenditures for the Company and its consolidated Subsidiaries and (y) $37,500,000: $______________            

(v) The aggregate amount of all Restricted Payments made in cash for the Company and its consolidated Subsidiaries: $______________            

C.    Ratio of (A) to (B):__________________to 1.00

S-34

EXHIBIT E

ASSIGNMENT AND ASSUMPTION

This Assignment and Assumption (this “Assignment and Assumption”) is dated as of the Effective Date set forth below and is entered into by and between [the][each] Assignor identified in item 1 below ([the][each, an] "Assignor") and [the][each] Assignee identified in item 2 below ([the][each, an] “Assignee”). [It is understood and agreed that the rights and obligations of [the Assignors][the Assignees] hereunder are several and not joint.] Capitalized terms used but not defined herein shall have the meanings given to them in the Credit Agreement identified below (the “Credit Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto are hereby agreed to and incorporated herein by reference and made a part of this Assignment and Assumption as if set forth herein in full.

For an agreed consideration, [the][each] Assignor hereby irrevocably sells and assigns to [the Assignee][the respective Assignees], and [the][each] Assignee hereby irrevocably purchases and assumes from [the Assignor][the respective Assignors], subject to and in accordance with the Standard Terms and Conditions and the Credit Agreement, as of the Effective Date inserted by the Administrative Agent as contemplated below (i) all of [the Assignor's][the respective Assignors'] rights and obligations in [its capacity as a Lender][their respective capacities as Lenders] under the Credit Agreement and any other documents or instruments delivered pursuant thereto to the extent related to the amount and percentage interest identified below of all of such outstanding rights and obligations of [the Assignor][the respective Assignors] under the respective facilities identified below (including, without limitation, the Letters of Credit and the Swing Line Loans included in such facilities) and (ii) to the extent permitted to be assigned under applicable law, all claims, suits, causes of action and any other right of [the Assignor (in its capacity as a Lender)][the respective Assignors (in their respective capacities as Lenders)] against any Person, whether known or unknown, arising under or in connection with the Credit Agreement, any other documents or instruments delivered pursuant thereto or the loan transactions governed thereby or in any way based on or related to any of the foregoing, including, but not limited to, contract claims, tort claims, malpractice claims, statutory claims and all other claims at law or in equity related to the rights and obligations sold and assigned pursuant to clause (i) above (the rights and obligations sold and assigned by [the][any] Assignor to [the][any] Assignee pursuant to clauses (i) and (ii) above being referred to herein collectively as [the][an] “Assigned Interest”). Each such sale and assignment is without recourse to [the][any] Assignor and, except as expressly provided in this Assignment and Assumption, without representation or warranty by [the][any] Assignor.

1.    Assignor[s]:    ______________________________

______________________________

2. Assignee[s]:    ______________________________

______________________________

[for each Assignee, indicate [Affiliate][Approved Fund] of [identify Lender]]

3. Borrowers:    Granite Construction Incorporated, Granite Construction Company and GILC Incorporated

4. Administrative Agent: Bank of America, N.A., as the administrative agent under the Credit Agreement

5. Credit Agreement:    Amended and Restated Credit Agreement, dated as of September 28, 2012 among Granite Construction Incorporated, Granite Construction Company, GILC Incorporated, the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, Collateral Agent, Swing Line Lender and L/C Issuer

S-35

6.    Assigned Interest[s]:

Assignor[s]	Assignee[s]	Facility Assigned	Aggregate Amount of Commitment/ Loans for all Lenders	Amount of Commitment/ Loans Assigned	Percentage Assigned of Commitment/ Loans	CUSIP  Number
			$___________	$_________	_________%
			$___________	$_________	_________%
			$___________	$_________	_________%

[7.Trade Date:__________________]⁴

Effective Date: __________________, 20__ [TO BE INSERTED BY ADMINISTRATIVE AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER THEREFOR.]

The terms set forth in this Assignment and Assumption are hereby agreed to:

ASSIGNOR

[NAME OF ASSIGNOR]

By: _____________________________

Title:

ASSIGNEE

[NAME OF ASSIGNEE]

By: _____________________________

Title:

[Consented to and]⁵ 

BANK OF AMERICA, N.A., as

Administrative Agent

By: _________________________________

Title:

[Consented to:]⁶ 

By: _________________________________

Title:

______________________________________________________

⁴ To be completed if the Assignor and the Assignee intend that the minimum assignment amount is to be determined as of the Trade Date.

⁵ To be added only if the consent of the Administrative Agent is required by the terms of the Credit Agreement. Accepted:

⁶ To be added only if the consent of other parties (e.g. the Company, Swing Line Lender or L/C Issuer) is required by the terms of the Credit Agreement.

S-36

ANNEX 1 TO ASSIGNMENT AND ASSUMPTION

Amended and Restated Credit Agreement dated as of September 28, 2012 by and among Granite Construction Incorporated, Granite Construction Company, GILC Incorporated, the Lenders party thereto from time to time and Bank of America, N.A., as Administrative Agent, Collateral Agent, Swing Line Lender and L/C Issuer

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ASSUMPTION

1.    Representations and Warranties.

1.1.    Assignor. [The][Each] Assignor (a) represents and warrants that (i) it is the legal and beneficial owner of [the][[the relevant] Assigned Interest, (ii) [the][such] Assigned Interest is free and clear of any lien, encumbrance or other adverse claim and (iii) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby; and (b) assumes no responsibility with respect to (i) any statements, warranties or representations made in or in connection with the Credit Agreement or any other Loan Document, (ii) the execution, legality, validity, enforceability, genuineness, sufficiency or value of the Loan Documents or any collateral thereunder, (iii) the financial condition of the Company, any of its Subsidiaries or Affiliates or any other Person obligated in respect of any Loan Document or (iv) the performance or observance by the Company, any of its Subsidiaries or Affiliates or any other Person of any of their respective obligations under any Loan Document.

1.2.    Assignee. [The][Each] Assignee (a) represents and warrants that (i) it has full power and authority, and has taken all action necessary, to execute and deliver this Assignment and Assumption and to consummate the transactions contemplated hereby and to become a Lender under the Credit Agreement, (ii) it meets all the requirements to be an assignee under Section 10.06(b)(iii) and (v) of the Credit Agreement (subject to such consents, if any, as may be required under Section 10.06(b)(iii) of the Credit Agreement), (iii) from and after the Effective Date, it shall be bound by the provisions of the Credit Agreement as a Lender thereunder and, to the extent of [the][the relevant] Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it is sophisticated with respect to decisions to acquire assets of the type represented by [the][such] Assigned Interest and either it, or the Person exercising discretion in making its decision to acquire [the][such] Assigned Interest, is experienced in acquiring assets of such type, (v) it has received a copy of the Credit Agreement, and has received or has been accorded the opportunity to receive copies of the most recent financial statements delivered pursuant to Section 6.01 thereof, as applicable, and such other documents and information as it deems appropriate to make its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, (vi) it has, independently and without reliance upon the Administrative Agent or any other Lender and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into this Assignment and Assumption and to purchase [the][such] Assigned Interest, and (vii) if it is a Foreign Lender, attached hereto is any documentation required to be delivered by it pursuant to the terms of the Credit Agreement, duly completed and executed by [the][such] Assignee; and (b) agrees that (i) it will, independently and without reliance upon the Administrative Agent, [the][any] Assignor or any other Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit decisions in taking or not taking action under the Loan Documents, and (ii) it will perform in accordance with their terms all of the obligations which by the terms of the Loan Documents are required to be performed by it as a Lender.

2.    Payments. From and after the Effective Date, the Administrative Agent shall make all payments in respect of [the][each] Assigned Interest (including payments of principal, interest, fees and other amounts) to [the][the relevant] Assignor for amounts which have accrued to but excluding the Effective Date and to [the][the relevant] Assignee for amounts which have accrued from and after the Effective Date.

3.    General Provisions. This Assignment and Assumption shall be binding upon, and inure to the benefit of, the parties hereto and their respective successors and assigns. This Assignment and Assumption may be executed in any number of counterparts, which together shall constitute one instrument. Delivery of an executed counterpart of a signature page of this Assignment and Assumption by telecopy shall be effective as delivery of a manually executed counterpart of this Assignment and Assumption. This Assignment and Assumption shall be governed by, and construed in accordance with, the law of the State of California.

S-37

EXHIBIT F

FORM OF GUARANTY

See attached.

S-38

EXHIBIT G

FORM OF PLEDGE AGREEMENT

See attached.

S-39

EXHIBIT H

FORM OF SECURITY AGREEMENT

See attached.

S-40

EXHIBIT I

List of Mortgaged Properties

	Project #	Address	City	County	State
1	L05008	Elder Creek Road	Sacramento	Sacramento	CA
2	L07004	999 Mission Rock Road	Santa Paula	Ventura	CA
3	L08001/ L08002		Oroville	Butte	CA
4	L06003	Fulton & Frank Road	Esparto	Yolo	CA
5	L14003	Highway 33	Coalinga	Fresno	CA
6	L26004	7131 N. Railroad Avenue	Pasco	Franklin	WA
7	L32009	E. Selah Rd	Yakima	Yakima	WA
8	L26002	W. Gill Station Rd	Coso Junction	Inyo	WA
9	L32011	Nelpar Drive	East Wenatchee	Douglas	WA
10	L07003	400 S. Hwy 101	Buellton	Santa Barbara	CA
11	L03002	Hwy 175	Lakeport	Lake	CA
12	L16010	10600 I-80 East	Lockwood	Washoe	NV
13	L16001	1900 Glendale Avenue	Sparks	Washoe	NV
14	L93005	701 East Main Street	Lewisville	Denton	TX
15	L03001	825 W. Warm Springs Road	Salt Lake City	Salt Lake	UT
16	L30012	South 1900 West	West Haven	Weber	UT
17	L12001	3001 James Road	Bakersfield	Kern	CA
18	L14008	Hildreth Quarry	Tracy	Madera	CA
19	L15002	South Bird Road	Modesto	San Joaquin	CA
20	L15006	Blewett Road	Modesto	San Joaquin	CA
21	L15001	Harlan Road	Stockton	San Joaquin	CA
22	L21901	715 Comstock Street	Santa Clara	Santa Clara	CA
23	L02004	580/582/680 West Beach Street	Watsonville	Santa Cruz	CA
24	L05024A	Bradshaw Road	Sacramento	Sacramento	CA
25	L17007	(7 parcels)	Marana	Pima	AZ
26	L11003	Hwy 138	Black Butte	Los Angeles	CA
27	L11004	Pearblossom Hwy	Little Rock	Los Angeles	CA
28	L25016	4 Parcels/ Monroe Street	Indio	Riverside	CA
29	L91001 / L91005	585 W. Beach Street	Watsonville	Santa Cruz	CA

S-41

EXHIBIT J

PERMITTED NOTES INTERCREDITOR AGREEMENT

See attached.

S-42

EXHIBIT K

Form of

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to that certain Amended and Restated Credit Agreement, dated as of September 28, 2012(as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement”), among Granite Construction Incorporated, a Delaware corporation (the “Company” and a “Borrower”), Granite Construction Company, a California corporation (“GCC” and a “Borrower”), and GILC Incorporated, a California corporation (“GILC” and a “Borrower”, and together with Company and GCC, collectively, the “Borrowers”), the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, Collateral Agent, Swing Line Lender and L/C Issuer.

Pursuant to the provisions of Section 3.01(e) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of any Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to any Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Company with a certificate of its non-U.S. Person status on IRS Form W-8BEN. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Company and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Company and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

[NAME OF LENDER]
	By: _______________________
	Name: ________________________
	Title: ________________________

Date: ________ __, 20[ ]

S-43

EXHIBIT K

Form of

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to that certain Amended and Restated Credit Agreement, dated as of September 28, 2012(as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement”), among Granite Construction Incorporated, a Delaware corporation (the “Company” and a “Borrower”), Granite Construction Company, a California corporation (“GCC” and a “Borrower”), and GILC Incorporated, a California corporation (“GILC” and a “Borrower”, and together with Company and GCC, collectively, the “Borrowers”), the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, Collateral Agent, Swing Line Lender and L/C Issuer.

Pursuant to the provisions of Section 3.01(e) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of any Borrower within the meaning of Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation related to any Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on IRS Form W-8BEN. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

[NAME OF PARTICIPANT]
	By: _______________________
	Name: ________________________
	Title: ________________________

Date: ________ __, 20[ ]

S-44

EXHIBIT K

Form of

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to that certain Amended and Restated Credit Agreement, dated as of September 28, 2012(as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement”), among Granite Construction Incorporated, a Delaware corporation (the “Company” and a “Borrower”), Granite Construction Company, a California corporation (“GCC” and a “Borrower”), and GILC Incorporated, a California corporation (“GILC” and a “Borrower”, and together with Company and GCC, collectively, the “Borrowers”), the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, Collateral Agent, Swing Line Lender and L/C Issuer.

Pursuant to the provisions of Section 3.01(e) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of any Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to any Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such partner's/member's beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

[NAME OF PARTICIPANT]
	By: _______________________
	Name: ________________________
	Title: ________________________

Date: ________ __, 20[ ]

S-45

EXHIBIT K

FORM OF

U.S. TAX COMPLIANCE CERTIFICATE

(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to that certain Amended and Restated Credit Agreement, dated as of September 28, 2012(as amended, restated, extended, supplemented or otherwise modified in writing from time to time, the “Agreement”), among Granite Construction Incorporated, a Delaware corporation (the “Company” and a “Borrower”), Granite Construction Company, a California corporation (“GCC” and a “Borrower”), and GILC Incorporated, a California corporation (“GILC” and a “Borrower”, and together with Company and GCC, collectively, the “Borrowers”), the Lenders from time to time party thereto, and Bank of America, N.A., as Administrative Agent, Collateral Agent, Swing Line Lender and L/C Issuer.

Pursuant to the provisions of Section 3.01(e) of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit Agreement or any other Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of any Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to any Borrower as described in Section 881(c)(3)(C) of the Code.

The undersigned has furnished the Administrative Agent and the Company with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such partner's/member's beneficial owners that is claiming the portfolio interest exemption. By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Company and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Company and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

[NAME OF LENDER]
	By: _______________________
	Name: ________________________
	Title: ________________________

Date: ________ __, 20[ ]

S-46

EX-10.6

Exhibit 10.6

GRANITE CONSTRUCTION INCORPORATED

___________________________________

SECOND AMENDMENT

Dated as of October 11, 2012

to

NOTE PURCHASE AGREEMENT

Dated as of May 1, 2001

___________________________________

RE: $75,000,000 6.96% Senior Notes Due May 1, 2013

SECOND AMENDMENT TO NOTE PURCHASE AGREEMENT

This Second Amendment dated as of October 11, 2012 (the or this “Second Amendment”) to that certain Note Purchase Agreement dated as of May 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 Note Purchase Agreement dated as of May 1, 2001, as amended by that the First Amendment thereto dated June 15, 2003 (as amended, the “Note Purchase Agreement”). The Company has heretofore issued $75,000,000 aggregate principal amount of its 6.96% Senior Notes due May 1, 2013 (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 Second 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 Second 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 7.1(a) of the Note Purchase Agreement shall be and is hereby amended by replacing the reference to “60 days” set forth therein with “45 days”.

1.2    Section 7.1(b) of the Note Purchase Agreement shall be and is hereby amended by replacing the reference to “105 days” set forth therein with “90 days”.

1.3    Section 7.1(h) of the Note Purchase Agreement shall be and is hereby amended and restated in its entirety to read as follows:

(h)    Requested Information - with reasonable promptness, such other data and information relating to the business, operations, affairs, financial condition, assets or properties of the Company or any of its Subsidiaries (including, but without limitation, actual copies of the Company's Quarterly Report on Form 10-Q and Annual Report on Form 10-K) or relating to the ability of the Company to perform its obligations hereunder and under the Notes or the ability of the Company or any Subsidiary to perform its obligations under the Guaranty Agreement or any Security Document to which it is a party, as from time to time as from time to time may be reasonably requested by any such holder of Notes.”

1.4    Section 7.2 of the Note Purchase Agreement shall be and is hereby amended and restated in its entirety to read as follows:

Section 7.2.Officer's Certificate. Each set of financial statements delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied by a certificate of a Senior Financial Officer, such certificate to be provided in the manner specified in Section 18 or, if the holder shall have previously provided the Company with an electronic mail address for such purpose, by electronic mail (which, in the case of Electronic Delivery of any such financial statements, shall be by separate delivery of such certificate to each such holder of Notes no later than the earlier of the third Business Day following such Electronic Delivery and the last day upon which the Company is required to deliver the corresponding financial statements pursuant to Section 7.1(a) or Section 7.1(b), as applicable):

(a)    Covenant Compliance - setting forth (1) the information (including detailed calculations) required in order to establish whether the Company was in compliance with the requirements of Section 10.2 through Section 10.5, inclusive, Section 10.8 and Section 10.10 during the quarterly or annual period covered by the statements then being furnished (including with respect to each such Section and covenant, where applicable, the calculations of the maximum or minimum amount, ratio or percentage, as the case may be, permissible under the terms of such Sections and covenants, and the calculation of the amount, ratio or percentage then in existence), and (2) the information (including detailed calculations) required in order to determine the Consolidated Fixed Charge Coverage Ratio for the Subject Period ending on the last day of the quarterly or annual period covered by the statements then being furnished;

(b)    Event of Default - certifying that such Senior Financial Officer has reviewed the relevant terms hereof, of the Security Documents and of the other Transaction Documents and has made, or caused to be made, under his or her supervision, a review of the transactions and conditions of the Company and its Subsidiaries from the beginning of the quarterly or annual period covered by the statements then being furnished to the date of the certificate and that such review shall not have disclosed the existence during such period of any condition or event that constitutes a Default or an Event of Default or, if any such condition or event existed or exists (including, without limitation, any such event or condition resulting from the failure of the Company or any Subsidiary to comply with any Environmental Law), specifying the nature and period of existence thereof and what action the Company shall have taken or proposes to take with respect thereto.

1.5    Section 9.2 of the Note Purchase Agreement shall be and is hereby amended to add the following sentence at the end of said Section:

Without limiting the foregoing, at all times other than during a Collateral Release Period, the Company will, and will cause each of its Subsidiaries to, (a) maintain, if available, fully paid flood hazard insurance with respect to each Mortgaged Property containing a Building (as defined in Section 208.25 of Regulation H of the Board of Governors of the Federal Reserve System) that is located in a special flood hazard area, as designated by the Federal Emergency Management Agency of the United States Department of Homeland Security (“FEMA”), on such terms and in such amounts as required by The National Flood Insurance Reform Act of 1994, as amended, or as otherwise reasonably required by the Required Holders, (b) upon request, furnish to the holders of the Notes evidence of the renewal of all such policies, and (c) furnish to the holders of the Notes written notice of any redesignation by FEMA of any such Building into or out of a special flood hazard area promptly upon obtaining knowledge of such redesignation.

1.6    Section 9.6 of the Note Purchase Agreement shall be and is hereby amended to:

(i)    add the words “; Collateral and Appraisals” to the end of the title of said Section,

(ii)    add the following words to the end of paragraph (a) of said Section:

Notwithstanding the foregoing, any Subsidiary formed under the laws of a jurisdiction other than the United States, any State thereof or the District of Columbia shall not be required to execute a supplement to the Guaranty Agreement or otherwise Guaranty the Notes if doing so would result in adverse tax consequences to the Company, unless such Subsidiary is or shall become an obligor or guarantor of any Debt existing under the Bank Credit Agreement.

(iii)    amend and restate paragraph (c) of said Section to read as follows;

(c)    If at any time, pursuant to the terms and conditions of the Bank Credit Agreement, any Guarantor is released from its liability under the Bank Guaranty and (1) such Guarantor is not a co-obligor in respect of any Debt existing under the Bank Credit Agreement or a guarantor or co-obligor in respect of any Debt existing under the Existing Note Agreements, (2) such Guarantor does not qualify as a Material Subsidiary under clause (a) or (b) of the definition thereof, (3) such Guarantor is not required to be designated as a Material Subsidiary for purposes of satisfying the 80% Threshold and (4) the Company shall have delivered to each holder of Notes an Officer's Certificate certifying that (i) the conditions specified in clauses (1), (2) and (3) above have been satisfied and (ii)

2

immediately preceding the release of such Guarantor from the Guaranty Agreement and after giving effect thereto, no Default or Event of Default shall have existed or would exist, then, upon receipt by the holders of Notes of such Officer's Certificate, such Guarantor shall be discharged from its obligations under the Guaranty Agreement.

(iv)    add the following new paragraphs (d), (e), (f) and (g) at the end of said Section:

(d)    At all times other than during a Collateral Release Period, the Company shall cause each Material Subsidiary required to execute and deliver a supplement to the Guaranty Agreement pursuant to Section 9.6(a) to promptly (and in any event, with respect to Domestic Subsidiaries, within 45 days of such Material Subsidiary being required to execute and deliver such supplement, with respect to Foreign Subsidiaries, within 75 days of such date, and solely with respect to Section 9.6(d)(3), within 60 days of such date, or in any case, such longer period requested by the Company and approved by the Required Holders) deliver to the Collateral Agent, with a copy to each holder of the Notes:

(1)    a Security Joinder Agreement by such Material Subsidiary, together with such Uniform Commercial Code financing statements naming such Material Subsidiary as “Debtor” and naming the Collateral Agent for the benefit of the Secured Creditors as “Secured Party,” in form, substance and number sufficient in the reasonable opinion of the Required Holders and their special counsel to be filed in all Uniform Commercial Code filing offices in all jurisdictions in which filing is necessary or advisable to perfect in favor of the Collateral Agent for the benefit of the Secured Creditors the Lien on the Collateral conferred under such Security Document to the extent such Lien may be perfected by Uniform Commercial Code filing;

(2)    documents of the types referred to in Section 9.6(b)(i) through (iv), inclusive, with respect to such Material Subsidiary and any pledgor and the agreements and instruments being delivered by such Person pursuant to this Section 9.6(d);

(3)    Mortgages, title insurance, appraisals and such other real property support documentation with respect to all real property (and related improvements) with a Fair Market Value in excess of $1,000,000 owned by such Material Subsidiary;

(4)    if the Subsidiary Securities issued by such Material Subsidiary that are, or are required to become, Pledged Interests are owned by a Subsidiary who has not then executed and delivered to the Collateral Agent a Pledge Agreement granting a Lien to the Collateral Agent, for the benefit of the Secured Creditors, in such equity interests, a Pledge Joinder Agreement executed by the Subsidiary that directly owns such Subsidiary Securities (or, as to the Pledged Interests issued by any Direct Foreign Subsidiary, in a form acceptable to the Required Holders), and if such Subsidiary Securities shall be owned by the Company or a Subsidiary who has previously executed a Pledge Agreement, a Pledge Agreement Supplement in the form required by such Pledge Agreement pertaining to such Subsidiary Securities;

(5)    if the Pledged Interests issued by such Material Subsidiary constitute securities under Article 8 of the Uniform Commercial Code, (i) the certificates representing 100% of such Subsidiary Securities and (ii) duly executed, undated stock powers or other appropriate powers of assignment in blank affixed thereto;

(6)    Uniform Commercial Code financing statements naming the pledgor as “Debtor” and naming the Collateral Agent for the benefit of the Secured Parties as “Secured Party,” in form, substance and number sufficient in the reasonable opinion of the Required Holders and their special counsel to be filed in all Uniform Commercial Code filing offices and in all jurisdictions in which filing is necessary or advisable to perfect in favor of the Collateral Agent for the benefit of the Secured Creditors the Lien on such Subsidiary Securities;

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(7)    a supplement to the appropriate schedule attached to the appropriate Security Documents listing the additional Collateral, certified as true, correct and complete by the Responsible Officer (provided that the failure to deliver such supplement shall not impair the rights conferred under the Security Documents in after acquired Collateral); and

(8)    such other assurances, certificates, documents, consents or opinions as the Required Holders reasonably may require.

(e)    At all times other than during a Collateral Release Period, the Company shall cause to be delivered to the Collateral Agent upon the Required Holders' reasonable request, as soon as practicable and in any event within 30 days of the acquisition thereof, a Mortgage on any fee owned real property (and related improvements) with a Fair Market Value in excess of $1,000,000 acquired by the Company or any Guarantor after the Second Amendment Effective Date as security for the Secured Obligations, together with the Uniform Commercial Code financing statements covering fixtures, mortgage policies of title insurance, surveys, opinions, evidence of flood insurance coverage and other documents in connection with such Mortgage as the Required Holders may reasonably request.

(f)    Notwithstanding any other provision of this Agreement, any Lien on the Collateral of the Company or any Guarantor granted to or held by the Collateral Agent (on behalf of the Secured Creditors) under any Security Document shall be released and the Company and any Guarantor that is a party to any Security Document shall be released from its respective obligations thereunder (collectively, the “Release”), including after any re-pledge of the Collateral pursuant to the second proviso of this Section 9.6(f) upon the written request of the Company delivered to the holders of the Notes at any time on or after June 30, 2013, provided that (1) no Default or Event of Default shall have occurred and be continuing at such time or would occur immediately after giving effect to such Release, (2) the Consolidated Fixed Charge Coverage Ratio (calculated as of the last day of each of the four most recently ended fiscal quarters of the Company) is greater than or equal to 1.25 to 1.00 for each of such four most recently ended fiscal quarters, (3) the Consolidated Leverage Ratio (calculated as of the last day of the most recently ended fiscal quarter of the Company) is equal to or less than 2.50 to 1.00, (4) immediately after giving effect to such Release, no Secured Creditor shall have any Liens on any property of the Company or any Guarantor securing any Secured Obligations then owing to such Secured Creditor and (5) the Company and the Guarantors bear the cost of the Release; provided further, that if any Release has occurred and subsequent to the date on which such Release occurred the Company delivers a certificate pursuant to Section 7.2(a) demonstrating that (i) the Consolidated Fixed Charge Coverage Ratio (calculated as of the last day of the most recently ended fiscal quarter of the Company) is less than 1.25 to 1.00 or (ii) the Consolidated Leverage Ratio (calculated as of the last day of the most recently ended fiscal quarter of the Company) is greater than 2.50 to 1.00, then promptly (and in any event within 30 days or such longer period of time as the Required Holders determine in their reasonable discretion) after such certificate is delivered, or sooner if the Company shall otherwise elect to do so, the Company and each Guarantor shall at their sole cost, (A) take action (including the filing of Uniform Commercial Code and other financing statements) that may be necessary or advisable in the reasonable opinion of the Required Holders to vest in a collateral agent (which collateral agent shall be, if the Bank Credit Agreement is then in effect, the bank agent under the Bank Credit Agreement pursuant to an intercreditor and collateral agency agreement on the same terms as those contained in the Intercreditor Agreement as in effect prior to such Release or on other terms acceptable to the holders of the Notes) for the benefit of the holders of the Notes and, if the Bank Credit Agreement is then in effect, the lenders party thereto valid and subsisting Liens on the Collateral other than real property consistent in all material respects in scope, perfection and priority as those in effect prior to such Release and pursuant to documentation substantially similar to such documentation in place on or after the Second Amendment Effective Date in accordance with this Section 9.6 and, in the case of any real property previously pledged pursuant to a Mortgage or real property acquired on or after the Collateral Release Date as to which a Lien would have been required to have been granted pursuant to Section 9.6 had it not been acquired during the Collateral Release Period, Liens of record consistent with the requirements of this Section 9.6, and (B) upon the Required Holders' request, deliver to the collateral agent described above and the holders of the Notes customary opinions of counsel in connection therewith. Other than during a Collateral Release Period, all or substantially

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all of the Collateral may not be released from the Liens of the Security Documents without the written consent of the holder of each Note at the time outstanding.

(g)    The holders of the Notes may obtain from time to time an appraisal of all or any part of any Collateral, prepared in accordance with written instructions from the Required Holders, from a third-party appraiser satisfactory to, and engaged directly by, the Required Holders. The cost of any appraisal after the occurrence and during the continuance of an Event of Default shall be borne by the Company and such cost shall be payable by the Company to the holders of the Notes on demand (which obligation the Company hereby promises to pay); provided that the cost of any appraisal obtained by the holders of the Notes at any time other than after the occurrence and during the continuance of an Event of Default shall not be required to be reimbursed by the Company.

1.7    Sections 10.2, 10.3 and 10.4 of the Note Purchase Agreement shall be and are hereby amended and restated in their entirety to read as follows:

Section 10.2.Consolidated Tangible Net Worth. The Company will not, at any time, permit Consolidated Tangible Net Worth to be less than the sum of 85% of the Consolidated Tangible Net Worth as of December 31, 2011, plus (a) an amount equal to 50% of the Consolidated Net Income earned in each fiscal quarter ending after December 31, 2011 (with no deduction for a net loss in any such fiscal quarter) plus (b) an amount equal to 50% of the aggregate increases in Consolidated Stockholders' Equity after the Second Amendment Effective Date by reason of the issuance and sale of capital stock of the Company.

Section 10.3.Leverage Ratio; Project Debt and Interest Coverage Ratio.

(a)    Consolidated Leverage Ratio. The Company will not, at any time, permitthe Consolidated Leverage Ratio to exceed:

Period	Ratio
For the period beginning on the Second Amendment Effective Date through and including September 30, 2013	3.50 to 1.00
For the period from and after October 1, 2013	3.25 to 1.00

; provided that during any Collateral Release Period, the Company will not, at any time, permitthe Consolidated Leverage Ratio to exceed 2.50 to 1.00.

Notwithstanding the foregoing, if at any time the “Maximum Consolidated Leverage Ratio” permitted by the Bank Credit Agreement for any period is increased or decreased, then, upon receipt of evidence thereof satisfactory to the Required Holders and, in the case of any such increase, so long as no Default or Event of Default shall have occurred and be continuing, (1) the maximum Consolidated Leverage Ratio permitted by this Agreement for such period shall be deemed to be increased or decreased by the same incremental amount as the increase or decrease in the “Maximum Consolidated Leverage Ratio” permitted by the Bank Credit Facility for such period and (2) any changes to the defined terms used in the calculation of the “Consolidated Leverage Ratio” under the Bank Credit Agreement shall be deemed to have been made to the defined terms used in the calculation of the Consolidated Leverage Ratio under this Agreement; provided, however, that in no event shall the maximum Consolidated Leverage Ratio permitted by this Agreement for any period ever exceed the maximum Consolidated Leverage Ratio (utilizing all relevant definitions appearing herein as of the Second Amendment Effective Date) for such period as set forth in this Agreement as of the Second Amendment Effective Date. The Company will promptly, and in any event within five days of the occurrence thereof, give each of the holders of the Notes notice of any increase or decrease in the “Maximum Consolidated Leverage Ratio” permitted by the Bank Credit Agreement for any period. If any party to the Bank Credit Agreement shall receive or become entitled to any fee or other consideration in connection with its agreement to increase or decrease the “Maximum Consolidated Leverage Ratio” permitted by the Bank Credit Agreement for any period, the holders of the Notes shall receive fees or other consideration in a proportionate amount

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based upon the relative outstanding principal amount of the Notes and of the Debt outstanding under such Bank Credit Agreement. For the avoidance of doubt, if at any time there shall be no Bank Credit Agreement in existence, the maximum Consolidated Leverage Ratio (utilizing all relevant definitions appearing herein as of the Second Amendment Effective Date) permitted by this Agreement for any period shall be that set forth herein as of the Second Amendment Effective Date for such period.

(b)    Limitation on Project Debt. The Company will not, and will not permit any Subsidiary to, create, incur, assume or suffer to exist any Project Debt other than (1) Project Debt outstanding on the Second Amendment Effective Date as set forth on Schedule 5 and (2) in addition thereto, an additional amount of Project Debt not to exceed $10,000,000 at any time outstanding.

(c)    Consolidated Interest Coverage Ratio. The Company will not, as of the last day of any fiscal quarter of the Company, permitthe Consolidated Interest Coverage Ratio to be less than 4.00 to 1.00.

Section 10.4Priority Debt. The Company will not (a) at any time other than during a Collateral Release Period, permit the aggregate amount of all Priority Debt to exceed $15,000,000 and (b) at any time during a Collateral Release Period, permit the aggregate amount of all Priority Debt to exceed an amount equal to 20% of Consolidated Tangible Net Worth determined as of the end of the then most recently ended fiscal quarter of the Company.

1.8    Section 10.5 of the Note Purchase Agreement shall be and is hereby is amended and restated in its entirety to read as follows:

Section 10.5Liens. The Company will not, and will not permit any Subsidiary to, directly or indirectly create, incur, assume or permit to exist (upon the happening of a contingency or otherwise) any Lien on or with respect to any property or asset (including, without limitation, any document or instrument in respect of goods or accounts receivable) of the Company or such Subsidiary, whether now owned or held or hereafter acquired, or any income or profits therefrom, or assign or otherwise convey any right to receive income or profits, except:

(a)    Liens for taxes, assessments or other governmental charges which are not yet due and payable or the payment of which is not at the time required by Section 9.4;

(b)    carriers', landlords', warehousemen's, mechanics', materialmen's, repairmen's or other like Liens arising in the Ordinary Course of Business in respect of the Company and its Subsidiaries, which are not overdue for a period of more than 45 days or which are being contested in good faith and by appropriate proceedings, if adequate reserves with respect thereto are maintained on the books of the applicable Person;

(c)    Liens (other than any Lien imposed by ERISA) incurred or deposits made in the Ordinary Course of Business (1) in connection with workers' compensation, unemployment insurance and other types of social security or retirement benefits, or (2) to secure (or to obtain letters of credit that secure) the performance of tenders, statutory obligations, surety bonds, appeal bonds, bids, leases (other than Capital Leases), performance bonds, purchase, construction or sales contracts and other similar obligations, in each case not incurred or made in connection with the borrowing of money, the obtaining of advances or credit or the payment of the deferred purchase price of property;

(d)    any attachment or judgment Lien, unless the judgment it secures shall not, within 60 days after the entry thereof, have been discharged or execution thereof stayed pending appeal, or shall not have been discharged within 60 days after the expiration of any such stay;

(e)    leases or subleases granted to others, easements, rights-of-way, restrictions and other similar charges or encumbrances, in each case incidental to, and not interfering with, the

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ordinary conduct of the business of the Company or any of its Subsidiaries, provided that such Liens do not, in the aggregate, materially detract from the value of such property;

(f)    Liens on property or assets of the Company or any of its Subsidiaries securing Debt owing to the Company or to a Wholly-Owned Subsidiary;

(g)    Liens existing on the date of the Closing and securing the Debt of the Company and its Subsidiaries referred to on Schedule 5.15;

(h)    any Lien created to secure all or any part of the purchase price, or to secure Debt incurred or assumed to pay all or any part of the purchase price or cost of construction, of property acquired or constructed by the Company or a Subsidiary after the date of the Closing, provided that

(1)    any such Lien shall extend solely to the item or items of such property so acquired or constructed,

(2)    the principal amount of the Debt secured by any such Lien shall at no time exceed an amount equal to the lesser of (i) the cost to the Company or such Subsidiary of the property so acquired or constructed and (ii) the Fair Market Value (as determined in good faith by the Board of Directors of the Company) of such property at the time of such acquisition or construction,

(3)    any such Lien shall be created contemporaneously with, or within 180 days after, the acquisition or construction of such property,

(4)    immediately after giving effect the creation of such Lien and giving effect thereto, no Default or Event of Default would exist, and

(5)     if such Lien is created at any time other than during a Collateral Release Period, the principal amount of the Debt secured by such Liens shall be permitted by clause (b) or (d) of the definition of Specified Debt or Section 10.4(a);

(i)    any Lien existing on property of a Person immediately prior to its being consolidated with or merged into the Company or a Subsidiary, or any Lien existing on any property acquired by the Company or any Subsidiary at the time such property is so acquired (whether or not the Debt secured thereby shall have been assumed), provided that (1) no such Lien shall have been created or assumed in contemplation of such consolidation or merger or such acquisition of property, (2) each such Lien shall extend solely to the item or items of property so acquired, (3) immediately after giving effect to the acquisition of the property subject to such Lien and giving effect thereto, no Default or Event of Default would exist and (4) if such merger or consolidation or acquisition occurs at any time other than during a Collateral Release Period, the principal amount of the Debt secured by such Liens shall be permitted by clause (b) or (d) of the definition of Specified Debt or Section 10.4(a);

(j)    any Lien renewing, extending or refunding any Lien permitted by paragraphs (g), (h) or (i) of this Section 10.5, provided that (1) the principal amount of Debt secured by such Lien immediately prior to such extension, renewal or refunding is not increased or the maturity thereof reduced, (2) such Lien is not extended to any other property and (3) immediately after such extension, renewal or refunding no Default or Event of Default would exist;

(k)    Liens in favor of the Collateral Agent securing Secured Obligations and subject to the Intercreditor Agreement;

(l)    rights of set off in favor of the administrative agent, letter of credit issuer and/or lenders under the Bank Credit Agreement;

(m)    Liens encumbering cash collateral (1) required to be posted in respect of letter of credit and other obligations of “defaulting lenders” under the Bank Credit Agreement and (2) at any time other than during a Collateral Release Period, required to be posted in respect of letter of credit

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obligations of the Company or any Subsidiary Guarantor under the Bank Credit Agreement other than any such requirement arising as a result of a default or event of default under the Bank Credit Agreement;

(n)    Liens on insurance policies and proceeds securing the payment of financed insurance premiums not in excess of $25,000,000 at any time;

(o)    Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods by the Company or any of its Subsidiaries;

(p)    Liens arising solely by virtue of any statutory or common law provision relating to banker's liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a creditor depository institution, provided that (1) such deposit account is not a dedicated cash collateral account and is not subject to restrictions against access by the Company or any of its Subsidiaries in excess of those set forth by regulations promulgated by the Board of Governors of the Federal Reserve System, and (2) such deposit account is not intended by the Company or any of its Subsidiaries to provide collateral to the depository institution;

(q)    Liens of lessors in any property subject to any operating lease, including Liens arising from precautionary UCC financing statements or similar filings made in respect of such leases;

(r)    Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into by the Company or any of its Subsidiaries in the Ordinary Course of Business;

(s)    any encumbrance or restriction (including put and call arrangements) with respect to capital stock of any Joint Venture or similar arrangement pursuant to any joint venture or similar agreement; provided that such encumbrance or restriction does not prohibit the granting of a Lien by a the Company or any of its Subsidiaries on any Collateral and any entity formed as part of such Joint Venture remains subject to the provisions of this Agreement to the extent provided herein;

(t)    Liens solely on cash earnest money deposits in an aggregate amount not to exceed $10,000,000 at any time, made in connection with any letter of intent or purchase agreement in connection with an Investment; and

(u)    other Liens not otherwise permitted by paragraphs (a) through (t) of this Section 10.5, so long as the aggregate principal amount of all Debt secured by such Liens is permitted by Section 10.4; provided, that notwithstanding the foregoing, the Company will not, and will not permit any of its Subsidiaries to, secure any Debt outstanding under the Bank Credit Agreement (or any guaranty thereof) pursuant to this Section 10.4(u) unless and until the Notes and the Guaranty shall be concurrently secured equally and ratably with such Debt pursuant to documentation reasonably acceptable to the Required Holders in substance and form, including without limitation, an intercreditor agreement and opinions of counsel to the Company from attorneys that are reasonably acceptable to the Required Holders.

1.9    Section 10.6 of the Note Purchase Agreement shall be and is hereby amended and restated in its entirety to read as follows:

Section 10.6Restrictions on Dividends of Subsidiaries, Etc. The Company will not, and will not permit any Subsidiary to, enter into, assume or suffer to exist any agreement that limits the ability of any Subsidiary to make Restricted Payments to the Company (or if such Subsidiary is not directly owned by the Company, the “parent” Subsidiary of such Subsidiary) or to otherwise transfer property to the Company (or if such Subsidiary is not directly owned by the Company, the “parent” Subsidiary of such Subsidiary) other than (a) provisions contained in the agreements set forth on Schedule 10.6(a) and provisions set forth in any other agreements pursuant to which Debt may be incurred by the Company or any Subsidiary, provided that such provisions are no more restrictive than those contained in the agreements set forth on Schedule 10.6(a), (b) provisions contained in the terms of any agreement governing Liens permitted under Section 10.5 that impose restrictions only on the property subject to such Liens, and (c) agreements restricting assignments, subletting or other transfers contained in leases, licenses, joint venture agreements and similar agreements entered into in the Ordinary Course of Business, in each case relating solely to the assets subject to such lease or license or assets relating solely to such joint venture agreement.

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1.10    Sections 10.7(d)(2) and 10.7(d)(3) of the Note Purchase Agreement shall be and are hereby amended and restated in their entirety to read as follows:

(2)    if the Company is not the Successor Corporation, (i) such corporation shall have executed and delivered to each holder of the Notes its assumption of the due and punctual performance and observance of each covenant and condition of this Agreement, the Notes and the Security Documents and the Transaction Documents to which the Company is a party (pursuant to such agreements and instruments as shall be reasonably satisfactory to the Required Holders), (ii) the Company shall have caused to be delivered to each holder of the Notes an opinion of nationally recognized independent counsel, or other independent counsel reasonably satisfactory to the Required Holders, to the effect that all agreements or instruments effecting such assumption are enforceable in accordance with their terms and comply with the terms hereof and (iii) each Guarantor shall have delivered to each holder of the Notes a certificate whereby such Guarantor shall have reaffirmed its obligations under the Guaranty Agreement and each of the Security Documents to which it is a party; and

(3)    immediately after giving effect to such transaction, no Default or Event of Default would exist.

1.11    Section 10.8 of the Note Purchase Agreement shall be and is hereby amended by (a) amending and restating clause (c) in its entirety to read as follows:

(c)    immediately after giving effect to the Asset Disposition, the Disposition Value of all property that was the subject of any Asset Disposition occurring during the immediately preceding 12 consecutive calendar month period would not exceed (1) at any time other than during a Collateral Release Period, 5% of Consolidated Total Assets and (2) at any time during a Collateral Release Period, 15% of Consolidated Total Assets, in each case determined as of the end of the then most recently ended fiscal year of the Company.

and (b) adding the following new sentence at the end of said Section 10.8:

Notwithstanding the foregoing, this Section 10.8 shall not restrict the Transfer of equity interests in, or assets of, any GLC Venture or any Project Debt Entity.

1.12    Section 10.9 of the Note Purchase Agreement shall be and is hereby amended by (a) deleting the word “and” at the end of clause (b), deleting the period “.” and replacing it with “; and” at the end of clause (c) and (c) adding a new clause (d) as follows:

(d)    the Transfer of equity interests in any GLC Venture or any Project Debt Entity.

1.13    Section 10.11 of the Note Purchase Agreement shall be and is hereby amended and restated in its entirety to read as follows:

Section 10.11.Transactions with Affiliates. The Company will not, and will not permit any Subsidiary to, enter into any transaction of any kind with any Affiliate of the Company (other than between or among the Company and the Guarantors, in each case to the extent not prohibited under the Transaction Documents), whether or not in the Ordinary Course of Business, other than (a) payment of customary directors' fees and indemnities (including equity compensation arrangements), (b) arm's length transactions with Affiliates that were consummated prior to the Second Amendment Effective Date and set forth on Schedule 10.11, (c) transactions with Affiliates upon fair and reasonable terms that are substantially as favorable to the Company or such Subsidiary than the Company or such Subsidiary would obtain in a comparable arm's length transaction with a Person that is not an Affiliate of the Company and (d) any employment agreement entered into by the Company or any of its Subsidiaries in the Ordinary Course of Business and consistent with the past practices of the Company and its Subsidiaries.

1.14    Section 10 of the Note Purchase Agreement shall be and is hereby amended to add at the end thereof the following new Section 10.12:

Section10.12.Terrorism Sanctions Regulations. The Company will not, and will not permit any Controlled Entity to, (a) become a Blocked Person or (b) have any investments in or engage in any dealings

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or transactions with any Blocked Person if such investments, dealings or transactions would cause any holder of a Note to be in violation of any laws or regulations that are applicable to such holder.

1.15    Section 10 of the Note Purchase Agreement shall be and is hereby amended to add at the end thereof the following new Section 10.13:

Section 10.13Limitation on Restrictive Agreements. The Company will not, and will not permit any of its Subsidiaries or Affiliates to, enter into any agreement or instrument that expressly prohibits (a) the Company from entering into any amendment, supplement, modification or restatement of this Agreement or of the Notes or (b) the making of any prepayment required to be made pursuant to Section 8.

1.16    Paragraphs (c), (e), (f), (g), (h), (i) and (k) of Section 11 of the Note Purchase Agreement shall be and are hereby amended and restated in their entirety to read as follows:

(c)     the Company defaults in the performance of or compliance with any term contained in Sections 10.2, 10.3(a) (for the avoidance of doubt, the failure to comply with the proviso in first paragraph thereof shall not result in an Event of Default under Section 10.3(a) but instead shall be governed by Section 9.6), 10.3(b), 10.4, or Sections 10.6 through 10.10, inclusive, or Section 10.12; or

(e)    any representation or warranty made in writing by or on behalf of the Company or any Guarantor or by any officer of the Company or any Guarantor in this Agreement or in the Guaranty Agreement, in any Security Document or in any other Transaction Document or in any writing furnished in connection with the transactions contemplated hereby or thereby proves to have been false or incorrect in any material respect on the date as of which made; or

(f)    (1) the Company or any Subsidiary (other than a Project Debt Entity that is not a Material Subsidiary) is in default (as principal or as guarantor or other surety) in the payment of any principal of or premium or make-whole amount or interest on any Debt (other than Project Debt) that is outstanding in an aggregate principal amount of at least $10,000,000 beyond any period of grace provided with respect thereto, or (2) the Company or any Subsidiary (other than a Project Debt Entity that is not a Material Subsidiary) is in default in the performance of or compliance with any term of any evidence of any Debt (other than Project Debt) in an aggregate outstanding principal amount of at least $10,000,000 or of any mortgage, indenture or other agreement relating thereto or any other condition exists, and as a consequence of such default or condition such Debt has become, or has been declared (or one or more Persons are entitled to declare such Debt to be) due and payable before its stated maturity or before its regularly scheduled dates of payment (excluding prepayments required upon the refinancing of such Debt or the Transfer of an asset other than as a result of the existence of a default) or (3) as a consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder of Debt to convert such Debt into equity interests), (x) the Company or any Subsidiary (other than a Project Debt Entity that is not a Material Subsidiary) has become obligated to purchase or repay Debt (other than (i) Project Debt and (ii) prepayments required upon the refinancing of such Debt or the Transfer of an asset other than as a result of the existence of a default) before its regular maturity or before its regularly scheduled dates of payment in an aggregate outstanding principal amount of at least $10,000,000) or (y) one or more Persons have the right to require the Company or any Subsidiary (other than a Project Debt Entity that is not a Material Subsidiary) to purchase or repay such Debt; or

(g)    the Company or any Subsidiary (other than a Project Debt Entity that is not a Material Subsidiary) (1) is generally not paying, or admits in writing its inability to pay, its debts as they become due (other than the failure of any Project Debt Entity to pay any Project Debt), (2) files, or consents by answer or otherwise to the filing against it of a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, (3) makes an assignment for the benefit of its creditors, (4) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (5) is adjudicated as insolvent or to be liquidated or (6) takes corporate action for the purpose of any of the foregoing; or

(h)    a court or other Governmental Authority of competent jurisdiction enters an order appointing, without consent by the Company or any of its Subsidiaries (other than Project Debt Entities that are not Material Subsidiaries), a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or constituting an order for relief or approving a

10

petition for relief or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of the Company or any of its Subsidiaries (other than Project Debt Entities that are not Material Subsidiaries), or any such petition shall be filed against the Company or any of its Subsidiaries (other than Project Debt Entities that are not Material Subsidiaries) and such petition shall not be dismissed within 60 days; or

(i)    a final judgment or judgments for the payment of money aggregating in excess of $10,000,000 are rendered against one or more of the Company and its Subsidiaries (other than Project Debt Entities that are not Material Subsidiaries) and which judgments are not fully covered by insurance or, within 60 days after entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within 60 days after the expiration of such stay; or

(k)    (1) default shall occur under the Guaranty Agreement or any Security Document and such default shall continue beyond the period of grace, if any, allowed with respect thereto, (2) the Guaranty Agreement or, other than during any Collateral Release Period, any Security Document shall cease to be in full force and effect with respect to the Company or any Guarantor party thereto for any reason whatsoever, including, without limitation, a determination by any Governmental Authority or court that such agreement is invalid, void or unenforceable or the Company or any Guarantor shall contest or deny in writing the validity or enforceability of any of its obligations under the Guaranty Agreement or any Security Document to which it is a party, or (3) other than during any Collateral Release Period, any Security Document shall for any reason fail to create a valid and perfected first priority security interest in any Collateral purported to be covered thereby, subject to the Liens permitted by Section 10.5.

1.17    Section 22.3 of the Note Purchase Agreement shall be and is hereby amended by adding the following sentence to the end thereof to read as follows:

For purposes of determining compliance with the financial covenants contained in this Agreement, any election by the Company to measure any financial liability using fair value (as permitted by Accounting Standard Codification Topic No. 825-10-25 - Fair Value Option or similar accounting standard) shall be disregarded and such determination shall be made as if such election had not been made.

1.18    Section 22 of the Note Purchase Agreement shall be and is hereby amended by adding the following new Section 22.7 at the end of said Section:

Section 22.7.Environmental Indemnity.

The Company agrees to indemnify and hold harmless the Collateral Agent and each holder of the Notes, each Person claiming by, through, under or on account of any of the foregoing and the respective directors, officers, counsel and employees of each of the foregoing Persons (the “Indemnified Parties”) from and against any and all losses, claims, damages, liabilities and costs and expenses (herein, “Claims”) incurred in connection therewith (including but not limited to reasonable attorneys' and/or paralegals' fees and expenses and costs incurred in connection with any investigation or monitoring of conditions or any clean-up, remedial, removal or restoration work with respect to the Collateral undertaken or required by any Governmental Authority) to which any such Indemnified Party may become subject under any Environmental Laws applicable to the Company or any Guarantor or any of the Collateral, including without limitation the treatment, storage or disposal of Hazardous Materials on any of the Collateral, or as a result of the breach or non-compliance by the Company or any Guarantor with any Environmental Laws applicable to the Company or any of the Collateral; provided that the Company shall not be required to indemnify any Indemnified Party pursuant to this Section 22.7 for any claim resulting solely from the gross negligence, willful misconduct or fraud of such Indemnified Party. The provisions of this Section 22.7 shall survive the termination of this Agreement by payment in full of all of the Notes issued hereunder, by the foreclosure by the Collateral Agent on any or all of the Collateral under the Security Documents or otherwise, and shall survive the transfer of any Note or Notes issued hereunder.

1.19    Schedule B to the Note Purchase Agreement shall be and is hereby amended by adding, or amending and restating, the following definitions, and inserting them in the proper alphabetical order:

“Asset Disposition” shall mean any Transfer except:

(a)    any

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(1)     Transfer from a Subsidiary to the Company or to a Wholly-Owned Subsidiary (other than any GLC Venture or any Project Debt Entity);

(2)    Transfer from the Company to a Wholly-Owned Subsidiary (other than any GLC Venture or any Project Debt Entity); and

(3)    Transfer from any GLC Venture or Project Debt Entity to a GLC Venture or Project Debt Entity

so long as immediately before and immediately after the consummation of any such Transfer and after giving effect thereto, no Default or Event of Default would exist;

(b)    any Transfer made in the Ordinary Course of Business and involving only property that is either (1) inventory held for sale or (2) equipment, fixtures, supplies or materials no longer required in the operation of the business of the Company or any of its Subsidiaries or that is obsolete; and

(c)    any Transfer in one lot of all of the voting Securities of TIC, directly or indirectly, owned or held by the Company to TIC pursuant to that certain Stock Purchase Agreement dated as of December 23, 1996 between the Company and TIC, as amended, supplemented, restated or otherwise modified from time to time.

“Attributable Debt” shall mean, on any date, (a) in respect of any Capital Lease of the Company or any Subsidiary, the capitalized amount thereof that would appear as a liability on a balance sheet of such Person prepared as of such date in accordance with GAAP, (b) in respect of any Synthetic Lease Obligation of the Company or any Subsidiary, the capitalized amount of the remaining lease payments under the relevant lease that would appear as a liability on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a Capital Lease and (c) in respect of any Long-Term Lease relating to a Sale-and-Leaseback Transaction of the Company or any Subsidiary, the present value of all Lease Rentals required to be paid by such Person under such lease during the remaining term thereof (determined in accordance with generally accepted financial practice using a discount factor equal to the interest rate implicit in such lease if known or, if not known, of 12% per annum).

“Bank Credit Agreement” shall mean that certain Amended and Restated Credit Agreement dated as of October 11, 2012 among the Company, Granite Construction Company and GILC Incorporated, as borrowers, Bank of America, as administrative agent, collateral agent thereunder, swing line lender and L/C issuer, BBVA Compass and Bank of the West, as co-syndication agents, and the other lenders party thereto, as the same may be amended, supplemented, restated, refinanced or otherwise modified from time to time, and any credit agreement or other like agreement entered into by the Company which is substantially similar to or replaces the Bank Credit Agreement.

“Blocked Person” shall mean (a) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by OFAC (an “OFAC Listed Person”) or (b) a department, agency or instrumentality of, or is otherwise controlled by or acting on behalf of, directly or indirectly, (1) any OFAC Listed Person or (2) any Person, entity, organization, foreign country or regime that is subject to any OFAC Sanctions Program.

“Collateral” shall mean, collectively, all property of the Company, each Guarantor or any other Person in which the Collateral Agent or any other Secured Party is granted a Lien under any Security Document as security for all or any portion of the Secured Obligations, including, without limitation, obligations of the Company hereunder and under the Notes and/or the obligations of the Guarantors under the Guaranty Agreement. Notwithstanding anything to the contrary contained herein or in any other Security Document, the Collateral shall not include any property that would otherwise constitute a general intangible to the extent that the grant of a security interest in such property is prohibited by any requirement of law of a Governmental Authority, requires a consent not obtained from any Governmental Authority pursuant to such requirement of law or is prohibited by, or constitutes a breach or default under or results in the termination of or requires any consent not obtained under, any contract, license, permit, agreement, instrument or other document evidencing or giving rise to such property or, in the case of any investment property, any applicable shareholder, joint venture or similar agreement, except in each case to the extent that such requirement of law or the term in such contract, license, agreement, instrument or other document or shareholder, joint

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venture or similar agreement providing for such prohibition, breach, default or termination or requiring such consent is ineffective under applicable law; provided that this exclusion shall not apply to capital stock in Joint Ventures or Subsidiaries acquired or created after the Second Amendment Effective Date unless, after reasonable best efforts, the Company or the relevant Guarantor is unable either to avoid the conditions set forth in this exclusion or to obtain consents, waivers or approvals thereof.

“Collateral Agent” shall mean Bank of America, N.A. in its capacity as collateral agent under the Intercreditor Agreement and the Security Documents, and its successor and assigns in that capacity.

“Collateral Release Date” shall mean the date on which the Collateral has been released pursuant to Section 9.6(f).

“Collateral Release Period” shall mean any period of time during which the Collateral Agent is not required to have a Lien (other than set off rights) on any Collateral pursuant to the Security Documents.

“Collateral Re-Pledge Date” shall mean the date on which the Company and the Guarantors are required to pledge and grant Liens on the Collateral pursuant to Section 9.6(f).

“Consolidated Cash Taxes” shall mean, for any Subject Period, for the Company and its Subsidiaries on a consolidated basis (excluding, however, any Project Debt Entity), the aggregate of all taxes actually paid by such Persons in cash during such period.

“Consolidated EBITDA” shall mean, for any Subject Period, for the Company and its Subsidiaries on a consolidated basis (excluding, however, any Project Debt Entity), an amount equal to Consolidated Net Income for such period plus Consolidated Cash Taxes for such period and the following to the extent deducted in calculating such Consolidated Net Income: (a) Consolidated Interest Expense for such period, (b) depreciation and amortization expense for such period, and (c) any non-cash charges for such period (excluding any such non-cash charges that represent the accrual of, or reserve for, anticipated cash charges in any future period); provided that all components of Consolidated EBITDA for such period shall include or exclude, as the case may be, without duplication, such components of Consolidated EBITDA attributable to any Investment other than Construction JV Investments arising in the Ordinary Course of Business consummated during such period or any business or assets that have been Transferred after the first day of such period and prior to the end of such period, in each case as determined on a pro forma basis, in accordance with Regulation S-X promulgated by the SEC.

“Consolidated Fixed Charge Coverage Ratio” shall mean, as of any date of determination, the ratio of (a) Consolidated EBITDA, measured for the Subject Period ending on such date, to (b) Consolidated Fixed Charges, measured for the Subject Period ending on such date.

“Consolidated Fixed Charges” shall mean, for any Subject Period, for the Company and its Subsidiaries on a consolidated basis, the sum of (a) Consolidated Interest Expenses paid in cash, plus (b) the aggregate amount of Federal, state, local and foreign taxes paid in cash, plus (c) the aggregate principal amount of all regularly scheduled principal payments of Consolidated Funded Indebtedness (for the avoidance of doubt, excluding all payments in respect of revolving Debt and prepayments in respect of all Debt), plus (d) the lesser amount of (1) the aggregate amount of all capital expenditures and (2) $37,500,000, plus (e) the aggregate amount of all Restricted Payments made in cash.

“Consolidated Funded Indebtedness” shall mean, as of any date of determination, for the Company and its Subsidiaries on a consolidated basis, the sum of (a) the outstanding principal amount of all obligations, whether current or long-term, for borrowed money (including the Notes) and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments, with or without recourse, but not including Project Debt, plus (b) Attributable Debt (excluding Attributable Debt of the type described in clause (c) of the definition thereof and Project Debt), plus (c) without duplication, all Guaranties with respect to Debt of the types specified in clauses (a) and (b) above of Persons other than the Company or any Subsidiary.

“Consolidated Interest Coverage Ratio” shall mean,as of any date of determination, the ratio of (a) Consolidated EBITDA, measured for the Subject Period ending on such date, to (b) Consolidated Interest Expense, measured for the Subject Period ending on such date.

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“Consolidated Interest Expense” shall mean, for any Subject Period, for the Company and its Subsidiaries on a consolidated basis, the sum of (a) all interest, premium payments, fees, charges and related expenses of the Company and its Subsidiaries in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP, plus (b) the portion of rent expense of the Company and its Subsidiaries with respect to such period under Capital Leases that is treated as interest in accordance with GAAP and the portion of Synthetic Lease Obligations payable by the Company and its Subsidiaries with respect to such period that would be treated as interest in accordance with GAAP if such lease were treated as a capital lease under GAAP; excluding for purposes of clause (a) and (b) hereof, such amounts in respect of Project Debt.

“Consolidated Leverage Ratio” shall mean, as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness as of such date to (b) Consolidated EBITDA, measured for the Subject Period ending on or most recently ended prior to such date.

“Consolidated Net Income” shall mean, for any Subject Period, for the Company and its Subsidiaries on a consolidated basis, the net income of the Company and its Subsidiaries from continuing operations, excluding extraordinary items and excluding gains and losses from Transfers for that period; not including, however, net income in respect of or attributable to any Project Debt Entity unless and until such net income has been received by the Company or a Subsidiary (other than a Project Debt Entity) in the form of dividends or similar distributions.

“Consolidated Stockholders' Equity” shall mean, as of any date of determination for the Company and its Subsidiaries (excluding Project Debt Entities) on a consolidated basis, stockholders' equity as of that date, determined in accordance with GAAP.

“Consolidated Tangible Net Worth” shall mean, as of any date of determination, the amount equal to Consolidated Stockholders' Equity on that date minus the Intangible Assets of the Company and its Subsidiaries (excluding Project Debt Entities) (determined on a consolidated basis in accordance with GAAP) on that date.

“Construction JV” shall mean any Joint Venture entered into by the Company or any of its Subsidiaries, initially, with any one or more other Persons in the Ordinary Course of Business solely for purposes of undertaking or completing a construction project; provided that a Construction JV shall not be deemed to cease being a Construction JV after the withdrawal or buy-out of such other Person(s) from the Joint Venture or the purchase, acquisition or redemption of such other Person's interest in such Joint Venture.

“Construction JV Investments” shall mean Investments in any Construction JV arising upon any initial capital contribution to or subsequent capital contribution in such Construction JV, and participated in ratably by all then existing co-joint venturers having an interest in such Construction JV, solely for purposes of undertaking or completing a construction project and Investments arising in connection with the purchase, acquisition, redemption or buy-out of another co-joint venturer's interest in such Construction JV; provided Construction JV Investments shall not include the incurrence, directly or indirectly, of any Guaranty by the Company or any of its Subsidiaries.

“Contingent Acquisition Obligation” shall mean those contingent obligations (including, without limitation, purchase price adjustments, indemnification obligations and “earnouts”) of the Company or any of its Subsidiaries incurred in favor of a seller (or other third party entitled thereto) under or with respect to any acquisition or Investment.

“Controlled Entity” shall mean any of the Subsidiaries of Company and any of their respective Controlled Affiliates. As used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

“Debt” shall mean, as to any Person at a particular time, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

(a)    all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

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(b)    all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), reimbursement agreements, bankers' acceptances, bank guaranties, surety bonds and similar instruments (in each case, whether or not such obligations are contingent or absolute); provided that the amount of any such contingent obligation permitted under this clause (b) shall be deemed to be equal to the maximum reasonably anticipated liability in respect thereof;

(c)    net obligations under any Swap Contract in an amount equal to the Swap Termination Value thereof;

(d)    all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the Ordinary Course of Business);

(e)    indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

(f)    Capital Leases and Synthetic Lease Obligations; and

(g)    all Guaranties of such Person in respect of any of the foregoing.

For all purposes hereof, the Debt of any Person shall include the Debt of any Joint Venture (other than a Joint Venture that is itself a corporation or limited liability company) in which such Person is a general partner or joint venturer, unless such Debt is (1) expressly made non-recourse to such Person and to such Person's assets (subject only to customary exceptions acceptable to the Required Holders) or (2) Project Debt. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of any Capital Lease or Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable Debt in respect thereof as of such date.

“Direct Foreign Subsidiary” shall mean a Foreign Subsidiary a majority of whose Voting Securities, or a majority of whose Subsidiary Securities, are owned by the Company or a Domestic Subsidiary.

“Domestic Subsidiary” shall mean any Subsidiary that is organized under the laws of any political subdivision of the United States, other than any such Subsidiary that is treated as a disregarded entity for U.S. federal income tax purposes if substantially all of the assets of such Subsidiary consist of capital stock of one or more direct or indirect Subsidiaries organized under the laws of any jurisdiction other than the United States or any political subdivision thereof.

“Foreign Subsidiary” shall mean any Subsidiary other than a Domestic Subsidiary.

“GLC Venture” shall mean any Joint Venture, now or hereafter formed by the Company or any of its Subsidiaries with any other Person in the Ordinary Course of Business of the Company or such Subsidiary for the purpose of engaging in the business of real estate development and/or Transfer of real estate or interests in real estate or entities owning real estate; provided that a GLC Venture shall not be deemed to cease being a GLC Venture after the withdrawal or buy-out of such other Person(s) from the Joint Venture or the purchase, acquisition or redemption of such other Person's interest in such Joint Venture.

“Intangible Assets” shall mean assets that are considered to be intangible assets under GAAP, including customer lists, goodwill, computer software, copyrights, trade names, trademarks, patents, franchises, licenses, unamortized deferred charges, unamortized debt discount and capitalized research and development costs.

“Intercreditor Agreement” shall mean the Collateral Agency and Intercreditor Agreement among the Collateral Agent, the Secured Parties and the Company, dated as of October 11, 2012, as amended, restated, supplemented or modified from time to time in accordance with the terms thereof.

“Investment” shall mean, as to any Person, any acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of capital stock or other Securities of another Person, (b) a loan, advance or capital contribution to, guaranty of debt of, or purchase or other acquisition of any other

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debt or equity participation or interest in, another Person, including any partnership or joint venture interest in or with such other Person, (c) the provision of goods or services to another Person for consideration other than cash payable in full upon the delivery or provision of such goods or services (other than trade accounts payable in the Ordinary Course of Business), or (d) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit of that Person.

“Joint Venture” shall mean a single-purpose corporation, partnership, limited liability company, joint venture or other similar legal arrangement (whether created by contract or conducted through a separate legal entity) now or hereafter formed by one Person with another Person in order to conduct a common venture or enterprise with such Person.

“Material Adverse Effect” shall mean a material adverse effect on (a) the business, operations, affairs, financial condition, assets, properties or prospects of the Company and its Subsidiaries, taken as a whole, (b) the ability of the Company to perform its obligations under this Agreement, the Notes, any Security Document to which it is a party or any other Transaction Document to which it is a party, (c) the ability of any Guarantor to perform its obligations under the Guaranty Agreement, any Security Document to which it is a party or any other Transaction Document to which it is a party, (d) the validity or enforceability of this Agreement, the Notes, the Guaranty Agreement, any Security Document or any other Transaction Document or (e) a material impairment of the rights and remedies of the Collateral Agent or any holder of a Note under any Transaction Document.

“Material Subsidiary” shall mean each Subsidiary identified as a Material Subsidiary on Schedule 5.4, each Subsidiary that is an obligor or guarantor of any Debt existing under the Bank Credit Agreement or an Existing Note Agreement and each other Subsidiary which meets either of the following conditions:

(a)    such Subsidiary's total revenues for the period of the immediately preceding four fiscal quarters are equal to or greater than 10% of the consolidated total 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 or quarterly financial statements of the Company and its Subsidiaries; or

(b)    such Subsidiary's total assets, as of the last day of the immediately preceding fiscal quarter, are equal to or greater than 10% of Consolidated Total Assets, in each case as reflected in the most recent annual or quarterly financial statements of the Company and its Subsidiaries.

If, at any time, Subsidiaries qualifying as Material Subsidiaries which, in the aggregate and together with the total revenues and total assets of the Company, do not represent at least 80% of the consolidated total revenues of the Company and its Subsidiaries and at least 80% of Consolidated Total Assets (the “80% Threshold”), the Company shall designate additional Domestic Subsidiaries or, to the extent no material adverse tax consequences shall result, Foreign Subsidiaries as Material Subsidiaries until the 80% Threshold is satisfied collectively by all Material Subsidiaries. Once a Subsidiary qualifies as or is designated by the Company as a Material Subsidiary, it shall continue to constitute a Material Subsidiary throughout the term of this Agreement, until such time as the Company provides to the holders of the Notes a certificate in accordance with Section 9.6(c) that such Subsidiary is no longer required to be designated as such pursuant to the terms hereof.

“Mortgage” shall mean any mortgage, deed of trust, trust deed or other equivalent document now or hereafter encumbering any fee-owned real property of the Company or any Guarantor in favor of the Collateral Agent on behalf of the Secured Parties, as security for any of the Secured Obligations, each of which shall be in form and substance reasonably acceptable to the Required Holders.

“Mortgaged Properties” shall mean, collectively, the real properties owned by the Company and the Guarantors and identified on Schedule 6, including, without limitation, all buildings, improvements, structures and fixtures now or subsequently located thereon and owned by the Company or any such Guarantor.

“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.

“OFAC Sanctions Program” shall mean any economic or trade sanction that OFAC is responsible for administering and enforcing. A list of OFAC Sanctions Programs may be found at http://www.ustreas.gov/offices/enforcement/ofac/programs/.

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“Ordinary Course of Business” shall mean, in respect of any transaction involving the Company or any Subsidiary, (a) the ordinary course of such Person's business, substantially as conducted by any such Person prior to or as of the Second Amendment Effective Date, or in a manner reasonably related thereto, and undertaken by such Person in good faith and not for purposes of evading any covenant or restriction herein or in any other Transaction Document, or (b) transactions outside the ordinary course of such Person's then-existing business, as long as the Company provides written notice to the holders of the Notes prior to such Person undertaking such business, specifically referencing this definition, provided that the Required Holders shall not have delivered written objections to the Company within five Business Days after their receipt of such written notice.

“Pledge Agreement” shall mean that certain Amended and Restated Securities Pledge Agreement dated as of the Second Amendment Effective Date among the Company, certain Guarantors and the Collateral Agent, for the benefit of the Secured Creditors, in the form attached hereto as Exhibit PA, as supplemented from time to time by the execution and delivery of Pledge Joinder Agreements pursuant to Section 9.6, as the same may be otherwise supplemented (including by Pledge Agreement Supplement), each as amended, restated, supplemented or otherwise modified from time to time.

“Pledge Agreement Supplement” shall mean, with respect to the Pledge Agreement, a Pledge Agreement Supplement substantially in the form attached to the Pledge Agreement, executed and delivered by the Company or a Guarantor to the Collateral Agent pursuant to Section 9.6.

“Pledge Joinder Agreement” shall mean each Pledge Joinder Agreement, substantially in the form thereof attached to the Pledge Agreement, executed and delivered by a Guarantor to the Collateral Agent pursuant to Section 9.6.

“Pledged Interests” shall mean the Subsidiary Securities heretofore pledged to the Collateral Agent and the Subsidiary Securities required to be pledged as Collateral pursuant to this Agreement or the terms of the Pledge Agreement; provided that notwithstanding any contrary provision in any Transaction Document, in the case of any Foreign Subsidiary, “Pledged Interests” shall be limited to a pledge of 65% of the Voting Securities and 100% of the other Subsidiary Securities issued by such Foreign Subsidiary.

“Priority Debt” shall mean (without duplication), as of the date of any determination thereof, the sum of (a) all unsecured Debt of Subsidiaries (including Attributable Debt of Subsidiaries and all guaranties of Debt of the Company) but excluding (1) unsecured Debt owing to the Company or any Wholly-Owned Subsidiary (other than any GLC Venture or a Project Debt Entity), (2) unsecured Debt outstanding at the time such Person became a Subsidiary, provided that such Debt shall have not been incurred in contemplation of such Person becoming a Subsidiary, (3) all guaranties of Debt of the Company by any Subsidiary which has also guaranteed the Notes pursuant to the Guaranty Agreement, (4) all unsecured Debt of Subsidiaries incurred under the Bank Credit Agreement by any Subsidiary which has also guaranteed the Notes pursuant to the Guaranty Agreement and (5) at any time other than during a Collateral Release Period, all unsecured Debt of Subsidiaries that is Specified Debt, (b) all Debt of the Company and its Subsidiaries secured by Liens other than Debt that is (1) secured by Liens permitted by subparagraphs (a) through (t), inclusive, of Section 10.5 and (2) at any time other than during a Collateral Release Period, secured Debt of the Company and its Subsidiaries that is Specified Debt, and (c) all Attributable Debt of the Company other than, at any time other than during a Collateral Release Period, Attributable Debt that is Specified Debt, but excluding, in the case of clause (a), (b) and (c) hereof, Project Debt permitted by Section 10.3(b).

“Project Debt” shall mean, in respect of any GLC Venture (the “obligor”), any Debt of such obligor incurred in the Ordinary Course of Business of such obligor and of the Company and its Subsidiaries, which may be secured by a Lien on assets of such obligor, but as to which there is no general recourse to the Company or any Guarantor except against such obligor (a) for breach of customary representations and warranties, or (b) to the extent such obligor is a limited liability company, corporation, limited partnership or other entity as to which neither the Company nor any Guarantor (other than obligor) is, directly or indirectly (at law, through any Guaranty or otherwise), liable to pay the debts of such obligor.

“Project Debt Entity” shall mean at any time, any GLC Venture obligated in respect of Project Debt at such time.

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“Restricted Payment” shall mean any dividend or other distribution (whether in cash, Securities or other property) with respect to any capital stock or other equity interest of the Company or any Subsidiary, or any payment (whether in cash, Securities or other property), including any sinking fund or similar deposit on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such capital stock or other equity interest or of any option, warrant or other right to acquire any such capital stock or other equity interest.

“Second Amendment Effective Date” shall mean October 11, 2012.

“Secured Creditors” shall mean the “Secured Creditors” as defined in the Intercreditor Agreement.

“Secured Obligations” means the “Secured Obligations” as defined in the Intercreditor Agreement.

“Security Agreement” shall mean that certain Amended and Restated Security Agreement dated as of theSecond Amendment Effective Date among the Company, the Guarantors and the Collateral Agent, in the form attached hereto as Exhibit SA, as supplemented from time to time by the execution and delivery of Security Joinder Agreements pursuant to Section 9.6, and as modified, amended, amended and restated or supplemented from time to time.

“Security Documents” shall mean, collectively, the Pledge Agreement, the Security Agreement, the Mortgages and all other agreements (including control agreements), instruments and other documents, whether now existing or hereafter in effect, pursuant to which the Company or any Subsidiary or other Person shall grant or convey to the Collateral Agent or any Secured Party a Lien in, or any other Person shall acknowledge any such Lien in, property as security for all or any portion of the Secured Obligations or any other obligation under any Transaction Document, as any of them has been or may be amended, amended and restated, modified or supplemented from time to time.

“Security Joinder Agreement” shall mean each Security Joinder Agreement, substantially in the form attached to the Security Agreement, executed and delivered by a Guarantor or any other Person to the Collateral Agent pursuant to Section 9.6.

“Specified Debt” shall mean, as to any Person at a particular time, all of the following:

(a)    all Debt of the Company and its Subsidiaries outstanding on the Second Amendment Effective Date and listed on Schedule 10.4 and any refinancings, refundings, renewals or extensions thereof, provided that the amount of such Debt is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder;

(b)    Debt in respect of Capital Leases, Synthetic Lease Obligations, Sale-and-Leaseback Transactions and purchase money Debt for fixed or capital assets acquired by the Company or any Subsidiary, provided that the aggregate principal amount of (1) all purchase money Debt for fixed or capital assets that may be incurred by the Company or any of its then-existing Subsidiaries in any fiscal year of the Company and included in Specified Debt under this clause (b) shall not exceed $25,000,000, (2) all Debt in respect of Capital Leases, Synthetic Lease Obligations and Sale-and-Leaseback Transactions to finance the acquisition of fixed or capital assets incurred by the Company or any of its Subsidiaries in any fiscal year of the Company and included in Specified Debt under this clause (b) shall not exceed $25,000,000 and (3) all Debt in respect of Capital Leases, Synthetic Lease Obligations, Sale-and-Leaseback Transactions and purchase money Debt for fixed or capital assets of Persons immediately prior to such Persons becoming Subsidiaries or being merged with or into (or otherwise becoming acquired by) the Company or any of its Subsidiaries following the Second Amendment Effective Date included in Specified Debt under this clause (b) shall not exceed an amount equal to $65,000,000, provided that none of such Debt was incurred in anticipation of any such merger or acquisition;

(c)    Debt incurred in the Ordinary Course of Business in connection with (1) securing the performance of bids, trade contracts (other than for borrowed money, the obtaining of advances or credit or the payment of the deferred purchase price of property), and statutory obligations, in each case, solely for the account and benefit of the Company, its Subsidiaries, any GLC Venture or Construction JV, (2) obligations on surety and appeal bonds solely for the account and benefit of the Company, its Subsidiaries, any GLC Venture or Construction JV (other than in relation to borrowed money debt, the obtaining of advances or credit

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or the payment of the deferred purchase price of property), and (3) other obligations of a like nature incurred in the Ordinary Course of Business solely for the account and benefit of the Company, its Subsidiaries, any GLC Venture or Construction JV (other than in relation to borrowed money debt, the obtaining of advances or credit or the payment of the deferred purchase price of property), in each of the foregoing cases to the extent not otherwise prohibited by the terms of any Transaction Document;

(d)    Debt of the Company or any Guarantor comprised solely of (1) the outstanding principal amount of unsecured obligations, whether current or long-term, for borrowed money and all obligations evidenced by bonds (other than performance, surety and appeal bonds), debentures, notes, loan agreements or other similar instruments, (2) Attributable Indebtedness in respect of Capital Leases and Synthetic Lease Obligations, (3) Contingent Acquisition Obligations in respect of any acquisition or Investment, or (4) without duplication, obligations under any Guaranty with respect to Debt of the types specified in the immediately preceding clauses (1) and (3), provided that, (i) the aggregate principal amount of outstanding Debt of the types permitted by the immediately preceding clauses (1) through (4) and is included in Specified Debt under this clause (d) shall not exceed $150,000,000, (ii) the aggregate principal amount of outstanding Debt of the types permitted by the immediately preceding clauses (1) through (4) that is subject to amortization or payment at maturity prior to October 11, 2016 and is included in Specified Debt under this clause (d) shall not exceed $100,000,000 and (iii) no such Debt shall be included in Specified Debt under this clause (d) if such Debt represents Debt of any co-joint venturer in any Joint Venture, to which the Company or any Subsidiary is a party, that is assumed by the Company or any Subsidiary, if such Debt was not originally incurred by such co-joint venturer in connection with (and relate solely to) the subject Joint Venture;

(e)    Guaranties by the Company or any Guarantor of Debt otherwise constituting Specified Debt of the Company or any Guarantor;

(f)    Debt arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds in the ordinary course of business; provided, however, that such Debt is extinguished within five Business Days of incurrence; and

(g)    customer deposits and advance payments received in the Ordinary Course of Business.

“Subject Period” shall mean, as of any date of determination, the four consecutive fiscal quarter period ending on such date.

“Subsidiary Securities” shall mean the shares of capital stock or other equity interests issued by or equity participations in any Material Subsidiary, whether or not constituting a “security” under Article 8 of the Uniform Commercial Code as in effect in any jurisdiction.

“Swap Contract” shall mean (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

“Swap Termination Value” shall mean, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts.

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“Synthetic Lease Obligation” shall mean the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

“Transaction Documents” shall mean, collectively, this Agreement, each Note, the Guaranty Agreement, the Security Documents, the Intercreditor Agreement, and the other agreements, documents, certificates and instruments now or hereafter executed or delivered by a Company or any Subsidiary or Affiliate in connection with this Agreement.

“Transfer” shall mean the sale, transfer, license, lease or other disposition (including, without limitation, any sale and leaseback transaction) of any property, including, without limitation, Subsidiary Stock, by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith; provided that the term “Transfer” shall not apply to or include any lease of real property. For purposes of determining the application of the Net Proceeds Amount in respect of any Transfer, the Company may designate any Transfer as one or more separate Transfers each yielding a separate Net Proceeds Amount. In any such case, (a) the Disposition Value of any property subject to each such separate Transfer and (b) the amount of Consolidated Total Assets attributable to any property subject to each such separate Transfer shall be determined by ratably allocating the aggregate Disposition Value of, and the aggregate Consolidated Total Assets attributable to, all property subject to all such separate Transfers to each such separate Transfer on a proportionate basis.

“Voting Securities” shall mean shares of capital stock issued by a corporation, or equivalent interests in any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right so to vote has been suspended by the happening of such a contingency.

1.20    Schedule B to the Note Purchase Agreement shall be and is hereby further amended to delete the following definitions therefrom:

“Capital Lease Obligation,” “Consolidated Net Worth,” “Consolidated Total Capitalization,” “Consolidated Total Debt,” “Preferred Stock,” “Receivables Securitization Transactions” and “Restricted Investments.”

1.21    Schedule 5, Schedule 6, Schedule 10.4, Schedule 10.6(a), Schedule 10.11, Exhibit PA and Exhibit SAare added to the Note Purchase Agreement to read respectively as Schedule 5, Schedule 6, Schedule 10.4, Schedule 10.6(a), Schedule 10.11, Exhibit PA and Exhibit SAattached hereto.

1.22    Schedule 5.4 to the Note Purchase Agreement shall be and is hereby amended and restated in its entirety to read as set forth on Schedule 5.4 attached hereto.

SECTION 2.    REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE GUARANTORS.

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

(a)this Second Amendment, each Security Document and the Intercreditor Agreement have been duly authorized by all necessary corporate or other action on the part of the Company and/or the Guarantors party thereto, executed and delivered by the Company and/or the Guarantors party thereto and this Second Amendment, the Note Purchase Agreement, as amended by this Second Amendment, each Security Document and the Intercreditor Agreement constitute the legal, valid and binding obligations, contracts and agreements of the Company and/or the Guarantors party thereto, enforceable against such Persons in accordance with their respective 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)Schedule 5.4 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, the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each other Subsidiary and whether or not such Subsidiary is a Material Subsidiary on the Second Amendment Effective Date, (2) of the Company's Affiliates and (3) of the Company's directors and executive officers;

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(c)the execution and delivery of this Second Amendment, each Security Document and the Intercreditor Agreement by the Company and/or the Guarantors party thereto and the performance thereof and of the Note Purchase Agreement, as amended by this Second Amendment, will not (1) violate (i) any provision of law, statute, rule or regulation or its certificate of incorporation or bylaws or other charter documents, (ii) any order of any court or any rule, regulation or order of any other agency or government binding upon it, or (iii) 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 (2) 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 (1)(iii) of this Section 2.1(c);

(d)no consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution and delivery of this Second Amendment, the Security Documents or the Intercreditor Agreement by the Company and/or the Guarantors party thereto or the performance thereof or of the Note Purchase Agreement, as amended by this Second Amendment, by the Company and/or any Guarantor party thereto except for (1) the authorizations, approvals, actions, notices and filings which have been duly obtained, taken, given or made and are in full force and effect or (2) the filing of Uniform Commercial Code financing statements and any applicable state certificate of title statute with respect to motor vehicles to perfect and exercise remedies with respect to the security interest conferred under the Security Documents, filings of security agreements in the United States Patent and Trademark Office and the United States Copyright Office, the recording of Mortgages pursuant to the Transaction Documents and filings required under state and federal securities laws upon the sale of stock;

(e)the provisions of the Security Documents are effective to create in favor of the Collateral Agent for the benefit of the Secured Parties a legal, valid and enforceable first priority Lien (subject only to Liens permitted by Section 10.5) on all right, title and interest of the Company or the applicable Guarantor in the Collateral described therein. Except for filings and actions contemplated hereby and by the Security Documents, no filing or other action will be necessary to perfect or protect such Liens;

(f)(1) other than in connection with a non-ratable prepayment or purchase of Notes pursuant to Section 8.5, the Notes and all other obligations of the Company under this Agreement shall rank at least pari passu in right of payment with all other present and future Secured Obligations of the Company; and

(2) the obligations of each Guarantor under the Guaranty Agreement rank at least pari passu in right of payment with all other present and future Secured Obligations of such Subsidiary Guarantor;

(g)as of the Second Amendment Effective Date, there exists no Project Debt, other than as specifically identified on Schedule 5;

(h)the Mortgaged Properties listed on Schedule 6 constitute all of the material real properties owned by the Company and the Guarantors as of the Second Amendment Effective Date;

(i)except as superseded by the representations and warranties set forth in Exhibit SR 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 date (except to the extent such representations and warranties expressly refer to an earlier date, in which case they were true and correct in all material respects as of such earlier date); and

(j)as of the date hereof and after giving effect to this Second Amendment, each of the Security Documents and the Intercreditor Agreement, no Default or Event of Default has occurred which is continuing and no waiver of Default or Event of Default is in effect.

SECTION 3.    CONDITIONS TO EFFECTIVENESS OF THIS SECOND AMENDMENT.

3.1    Upon satisfaction of each and every one of the following conditions, this Second Amendment shall become effective as of the date first written above:

(a)    executed counterparts of this Second 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 each Noteholder or its special counsel;

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(b)    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;

(c)    the Intercreditor Agreement, in form and substance satisfactory to each Noteholder, shall have been duly executed by each of the parties thereto and shall be in full force and effect and a copy thereof shall have been delivered to each Noteholder or its special counsel;

(d)    each Noteholder or its special counsel (or, in the case of clause (2) below, the Collateral Agent) shall have received an executed counterpart of the Security Agreement and the Pledge Agreement, each in form and substance satisfactory to the Required Holders, together with:

(1)    Uniform Commercial Code financing statements suitable in form and substance for filing in all places required by applicable law to perfect the Liens of the Collateral Agent under the Security Documents as a first priority Lien as to items of Collateral in which a security interest may be perfected by the filing of financing statements, and such other documents and/or evidence of other actions as may be reasonably necessary under applicable law to perfect the Liens of the Collateral Agent under such Security Documents as a first priority Lien in and to such other Collateral as the Required Holders may reasonably require, including without limitation the delivery by the Company or any Subsidiary of all certificates evidencing pledged interests, accompanied in each case by duly executed stock powers (or other appropriate transfer documents) in blank affixed thereto;

(2)    the originals of all promissory notes issued in connection with Debt permitted by Section 7.03(e) of the Bank Credit Agreement, together with duly executed undated endorsements in blank affixed thereto;

(3)    except with the express prior written consent of the Required Holders in each instance, with respect to the Investment Property (as defined in the Security Agreement) listed on Schedule 9(e) of the Security Agreement, copies of each existing Qualifying Control Agreement (as defined in the Security Agreement) from the applicable securities intermediary;

(4)    except with the express prior written consent of the Required Holders in each instance, with respect to the Deposit Accounts (as defined in the Security Agreement) listed on Schedule 9(f) of the Security Agreement, copies of each existing Qualifying Control Agreement (as defined in the Security Agreement) from the applicable depositary institutions; and

(5)    evidence that all insurance required to be maintained pursuant to the Note Purchase Agreement, the Security Documents or any other Transaction Document has been obtained and is in effect, together with the certificates of insurance and endorsements, naming the Collateral Agent on behalf of the Secured Creditors as an additional insured or lender's loss payee, as the case may be, under all insurance policies maintained with respect to the assets and properties of the Company and the Guarantors that constitute Collateral.

(e)    each Noteholder or its special counsel shall have received an executed counterpart of a Mortgage, or an amendment to Mortgage, in each case, in form and substance satisfactory to the Required Holders, with respect to each Mortgaged Property listed on Schedule 6 in recordable form, and, to the extent not previously delivered to the Collateral Agent, together with:

(1)    to the extent necessary under applicable law, for filing in the appropriate county land office(s), Uniform Commercial Code financing statements covering fixtures, if required, in each case appropriately completed;

(2)    mortgage policies of title insurance (which, if satisfactory to the Required Holders, may be in the form of a mark-up of pro forma mortgage policies which are satisfactory to the Required Holders subsequently to be followed by mortgage policies) relating to each Mortgage of the Mortgaged Property referred to above, issued by a title insurer reasonably satisfactory to the Required Holders (the “Title Company”), in an insured amount satisfactory to the Required Holders and insuring the Collateral Agent and the Secured Creditors that the Mortgage on each such Mortgaged Property is a valid and enforceable first priority mortgage lien on such Mortgaged Property, free and clear of all defects and encumbrances except Liens permitted by Section 10.5, with each such mortgage policy (i) to be in form and substance satisfactory to the Required Holders, (ii) to include a reference to the relevant survey with no survey exceptions except those theretofore approved by the Required Holders (such approval not to be unreasonably withheld or delayed), (iii) not to include any exception(s) for mechanic's liens, and (iv) to provide for affirmative insurance

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and endorsements (to the extent applicable and available in the relevant jurisdiction) as the Required Holders may reasonably request;

(3)    if requested by the Required Holders, (i) surveys for each Mortgaged Property sufficient for the Title Company to remove the standard survey exceptions from the title insurance policies and issue the endorsements required in clause (2)(iv) above, or (ii) affidavits delivered to the title insurer sufficient for the Title Company to remove the standard survey exceptions from the title policies and issue the endorsements referenced in clause (2)(iv) above;

(4)    evidence (which may be satisfied by appropriate instructions in a funds flow memorandum) of payment to the title insurer of all expenses and premiums of the title insurer in connection with the issuance of such policies and endorsements and payment to the Title Company of an amount equal to any fees or taxes, including recording, mortgage, intangible and stamp taxes payable in connection with recording the Mortgages and Uniform Commercial Code financing statements covering fixtures, if applicable, in the appropriate county or state land office(s);

(5)    in connection with any Mortgage, customary opinions of counsel in the jurisdiction where each Mortgaged Property is located; and

(6)    evidence of flood insurance coverage satisfactory to the Required Holders for each Mortgaged Property located in a specified flood hazard zone pursuant to a Standard Flood Hazard Determination.

(f)    the Bank Credit Agreement, providing for a $215,000,000 revolving credit facility to the Company and having other terms and conditions satisfactory to the Required Holders, shall have been duly executed and delivered by each of the parties thereto and shall be in full force and effect and a copy thereof shall have been delivered to each Noteholder or its special counsel;

(g)    an amendment to the Note Purchase Agreement, dated as of December 12, 2007, by and among the Company and the Purchasers named on the Schedule A attached thereto, consistent with the amendments set forth in this Amendment, and such amendment shall have been duly executed by each of the parties thereto and shall be in full force and effect and a copy thereof shall have been delivered to each Noteholder or its special counsel;

(h)    such certificates of resolutions or other action, incumbency certificates and/or other certificates (including specimen signatures) of Responsible Officers of the Company and each Guarantor as the Required Holders or their special counsel may require evidencing the identity, authority and capacity of each Responsible Officer thereof authorized to act as a Responsible Officer in connection with this Second Amendment, the Security Documents to which such Person is a party and the Intercreditor Agreement;

(i)    such documents and certifications as the Required Holders may reasonably require to evidence that the Company and each Guarantor is duly organized or formed, and that the Company and each Guarantor is validly existing, in good standing and qualified to engage in business in each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect;

(j)    each Noteholder shall have received a customary opinion, addressed to the such Noteholder, of Jones Day, counsel for the Company and the Guarantors, and the general counsel or assistant general counsel for the Company and the Guarantors, in each case in form and substance satisfactory to the Required Holders concerning the Company, the Guarantors, this Second Amendment, the Security Documents (which may include some or all of the Mortgages), the Intercreditor Agreement and as to such matters as the Required Holders may reasonably request;

(k)a certificate of a Responsible Officer of the Company and each Guarantor either (1) attaching copies of all consents, licenses and approvals required in connection with the execution, delivery and performance by such Person and the validity against such Person of the Transaction Documents to which it is a party, and such consents, licenses and approvals shall be in full force and effect, or (B) stating that no such consents, licenses or approvals are so required;

(l)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

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(m)the Company shall have paid the fees and expenses of Schiff Hardin LLP, special counsel to the Noteholders, in connection with the negotiation, preparation, approval, execution and delivery of this Second Amendment, the Security Documents and the Intercreditor Agreement.

SECTION 4.    REAFFIRMATION OF GUARANTY AGREEMENT.

4.1    By their execution and delivery hereof, the undersigned Guarantors hereby acknowledge and agree to this Second Amendment and reaffirm the Guaranty Agreement dated as of May 1, 2001 given in favor of each Noteholder and their respective successors and assigns.

SECTION 5.    POST-CLOSING COVENANT.

5.1    Unless otherwise agreed to by the Required Holders (in their reasonable discretion), the Company and the Guarantors hereby agree to deliver, or cause to be delivered, to the holders of the Notes each of the agreements, instruments and other documents (each in form and substance reasonably acceptable to the Required Holders) set forth on Exhibit P-C attached hereto and made a part hereof, and to take, or cause to be taken, each of the actions set forth on Exhibit P-C, in each case within the time set forth therein for each such agreement, instrument, document or action. The Required Holders may, but shall not be obligated to, extend the time (if applicable) for the satisfaction of any of the requirements set forth in Exhibit P-C in its reasonable discretion.

5.2    The Company and the Guarantors hereby acknowledge and agree that the failure to satisfy any of the requirements set forth in Exhibit P-C within the time provided herein or therein (including any extension granted by the Required Holders pursuant to the last sentence of Section 5.1) shall constitute a default hereunder and an additional Event of Default under the Note Purchase Agreement for all purposes, and, without limiting the foregoing, all rights, powers, remedies and restrictions, including restrictions on extensions of credit, under the Transaction Documents resulting from an Event of Default shall be applicable.

SECTION 6.    MISCELLANEOUS.

6.1    No right, power or remedy conferred by this Second Amendment, the Note Purchase Agreement, by any Note, by the Guaranty Agreement, by any Security Document or by any other Transaction Document upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise.

6.2    The Company will pay all reasonable costs and expenses (including reasonable attorneys' fees of a special counsel for the Purchasers and the Collateral Agent and, if reasonably required by the Required Holders, local or other counsel) incurred by each holder of a Note or the Collateral Agent in connection with the transactions contemplated hereby and in connection with any amendments, waivers or consents under or in respect of this Second Amendment, the Note Purchase Agreement, the Notes, the Guaranty Agreement, any Security Document or any other Transaction Document (whether or not such amendment, waiver or consent becomes effective), including, without limitation: (a) the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under this Second Amendment, the Note Purchase Agreement, the Notes, the Guaranty Agreement, any Security Document or any other Transaction Document or the Collateral or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Second Amendment, the Note Purchase Agreement, the Notes, the Guaranty Agreement, any Security Document or any other Transaction Document or the Collateral, or by reason of being a holder of any Note or a beneficiary of the Guaranty Agreement or any Security Document or any other Transaction Document, and (b) the costs and expenses, including financial advisors' fees, incurred in connection with the insolvency or bankruptcy of the Company or any Subsidiary or in connection with any work-out or restructuring of the transactions contemplated hereby, by the Note Purchase Agreement, by the Notes, by the Guaranty Agreement, by any Security Document or by any other Transaction Document or any realization upon the Collateral.

6.3    The Company will provide each holder of the Notes (irrespective of the amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof, of the Note Purchase Agreement, of the Notes, of any Security Document or of any other Transaction Document.

6.4    The Company will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security or provide other credit support, to any holder of Notes as consideration for or as an inducement to the entering into by any holder of Notes of any waiver or amendment of any

24

of the terms and provisions hereof, of any Note, the Guaranty Agreement, any Security Document or any other Transaction Document unless such remuneration is concurrently paid, or security is concurrently granted or other credit support concurrently provided, on the same terms, ratably to each holder of Notes then outstanding even if such holder did not consent to such waiver or amendment.

6.5    This Second Amendment shall be construed in connection with and as part of the Note Purchase Agreement, and except as modified and expressly amended by this Second 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.

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

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

6.8    This Second Amendment shall he governed by and construed in accordance with the laws of the State of New York.

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

[Remainder of page intentionally left blank.]

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GRANITE CONSTRUCTION INCORPORATED

By /s/ Laurel J. Krzeminski

Laurel J. Krzeminski

Its VP and CFO

By /s/ Jigisha Desai

Jigisha Desai

Its VP Treasurer

GRANITE CONSTRUCTION COMPANY

By /s/ Laurel J. Krzeminski

Laurel J. Krzeminski

Its VP and CFO

By /s/ Jigisha Desai

Jigisha Desai

Its VP Treasurer

GILC INCORPORATED

By /s/ Laurel J. Krzeminski

Laurel J. Krzeminski

Its President and CEO

By /s/ Jigisha Desai

Jigisha Desai

Its VP and CFO

Second Amendment to 2001 Note Purchase Agreement

26

GRANITE CONSTRUCTION NORTHEAST, INC.

By /s/ Laurel J. Krzeminski

Laurel J. Krzeminski

Its VP and CFO

By /s/ Jigisha Desai

Jigisha Desai

Its VP Treasurer

INTERMOUNTAIN SLURRY SEAL, INC.

By /s/ Kathleen Schreckengost

Kathleen Schreckengost

Its VP Treasurer

By /s/ Darren S. Beevor

Darren S. Beevor

Its VP Controller

Second Amendment to 2001 Note Purchase Agreement

27

Accepted and Agreed to:

PRUDENTIAL RETIREMENT INSURANCE AND ANNUITY

COMPANY

By:    Prudential Investment Management, Inc.,

as investment manager

By: /s/ Mitchell W. Reed

Vice President

SECURITY BENEFIT LIFE INSURANCE,

COMPANY, INC.

By:    Prudential Private Placement Investors,

L.P. (as Investment Advisor)

By:    Prudential Private Placement Investors, Inc.

(as its General Partner)

By: /s/ Mitchell W. Reed

Vice President

Second Amendment to 2001 Note Purchase Agreement

28

NATIONWIDE LIFE INSURANCE COMPANY

NATIONWIDE INDEMNITY COMPANY

NATIONWIDE MUTUAL FIRE INSURANCE

COMPANY

NATIONWIDE MUTUAL INSURANCE COMPANY

By /s/ Thomas A. Gleason

Name: Thomas A. Gleason

Title: Authorized Signatory

Second Amendment to 2001 Note Purchase Agreement

29

ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK

By /s/ Mark W. (Sam) Davis

Name: Mark W. (Sam) Davis

By /s/ Allen Dick

Name: Allen Dick

Authorized Signatories

Second Amendment to 2001 Note Purchase Agreement

30

UNITED OF OMAHA LIFE INSURANCE COMPANY

By /s/ Curtis R. Caldwell

Name: Curtis R. Caldwell

Title: Senior Vice President

Second Amendment to 2001 Note Purchase Agreement

31

COMPANION LIFE INSURANCE COMPANY

By /s/ Curtis R. Caldwell

Name: Curtis R. Caldwell

Title: Authorized Signer

Second Amendment to 2001 Note Purchase Agreement

32

THRIVENT FINANCIAL FOR LUTHERANS,

successor by merger to Lutheran Brotherhood

By /s/ Alan D. Onstad

Name: Alan D. Onstad

Title: Senior Director

Second Amendment to 2001 Note Purchase Agreement

33

Schedule 1

Fee Schedule

Connecticut General Life Insurance Company	$	1,000.00
Nationwide Life Insurance Company	$	555.56
Nationwide Indemnity Company	$	555.55
Nationwide Mutual Fire Insurance Company	$	444.45
Nationwide Mutual Insurance Company	$	333.34
Allstate Life Insurance Company of New York	$	1,000.00
United of Omaha Life Insurance Company	$	1,222.33
Companion Life Insurance Company	$	222.22
Thrivent Financial for Lutherans	$	555.56
Prudential Retirement Insurance and Annuity Company	$	2,083.33
Security Benefit Life Insurance Company	$	361.11
Total	$	8,333.45

SCHEDULE 5

PROJECT DEBT

Entity's Name	Lender	Interest	Terms	Maturity	Balance as of 6/30/12
McCormick Woods	Washington Federal	4.50%	Development Loan, interest accrued to principal, due on maturity	2/28/13	10,439,163
Summer Sycamore	Preston State Bank	6.00%	Interest only, payable monthly, principal due at maturity	1/6/14	921,492
GLC-Lake Goodwin Assemblage	Whidbey Island Bank	7.00%	Monthly Interest plus quarterly amortized payments	1/30/15	4,284,128
GLC-Lake Goodwin Assemblage	Washington Federal	3.75%	Interest only. Paid to 12/31/2012	12/31/12	3,769,275
GLC-Lake Goodwin Assemblage	Washington Federal	4.00%	Interest only. Paid to 12/31/2012	12/31/12	1,593,475
Subtotal - Consolidated Entities Project Debt					$	21,007,533
Realty Capital Belmont	Park Cities Bank	4.25%	2014 maturity with 3 1-yr ext. options (to 2017) with cumulative principal reduction requirements to extend. Monthly interest payments required	12/28/14	16,731,206
Realty Capital Argyle	Northstar Bank	6.50%	Interest pre-funded and scheduled principal payment required each year	7/27/16	2,460,894
Realty Capital Argyle	Northstar Bank	6.50%	Interest pre-funded and scheduled principal payment required each year	7/27/16	1,414,895
Highpoint Oaks	First United Bank	6.00%	Interest pre-funded and scheduled principal payment required each year	5/26/14	4,176,433
Granite Regional Park	Rabobank	6.04%	Principal & interest payable monthly, fully amortized	1/5/18	14,060,391
Granite Regional Park	Bank of Sacramento	7.00%	Principal & interest payable monthly, fully amortized	10/6/12	20,445
Granite Regional Park	ING	4.85%	Principal & interest payable monthly, fully amortized	1/1/23	14,381,747
Granite Regional Park	SAC County	6.19%	Semi-annual principal and interest (BOND)	9/1/22	3,085,117
XS Ranch	Steiner Family	7.00%	Interest only, payable quarterly, principal due at maturity	12/19/14	10,000,000
Subtotal - Nonconsolidated Limited Partnerships Project Debt					$	66,331,118
Total Debt, GLC Investees					$	87,338,651

SCHEDULE 5.4

SUBSIDIARIES AND AFFILIATES OF THE COMPANY;

OWNERSHIP OF SUBSIDIARY STOCK; DIRECTORS AND EXECUTIVE OFFICERS

Company	Formation		Capital Structure		Related Entities
	Date*	State	Type		Name(s)	Owner (%)	Position
Granite Construction Incorporated	1/24/1990	DE	C Corp	Parent	—	Parent	—
GILC Incorporated	5/22/1995	CA	C Corp	Subsidiary	GCI	100	Investor	—
Granite Construction Company	1/4/1922	CA	C Corp	Subsidiary	GCI	100	Investor	—
ABC Marine L.L.C.	9/15/2006	LA	LLC		GCC	41	Manager
Ames-Granite Joint Venture	7/15/2009	MN	JV	True	GCC	50	Partner
Audubon Bridge Constructors, a Joint Venture	10/31/2005	LA	JV	Integrated	GCC .	25	Partner
California Corridor Constructors, a Joint Venture	7/31/1991	CA	JV	True	GCC	30	Partner
Copper Hills Constructors, a Joint Venture	6/10/2009	DE	JV	True	GCC	45	Manager
Eastside Corridor Constructors	9/16/2010	WA	JV	True	GCC	60	Sponsor
FCI Constructors/Granite, A Joint Venture	10/17/2005	CA	JV	Line-item	GCC	60	Manager Partner
Gateway Constructors	10/11/2006	CA	JV	??	GCC	50	Sponsor
GCC/MCM, A Joint Venture	10/25/2010	CA	JV	Line-item	GCC	70.4	Sponsor
Granite-Archer Western, a Joint Venture	10/1/2005	MS	JV	True	GCC	60	Manager
Granite-McCrossan	9/18/2003	MN	JV	True	GCC .	60	Manager
Granite-Myers-Rados, A Joint Venture	9/17/2002	CA	JV	True	GCC	55	Sponsor
Granite Northwest, Inc.	9/22/2006	WA	C Corp	Subsidiary	GCC	100	Investor
Granite/PCL, A Joint Venture	12/2000	FL	JV	Line-item	GCC PCL Civil Constructors	60	Manager
Granite/Rizzani de Eccher, A Joint Venture	8/3/2000	FL	JV	True	GCC	60	Sponsor
Granite Hensel Phelps JV (Prison Hospitals)	11/17/2010	DE	JV	Line-Item	GCC	24.2	Partner
Hensel Phelps-Granite JV (Mamizu)	3/26/2011	DE	JV	True	GCCG	49	Partner
Hensel Phelps Granite Hangar Joint Venture        (Hangar Project - Miramar Naval Air Station)	3/13/2011	DE	JV	True	GCC	25	Partner
Hill Country Constructors	9/1/2004	TX	JV	True	GCC JD Abrams LP	70	Sponsor
Houston Rapid Transit, a Joint Venture	11/6/2008	TX	JV	True	. GCC	33	Manager
Intercounty Constructors	11/30/2006	MD	JV		GCC	55	Manager
Largo Constructors (LGS), A Joint Venture	9/5/2000	MD	JV	True	GCC .	30	Partner
Las Vegas Monorail Team	9/20/2000	NV	JV	Line-item	GCC	44.8	Partner
Market Street Constructors	10/28/2002	PA	JV	True	GCC	69	Sponsor
Minnesota Transit Constructors	5/26/2000	MN	JV	True	GCC	56.5	Sponsor
Old Pueblo Trackworks (ARRA - Tucson Modern Streetcar Project)	12/12/2011	CA	JV	Line-Item	GCC	80	Managing

Pulice-Granite JV	3/5/2010	AZ	JV		GCC	25	Member
Raleigh-Durham Roadbuilders	5/17/2008	SC	JV	True	GCC	40	Partner
Riverside Motorsports Park, LLC			LLC		GCC	2.5	Member
South Corridor Constructors, (A Joint Venture)	9/22/2003	OR	JV	True	GCC	25	Partner
SSP Holding LLC	6/10/2010	DE	LLC		GCC	Variable	Member
TGM Constructors	6/12/2002	KY	JV	True	GCC	25	Partner
Thermwest Development, LLC	2/7/2003		LLC		GCC	9.8	Member
Tri-County Rail Constructors, A Joint Venture	04/2001	FL	JV	True	GCC	30	Partner
Virginia Approach Constructors	2/11/2003	VA	JV	True	GCC	79	Sponsor
Wasatch Constructors, A Joint Venture	6/25/1996	UT	JV	True	GCC	57	Partner
Washington County Constructors	6/5/2009	UT	JV	True	GCC	40	Partner
Weber County Constructors	9/15/2005	UT	JV	True	GCC	75	Manager
Yaquina River Constructors, A Joint Venture	2/3/2005	OR	JV		GCC GNW	99 1	Manager
Granite Construction International	7/31/1997	CA	C Corp	Subsidiary	GCI	100	Investor	—
Granite Construction Company Guam	9/19/2011	GU	C Corp	Subsidiary	GC Int'l	100	Investor	—
Granite Construction Northeast, Inc.	3/6/1989	NY	C Corp	Subsidiary	GCI	100	Investor	—
Granite Halmar-Fujitec America A Joint Venture	11/11/2003	NY	JV	Line-item	GNE	44.9	Manager
Granite-Traylor-Frontier Joint Venture	11/5/2008	NY	JV	True	GNE	42.5	Manager
Phoenix Constructors	7/15/2005	NY	JV	True	GNE	20	Partner
Schiavone-Granite Halmar, A Joint Venture		NY	JV		GNE	40	Partner
Skanska/Granite/Skanska JV	1/21/2010	NY	JV	True	GNE	20	Partner
Granite Land Company	4/28/1993	CA	C Corp	Subsidiary	GCI	100	Investor
GGV Greenwood, LLC	8/30/2006	CA	LLC		GLC	91.98	Manager
GGV Missouri Flat, LLC	11/16/2007	CA	LLC		GLC	91.22	Manager
GLC Argyle 114, Ltd.	6/23/2006	TX	LP		GLC	99.8	Class A LP
Realty Capital Argyle 114, Ltd.	6/23/2006	TX	LP		GLC Argyle 114, Ltd	48.00	LP
GLC Belmont, Ltd.	10/6/2005	TX	LP		GLC	99.8	Class A LP
Realty Capital Belmont, Ltd.	10/6/2005	TX	LP		GLC Belmont, Ltd.	41.67	LP
Belmont 407, LLC	12/29/2011	TX	LLC		Realty capital Belmont, Ltd.	95.39	Member
GLC/EPC McCormick Woods, LLC	9/9/2003	WA	LLC		GLC	99.9	Manager
GEM1, LLC	9/9/2003	WA	LLC		GLC/EPC M Woods, LLC	70	Manager
GLC/Foothill Monterey, LLC	9/29/2006	CA	LLC		GLC	99	Manager
GLC/Foothill Monterey II, LLC	5/13/2008	CA	LLC		GLC	99	Manager
GLC Fort Worth, LLC	12/23/2002	TX	LLC		GLC	100	Sole member
Presidio Vista I, Ltd.	1/8/2003	TX	LP		GLC	89	LP
GLC Hometown Apartments, Ltd.	11/2/2007	TX	LP		GLC	99.89	Class A LP
Hometown Urban Partners, Ltd.	9/25/2007	TX	LP		GLC Hometown Apts., Ltd.	49.9	LP
GLC-LGA, LLC	4/28/2008	WA	LLC		GLC	100	Sole Member
LGAJV, LLC	4/28/2008	WA	LLC		GLC-LGA, LLC	64.38	Manager
GLC/LP Rancho Road, LLC	7/31/2006	CA	LLC		GLC	99	Manager

GLC Summer Creek, LLC	7/27/2006	TX	LLC		GLC	100	Sole Member
Summer Sycamore I, Ltd.	7/27/2006	TX	LP		GLC	89	LP
GLC Vista Crossroads, LLC	10/8/2004	TX	LLC		GLC	100	Sole Member
Vista Crossroads I, Ltd.	10/8/2004	TX	LP		GLC	89	LP
Granite Grado Ventures, LLC	5/23/2003	CA	LLC		GLC	100	Sole Member
Granite Grado Ventures Project I, LLC	5/23/2003	CA	LLC		Granite Grado Vent's, LLC	100	Manager
Granite Grado Ventures Project II, LLC	8/17/2003	CA	LLC		GLC	89.4	Manager
Granite/PBC Pajaro, LLC	1/14/2005	CA	LLC		GLC	62.26	Manager
Highpoint Oaks, Ltd.	9/1/2004	TX	LP		GLC .	76.2	LP
Lodi Victor Ventures, LLC	8/10/2007	CA	LLC		GLC	91.1	Manager
Main Street Ventures, LLC	1/21/2003	CA	LLC		GLC	99.9	Manager
Main Street Ventures-Project II, LLC	10/13/2006	CA	LLC		Main Street Ventures, LLC	100	Sole Member
RCP Belmont, Ltd.       (Note: Entity has interest in Realty Capital Belmont, Ltd. - See listing under GLC Belmont, Ltd., above)	09/07/2005 (GLC share purchased 01/31/2009)	TX	LP		GLC	17.8	Class A LP
Regional Park Limited Partnership	11/16/1995	CA	LP		GLC	25	LP
XS Ranch Fund VI, L.P.	1/8/2007	DE	LP		GLC	5.58	LP
Granite SR 91 Corporation	6/23/1993	CA	C Corp	Subsidiary	GCI	100	Investor	—
Granite SR 91, LP	7/7/1993	CA	LP		GCI	99	LP	—
Intermountain Slurry Seal, Inc.	4/23/1982	WY	C Corp	Subsidiary	GCI	100	Investor	—
Paramount-Nevada Asphalt Company, LLC		NV	LLC		GCI	50	Member	—
Pozzolan Products Company (P.P.C.)	1/2/1976	UT	C Corp	Subsidiary	GCI	100	Investor	—

			GRANITE CONSTRUCTION INCORPORATED (and subsidiaries)
Directors: W.H. Powell, Chair C.G. Bjork J.W. Bradford, Jr. G.M. Cusumano W.G. Dorey	D.H. Kelsey R.A. McDonald J.H. Roberts G.H. Vasquez1	Officers: J.H. Roberts - Pres & CEO *L.J. Krzeminski - VP, CFO *M.F. Donnino - Senior VP& Group Manager *T.S. Case - VP & Group Manager *J.A. Franich - VP & Group Manager			*P.M. DeCocco - VP of Human Resources *+J. Desai - VP & Treasurer *+R.L. Gatto - VP & Controller *K.H. Marshall - VP & Dir of Development & Strategy		*J.L McQuillen, Jr. - VP & Group Manager R.A. Watts - VP, General Counsel, Corp Compliance Officer & Secretary S.D. Wolcott - VP of Land & Quarry
Granite Construction                      Company Material Subsidiary Heavy/Highway Construction and                   Material Sales Directors: W.H. Powell, Chair C.G. Bjork J.W. Bradford G.M. Cusumano W.G. Dorey D.H. Kelsey R.A. McDonald J.H. Roberts G.H. Vasquez1 Officers: J.H. Roberts-Pres & CEO *L.J. Krzeminski-VP & CFO *M.F. Donnino-Sr VP & Grp Mgr *T.S. Case-VP & Grp Mgr *J.A. Franich-VP & Grp Mgr *P.M. DeCocco, VP of HR *+J. Desai-VP & Treas *+R.L. Gatto-VP, Controller *K.H. Marshall-VP & Dir of Dev & Strat *J.L. McQuillen, Jr.-VP & Grp Mgr R.A. Watts-VP, Genl Counsel, Corp Compl Off & Secretary S.D. Wolcott-VP of Land & Quarry *K.M. Smith-Grp Counsel *J.M. Jasper-Grp Counsel				Granite Construction Northeast, Inc. Material Subsidiary 120 White Plains Road, Ste. 310 Tarrytown, NY 10591 Heavy/Highway Construction Director: J.H. Roberts, Chair Officers: J.H. Roberts -Pres & CEO * L.J. Krzeminski-VP & CFO *M.F. Donnino-Sr VP *T.S. Case-VP *J.A. Franich-VP *P.M. DeCocco, VP of HR *+J. Desai-VP & Treas *+R.L. Gatto-VP, Controller *K.H. Marshall-VP *J.L. McQuillen, Jr.-VP R.A. Watts-VP, Genl Cnsl & Secy *K.M. Smith *J.M. Jasper *R.F. McTavish		GILC Incorporated Material Subsidiary Equipment Leasing Director: J.H. Roberts, Chair Officers: L.J. Krzeminski- Pres & CEO J. Desai- VP & CFO R.A. Watts- VP, General Counsel & Secy		Intermountain Slurry           Seal, Inc. Material Subsidiary Heavy/Highway Construction Non-Union Crusher/Asphalt Plant Directors: T. Coppinger, Chair D.J. Brunton D.S. Beevor Officers: K.T. Larkin-Pres *K. Schreckengost-VP & Treas D.S. Beevor-VP, Controller & Secy *D.J. Brunton *C.P. Johnson *D.L. Larson

¹ Appointed effective October 1, 2012

SCHEDULE 6

MORTGAGED PROPERTIES

	Project #	Address	City	County	State
1	L05008	Elder Creek Road	Sacramento	Sacramento	CA
2	L07004	999 Mission Rock Road	Santa Paula	Ventura	CA
3	L08001/ L08002		Oroville	Butte	CA
4	L06003	Fulton & Frank Road	Esparto	Yolo	CA
5	L14003	Highway 33	Coalinga	Fresno	CA
6	L26004	7131 N. Railroad Avenue	Pasco	Franklin	WA
7	L32009	E. Selah Rd	Yakima	Yakima	WA
8	L26002	W. Gill Station Rd	Coso Junction	Inyo	WA
9	L32011	Nelpar Drive	East Wenatchee	Douglas	WA
10	L07003	400 S. Hwy 101	Buellton	Santa Barbara	CA
11	L03002	Hwy 175	Lakeport	Lake	CA
12	L16010	10600 I-80 East	Lockwood	Washoe	NV
13	L16001	1900 Glendale Avenue	Sparks	Washoe	NV
14	L93005	701 East Main Street	Lewisville	Denton	TX
15	L03001	825 W. Warm Springs Road	Salt Lake City	Salt Lake	UT
16	L30012	South 1900 West	West Haven	Weber	UT
17	L12001	3001 James Road	Bakersfield	Kern	CA
18	L14008	Hildreth Quarry	Tracy	Madera	CA
19	L15002	South Bird Road	Modesto	San Joaquin	CA
20	L15006	Blewett Road	Modesto	San Joaquin	CA
21	L15001	Harlan Road	Stockton	San Joaquin	CA
22	L21901	715 Comstock Street	Santa Clara	Santa Clara	CA
23	L02004	580/582/680 West Beach Street	Watsonville	Santa Cruz	CA
24	L05024A	Bradshaw Road	Sacramento	Sacramento	CA
25	L17007	(7 parcels)	Marana	Pima	AZ
26	L11003	Hwy 138	Black Butte	Los Angeles	CA
27	L11004	Pearblossom Hwy	Little Rock	Los Angeles	CA
28	L25016	4 Parcels/ Monroe Street	Indio	Riverside	CA
29	L91001 / L91005	585 W. Beach Street	Watsonville	Santa Cruz	CA

SCHEDULE 10.4

EXISTING DEBT

Borrower	Lender	Interest Rate	Maturity	Balance		Description
Granite Construction Incorporated	Private Placement Note Holders	6.96%	5/13/13	$	8,333,337	Notes issued to refinance debt and for general corporate purposes
Granite Construction Incorporated	Private Placement Note Holders	6.11%	12/12/19	200,000,000		Notes issued to refinance debt and for general corporate purposes
Granite Construction Company	Anderson/Watson	6.50%	12/15/19	114,864		Real estate property
Granite Construction Company	Linda Watson	6.50%	12/22/19	71,092		Real estate property
Granite Construction Company	Anchorage Sand & Gravel Co.	6.00%	9/30/12	750,000		Hot Plant
				$	209,269,293
McCormick Woods	Washington Federal	4.50%	2/28/13	10,439,163		Project Debt
Summer Sycamore	Preston State Bank	6.00%	1/6/14	921,492		Project Debt
GLC-Lake Goodwin Assemblage	Whidbey Island Bank	7.00%	1/30/15	4,284,128		Project Debt
GLC-Lake Goodwin Assemblage	Washington Federal	3.75%	12/31/12	3,769,275		Project Debt
GLC-Lake Goodwin Assemblage	Washington Federal	4.00%	12/31/12	1,593,475		Project Debt
Subtotal - Consolidated Entities Project Debt				$	21,007,533
Realty Capital Belmont	Park Cities Bank	4.25%	12/28/14	16,731,206		Project Debt
Realty Capital Argyle	Northstar Bank	5.75%	7/27/16	2,460,894		Project Debt
Realty Capital Argyle	Northstar Bank	5.75%	7/27/16	1,414,895		Project Debt
Highpoint Oaks	First United Bank	6.00%	5/26/14	4,176,433		Project Debt
Granite Regional Park	Rabobank	6.04%	1/5/18	14,060,381		Project Debt
Granite Regional Park	Bank of Sacramento	7.00%	10/6/12	20,445		Project Debt
Granite Regional Park	ING	4.85%	1/1/23	14,381,747		Project Debt
Granite Regional Park	SAC County (Bond)	6.19%	9/1/22	3,085,117		Project Debt
XS Ranch	Steiner Family	7.00%	12/19/14	10,000,000		Project Debt
Subtotal - Nonconsolidated Limited Partnerships Project Debt				$	66,331,118

Principal	Insurer	Description	Penal Sum		Cost to complete		Maturity
Granite Construction Incorporated and Subsidiaries	Federal Insurance Company, Travelers Casualty and Surety Company, Zurich American Insurance Company	Payment and Performance Bonds for Construction Projects	$	8,714,666,497	$	1,789,690,000	Various
Granite Construction Incorporated and Subsidiaries	Federal Insurance Company	Miscellaneous bonds in support of permitting, reclamation and licensing	$	51,736,480	$	51,736,480	Various
Granite Construction Incorporated	Shell Energy North America (US), L.P.	International Swap Dealers Association Master Agreement Dated as of 3/16/2010
Granite Construction Incorporated	Merrill Lynch Commodities, Inc.	Amendment as of 11/29/2011 to International Swap Dealers Association Master Agreement Dated as of 6/12/2009

SCHEDULE 10.6(a)

RESTRICTIONS ON DIVIDENDS OF SUBSIDIARIES

Section 7.2 of the Amended and Restated Credit Agreement dated as of October 11, 2012, as in effect on the date hereof

First Amendment to 2007 Note Purchase Agreement dated December 12, 2007

Second Amendment to 2001 Note Purchase Agreement dated May 1, 2001

EXHIBIT 10.11

EXISTING TRANSACTIONS WITH AFFILIATES

None

EXHIBIT PA

FORM OF PLEDGE AGREEMENT

EXHIBIT SA

FORM OF SECURITY AGREEMENT

EXHIBIT SR

SUPPLEMENTAL REPRESENTATIONS

For purposes of Section 2.1(i) of the Second Amendment, the following representations and warranties supersede the representations and warranties contained in the Note Purchase Agreement with the corresponding section references.

The Company represents and warrants to each Noteholder that:

Section 5.4Organization and Ownership of Shares of Subsidiaries.

(d)    No Subsidiary is a party to, or otherwise subject to, any legal, regulatory, contractual or other restriction (other than this Agreement, the agreements listed on Schedule 10.6 to the Second Amendment and customary limitations imposed by corporate law or similar 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 5.8Litigation; Observance of Agreements, Statutes and Orders.

(a)    Except as set forth on Schedule 5.8 to these Supplemental Representations, there are no actions, suits, investigations or proceedings pending or, to the knowledge of the Company, threatened against or affecting the Company or 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 5.15Existing Debt.

(a)    Schedule 10.4 to the Second Amendment sets forth a complete and correct list of all outstanding Debt of the Company and its Subsidiaries as of the Second Amendment Effective Date (including a description of the obligors and obligees, principal amount outstanding and collateral therefor, if any, and Guaranty thereof, if any). 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 5.16Existing Investments. Schedule 5.16 to these Supplemental Resolutions sets forth a complete and correct list of all outstanding Investments of the Company and its Subsidiaries as of the Second Amendment Effective Date.

Section 5.18Environmental Matters.

(a)    Neither the Company nor any Subsidiary has knowledge of any claim or has received any notice of any claim, and no proceeding has been instituted raising any 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, in each case, that could reasonably be expected to have a Material Adverse Effect.

(b)    Neither the Company nor any Subsidiary has knowledge of any facts which would give rise to any claim, public or private, or 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, in each case, that could reasonably be expected to have a Material Adverse Effect.

(d)    Neither the Company nor any Subsidiary (1) has stored any Hazardous Materials on real properties now or formerly owned, leased or operated by any of them in a manner contrary to any Environmental Laws, 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.

(e) All buildings on all real properties now owned, leased or operated by the Company or any Subsidiary are in material compliance with applicable Environmental Laws except to the extent that failure to so comply could not reasonably be expected to have a Material Adverse Effect.

SCHEDULE 5.8 TO SUPPLEMENTAL REPRESENTATIONS

EXISTING LITIGATION

Grand Avenue Project DBE Issues: On March 6, 2009, the U.S. Department of Transportation, Office of Inspector General (“OIG”) served upon our wholly-owned subsidiary, Granite Construction Northeast, Inc. (“Granite Northeast”), a United States District Court Eastern District of New York subpoena to testify before a grand jury by producing documents. The subpoena seeks all documents pertaining to the use of a DBE firm (the “Subcontractor”), and the Subcontractor's use of a non-DBE lower tier subcontractor/consultant, on the Grand Avenue Bus Depot and Central Maintenance Facility for the Borough of Queens Project, a Granite Northeast project.  The subpoena also seeks any documents regarding the use of the Subcontractor as a DBE on any other projects and any other documents related to the Subcontractor or to the lower-tier subcontractor/consultant.  We have received two follow-up requests from the USDOJ for additional information and documents.  We have complied with the subpoena and the requests, and are fully cooperating with the OIG's investigation. To date, Granite Northeast has not been notified that it is either a subject or target of the OIG's investigation. Accordingly, we do not know whether any criminal charges or civil lawsuits will be brought against any party as a result of the investigation. We cannot, however, rule out the possibility of civil or criminal actions or administrative sanctions being brought against Granite Northeast.

SCHEDULE 5.16 TO SUPPLEMENTAL REPRESENTATIONS

EXISTING INVESTMENTS

Company	Descriptions	Book
		July 31, 2012
Paramount-Nevada Asphalt	LLP	$	10,005,781
		$	10,005,781
		July 31, 2012
ABC Marine	Joint Venture	209,100
Halmar/Egis	Joint Venture	12,770,626
Market Street	Joint Venture	5,576,643
Vaginia Approach	Joint Venture	4,902,778
Granite Myers/Rados	Joint Venture	19,313,625
Hill Country Constructors	Joint Venture	9,310,000
Audubon Bridge Constructors	Joint Venture	6,250,000
Skanska, GCN, Skanska Builders	Joint Venture	4,000,000
Eastside Corridor Constructors	Joint Venture	7,500,000
SSP Holdings	Joint Venture	2,416,335
Hensel Phelps - Granite Miramar Hangars	Joint Venture	50,000
Hensel Phelps - Granite Guam (Mamizu)	Joint Venture	241,793
		$	72,540,900
Granite Land Company	Descriptions	Book
		May 31, 2012
Granite Grado II	LLC	371,335
McCormick Woods	LLC	18,658,468
Summer Creek	LLC	5,438,892
Rancho Road	LLC	570,293
GGV Greenwood	LLC	405,517
Missouri Flat Road	LLC	1,006,795
LGAJV, LLC	LLC	(1,168,817		)
Highpoint Oaks	LP	1,914,853
Belmont - Including Investment II in RCP Belmont	LP	7,089,382
Argyle 114	LP	2,329,408
GLC Hometown Apartments	LP	88,600
XS Ranch	LP	2,130,484
		$	38,835,210

EXHIBIT P-C

POST-CLOSING ITEMS

(a)    Real Property Matters.    To the extent not previously delivered to the holders of the Notes, by the date that is 120 days after the date hereof, deliver the following:

(i)    Mortgages and Assignment of Leases and Rents. An executed Mortgage with respect to each Mortgaged Property listed on Schedule I hereto in recordable form.

(ii)    Uniform Commercial Code Financing Statements. To the extent necessary under applicable Law, for filing in the appropriate county land office(s), Uniform Commercial Code financing statements covering fixtures, if required, in each case appropriately completed.

(iii)    Mortgage Policies. Mortgage policies of title insurance (which, if satisfactory to the Required Holders, may be in the form of a mark-up of pro forma mortgage policies which are satisfactory to the Required Holders subsequently to be followed by mortgage policies) relating to each Mortgage of the Mortgaged Property referred to above, issued by a title insurer reasonably satisfactory to the Required Holders (the “Title Company”), in an insured amount satisfactory to the Required Holders and insuring the Collateral Agent that the Mortgage on each such Mortgaged Property is a valid and enforceable first priority mortgage lien on such Mortgaged Property, free and clear of all defects and encumbrances except Liens permitted by Section 10.5 of the Note Purchase Agreement, with each such mortgage policy (A) to be in form and substance satisfactory to the Required Holders, (B) not to include any exception(s) for mechanic's liens, and (C) to provide for affirmative insurance and endorsements (to the extent applicable and available in the relevant jurisdiction) as the Collateral Agent may reasonably request.

(iv)    Evidence of Payment. evidence (which may be satisfied by appropriate instructions in the funds flow memorandum) of payment to the title insurer of all expenses and premiums of the title insurer in connection with the issuance of such policies and endorsements and payment to the Title Company of an amount equal to any fees or taxes, including recording, mortgage, intangible and stamp taxes payable in connection with recording the Mortgages and Uniform Commercial Code financing statements covering fixtures, if applicable, in the appropriate county or state land office(s).

(v)    Legal Opinions. In connection with any Mortgage, customary opinions of counsel in the jurisdiction where each Mortgaged Property is located.

(b)    Vehicle Titles.    To the extent not previously delivered to the holders of the Notes, by the date that is 120 days after the date hereof, deliver to the holders of the Notes all applications for certificates of title or ownership indicating the Collateral Agent's first priority Lien (subject to any Permitted Liens) on each motor vehicle listed on Schedule II hereto (as such requirements are further set forth in Section 3(d) of the Security Agreement), and any other necessary documentation which the Collateral Agent shall deem reasonably advisable to perfect its Liens on such motor vehicles subject to a certificate of title.

SCHEDULE I to EXHIBIT P-C

(Mortgaged Property)

GRANITE REAL ESTATE PROPERTIES
	Address	City	County	State
1	999 Mission Rock Rd	Santa Paula	Ventura	CA
2	Unknown	Oroville	Butte	CA
3	38940 Highway 33	Coalinga	Fresno	CA
4	110 Blewett Road	Tracy	San Joaquin	CA
5	715 Comstock Street	Santa Clara	Santa Clara	CA
6	585 W. Beach Street	Watsonville	Santa Cruz	CA
7	825 W. Warm Springs Road (825 West 1000 Street)	Salt Lake City	Salt Lake	UT
8	1900 Glendale Avenue	Sparks	Washoe	NV
9	10500 S. Harlan Road	French Camp	San Joaquin	CA
10	701 East Main Street	Lewisville	Denton	TX
11	7131 N. Railroad Ave.	Pasco	Franklin	WA
12a	5497 Enterprise Dr and 5665 Nelpar Drive	East Wenatchee	Douglas	WA
12b	5719 Nelpar Dr	East Wenatchee	Douglas	WA
13	580/582/680 West Beach Street	Watsonville	Santa Cruz	CA
14	NW 1/2 of Sec 29 T10S R20E MDB&M	N/A	Merced	CA
15	7005 Pearblossom Hwy	Littlerock	Los Angeles	CA
16	1555 South 1900 West	West Haven	Weber	UT
17	3001 James Road	Bakersfield	Kern	CA
18	10600 I-80 East	Lockwood	Washoe	NV
19a	Canada De Capay Land Grant near Sec 713 T10N R2W MDB&M	Esparto	Yolo	CA
19b	26410 Fulton and Frank Ln	Esparto	Yolo	CA
20	38000 Monroe Street	Indio	Riverside	CA
21	37400 S. Bird Road	Vernalis	San Joaquin	CA
22	Elder Creek Rd; Hedge Ave; Mayhew Rd; 6360 Mayhew Rd; 9300 and 9400 Fruitridge Rd	Sacramento	Sacramento	CA
23	9601 W Benta Vista St and related parcels	Marana	Pima	AZ
24	4220 Hwy 175	Lakeport	Lake	CA
25	4001 Bradshaw Road	Sacramento	Sacramento	CA
26	State Hwy 138 and 155th Street East	Black Butte	Los Angeles	CA
27	400 S Hwy 101	Buellton	Santa Barbara	CA
28	E. Selah Road	Yakima	Yakima	WA
29	1157 W. Gill Station Road (Nik and Nik Bishop)	Coso Junction	Inyo	CA

SCHEDULE II to EXHIBIT P-C

(Vehicle Titles)

RBU	ST	Equipment Number	VIN/serial number	Description	Eq St	Acquired Date	Received
3831	NY	4.1790	1NPTL00XXAD797183	PETRB 367 BOOM	PK	9/8/2009
3600	NY	4.1789	1NPTL00X8AD797182	PETRB 367 BOOM	WK	8/14/2009
1650	UT	4.1813	1NPTL4EX8BD117296	PETRB 367 3X NURSE TRK	WK	5/25/2010
2058		5.11410	1M2B225C24M005017	MACK 3AX CONC AGITATOR TRUCK	WK	4/17/2012
2058		5.11411	1M2B225C44M005018	MACK 3AX CONC AGITATOR TRK	WK	4/17/2012

EX-10.7

Exhibit 10.7

GRANITE CONSTRUCTION INCORPORATED

______________________________

FIRST AMENDMENT

Dated as of October 11, 2012

to

NOTE PURCHASE AGREEMENT

Dated as of December 12, 2007

______________________________

Re: $200,000,000 6.11% Series 2007-A Senior Notes due December 12, 2019

FIRST AMENDMENT TO NOTE PURCHASE AGREEMENT

This First Amendment dated as of October 11, 2012 (the or this “First Amendment”) to that certain Note Purchase Agreement dated as of December 12, 2007 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 Note Purchase Agreement dated as of December 12, 2007 (the “Note Purchase Agreement”). The Company has heretofore issued $200,000,000 aggregate principal amount of its 6.11% Series 2007-A Senior Notes due December 12, 2019 (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 7.1(a) of the Note Purchase Agreement shall be and is hereby amended by replacing the reference to “60 days” set forth therein with “45 days”.

1.2    Section 7.1(b) of the Note Purchase Agreement shall be and is hereby amended by replacing the reference to “105 days” set forth therein with “90 days”.

1.3    Section 7.1(i) of the Note Purchase Agreement shall be and is hereby amended and restated in its entirety to read as follows:

(i)    Requested Information - with reasonable promptness, such other data and information relating to the business, operations, affairs, financial condition, assets or properties of the Company or any of its Subsidiaries (including, but without limitation, actual copies of the Company's Quarterly Report on Form 10-Q and Annual Report on Form 10-K) or relating to the ability of the Company to perform its obligations hereunder and under the Notes or the ability of the Company or any Subsidiary to perform its obligations under the Guaranty Agreement or any Security Document to which it is a party, as from time to time as from time to time may be reasonably requested by any such holder of Notes.”

1.4    Section 7.2 of the Note Purchase Agreement shall be and is hereby amended and restated in its entirety to read as follows:

Section 7.2.Officer's Certificate. Each set of financial statements delivered to a holder of Notes pursuant to Section 7.1(a) or Section 7.1(b) shall be accompanied by a certificate of a Senior Financial Officer, such certificate to be provided in the manner specified in Section 18 or, if the holder shall have previously provided the Company with an electronic mail address for such purpose, by electronic mail (which, in the case of Electronic Delivery of any such financial statements, shall be by separate delivery of such certificate to each such holder of Notes no later than the earlier of the third Business Day following such Electronic Delivery and the last day upon which the Company is required to deliver the corresponding financial statements pursuant to Section 7.1(a) or Section 7.1(b), as applicable):

(a)    Covenant Compliance - setting forth (1) the information (including detailed calculations) required in order to establish whether the Company was in compliance with the requirements of Section 10.2 through Section 10.5, inclusive, Section 10.8 and Section 10.10 and any covenant in a Supplement which specifically provides that it shall have the benefit of this clause (a) during the quarterly or annual period covered by the statements then being furnished (including with respect to each such Section and covenant, where applicable, the calculations of the maximum or minimum amount, ratio or percentage, as the case may be, permissible under the terms of such Sections and covenants, and the calculation of the amount, ratio or percentage then in existence), and (2) the information (including detailed calculations) required in order to determine the Consolidated Fixed Charge Coverage Ratio for the Subject Period ending on the last day of the quarterly or annual period covered by the statements then being furnished;

(b)    Event of Default - certifying that such Senior Financial Officer has reviewed the relevant terms hereof (including all Supplements), of the Security Documents and of the other Transaction Documents and has made, or caused to be made, under his or her supervision, a review of the transactions and conditions of the Company and its Subsidiaries from the beginning of the quarterly or annual period covered by the statements then being furnished to the date of the certificate and that such review shall not have disclosed the existence during such period of any condition or event that constitutes a Default or an Event of Default or, if any such condition or event existed or exists (including, without limitation, any such event or condition resulting from the failure of the Company or any Subsidiary to comply with any Environmental Law), specifying the nature and period of existence thereof and what action the Company shall have taken or proposes to take with respect thereto.

1.5    Section 9.2 of the Note Purchase Agreement shall be and is hereby amended to add the following sentence at the end of said Section:

Without limiting the foregoing, at all times other than during a Collateral Release Period, the Company will, and will cause each of its Subsidiaries to, (a) maintain, if available, fully paid flood hazard insurance with respect to each Mortgaged Property containing a Building (as defined in Section 208.25 of Regulation H of the Board of Governors of the Federal Reserve System) that is located in a special flood hazard area, as designated by the Federal Emergency Management Agency of the United States Department of Homeland Security (“FEMA”), on such terms and in such amounts as required by The National Flood Insurance Reform Act of 1994, as amended, or as otherwise reasonably required by the Required Holders, (b) upon request, furnish to the holders of the Notes evidence of the renewal of all such policies, and (c) furnish to the holders of the Notes written notice of any redesignation by FEMA of any such Building into or out of a special flood hazard area promptly upon obtaining knowledge of such redesignation.

1.6    Section 9.7 of the Note Purchase Agreement shall be and is hereby amended to (a) add the words “; Collateral and Appraisals” to the end of the title of said Section, (b) amend and restate paragraph (c) to read as follows and (c) add the following new paragraphs (d), (e), (f) and (g) at the end of said Section:

(c)    If at any time, pursuant to the terms and conditions of the Bank Credit Agreement, any Guarantor is released from its liability under the Bank Guaranty and (1) such Guarantor is not a co-obligor in respect of any Debt existing under the Bank Credit Agreement or a guarantor or co-obligor in respect of any Debt existing under the Existing Note Agreements, (2) such Guarantor does not qualify as a Material Subsidiary under clause (a) or (b) of the definition thereof, (3) such Guarantor is not required to be designated as a Material Subsidiary for purposes of satisfying the 80% Threshold and (4) the Company shall have delivered to each holder of Notes an Officer's Certificate certifying that (i) the conditions specified in clauses (1), (2) and (3) above have been satisfied and (ii) immediately preceding the release of such Guarantor from the Guaranty Agreement and after giving effect thereto, no Default or Event of Default shall have existed or would exist, then, upon receipt by the holders of Notes of such Officer's Certificate, such Guarantor shall be discharged from its obligations under the Guaranty Agreement.

(d)    At all times other than during a Collateral Release Period, the Company shall cause each Material Subsidiary required to execute and deliver a supplement to the Guaranty Agreement pursuant to Section 9.7(a) to promptly (and in any event, with respect to Domestic Subsidiaries, within 45 days of such Material Subsidiary being required to execute and deliver such supplement, with respect to Foreign Subsidiaries, within 75 days of such date, and solely with respect to Section 9.7(d)(3), within 60 days of such date, or in any case, such longer period requested by the Company and approved by the Required Holders) deliver to the Collateral Agent, with a copy to each holder of the Notes:

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(1)    a Security Joinder Agreement by such Material Subsidiary, together with such Uniform Commercial Code financing statements naming such Material Subsidiary as “Debtor” and naming the Collateral Agent for the benefit of the Secured Creditors as “Secured Party,” in form, substance and number sufficient in the reasonable opinion of the Required Holders and their special counsel to be filed in all Uniform Commercial Code filing offices in all jurisdictions in which filing is necessary or advisable to perfect in favor of the Collateral Agent for the benefit of the Secured Creditors the Lien on the Collateral conferred under such Security Document to the extent such Lien may be perfected by Uniform Commercial Code filing;

(2)    documents of the types referred to in Section 9.7(b)(i) through (iv), inclusive, with respect to such Material Subsidiary and any pledgor and the agreements and instruments being delivered by such Person pursuant to this Section 9.7(d);

(3)    Mortgages, title insurance, appraisals and such other real property support documentation with respect to all real property (and related improvements) with a Fair Market Value in excess of $1,000,000 owned by such Material Subsidiary;

(4)    if the Subsidiary Securities issued by such Material Subsidiary that are, or are required to become, Pledged Interests are owned by a Subsidiary who has not then executed and delivered to the Collateral Agent a Pledge Agreement granting a Lien to the Collateral Agent, for the benefit of the Secured Creditors, in such equity interests, a Pledge Joinder Agreement executed by the Subsidiary that directly owns such Subsidiary Securities (or, as to the Pledged Interests issued by any Direct Foreign Subsidiary, in a form acceptable to the Required Holders), and if such Subsidiary Securities shall be owned by the Company or a Subsidiary who has previously executed a Pledge Agreement, a Pledge Agreement Supplement in the form required by such Pledge Agreement pertaining to such Subsidiary Securities;

(5)    if the Pledged Interests issued by such Material Subsidiary constitute securities under Article 8 of the Uniform Commercial Code, (i) the certificates representing 100% of such Subsidiary Securities and (ii) duly executed, undated stock powers or other appropriate powers of assignment in blank affixed thereto;

(6)    Uniform Commercial Code financing statements naming the pledgor as “Debtor” and naming the Collateral Agent for the benefit of the Secured Parties as “Secured Party,” in form, substance and number sufficient in the reasonable opinion of the Required Holders and their special counsel to be filed in all Uniform Commercial Code filing offices and in all jurisdictions in which filing is necessary or advisable to perfect in favor of the Collateral Agent for the benefit of the Secured Creditors the Lien on such Subsidiary Securities;

(7)    a supplement to the appropriate schedule attached to the appropriate Security Documents listing the additional Collateral, certified as true, correct and complete by the Responsible Officer (provided that the failure to deliver such supplement shall not impair the rights conferred under the Security Documents in after acquired Collateral); and

(8)    such other assurances, certificates, documents, consents or opinions as the Required Holders reasonably may require.

(e)    At all times other than during a Collateral Release Period, the Company shall cause to be delivered to the Collateral Agent upon the Required Holders' reasonable request, as soon as practicable and in any event within 30 days of the acquisition thereof, a Mortgage on any fee owned real property (and related improvements) with a Fair Market Value in excess of $1,000,000 acquired by the Company or any Guarantor after the First Amendment Effective Date as security for the Secured Obligations, together with the Uniform Commercial Code financing statements covering fixtures, mortgage policies of title insurance, surveys, opinions, evidence of flood insurance coverage and other documents in connection with such Mortgage as the Required Holders may reasonably request.

(f)    Notwithstanding any other provision of this Agreement, any Lien on the Collateral of the Company or any Guarantor granted to or held by the Collateral Agent (on behalf of the Secured Creditors) under any Security Document shall be released and the Company and any Guarantor that is a party to any Security Document shall be released from its respective obligations thereunder (collectively, the “Release”), including after any re-pledge of the Collateral pursuant to the second proviso of this Section 9.7(f) upon the written request of the Company delivered to the holders of the Notes at any time on or after June 30, 2013, provided that (1) no Default or Event of Default shall have occurred and be continuing at such time or would occur immediately after

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giving effect to such Release, (2) the Consolidated Fixed Charge Coverage Ratio (calculated as of the last day of each of the four most recently ended fiscal quarters of the Company) is greater than or equal to 1.25 to 1.00 for each of such four most recently ended fiscal quarters, (3) the Consolidated Leverage Ratio (calculated as of the last day of the most recently ended fiscal quarter of the Company) is equal to or less than 2.50 to 1.00, (4) immediately after giving effect to such Release, no Secured Creditor shall have any Liens on any property of the Company or any Guarantor securing any Secured Obligations then owing to such Secured Creditor and (5) the Company and the Guarantors bear the cost of the Release; provided further, that if any Release has occurred and subsequent to the date on which such Release occurred the Company delivers a certificate pursuant to Section 7.2(a) demonstrating that (i) the Consolidated Fixed Charge Coverage Ratio (calculated as of the last day of the most recently ended fiscal quarter of the Company) is less than 1.25 to 1.00 or (ii) the Consolidated Leverage Ratio (calculated as of the last day of the most recently ended fiscal quarter of the Company) is greater than 2.50 to 1.00, then promptly (and in any event within 30 days or such longer period of time as the Required Holders determine in their reasonable discretion) after such certificate is delivered, or sooner if the Company shall otherwise elect to do so, the Company and each Guarantor shall at their sole cost, (A) take action (including the filing of Uniform Commercial Code and other financing statements) that may be necessary or advisable in the reasonable opinion of the Required Holders to vest in a collateral agent (which collateral agent shall be, if the Bank Credit Agreement is then in effect, the bank agent under the Bank Credit Agreement pursuant to an intercreditor and collateral agency agreement on the same terms as those contained in the Intercreditor Agreement as in effect prior to such Release or on other terms acceptable to the holders of the Notes) for the benefit of the holders of the Notes and, if the Bank Credit Agreement is then in effect, the lenders party thereto valid and subsisting Liens on the Collateral other than real property consistent in all material respects in scope, perfection and priority as those in effect prior to such Release and pursuant to documentation substantially similar to such documentation in place on or after the First Amendment Effective Date in accordance with this Section 9.7 and, in the case of any real property previously pledged pursuant to a Mortgage or real property acquired on or after the Collateral Release Date as to which a Lien would have been required to have been granted pursuant to Section 9.7 had it not been acquired during the Collateral Release Period, Liens of record consistent with the requirements of this Section 9.7, and (B) upon the Required Holders' request, deliver to the collateral agent described above and the holders of the Notes customary opinions of counsel in connection therewith.

(g)    The holders of the Notes may obtain from time to time an appraisal of all or any part of any Collateral, prepared in accordance with written instructions from the Required Holders, from a third-party appraiser satisfactory to, and engaged directly by, the Required Holders. The cost of any appraisal after the occurrence and during the continuance of an Event of Default shall be borne by the Company and such cost shall be payable by the Company to the holders of the Notes on demand (which obligation the Company hereby promises to pay); provided that the cost of any appraisal obtained by the holders of the Notes at any time other than after the occurrence and during the continuance of an Event of Default shall not be required to be reimbursed by the Company.

1.7    Sections 10.2, 10.3 and 10.4 of the Note Purchase Agreement shall be and are hereby amended and restated in their entirety to read as follows:

Section 10.2.Consolidated Tangible Net Worth. The Company will not, at any time, permit Consolidated Tangible Net Worth to be less than the sum of 85% of the Consolidated Tangible Net Worth as of December 31, 2011, plus (a) an amount equal to 50% of the Consolidated Net Income earned in each fiscal quarter ending after December 31, 2011 (with no deduction for a net loss in any such fiscal quarter) plus (b) an amount equal to 50% of the aggregate increases in Consolidated Stockholders' Equity after the First Amendment Effective Date by reason of the issuance and sale of capital stock of the Company.

Section 10.3.Leverage Ratio; Project Debt and Interest Coverage Ratio.

(a)    Consolidated Leverage Ratio. The Company will not, at any time, permitthe Consolidated Leverage Ratio to exceed:

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Period	Ratio
For the period beginning on the First Amendment Effective Date through and including September 30, 2013	3.50 to 1.00
For the period from and after October 1, 2013	3.25 to 1.00

; provided that during any Collateral Release Period, the Company will not, at any time, permitthe Consolidated Leverage Ratio to exceed 2.50 to 1.00.

Notwithstanding the foregoing, if at any time the “Maximum Consolidated Leverage Ratio” permitted by the Bank Credit Agreement for any period is increased or decreased, then, upon receipt of evidence thereof satisfactory to the Required Holders and, in the case of any such increase, so long as no Default or Event of Default shall have occurred and be continuing, (1) the maximum Consolidated Leverage Ratio permitted by this Agreement for such period shall be deemed to be increased or decreased by the same incremental amount as the increase or decrease in the “Maximum Consolidated Leverage Ratio” permitted by the Bank Credit Facility for such period and (2) any changes to the defined terms used in the calculation of the “Consolidated Leverage Ratio” under the Bank Credit Agreement shall be deemed to have been made to the defined terms used in the calculation of the Consolidated Leverage Ratio under this Agreement; provided, however, that in no event shall the maximum Consolidated Leverage Ratio permitted by this Agreement for any period ever exceed the maximum Consolidated Leverage Ratio (utilizing all relevant definitions appearing herein as of the First Amendment Effective Date) for such period as set forth in this Agreement as of the First Amendment Effective Date. The Company will promptly, and in any event within five days of the occurrence thereof, give each of the holders of the Notes notice of any increase or decrease in the “Maximum Consolidated Leverage Ratio” permitted by the Bank Credit Agreement for any period. If any party to the Bank Credit Agreement shall receive or become entitled to any fee or other consideration in connection with its agreement to increase or decrease the “Maximum Consolidated Leverage Ratio” permitted by the Bank Credit Agreement for any period, the holders of the Notes shall receive fees or other consideration in a proportionate amount based upon the relative outstanding principal amount of the Notes and of the Debt outstanding under such Bank Credit Agreement. For the avoidance of doubt, if at any time there shall be no Bank Credit Agreement in existence, the maximum Consolidated Leverage Ratio (utilizing all relevant definitions appearing herein as of the First Amendment Effective Date) permitted by this Agreement for any period shall be that set forth herein as of the First Amendment Effective Date for such period.

(b)    Limitation on Project Debt. The Company will not, and will not permit any Subsidiary to, create, incur, assume or suffer to exist any Project Debt other than (1) Project Debt outstanding on the First Amendment Effective Date as set forth on Schedule 5 and (2) in addition thereto, an additional amount of Project Debt not to exceed $10,000,000 at any time outstanding.

(c)    Consolidated Interest Coverage Ratio. The Company will not, as of the last day of any fiscal quarter of the Company, permitthe Consolidated Interest Coverage Ratio to be less than 4.00 to 1.00.

Section 10.4Priority Debt. The Company will not (a) at any time other than during a Collateral Release Period, permit the aggregate amount of all Priority Debt to exceed $15,000,000 and (b) at any time during a Collateral Release Period, permit the aggregate amount of all Priority Debt to exceed an amount equal to 20% of Consolidated Tangible Net Worth determined as of the end of the then most recently ended fiscal quarter of the Company.

1.8.    Section 10.5 of the Note Purchase Agreement shall be and is hereby is amended and restated in its entirety to read as follows:

Section 10.5Liens. The Company will not, and will not permit any Subsidiary to, directly or indirectly create, incur, assume or permit to exist (upon the happening of a contingency or otherwise) any Lien on or with respect to any property or asset (including, without limitation, any document or instrument in respect

5

of goods or accounts receivable) of the Company or such Subsidiary, whether now owned or held or hereafter acquired, or any income or profits therefrom, or assign or otherwise convey any right to receive income or profits, except:

(a)    Liens for taxes, assessments or other governmental charges which are not yet due and payable or the payment of which is not at the time required by Section 9.4;

(b)    carriers', landlords', warehousemen's, mechanics', materialmen's, repairmen's or other like Liens arising in the Ordinary Course of Business in respect of the Company and its Subsidiaries, which are not overdue for a period of more than 45 days or which are being contested in good faith and by appropriate proceedings, if adequate reserves with respect thereto are maintained on the books of the applicable Person;

(c)    Liens (other than any Lien imposed by ERISA) incurred or deposits made in the Ordinary Course of Business (1) in connection with workers' compensation, unemployment insurance and other types of social security or retirement benefits, or (2) to secure (or to obtain letters of credit that secure) the performance of tenders, statutory obligations, surety bonds, appeal bonds, bids, leases (other than Capital Leases), performance bonds, purchase, construction or sales contracts and other similar obligations, in each case not incurred or made in connection with the borrowing of money, the obtaining of advances or credit or the payment of the deferred purchase price of property;

(d)    any attachment or judgment Lien, unless the judgment it secures shall not, within 60 days after the entry thereof, have been discharged or execution thereof stayed pending appeal, or shall not have been discharged within 60 days after the expiration of any such stay;

(e)    leases or subleases granted to others, easements, rights-of-way, restrictions and other similar charges or encumbrances, in each case incidental to, and not interfering with, the ordinary conduct of the business of the Company or any of its Subsidiaries, provided that such Liens do not, in the aggregate, materially detract from the value of such property;

(f)    Liens on property or assets of the Company or any of its Subsidiaries securing Debt owing to the Company or to a Wholly-Owned Subsidiary;

(g)    Liens existing on the date of the Closing and securing the Debt of the Company and its Subsidiaries referred to on Schedule 5.15;

(h)    any Lien created to secure all or any part of the purchase price, or to secure Debt incurred or assumed to pay all or any part of the purchase price or cost of construction, of property acquired or constructed by the Company or a Subsidiary after the date of the Closing, provided that

(1)    any such Lien shall extend solely to the item or items of such property so acquired or constructed,

(2)    the principal amount of the Debt secured by any such Lien shall at no time exceed an amount equal to the lesser of (i) the cost to the Company or such Subsidiary of the property so acquired or constructed and (ii) the Fair Market Value (as determined in good faith by the Board of Directors of the Company) of such property at the time of such acquisition or construction,

(3)    any such Lien shall be created contemporaneously with, or within 180 days after, the acquisition or construction of such property,

(4)    immediately after giving effect the creation of such Lien and giving effect thereto, no Default or Event of Default would exist, and

(5)     if such Lien is created at any time other than during a Collateral Release Period, the principal amount of the Debt secured by such Liens shall be permitted by clause (b) or (d) of the definition of Specified Debt or Section 10.4(a);

6

(i)    any Lien existing on property of a Person immediately prior to its being consolidated with or merged into the Company or a Subsidiary, or any Lien existing on any property acquired by the Company or any Subsidiary at the time such property is so acquired (whether or not the Debt secured thereby shall have been assumed), provided that (1) no such Lien shall have been created or assumed in contemplation of such consolidation or merger or such acquisition of property, (2) each such Lien shall extend solely to the item or items of property so acquired, (3) immediately after giving effect to the acquisition of the property subject to such Lien and giving effect thereto, no Default or Event of Default would exist and (4) if such merger or consolidation or acquisition occurs at any time other than during a Collateral Release Period, the principal amount of the Debt secured by such Liens shall be permitted by clause (b) or (d) of the definition of Specified Debt or Section 10.4(a);

(j)    any Lien renewing, extending or refunding any Lien permitted by paragraphs (g), (h) or (i) of this Section 10.5, provided that (1) the principal amount of Debt secured by such Lien immediately prior to such extension, renewal or refunding is not increased or the maturity thereof reduced, (2) such Lien is not extended to any other property and (3) immediately after such extension, renewal or refunding no Default or Event of Default would exist;

(k)    Liens in favor of the Collateral Agent securing Secured Obligations and subject to the Intercreditor Agreement;

(l)    rights of set off in favor of the administrative agent, letter of credit issuer and/or lenders under the Bank Credit Agreement;

(m)    Liens encumbering cash collateral (1) required to be posted in respect of letter of credit and other obligations of “defaulting lenders” under the Bank Credit Agreement and (2) at any time other than during a Collateral Release Period, required to be posted in respect of letter of credit obligations of the Company or any Subsidiary Guarantor under the Bank Credit Agreement other than any such requirement arising as a result of a default or event of default under the Bank Credit Agreement;

(n)    Liens on insurance policies and proceeds securing the payment of financed insurance premiums not in excess of $25,000,000 at any time;

(o)    Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods by the Company or any of its Subsidiaries;

(p)    Liens arising solely by virtue of any statutory or common law provision relating to banker's liens, rights of set-off or similar rights and remedies as to deposit accounts or other funds maintained with a creditor depository institution, provided that (1) such deposit account is not a dedicated cash collateral account and is not subject to restrictions against access by the Company or any of its Subsidiaries in excess of those set forth by regulations promulgated by the Board of Governors of the Federal Reserve System, and (2) such deposit account is not intended by the Company or any of its Subsidiaries to provide collateral to the depository institution;

(q)    Liens of lessors in any property subject to any operating lease, including Liens arising from precautionary UCC financing statements or similar filings made in respect of such leases;

(r)    Liens arising out of conditional sale, title retention, consignment or similar arrangements for the sale of goods entered into by the Company or any of its Subsidiaries in the Ordinary Course of Business;

(s)    any encumbrance or restriction (including put and call arrangements) with respect to capital stock of any Joint Venture or similar arrangement pursuant to any joint venture or similar agreement; provided that such encumbrance or restriction does not prohibit the granting of a Lien by a the Company or any of its Subsidiaries on any Collateral and any entity formed as part of such Joint Venture remains subject to the provisions of this Agreement to the extent provided herein;

(t)    Liens solely on cash earnest money deposits in an aggregate amount not to exceed $10,000,000 at any time, made in connection with any letter of intent or purchase agreement in connection with an Investment; and

(u)    other Liens not otherwise permitted by paragraphs (a) through (t) of this Section 10.5, so long as the aggregate principal amount of all Debt secured by such Liens is permitted by Section 10.4;

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provided, that notwithstanding the foregoing, the Company will not, and will not permit any of its Subsidiaries to, secure any Debt outstanding under the Bank Credit Agreement (or any guaranty thereof) pursuant to this Section 10.4(u) unless and until the Notes and the Guaranty shall be concurrently secured equally and ratably with such Debt pursuant to documentation reasonably acceptable to the Required Holders in substance and form, including without limitation, an intercreditor agreement and opinions of counsel to the Company from attorneys that are reasonably acceptable to the Required Holders.

1.9.    Section 10.6 of the Note Purchase Agreement shall be and is hereby amended and restated in its entirety to read as follows:

Section 10.6Restrictions on Dividends of Subsidiaries, Etc. The Company will not, and will not permit any Subsidiary to, enter into, assume or suffer to exist any agreement that limits the ability of any Subsidiary to make Restricted Payments to the Company (or if such Subsidiary is not directly owned by the Company, the “parent” Subsidiary of such Subsidiary) or to otherwise transfer property to the Company (or if such Subsidiary is not directly owned by the Company, the “parent” Subsidiary of such Subsidiary) other than (a) provisions contained in the agreements set forth on Schedule 10.6(a) and provisions set forth in any other agreements pursuant to which Debt may be incurred by the Company or any Subsidiary, provided that such provisions are no more restrictive than those contained in the agreements set forth on Schedule 10.6(a), (b) provisions contained in the terms of any agreement governing Liens permitted under Section 10.5 that impose restrictions only on the property subject to such Liens, and (c) agreements restricting assignments, subletting or other transfers contained in leases, licenses, joint venture agreements and similar agreements entered into in the Ordinary Course of Business, in each case relating solely to the assets subject to such lease or license or assets relating solely to such joint venture agreement.

1.10.    Section 10.7(d)(2) of the Note Purchase Agreement shall be and is hereby amended and restated in its entirety to read as follows:

(2)    if the Company is not the Successor Corporation, (i) such corporation shall have executed and delivered to each holder of the Notes its assumption of the due and punctual performance and observance of each covenant and condition of this Agreement (including all Supplements), the Notes and the Security Documents and the Transaction Documents to which the Company is a party (pursuant to such agreements and instruments as shall be reasonably satisfactory to the Required Holders), (ii) the Company shall have caused to be delivered to each holder of the Notes an opinion of nationally recognized independent counsel, or other independent counsel reasonably satisfactory to the Required Holders, to the effect that all agreements or instruments effecting such assumption are enforceable in accordance with their terms and comply with the terms hereof and (iii) each Guarantor shall have delivered to each holder of the Notes a certificate whereby such Guarantor shall have reaffirmed its obligations under the Guaranty Agreement and each of the Security Documents to which it is a party; and

1.11    Section 10.8 of the Note Purchase Agreement shall be and is hereby amended by (a) amending and restating clause (c) in its entirety to read as follows:

(c)    immediately after giving effect to the Asset Disposition, the Disposition Value of all property that was the subject of any Asset Disposition occurring during the immediately preceding 12 consecutive calendar month period would not exceed (1) at any time other than during a Collateral Release Period, 5% of Consolidated Total Assets and (2) at any time during a Collateral Release Period, 15% of Consolidated Total Assets, in each case determined as of the end of the then most recently ended fiscal year of the Company.

and (b) adding the following new sentence at the end of said Section 10.8:

Notwithstanding the foregoing, this Section 10.8 shall not restrict the Transfer of equity interests in, or assets of, any GLC Venture or any Project Debt Entity.

1.12.    Section 10.9 of the Note Purchase Agreement shall be and is hereby amended by (a) deleting the word “and” at the end of clause (b), deleting the period “.” and replacing it with “; and” at the end of clause (c) and (c) adding a new clause (d) as follows:

(d)    the Transfer of equity interests in any GLC Venture or any Project Debt Entity.

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1.13.    Section 10.11 of the Note Purchase Agreement shall be and is hereby amended and restated in its entirety to read as follows:

Section 10.11.Transactions with Affiliates. The Company will not, and will not permit any Subsidiary to, enter into any transaction of any kind with any Affiliate of the Company (other than between or among the Company and the Guarantors, in each case to the extent not prohibited under the Transaction Documents), whether or not in the Ordinary Course of Business, other than (a) payment of customary directors' fees and indemnities (including equity compensation arrangements), (b) arm's length transactions with Affiliates that were consummated prior to the First Amendment Effective Date and set forth on Schedule 10.11, (c) transactions with Affiliates upon fair and reasonable terms that are substantially as favorable to the Company or such Subsidiary than the Company or such Subsidiary would obtain in a comparable arm's length transaction with a Person that is not an Affiliate of the Company and (d) any employment agreement entered into by the Company or any of its Subsidiaries in the Ordinary Course of Business and consistent with the past practices of the Company and its Subsidiaries.

1.14    Section 10.12 of the Note Purchase Agreement shall be and is hereby amended and restated in its entirety to read as follows:

Section10.12.Terrorism Sanctions Regulations. The Company will not, and will not permit any Controlled Entity to, (a) become a Blocked Person or (b) have any investments in or engage in any dealings or transactions with any Blocked Person if such investments, dealings or transactions would cause any holder of a Note to be in violation of any laws or regulations that are applicable to such holder.

1.15    Section 10 of the Note Purchase Agreement shall be and is hereby amended to add at the end thereof the following new Section 10.13:

Section 10.13Limitation on Restrictive Agreements. The Company will not, and will not permit any of its Subsidiaries or Affiliates to, enter into any agreement or instrument that expressly prohibits (a) the Company from entering into any amendment, supplement, modification or restatement of this Agreement or of the Notes or (b) the making of any prepayment required to be made pursuant to Section 8.

1.16    Paragraphs (c), (e), (f), (g), (h), (i) and (k) of Section 11 of the Note Purchase Agreement shall be and are hereby amended and restated in their entirety to read as follows:

(c) the Company defaults in the performance of or compliance with any term contained in Sections 10.2, 10.3(a) (for the avoidance of doubt, the failure to comply with the proviso in first paragraph thereof shall not result in an Event of Default under Section 10.3(a) but instead shall be governed by Section 9.7), 10.3(b), 10.4, or Sections 10.6 through 10.10, inclusive, or Section 10.12 or any covenant in a Supplement which specifically provides that it shall have the benefit of this paragraph (c); or

(e)    any representation or warranty made in writing by or on behalf of the Company or any Guarantor or by any officer of the Company or any Guarantor in this Agreement, in any Supplement under which Additional Notes are then outstanding, in the Guaranty Agreement, in any Security Document or in any other Transaction Document or in any writing furnished in connection with the transactions contemplated hereby or thereby proves to have been false or incorrect in any material respect on the date as of which made; or

(f)    (1) the Company or any Subsidiary (other than a Project Debt Entity that is not a Material Subsidiary) is in default (as principal or as guarantor or other surety) in the payment of any principal of or premium or make-whole amount or interest on any Debt (other than Project Debt) that is outstanding in an aggregate principal amount of at least $10,000,000 beyond any period of grace provided with respect thereto, or (2) the Company or any Subsidiary (other than a Project Debt Entity that is not a Material Subsidiary) is in default in the performance of or compliance with any term of any evidence of any Debt (other than Project Debt) in an aggregate outstanding principal amount of at least $10,000,000 or of any mortgage, indenture or other agreement relating thereto or any other condition exists, and as a consequence of such default or condition such Debt has become, or has been declared (or one or more Persons are entitled to declare such Debt to be) due and payable before its stated maturity or before its regularly scheduled dates of payment (excluding prepayments required upon the refinancing of such Debt or the Transfer of an asset other than as a result of the existence of a default) or (3) as a consequence of the occurrence or continuation of any event or condition (other than the passage of time or the right of the holder of Debt to convert such Debt into equity interests), (x) the Company or any Subsidiary

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(other than a Project Debt Entity that is not a Material Subsidiary) has become obligated to purchase or repay Debt (other than (i) Project Debt and (ii) prepayments required upon the refinancing of such Debt or the Transfer of an asset other than as a result of the existence of a default) before its regular maturity or before its regularly scheduled dates of payment in an aggregate outstanding principal amount of at least $10,000,000) or (y) one or more Persons have the right to require the Company or any Subsidiary (other than a Project Debt Entity that is not a Material Subsidiary) to purchase or repay such Debt; or

(g)    the Company or any Subsidiary (other than a Project Debt Entity that is not a Material Subsidiary) (1) is generally not paying, or admits in writing its inability to pay, its debts as they become due (other than the failure of any Project Debt Entity to pay any Project Debt), (2) files, or consents by answer or otherwise to the filing against it of a petition for relief or reorganization or arrangement or any other petition in bankruptcy, for liquidation or to take advantage of any bankruptcy, insolvency, reorganization, moratorium or other similar law of any jurisdiction, (3) makes an assignment for the benefit of its creditors, (4) consents to the appointment of a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, (5) is adjudicated as insolvent or to be liquidated or (6) takes corporate action for the purpose of any of the foregoing; or

(h)     a court or other Governmental Authority of competent jurisdiction enters an order appointing, without consent by the Company or any of its Subsidiaries (other than Project Debt Entities that are not Material Subsidiaries), a custodian, receiver, trustee or other officer with similar powers with respect to it or with respect to any substantial part of its property, or constituting an order for relief or approving a petition for relief or reorganization or any other petition in bankruptcy or for liquidation or to take advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering the dissolution, winding-up or liquidation of the Company or any of its Subsidiaries (other than Project Debt Entities that are not Material Subsidiaries), or any such petition shall be filed against the Company or any of its Subsidiaries (other than Project Debt Entities that are not Material Subsidiaries) and such petition shall not be dismissed within 60 days; or

(i)    a final judgment or judgments for the payment of money aggregating in excess of $10,000,000 are rendered against one or more of the Company and its Subsidiaries (other than Project Debt Entities that are not Material Subsidiaries) and which judgments are not fully covered by insurance or, within 60 days after entry thereof, bonded, discharged or stayed pending appeal, or are not discharged within 60 days after the expiration of such stay; or

(k)    (1) default shall occur under the Guaranty Agreement or any Security Document and such default shall continue beyond the period of grace, if any, allowed with respect thereto, (2) the Guaranty Agreement or, other than during any Collateral Release Period, any Security Document shall cease to be in full force and effect with respect to the Company or any Guarantor party thereto for any reason whatsoever, including, without limitation, a determination by any Governmental Authority or court that such agreement is invalid, void or unenforceable or the Company or any Guarantor shall contest or deny in writing the validity or enforceability of any of its obligations under the Guaranty Agreement or any Security Document to which it is a party, or (3) other than during any Collateral Release Period, any Security Document shall for any reason fail to create a valid and perfected first priority security interest in any Collateral purported to be covered thereby, subject to the Liens permitted by Section 10.5.

1.17    Section 12.4 of the Note Purchase Agreement shall be and is hereby amended and restated in its entirety to read as follows:

Section 12.4.No Waivers or Election of Remedies, Expenses, Etc. No course of dealing and no delay on the part of any holder of any Note in exercising any right, power or remedy shall operate as a waiver thereof or otherwise prejudice such holder's rights, powers or remedies. No right, power or remedy conferred by this Agreement (including any Supplement), by any Note, by the Guaranty Agreement, by any Security Document or by any other Transaction Document upon any holder thereof shall be exclusive of any other right, power or remedy referred to herein or therein or now or hereafter available at law, in equity, by statute or otherwise. Without limiting the obligations of the Company under Section 15, the Company will pay to the holder of each Note on demand such further amount as shall be sufficient to cover all costs and expenses of such holder incurred in any enforcement or collection under this Section 12, including, without limitation, reasonable attorneys' fees, expenses and disbursements.

1.18    Section 15.1 of the Note Purchase Agreement shall be and is hereby amended and restated in its entirety to read as follows:

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Section 15.1.Transaction Expenses. Whether or not the transactions contemplated hereby are consummated, the Company will pay all reasonable costs and expenses (including reasonable attorneys' fees of a special counsel for the Purchasers, any Additional Purchasers and the Collateral Agent and, if reasonably required by the Required Holders, local or other counsel) incurred by the Purchasers, any Additional Purchasers, each other holder of a Note or the Collateral Agent in connection with such transactions and in connection with any amendments, waivers or consents under or in respect of this Agreement (including any Supplement), the Notes, the Guaranty Agreement, any Security Document or any other Transaction Document (whether or not such amendment, waiver or consent becomes effective), including, without limitation: (a) the costs and expenses incurred in enforcing or defending (or determining whether or how to enforce or defend) any rights under this Agreement (including any Supplement), the Notes, the Guaranty Agreement, any Security Document or any other Transaction Document or the Collateral or in responding to any subpoena or other legal process or informal investigative demand issued in connection with this Agreement (including any Supplement), the Notes, the Guaranty Agreement, any Security Document or any other Transaction Document or the Collateral, or by reason of being a holder of any Note or a beneficiary of the Guaranty Agreement or any Security Document or any other Transaction Document, and (b) the costs and expenses, including financial advisors' fees, incurred in connection with the insolvency or bankruptcy of the Company or any Subsidiary or in connection with any work-out or restructuring of the transactions contemplated hereby (including all Supplements), by the Notes, by the Guaranty Agreement, by any Security Document or by any other Transaction Document or any realization upon the Collateral. The Company will pay, and will save each Purchaser, each Additional Purchaser and each other holder of a Note harmless from, all claims in respect of any fees, costs or expenses, if any, of brokers and finders (other than those, if any, retained by a Purchaser, an Additional Purchaser or other holder in connection with its purchase of its Notes).

1.19.    Section 17.1(a) of the Note Purchase Agreement shall be and is hereby amended by (a) deleting the word “or” and replacing it with a comma “,” before the words “(3) amend” and (b) adding the following at the end of said Section:

or (4) other than during a Collateral Release Period, release all or substantially all of the Collateral from the Liens of the Security Documents

1.20.    The first sentence of Section 17.2(a) of Note Purchase Agreement shall be and is hereby amended and restated in its entirety to read as follows:

The Company will provide each holder of the Notes (irrespective of the amount of Notes then owned by it) with sufficient information, sufficiently far in advance of the date a decision is required, to enable such holder to make an informed and considered decision with respect to any proposed amendment, waiver or consent in respect of any of the provisions hereof (including any Supplement), of the Notes, of any Security Document or of any other Transaction Document.

1.21.    Section 17.2(b) of the Note Purchase Agreement shall be and is hereby amended and restated in its entirety to read as follows:

(b)    Payment. The Company will not directly or indirectly pay or cause to be paid any remuneration, whether by way of supplemental or additional interest, fee or otherwise, or grant any security or provide other credit support, to any holder of Notes as consideration for or as an inducement to the entering into by any holder of Notes of any waiver or amendment of any of the terms and provisions hereof, of any Note, the Guaranty Agreement, any Security Document or any other Transaction Document unless such remuneration is concurrently paid, or security is concurrently granted or other credit support concurrently provided, on the same terms, ratably to each holder of Notes then outstanding even if such holder did not consent to such waiver or amendment.

1.22    The first sentence of Section 19 of the Note Purchase Agreement shall be and is hereby amended and restated in its entirety to read as follows:

This Agreement and all documents relating hereto, including, without limitation, (a) all Supplements, (b) the Guaranty Agreement, (c) the Security Documents, (d) all other Transaction Documents (except the Notes themselves), (e) consents, waivers and modifications that may hereafter be executed, (f) documents received by any Purchaser at the Closing or by any Additional Purchaser on the date of purchase of its Additional Notes (except the Notes themselves), (g) documents received by any holder of the Notes on the First Amendment Effective Date and (h) financial statements, certificates and other information previously or hereafter furnished

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to any holder of Notes, may be reproduced by such holder by any photographic, photostatic, electronic, digital or other similar process and such holder may destroy any original document so reproduced.

1.23    Clause (8)(iv) of Section 20 of the Note Purchase Agreement shall be and is hereby amended and restated in its entirety to read as follows:

(iv) if an Event of Default exists, to the extent such Purchaser or Additional Purchaser may reasonably determine such delivery and disclosure to be necessary or appropriate in the enforcement or for the protection of the rights and remedies under such Purchaser's or Additional Purchaser's Notes, this Agreement (including any Supplement), the Guaranty Agreement, any Security Document or any other Transaction Document.

1.24    Section 22.3 of the Note Purchase Agreement shall be and is hereby amended by adding the following sentence to the end thereof to read as follows:

For purposes of determining compliance with the financial covenants contained in this Agreement, any election by the Company to measure any financial liability using fair value (as permitted by Accounting Standard Codification Topic No. 825-10-25 - Fair Value Option or similar accounting standard) shall be disregarded and such determination shall be made as if such election had not been made.

1.25    Section 22 of the Note Purchase Agreement shall be and is hereby amended by adding the following new Section 22.9 at the end of said Section:

Section 22.9.Environmental Indemnity.

The Company agrees to indemnify and hold harmless the Collateral Agent and each holder of the Notes, each Person claiming by, through, under or on account of any of the foregoing and the respective directors, officers, counsel and employees of each of the foregoing Persons (the “Indemnified Parties”) from and against any and all losses, claims, damages, liabilities and costs and expenses (herein, “Claims”) incurred in connection therewith (including but not limited to reasonable attorneys' and/or paralegals' fees and expenses and costs incurred in connection with any investigation or monitoring of conditions or any clean-up, remedial, removal or restoration work with respect to the Collateral undertaken or required by any Governmental Authority) to which any such Indemnified Party may become subject under any Environmental Laws applicable to the Company or any Guarantor or any of the Collateral, including without limitation the treatment, storage or disposal of Hazardous Materials on any of the Collateral, or as a result of the breach or non-compliance by the Company or any Guarantor with any Environmental Laws applicable to the Company or any of the Collateral; provided that the Company shall not be required to indemnify any Indemnified Party pursuant to this Section 22.9 for any claim resulting solely from the gross negligence, willful misconduct or fraud of such Indemnified Party. The provisions of this Section 22.9 shall survive the termination of this Agreement by payment in full of all of the Notes issued hereunder, by the foreclosure by the Collateral Agent on any or all of the Collateral under the Security Documents or otherwise, and shall survive the transfer of any Note or Notes issued hereunder.

1.26    Schedule B to the Note Purchase Agreement shall be and is hereby amended by adding, or amending and restating, the following definitions, and inserting them in the proper alphabetical order:

“Asset Disposition” shall mean any Transfer except:

(a)    any

(1) Transfer from a Subsidiary to the Company or to a Wholly-Owned Subsidiary (other than any GLC Venture or any Project Debt Entity);

(2)    Transfer from the Company to a Wholly-Owned Subsidiary (other than any GLC Venture or any Project Debt Entity); and

(3)    Transfer from any GLC Venture or Project Debt Entity to a GLC Venture or Project Debt Entity

so long as immediately before and immediately after the consummation of any such Transfer and after giving effect thereto, no Default or Event of Default would exist;

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(b)    any Transfer made in the Ordinary Course of Business and involving only property that is either (1) inventory held for sale or (2) equipment, fixtures, supplies or materials no longer required in the operation of the business of the Company or any of its Subsidiaries or that is obsolete; and

(c)    any Transfer in one lot of all of the voting Securities of TIC, directly or indirectly, owned or held by the Company to TIC pursuant to that certain Stock Purchase Agreement dated as of December 23, 1996 between the Company and TIC, as amended, supplemented, restated or otherwise modified from time to time.

“Attributable Debt” shall mean, on any date, (a) in respect of any Capital Lease of the Company or any Subsidiary, the capitalized amount thereof that would appear as a liability on a balance sheet of such Person prepared as of such date in accordance with GAAP, (b) in respect of any Synthetic Lease Obligation of the Company or any Subsidiary, the capitalized amount of the remaining lease payments under the relevant lease that would appear as a liability on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a Capital Lease and (c) in respect of any Long-Term Lease relating to a Sale-and-Leaseback Transaction of the Company or any Subsidiary, the present value of all Lease Rentals required to be paid by such Person under such lease during the remaining term thereof (determined in accordance with generally accepted financial practice using a discount factor equal to the interest rate implicit in such lease if known or, if not known, of 12% per annum).

“Bank Credit Agreement” shall mean that certain Amended and Restated Credit Agreement dated as of October 11, 2012 among the Company, Granite Construction Company and GILC Incorporated, as borrowers, Bank of America, as administrative agent, collateral agent thereunder, swing line lender and L/C issuer, BBVA Compass and Bank of the West, as co-syndication agents, and the other lenders party thereto, as the same may be amended, supplemented, restated, refinanced or otherwise modified from time to time, and any credit agreement or other like agreement entered into by the Company which is substantially similar to or replaces the Bank Credit Agreement.

“Blocked Person” shall mean (a) a Person whose name appears on the list of Specially Designated Nationals and Blocked Persons published by OFAC (an “OFAC Listed Person”) or (b) a department, agency or instrumentality of, or is otherwise controlled by or acting on behalf of, directly or indirectly, (1) any OFAC Listed Person or (2) any Person, entity, organization, foreign country or regime that is subject to any OFAC Sanctions Program.

“Collateral” shall mean, collectively, all property of the Company, each Guarantor or any other Person in which the Collateral Agent or any other Secured Party is granted a Lien under any Security Document as security for all or any portion of the Secured Obligations, including, without limitation, obligations of the Company hereunder and under the Notes and/or the obligations of the Guarantors under the Guaranty Agreement. Notwithstanding anything to the contrary contained herein or in any other Security Document, the Collateral shall not include any property that would otherwise constitute a general intangible to the extent that the grant of a security interest in such property is prohibited by any requirement of law of a Governmental Authority, requires a consent not obtained from any Governmental Authority pursuant to such requirement of law or is prohibited by, or constitutes a breach or default under or results in the termination of or requires any consent not obtained under, any contract, license, permit, agreement, instrument or other document evidencing or giving rise to such property or, in the case of any investment property, any applicable shareholder, joint venture or similar agreement, except in each case to the extent that such requirement of law or the term in such contract, license, agreement, instrument or other document or shareholder, joint venture or similar agreement providing for such prohibition, breach, default or termination or requiring such consent is ineffective under applicable law; provided that this exclusion shall not apply to capital stock in Joint Ventures or Subsidiaries acquired or created after the First Amendment Effective Date unless, after reasonable best efforts, the Company or the relevant Guarantor is unable either to avoid the conditions set forth in this exclusion or to obtain consents, waivers or approvals thereof.

“Collateral Agent” shall mean Bank of America, N.A. in its capacity as collateral agent under the Intercreditor Agreement and the Security Documents, and its successor and assigns in that capacity.

“Collateral Release Date” shall mean the date on which the Collateral has been released pursuant to Section 9.7(f).

“Collateral Release Period” shall mean any period of time during which the Collateral Agent is not required to have a Lien (other than set off rights) on any Collateral pursuant to the Security Documents.

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“Collateral Re-Pledge Date” shall mean the date on which the Company and the Guarantors are required to pledge and grant Liens on the Collateral pursuant to Section 9.7(f).

“Consolidated Cash Taxes” shall mean, for any Subject Period, for the Company and its Subsidiaries on a consolidated basis (excluding, however, any Project Debt Entity), the aggregate of all taxes actually paid by such Persons in cash during such period.

“Consolidated EBITDA” shall mean, for any Subject Period, for the Company and its Subsidiaries on a consolidated basis (excluding, however, any Project Debt Entity), an amount equal to Consolidated Net Income for such period plus Consolidated Cash Taxes for such period and the following to the extent deducted in calculating such Consolidated Net Income: (a) Consolidated Interest Expense for such period, (b) depreciation and amortization expense for such period, and (c) any non-cash charges for such period (excluding any such non-cash charges that represent the accrual of, or reserve for, anticipated cash charges in any future period); provided that all components of Consolidated EBITDA for such period shall include or exclude, as the case may be, without duplication, such components of Consolidated EBITDA attributable to any Investment other than Construction JV Investments arising in the Ordinary Course of Business consummated during such period or any business or assets that have been Transferred after the first day of such period and prior to the end of such period, in each case as determined on a pro forma basis, in accordance with Regulation S-X promulgated by the SEC.

“Consolidated Fixed Charge Coverage Ratio” shall mean, as of any date of determination, the ratio of (a) Consolidated EBITDA, measured for the Subject Period ending on such date, to (b) Consolidated Fixed Charges, measured for the Subject Period ending on such date.

“Consolidated Fixed Charges” shall mean, for any Subject Period, for the Company and its Subsidiaries on a consolidated basis, the sum of (a) Consolidated Interest Expenses paid in cash, plus (b) the aggregate amount of Federal, state, local and foreign taxes paid in cash, plus (c) the aggregate principal amount of all regularly scheduled principal payments of Consolidated Funded Indebtedness (for the avoidance of doubt, excluding all payments in respect of revolving Debt and prepayments in respect of all Debt), plus (d) the lesser amount of (1) the aggregate amount of all capital expenditures and (2) $37,500,000, plus (e) the aggregate amount of all Restricted Payments made in cash.

“Consolidated Funded Indebtedness” shall mean, as of any date of determination, for the Company and its Subsidiaries on a consolidated basis, the sum of (a) the outstanding principal amount of all obligations, whether current or long-term, for borrowed money (including the Notes) and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments, with or without recourse, but not including Project Debt, plus (b) Attributable Debt (excluding Attributable Debt of the type described in clause (c) of the definition thereof and Project Debt), plus (c) without duplication, all Guaranties with respect to Debt of the types specified in clauses (a) and (b) above of Persons other than the Company or any Subsidiary.

“Consolidated Interest Coverage Ratio” shall mean,as of any date of determination, the ratio of (a) Consolidated EBITDA, measured for the Subject Period ending on such date, to (b) Consolidated Interest Expense, measured for the Subject Period ending on such date.

“Consolidated Interest Expense” shall mean, for any Subject Period, for the Company and its Subsidiaries on a consolidated basis, the sum of (a) all interest, premium payments, fees, charges and related expenses of the Company and its Subsidiaries in connection with borrowed money (including capitalized interest) or in connection with the deferred purchase price of assets, in each case to the extent treated as interest in accordance with GAAP, plus (b) the portion of rent expense of the Company and its Subsidiaries with respect to such period under Capital Leases that is treated as interest in accordance with GAAP and the portion of Synthetic Lease Obligations payable by the Company and its Subsidiaries with respect to such period that would be treated as interest in accordance with GAAP if such lease were treated as a capital lease under GAAP; excluding for purposes of clause (a) and (b) hereof, such amounts in respect of Project Debt.

“Consolidated Leverage Ratio” shall mean, as of any date of determination, the ratio of (a) Consolidated Funded Indebtedness as of such date to (b) Consolidated EBITDA, measured for the Subject Period ending on or most recently ended prior to such date.

“Consolidated Net Income” shall mean, for any Subject Period, for the Company and its Subsidiaries on a consolidated basis, the net income of the Company and its Subsidiaries from continuing operations, excluding

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extraordinary items and excluding gains and losses from Transfers for that period; not including, however, net income in respect of or attributable to any Project Debt Entity unless and until such net income has been received by the Company or a Subsidiary (other than a Project Debt Entity) in the form of dividends or similar distributions.

“Consolidated Stockholders' Equity” shall mean, as of any date of determination for the Company and its Subsidiaries (excluding Project Debt Entities) on a consolidated basis, stockholders' equity as of that date, determined in accordance with GAAP.

“Consolidated Tangible Net Worth” shall mean, as of any date of determination, the amount equal to Consolidated Stockholders' Equity on that date minus the Intangible Assets of the Company and its Subsidiaries (excluding Project Debt Entities) (determined on a consolidated basis in accordance with GAAP) on that date.

“Construction JV” shall mean any Joint Venture entered into by the Company or any of its Subsidiaries, initially, with any one or more other Persons in the Ordinary Course of Business solely for purposes of undertaking or completing a construction project; provided that a Construction JV shall not be deemed to cease being a Construction JV after the withdrawal or buy-out of such other Person(s) from the Joint Venture or the purchase, acquisition or redemption of such other Person's interest in such Joint Venture.

“Construction JV Investments” shall mean Investments in any Construction JV arising upon any initial capital contribution to or subsequent capital contribution in such Construction JV, and participated in ratably by all then existing co-joint venturers having an interest in such Construction JV, solely for purposes of undertaking or completing a construction project and Investments arising in connection with the purchase, acquisition, redemption or buy-out of another co-joint venturer's interest in such Construction JV; provided Construction JV Investments shall not include the incurrence, directly or indirectly, of any Guaranty by the Company or any of its Subsidiaries.

“Contingent Acquisition Obligation” shall mean those contingent obligations (including, without limitation, purchase price adjustments, indemnification obligations and “earnouts”) of the Company or any of its Subsidiaries incurred in favor of a seller (or other third party entitled thereto) under or with respect to any acquisition or Investment.

“Controlled Entity” shall mean any of the Subsidiaries of Company and any of their respective Controlled Affiliates. As used in this definition, “Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.

“Debt” shall mean, as to any Person at a particular time, all of the following, whether or not included as indebtedness or liabilities in accordance with GAAP:

(a)    all obligations of such Person for borrowed money and all obligations of such Person evidenced by bonds, debentures, notes, loan agreements or other similar instruments;

(b)    all direct or contingent obligations of such Person arising under letters of credit (including standby and commercial), reimbursement agreements, bankers' acceptances, bank guaranties, surety bonds and similar instruments (in each case, whether or not such obligations are contingent or absolute); provided that the amount of any such contingent obligation permitted under this clause (b) shall be deemed to be equal to the maximum reasonably anticipated liability in respect thereof;

(c)    net obligations under any Swap Contract in an amount equal to the Swap Termination Value thereof;

(d)    all obligations of such Person to pay the deferred purchase price of property or services (other than trade accounts payable in the Ordinary Course of Business);

(e)    indebtedness (excluding prepaid interest thereon) secured by a Lien on property owned or being purchased by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse;

(f)    Capital Leases and Synthetic Lease Obligations; and

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(g)    all Guaranties of such Person in respect of any of the foregoing.

For all purposes hereof, the Debt of any Person shall include the Debt of any Joint Venture (other than a Joint Venture that is itself a corporation or limited liability company) in which such Person is a general partner or joint venturer, unless such Debt is (1) expressly made non-recourse to such Person and to such Person's assets (subject only to customary exceptions acceptable to the Required Holders) or (2) Project Debt. The amount of any net obligation under any Swap Contract on any date shall be deemed to be the Swap Termination Value thereof as of such date. The amount of any Capital Lease or Synthetic Lease Obligation as of any date shall be deemed to be the amount of Attributable Debt in respect thereof as of such date.

“Direct Foreign Subsidiary” shall mean a Foreign Subsidiary a majority of whose Voting Securities, or a majority of whose Subsidiary Securities, are owned by the Company or a Domestic Subsidiary.

“Domestic Subsidiary” shall mean any Subsidiary that is organized under the laws of any political subdivision of the United States, other than any such Subsidiary that is treated as a disregarded entity for U.S. federal income tax purposes if substantially all of the assets of such Subsidiary consist of capital stock of one or more direct or indirect Subsidiaries organized under the laws of any jurisdiction other than the United States or any political subdivision thereof.

“First Amendment Effective Date” shall mean October 11, 2012.

“Foreign Subsidiary” shall mean any Subsidiary other than a Domestic Subsidiary.

“GLC Venture” shall mean any Joint Venture, now or hereafter formed by the Company or any of its Subsidiaries with any other Person in the Ordinary Course of Business of the Company or such Subsidiary for the purpose of engaging in the business of real estate development and/or Transfer of real estate or interests in real estate or entities owning real estate; provided that a GLC Venture shall not be deemed to cease being a GLC Venture after the withdrawal or buy-out of such other Person(s) from the Joint Venture or the purchase, acquisition or redemption of such other Person's interest in such Joint Venture.

“Intangible Assets” shall mean assets that are considered to be intangible assets under GAAP, including customer lists, goodwill, computer software, copyrights, trade names, trademarks, patents, franchises, licenses, unamortized deferred charges, unamortized debt discount and capitalized research and development costs.

“Intercreditor Agreement” shall mean the Collateral Agency and Intercreditor Agreement among the Collateral Agent, the Secured Parties and the Company, dated as of October 11, 2012, as amended, restated, supplemented or modified from time to time in accordance with the terms thereof.

“Investment” shall mean, as to any Person, any acquisition or investment by such Person, whether by means of (a) the purchase or other acquisition of capital stock or other Securities of another Person, (b) a loan, advance or capital contribution to, guaranty of debt of, or purchase or other acquisition of any other debt or equity participation or interest in, another Person, including any partnership or joint venture interest in or with such other Person, (c) the provision of goods or services to another Person for consideration other than cash payable in full upon the delivery or provision of such goods or services (other than trade accounts payable in the Ordinary Course of Business), or (d) the purchase or other acquisition (in one transaction or a series of transactions) of assets of another Person that constitute a business unit of that Person.

“Joint Venture” shall mean a single-purpose corporation, partnership, limited liability company, joint venture or other similar legal arrangement (whether created by contract or conducted through a separate legal entity) now or hereafter formed by one Person with another Person in order to conduct a common venture or enterprise with such Person.

“Material Adverse Effect” shall mean a material adverse effect on (a) the business, operations, affairs, financial condition, assets, properties or prospects of the Company and its Subsidiaries, taken as a whole, (b) the ability of the Company to perform its obligations under this Agreement (including all Supplements), the Notes, any Security Document to which it is a party or any other Transaction Document to which it is a party, (c) the ability of any Guarantor to perform its obligations under the Guaranty Agreement, any Security Document to which it is a party or any other Transaction Document to which it is a party, (d) the validity or enforceability of this Agreement (including all Supplements), the Notes, the Guaranty Agreement, any Security Document or any

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other Transaction Document or (e) a material impairment of the rights and remedies of the Collateral Agent or any holder of a Note under any Transaction Document.

“Material Subsidiary” shall mean each Subsidiary identified as a Material Subsidiary on Schedule 5.4, each Subsidiary that is an obligor or guarantor of any Debt existing under the Bank Credit Agreement or an Existing Note Agreement and each other Subsidiary which meets either of the following conditions:

(a)    such Subsidiary's total revenues for the period of the immediately preceding four fiscal quarters are equal to or greater than 10% of the consolidated total 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 or quarterly financial statements of the Company and its Subsidiaries; or

(b)    such Subsidiary's total assets, as of the last day of the immediately preceding fiscal quarter, are equal to or greater than 10% of Consolidated Total Assets, in each case as reflected in the most recent annual or quarterly financial statements of the Company and its Subsidiaries.

If, at any time, Subsidiaries qualifying as Material Subsidiaries which, in the aggregate and together with the total revenues and total assets of the Company, do not represent at least 80% of the consolidated total revenues of the Company and its Subsidiaries and at least 80% of Consolidated Total Assets (the “80% Threshold”), the Company shall designate additional Domestic Subsidiaries or, to the extent no material adverse tax consequences shall result, Foreign Subsidiaries as Material Subsidiaries until the 80% Threshold is satisfied collectively by all Material Subsidiaries. Once a Subsidiary qualifies as or is designated by the Company as a Material Subsidiary, it shall continue to constitute a Material Subsidiary throughout the term of this Agreement, until such time as the Company provides to the holders of the Notes a certificate in accordance with Section 9.7(c) that such Subsidiary is no longer required to be designated as such pursuant to the terms hereof.

“Mortgage” shall mean any mortgage, deed of trust, trust deed or other equivalent document now or hereafter encumbering any fee-owned real property of the Company or any Guarantor in favor of the Collateral Agent on behalf of the Secured Parties, as security for any of the Secured Obligations, each of which shall be in form and substance reasonably acceptable to the Required Holders.

“Mortgaged Properties” shall mean, collectively, the real properties owned by the Company and the Guarantors and identified on Schedule 6, including, without limitation, all buildings, improvements, structures and fixtures now or subsequently located thereon and owned by the Company or any such Guarantor.

“OFAC” means the Office of Foreign Assets Control of the United States Department of the Treasury.

“OFAC Sanctions Program” shall mean any economic or trade sanction that OFAC is responsible for administering and enforcing. A list of OFAC Sanctions Programs may be found at http://www.ustreas.gov/offices/enforcement/ofac/programs/.

“Ordinary Course of Business” shall mean, in respect of any transaction involving the Company or any Subsidiary, (a) the ordinary course of such Person's business, substantially as conducted by any such Person prior to or as of the First Amendment Effective Date, or in a manner reasonably related thereto, and undertaken by such Person in good faith and not for purposes of evading any covenant or restriction herein or in any other Transaction Document, or (b) transactions outside the ordinary course of such Person's then-existing business, as long as the Company provides written notice to the holders of the Notes prior to such Person undertaking such business, specifically referencing this definition, provided that the Required Holders shall not have delivered written objections to the Company within five Business Days after their receipt of such written notice.

“Pledge Agreement” shall mean that certain Amended and Restated Securities Pledge Agreement dated as of the First Amendment Effective Date among the Company, certain Guarantors and the Collateral Agent, for the benefit of the Secured Creditors, in the form attached hereto as Exhibit PA, as supplemented from time to time by the execution and delivery of Pledge Joinder Agreements pursuant to Section 9.7, as the same may be otherwise supplemented (including by Pledge Agreement Supplement), each as amended, restated, supplemented or otherwise modified from time to time.

“Pledge Agreement Supplement” shall mean, with respect to the Pledge Agreement, a Pledge Agreement Supplement substantially in the form attached to the Pledge Agreement, executed and delivered by the Company or a Guarantor to the Collateral Agent pursuant to Section 9.7.

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“Pledge Joinder Agreement” shall mean each Pledge Joinder Agreement, substantially in the form thereof attached to the Pledge Agreement, executed and delivered by a Guarantor to the Collateral Agent pursuant to Section 9.7.

“Pledged Interests” shall mean the Subsidiary Securities heretofore pledged to the Collateral Agent and the Subsidiary Securities required to be pledged as Collateral pursuant to this Agreement or the terms of the Pledge Agreement; provided that notwithstanding any contrary provision in any Transaction Document, in the case of any Foreign Subsidiary, “Pledged Interests” shall be limited to a pledge of 65% of the Voting Securities and 100% of the other Subsidiary Securities issued by such Foreign Subsidiary.

“Priority Debt” shall mean (without duplication), as of the date of any determination thereof, the sum of (a) all unsecured Debt of Subsidiaries (including Attributable Debt of Subsidiaries and all guaranties of Debt of the Company) but excluding (1) unsecured Debt owing to the Company or any Wholly-Owned Subsidiary (other than any GLC Venture or a Project Debt Entity), (2) unsecured Debt outstanding at the time such Person became a Subsidiary, provided that such Debt shall have not been incurred in contemplation of such Person becoming a Subsidiary, (3) all guaranties of Debt of the Company by any Subsidiary which has also guaranteed the Notes pursuant to the Guaranty Agreement, (4) all unsecured Debt of Subsidiaries incurred under the Bank Credit Agreement by any Subsidiary which has also guaranteed the Notes pursuant to the Guaranty Agreement and (5) at any time other than during a Collateral Release Period, all unsecured Debt of Subsidiaries that is Specified Debt, (b) all Debt of the Company and its Subsidiaries secured by Liens other than Debt that is (1) secured by Liens permitted by subparagraphs (a) through (t), inclusive, of Section 10.5 and (2) at any time other than during a Collateral Release Period, secured Debt of the Company and its Subsidiaries that is Specified Debt, and (c) all Attributable Debt of the Company other than, at any time other than during a Collateral Release Period, Attributable Debt that is Specified Debt, but excluding, in the case of clause (a), (b) and (c) hereof, Project Debt permitted by Section 10.3(b).

“Project Debt” shall mean, in respect of any GLC Venture (the “obligor”), any Debt of such obligor incurred in the Ordinary Course of Business of such obligor and of the Company and its Subsidiaries, which may be secured by a Lien on assets of such obligor, but as to which there is no general recourse to the Company or any Guarantor except against such obligor (a) for breach of customary representations and warranties, or (b) to the extent such obligor is a limited liability company, corporation, limited partnership or other entity as to which neither the Company nor any Guarantor (other than obligor) is, directly or indirectly (at law, through any Guaranty or otherwise), liable to pay the debts of such obligor.

“Project Debt Entity” shall mean at any time, any GLC Venture obligated in respect of Project Debt at such time.

“Restricted Payment” shall mean any dividend or other distribution (whether in cash, Securities or other property) with respect to any capital stock or other equity interest of the Company or any Subsidiary, or any payment (whether in cash, Securities or other property), including any sinking fund or similar deposit on account of the purchase, redemption, retirement, acquisition, cancellation or termination of any such capital stock or other equity interest or of any option, warrant or other right to acquire any such capital stock or other equity interest.

“Secured Creditors” shall mean the “Secured Creditors” as defined in the Intercreditor Agreement.

“Secured Obligations” means the “Secured Obligations” as defined in the Intercreditor Agreement.

“Security Agreement” shall mean that certain Amended and Restated Security Agreement dated as of theFirst Amendment Effective Date among the Company, the Guarantors and the Collateral Agent, in the form attached hereto as Exhibit SA, as supplemented from time to time by the execution and delivery of Security Joinder Agreements pursuant to Section 9.7, and as modified, amended, amended and restated or supplemented from time to time.

“Security Documents” shall mean, collectively, the Pledge Agreement, the Security Agreement, the Mortgages and all other agreements (including control agreements), instruments and other documents, whether now existing or hereafter in effect, pursuant to which the Company or any Subsidiary or other Person shall grant or convey to the Collateral Agent or any Secured Party a Lien in, or any other Person shall acknowledge any such Lien in, property as security for all or any portion of the Secured Obligations or any other obligation under any

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Transaction Document, as any of them has been or may be amended, amended and restated, modified or supplemented from time to time.

“Security Joinder Agreement” shall mean each Security Joinder Agreement, substantially in the form attached to the Security Agreement, executed and delivered by a Guarantor or any other Person to the Collateral Agent pursuant to Section 9.7.

“Specified Debt” shall mean, as to any Person at a particular time, all of the following:

(a)    all Debt of the Company and its Subsidiaries outstanding on the First Amendment Effective Date and listed on Schedule 10.4 and any refinancings, refundings, renewals or extensions thereof, provided that the amount of such Debt is not increased at the time of such refinancing, refunding, renewal or extension except by an amount equal to a reasonable premium or other reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing and by an amount equal to any existing commitments unutilized thereunder;

(b)    Debt in respect of Capital Leases, Synthetic Lease Obligations, Sale-and-Leaseback Transactions and purchase money Debt for fixed or capital assets acquired by the Company or any Subsidiary, provided that the aggregate principal amount of (1) all purchase money Debt for fixed or capital assets that may be incurred by the Company or any of its then-existing Subsidiaries in any fiscal year of the Company and included in Specified Debt under this clause (b) shall not exceed $25,000,000, (2) all Debt in respect of Capital Leases, Synthetic Lease Obligations and Sale-and-Leaseback Transactions to finance the acquisition of fixed or capital assets incurred by the Company or any of its Subsidiaries in any fiscal year of the Company and included in Specified Debt under this clause (b) shall not exceed $25,000,000 and (3) all Debt in respect of Capital Leases, Synthetic Lease Obligations, Sale-and-Leaseback Transactions and purchase money Debt for fixed or capital assets of Persons immediately prior to such Persons becoming Subsidiaries or being merged with or into (or otherwise becoming acquired by) the Company or any of its Subsidiaries following the First Amendment Effective Date included in Specified Debt under this clause (b) shall not exceed an amount equal to $65,000,000, provided that none of such Debt was incurred in anticipation of any such merger or acquisition;

(c)    Debt incurred in the Ordinary Course of Business in connection with (1) securing the performance of bids, trade contracts (other than for borrowed money, the obtaining of advances or credit or the payment of the deferred purchase price of property), and statutory obligations, in each case, solely for the account and benefit of the Company, its Subsidiaries, any GLC Venture or Construction JV, (2) obligations on surety and appeal bonds solely for the account and benefit of the Company, its Subsidiaries, any GLC Venture or Construction JV (other than in relation to borrowed money debt, the obtaining of advances or credit or the payment of the deferred purchase price of property), and (3) other obligations of a like nature incurred in the Ordinary Course of Business solely for the account and benefit of the Company, its Subsidiaries, any GLC Venture or Construction JV (other than in relation to borrowed money debt, the obtaining of advances or credit or the payment of the deferred purchase price of property), in each of the foregoing cases to the extent not otherwise prohibited by the terms of any Transaction Document;

(d)    Debt of the Company or any Guarantor comprised solely of (1) the outstanding principal amount of unsecured obligations, whether current or long-term, for borrowed money and all obligations evidenced by bonds (other than performance, surety and appeal bonds), debentures, notes, loan agreements or other similar instruments, (2) Attributable Indebtedness in respect of Capital Leases and Synthetic Lease Obligations, (3) Contingent Acquisition Obligations in respect of any acquisition or Investment, or (4) without duplication, obligations under any Guaranty with respect to Debt of the types specified in the immediately preceding clauses (1) and (3), provided that, (i) the aggregate principal amount of outstanding Debt of the types permitted by the immediately preceding clauses (1) through (4) and is included in Specified Debt under this clause (d) shall not exceed $150,000,000, (ii) the aggregate principal amount of outstanding Debt of the types permitted by the immediately preceding clauses (1) through (4) that is subject to amortization or payment at maturity prior to October 11, 2016 and is included in Specified Debt under this clause (d) shall not exceed $100,000,000 and (iii) no such Debt shall be included in Specified Debt under this clause (d) if such Debt represents Debt of any co-joint venturer in any Joint Venture, to which the Company or any Subsidiary is a party, that is assumed by the Company or any Subsidiary, if such Debt was not originally incurred by such co-joint venturer in connection with (and relate solely to) the subject Joint Venture;

(e)    Guaranties by the Company or any Guarantor of Debt otherwise constituting Specified Debt of the Company or any Guarantor;

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(f)    Debt arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently drawn against insufficient funds in the ordinary course of business; provided, however, that such Debt is extinguished within five Business Days of incurrence; and

(g)    customer deposits and advance payments received in the Ordinary Course of Business.

“Subject Period” shall mean, as of any date of determination, the four consecutive fiscal quarter period ending on such date.

“Subsidiary Securities” shall mean the shares of capital stock or other equity interests issued by or equity participations in any Material Subsidiary, whether or not constituting a “security” under Article 8 of the Uniform Commercial Code as in effect in any jurisdiction.

“Swap Contract” shall mean (a) any and all rate swap transactions, basis swaps, credit derivative transactions, forward rate transactions, commodity swaps, commodity options, forward commodity contracts, equity or equity index swaps or options, bond or bond price or bond index swaps or options or forward bond or forward bond price or forward bond index transactions, interest rate options, forward foreign exchange transactions, cap transactions, floor transactions, collar transactions, currency swap transactions, cross-currency rate swap transactions, currency options, spot contracts, or any other similar transactions or any combination of any of the foregoing (including any options to enter into any of the foregoing), whether or not any such transaction is governed by or subject to any master agreement, and (b) any and all transactions of any kind, and the related confirmations, which are subject to the terms and conditions of, or governed by, any form of master agreement published by the International Swaps and Derivatives Association, Inc., any International Foreign Exchange Master Agreement, or any other master agreement (any such master agreement, together with any related schedules, a “Master Agreement”), including any such obligations or liabilities under any Master Agreement.

“Swap Termination Value” shall mean, in respect of any one or more Swap Contracts, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Contracts, (a) for any date on or after the date such Swap Contracts have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and (b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Contracts, as determined based upon one or more mid-market or other readily available quotations provided by any recognized dealer in such Swap Contracts.

“Synthetic Lease Obligation” shall mean the monetary obligation of a Person under (a) a so-called synthetic, off-balance sheet or tax retention lease, or (b) an agreement for the use or possession of property creating obligations that do not appear on the balance sheet of such Person but which, upon the insolvency or bankruptcy of such Person, would be characterized as the indebtedness of such Person (without regard to accounting treatment).

“Transaction Documents” shall mean, collectively, this Agreement, each Note, the Guaranty Agreement, the Security Documents, the Intercreditor Agreement, and the other agreements, documents, certificates and instruments now or hereafter executed or delivered by a Company or any Subsidiary or Affiliate in connection with this Agreement.

“Transfer” shall mean the sale, transfer, license, lease or other disposition (including, without limitation, any sale and leaseback transaction) of any property, including, without limitation, Subsidiary Stock, by any Person, including any sale, assignment, transfer or other disposal, with or without recourse, of any notes or accounts receivable or any rights and claims associated therewith; provided that the term “Transfer” shall not apply to or include any lease of real property. For purposes of determining the application of the Net Proceeds Amount in respect of any Transfer, the Company may designate any Transfer as one or more separate Transfers each yielding a separate Net Proceeds Amount. In any such case, (a) the Disposition Value of any property subject to each such separate Transfer and (b) the amount of Consolidated Total Assets attributable to any property subject to each such separate Transfer shall be determined by ratably allocating the aggregate Disposition Value of, and the aggregate Consolidated Total Assets attributable to, all property subject to all such separate Transfers to each such separate Transfer on a proportionate basis.

“Voting Securities” shall mean shares of capital stock issued by a corporation, or equivalent interests in any other Person, the holders of which are ordinarily, in the absence of contingencies, entitled to vote for the election of directors (or persons performing similar functions) of such Person, even if the right so to vote has been suspended by the happening of such a contingency.

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1.27    Schedule B to the Note Purchase Agreement shall be and is hereby further amended to delete the following definitions therefrom:

“Capital Lease Obligation,” “Consolidated Net Worth,” “Consolidated Total Capitalization,” “Consolidated Total Debt,” “Preferred Stock,” “Receivables Securitization Transactions” and “Restricted Investments.”

1.28    Schedule 5, Schedule 6, Schedule 10.4, Schedule 10.6(a), Schedule 10.11, Exhibit PA and Exhibit SAare added to the Note Purchase Agreement to read respectively as Schedule 5, Schedule 6, Schedule 10.4, Schedule 10.6(a), Schedule 10.11, Exhibit PA and Exhibit SAattached hereto.

1.29    Schedule 5.4 to the Note Purchase Agreement shall be and is hereby amended and restated in its entirety to read as set forth on Schedule 5.4 attached hereto.

SECTION 1.REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE GUARANTORS.

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, each Security Document and the Intercreditor Agreement have been duly authorized by all necessary corporate or other action on the part of the Company and/or the Guarantors party thereto, executed and delivered by the Company and/or the Guarantors party thereto and this First Amendment, the Note Purchase Agreement, as amended by this First Amendment, each Security Document and the Intercreditor Agreement constitute the legal, valid and binding obligations, contracts and agreements of the Company and/or the Guarantors party thereto, enforceable against such Persons in accordance with their respective 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)Schedule 5.4 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, the percentage of shares of each class of its capital stock or similar equity interests outstanding owned by the Company and each other Subsidiary and whether or not such Subsidiary is a Material Subsidiary on the First Amendment Effective Date, (2) of the Company's Affiliates and (3) of the Company's directors and executive officers;

(c)the execution and delivery of this First Amendment, each Security Document and the Intercreditor Agreement by the Company and/or the Guarantors party thereto and the performance thereof and of the Note Purchase Agreement, as amended by this First Amendment, will not (1) violate (i) any provision of law, statute, rule or regulation or its certificate of incorporation or bylaws or other charter documents, (ii) any order of any court or any rule, regulation or order of any other agency or government binding upon it, or (iii) 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 (2) 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 (1)(iii) of this Section 2.1(c);

(d)no consent, approval or authorization of, or registration, filing or declaration with, any Governmental Authority is required in connection with the execution and delivery of this First Amendment, the Security Documents or the Intercreditor Agreement by the Company and/or the Guarantors party thereto or the performance thereof or of the Note Purchase Agreement, as amended by this First Amendment, by the Company and/or any Guarantor party thereto except for (1) the authorizations, approvals, actions, notices and filings which have been duly obtained, taken, given or made and are in full force and effect or (2) the filing of Uniform Commercial Code financing statements and any applicable state certificate of title statute with respect to motor vehicles to perfect and exercise remedies with respect to the security interest conferred under the Security Documents, filings of security agreements in the United States Patent and Trademark Office and the United States Copyright Office, the recording of Mortgages pursuant to the Transaction Documents and filings required under state and federal securities laws upon the sale of stock;

(e)the provisions of the Security Documents are effective to create in favor of the Collateral Agent for the benefit of the Secured Parties a legal, valid and enforceable first priority Lien (subject only to Liens permitted by Section 10.5) on all right, title and interest of the Company or the applicable Guarantor in the Collateral described therein. Except for filings and actions contemplated hereby and by the Security Documents, no filing or other action will be necessary to perfect or protect such Liens;

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(f)(1) other than in connection with a non-ratable prepayment or purchase of Notes pursuant to Sections 8.3 or 8.6, the Series 2007‑A Notes and all other obligations of the Company under this Agreement shall rank at least pari passu in right of payment with all other present and future Secured Obligations of the Company; and

(2) the obligations of each Guarantor under the Guaranty Agreement rank at least pari passu in right of payment with all other present and future Secured Obligations of such Subsidiary Guarantor;

(g)as of the First Amendment Effective Date, there exists no Project Debt, other than as specifically identified on Schedule 5;

(h)the Mortgaged Properties listed on Schedule 6 constitute all of the material real properties owned by the Company and the Guarantors as of the First Amendment Effective Date;

(i)except as superseded by the representations and warranties set forth in Exhibit SR 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 date (except to the extent such representations and warranties expressly refer to an earlier date, in which case they were true and correct in all material respects as of such earlier date); and

(j)as of the date hereof and after giving effect to this First Amendment, each of the Security Documents and the Intercreditor Agreement, no Default or Event of Default has occurred which is continuing and no waiver of Default or Event of Default is in effect.

SECTION 2.CONDITIONS AND 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 the date first written above:

(a)executed counterparts of this First Amendment, duly executed by the Company and the holders of all of the outstanding principal of the Notes, shall have been delivered to each Noteholder or its special counsel;

(b)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;

(c)the Intercreditor Agreement, in form and substance satisfactory to each Noteholder, shall have been duly executed by each of the parties thereto and shall be in full force and effect and a copy thereof shall have been delivered to each Noteholder or its special counsel;

(d)each Noteholder or its special counsel (or, in the case of clause (2) below, the Collateral Agent) shall have received an executed counterpart of the Security Agreement and the Pledge Agreement, each in form and substance satisfactory to the Required Holders, together with:

(1)    Uniform Commercial Code financing statements suitable in form and substance for filing in all places required by applicable law to perfect the Liens of the Collateral Agent under the Security Documents as a first priority Lien as to items of Collateral in which a security interest may be perfected by the filing of financing statements, and such other documents and/or evidence of other actions as may be reasonably necessary under applicable law to perfect the Liens of the Collateral Agent under such Security Documents as a first priority Lien in and to such other Collateral as the Required Holders may reasonably require, including without limitation the delivery by the Company or any Subsidiary of all certificates evidencing pledged interests, accompanied in each case by duly executed stock powers (or other appropriate transfer documents) in blank affixed thereto;

(2)    the originals of all promissory notes issued in connection with Debt permitted by Section 7.03(e) of the Bank Credit Agreement, together with duly executed undated endorsements in blank affixed thereto;

(3)    except with the express prior written consent of the Required Holders in each instance, with respect to the Investment Property (as defined in the Security Agreement) listed on Schedule 9(e) of the Security Agreement, copies of each existing Qualifying Control Agreement (as defined in the Security Agreement) from the applicable securities intermediary;

(4)    except with the express prior written consent of the Required Holders in each instance, with respect to the Deposit Accounts (as defined in the Security Agreement) listed on Schedule 9(f) of the Security

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Agreement, copies of each existing Qualifying Control Agreement (as defined in the Security Agreement) from the applicable depositary institutions; and

(5)    evidence that all insurance required to be maintained pursuant to the Note Purchase Agreement, the Security Documents or any other Transaction Document has been obtained and is in effect, together with the certificates of insurance and endorsements, naming the Collateral Agent on behalf of the Secured Creditors as an additional insured or lender's loss payee, as the case may be, under all insurance policies maintained with respect to the assets and properties of the Company and the Guarantors that constitute Collateral.

(e)each Noteholder or its special counsel shall have received an executed counterpart of a Mortgage, or an amendment to Mortgage, in each case, in form and substance satisfactory to the Required Holders, with respect to each Mortgaged Property listed on Schedule 6 in recordable form, and, to the extent not previously delivered to the Collateral Agent, together with:

(1)    to the extent necessary under applicable law, for filing in the appropriate county land office(s), Uniform Commercial Code financing statements covering fixtures, if required, in each case appropriately completed;

(2)    mortgage policies of title insurance (which, if satisfactory to the Required Holders, may be in the form of a mark-up of pro forma mortgage policies which are satisfactory to the Required Holders subsequently to be followed by mortgage policies) relating to each Mortgage of the Mortgaged Property referred to above, issued by a title insurer reasonably satisfactory to the Required Holders (the “Title Company”), in an insured amount satisfactory to the Required Holders and insuring the Collateral Agent and the Secured Creditors that the Mortgage on each such Mortgaged Property is a valid and enforceable first priority mortgage lien on such Mortgaged Property, free and clear of all defects and encumbrances except Liens permitted by Section 10.5, with each such mortgage policy (i) to be in form and substance satisfactory to the Required Holders, (ii) to include a reference to the relevant survey with no survey exceptions except those theretofore approved by the Required Holders (such approval not to be unreasonably withheld or delayed), (iii) not to include any exception(s) for mechanic's liens, and (iv) to provide for affirmative insurance and endorsements (to the extent applicable and available in the relevant jurisdiction) as the Required Holders may reasonably request;

(3)    if requested by the Required Holders, (i) surveys for each Mortgaged Property sufficient for the Title Company to remove the standard survey exceptions from the title insurance policies and issue the endorsements required in clause (2)(iv) above, or (ii) affidavits delivered to the title insurer sufficient for the Title Company to remove the standard survey exceptions from the title policies and issue the endorsements referenced in clause (2)(iv) above;

(4)    evidence (which may be satisfied by appropriate instructions in a funds flow memorandum) of payment to the title insurer of all expenses and premiums of the title insurer in connection with the issuance of such policies and endorsements and payment to the Title Company of an amount equal to any fees or taxes, including recording, mortgage, intangible and stamp taxes payable in connection with recording the Mortgages and Uniform Commercial Code financing statements covering fixtures, if applicable, in the appropriate county or state land office(s);

(5)     in connection with any Mortgage, customary opinions of counsel in the jurisdiction where each Mortgaged Property is located; and

(6)    evidence of flood insurance coverage satisfactory to the Required Holders for each Mortgaged Property located in a specified flood hazard zone pursuant to a Standard Flood Hazard Determination.

(f)the Bank Credit Agreement, providing for a $215,000,000 revolving credit facility to the Company and having other terms and conditions satisfactory to the Required Holders, shall have been duly executed and delivered by each of the parties thereto and shall be in full force and effect and a copy thereof shall have been delivered to each Noteholder or its special counsel;

(g)an amendment to the Note Purchase Agreement, dated as of May 1, 2001, by and among the Company and the Purchasers named on the Schedule A attached thereto, consistent with the amendments set forth in this Amendment, and such amendment shall have been duly executed by each of the parties thereto and shall be in full force and effect and a copy thereof shall have been delivered to each Noteholder or its special counsel;

(h)such certificates of resolutions or other action, incumbency certificates and/or other certificates (including specimen signatures) of Responsible Officers of the Company and each Guarantor as the Required Holders or their special counsel may require evidencing the identity, authority and capacity of each Responsible Officer thereof

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authorized to act as a Responsible Officer in connection with this First Amendment, the Security Documents to which such Person is a party and the Intercreditor Agreement;

(i)such documents and certifications as the Required Holders may reasonably require to evidence that the Company and each Guarantor is duly organized or formed, and that the Company and each Guarantor is validly existing, in good standing and qualified to engage in business in each jurisdiction where its ownership, lease or operation of properties or the conduct of its business requires such qualification, except to the extent that failure to do so could not reasonably be expected to have a Material Adverse Effect;

(j)each Noteholder shall have received a customary opinion, addressed to the such Noteholder, of Jones Day, counsel for the Company and the Guarantors, and the general counsel or assistant general counsel for the Company and the Guarantors, in each case in form and substance satisfactory to the Required Holders concerning the Company, the Guarantors, this First Amendment, the Security Documents (which may include some or all of the Mortgages), the Intercreditor Agreement and as to such matters as the Required Holders may reasonably request;

(k)a certificate of a Responsible Officer of the Company and each Guarantor either (1) attaching copies of all consents, licenses and approvals required in connection with the execution, delivery and performance by such Person and the validity against such Person of the Transaction Documents to which it is a party, and such consents, licenses and approvals shall be in full force and effect, or (B) stating that no such consents, licenses or approvals are so required;

(l)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

(m)the Company shall have paid the fees and expenses of Schiff Hardin LLP, special counsel to the Noteholders, in connection with the negotiation, preparation, approval, execution and delivery of this First Amendment, the Security Documents and the Intercreditor Agreement.

SECTION 3.REAFFIRMATION OF GUARANTY AGREEMENT.

4.1    By their execution and delivery hereof, the undersigned Guarantors hereby acknowledge and agree to this First Amendment and reaffirm the Guaranty Agreement dated as of December 12, 2007 given in favor of each Noteholder and their respective successors and assigns.

SECTION 4.POST-CLOSING COVENANT.

5.1    Unless otherwise agreed to by the Required Holders (in their reasonable discretion), the Company and the Guarantors hereby agree to deliver, or cause to be delivered, to the holders of the Notes each of the agreements, instruments and other documents (each in form and substance reasonably acceptable to the Required Holders) set forth on Exhibit P-C attached hereto and made a part hereof, and to take, or cause to be taken, each of the actions set forth on Exhibit P-C, in each case within the time set forth therein for each such agreement, instrument, document or action. The Required Holders may, but shall not be obligated to, extend the time (if applicable) for the satisfaction of any of the requirements set forth in Exhibit P-C in its reasonable discretion.

5.2    The Company and the Guarantors hereby acknowledge and agree that the failure to satisfy any of the requirements set forth in Exhibit P-C within the time provided herein or therein (including any extension granted by the Required Holders pursuant to the last sentence of Section 5.1) shall constitute a default hereunder and an additional Event of Default under the Note Purchase Agreement for all purposes, and, without limiting the foregoing, all rights, powers, remedies and restrictions, including restrictions on extensions of credit, under the Transaction Documents resulting from an Event of Default shall be applicable.

SECTION 5.MISCELLANEOUS.

6.1    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.

6.2    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.

24

6.3    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.

6.4    This First Amendment shall he governed by and construed in accordance with the laws of the State of New York.

6.5    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.

[Remainder of page intentionally left blank.]

25

GRANITE CONSTRUCTION INCORPORATED

By /s/ Laurel J. Krzeminski

Laurel J. Krzeminski

Its VP and CFO

By /s/ Jigisha Desai

Jigisha Desai

Its VP Treasurer

GRANITE CONSTRUCTION COMPANY

By /s/ Laurel J. Krzeminski

Laurel J. Krzeminski

Its VP and CFO

By /s/ Jigisha Desai

Jigisha Desai

Its VP Treasurer

GILC INCORPORATED

By /s/ Laurel J. Krzeminski

Laurel J. Krzeminski

Its President and CEO

By /s/ Jigisha Desai

Jigisha Desai

Its VP and CFO

First Amendment to 2007 Note Purchase Agreement

GRANITE CONSTRUCTION NORTHEAST, INC.

By /s/ Laurel J. Krzeminski

Laurel J. Krzeminski

Its VP and CFO

By /s/ Jigisha Desai

Jigisha Desai

Its VP Treasurer

INTERMOUNTAIN SLURRY SEAL, INC.

By /s/ Kathleen Schreckengost

Kathleen Schreckengost

Its VP Treasurer

By /s/ Darren S. Beevor

Darren S. Beevor

Its VP Controller

First Amendment to 2007 Note Purchase Agreement

Accepted and Agreed to:

THE PRUDENTIAL INSURANCE COMPANY

OF AMERICA

By: /s/ Iris Krause

Vice President

PRUDENTIAL RETIREMENT INSURANCE AND ANNUITY

COMPANY

By:    Prudential Investment Management, Inc.,

as investment manager

By: /s/ Iris Krause

Vice President

UNIVERSAL PRUDENTIAL ARIZONA REINSURANCE

COMPANY

By:    Prudential Investment Management, Inc.,

as investment manager

By: /s/ Mitchell W. Reed

Vice President

ZURICH AMERICAN INSURANCE COMPANY

By:    Prudential Private Placement Investors, L.P.

(as Investment Advisor)

By:    Prudential Private Placement Investors, Inc.

(as its General Partner)

By: /s/ Mitchell W. Reed

Vice President

First Amendment to 2007 Note Purchase Agreement

AMERICAN INTERNATIONAL GROUP, INC.

By:    AIG Asset Management (U.S.), LLC,

Investment Advisor

By: /s/ David C. Patch

Name: David C. Patch

Title: Vice President

First Amendment to 2007 Note Purchase Agreement

ING LIFE INSURANCE AND ANNUITY COMPANY

ING USA ANNUITY AND LIFE INSURANCE COMPANY

RELIASTAR LIFE INSURANCE COMPANY

RELIASTAR LIFE INSURANCE COMPANY OF NEW YORK

SECURITY LIFE OF DENVER INSURANCE COMPANY

By:    ING Investment Management LLC,

as Agent

By: /s/ Gregory R. Addicks

Gregory R. Addicks

Senior Vice President

THE GUARDIAN LIFE INSURANCE COMPANY

OF AMERICA

By: /s/ Gwendolyn S. Foster

Name: Gwendolyn S. Foster

Title: Senior Director

First Amendment to 2007 Note Purchase Agreement

PRINCIPAL LIFE INSURANCE COMPANY

By:    Principal Global Investors, LLC,

a Delaware limited liability company,

its authorized signatory

By: /s/ Alan P. Kress

Its: Counsel

By: /s/ Clint Woods

Its: Assistant General Counsel

First Amendment to 2007 Note Purchase Agreement

UNITED OF OMAHA LIFE INSURANCE COMPANY

By: /s/ Curtis R. Caldwell

Name: Curtis R. Caldwell

Title: Senior Vice President

First Amendment to 2007 Note Purchase Agreement

ALLIANZ LIFE INSURANCE COMPANY OF NORTH

AMERICA

By: /s/ Brian F. Landry

Name: Brian F. Landry

Title: Assistant Treasurer

First Amendment to 2007 Note Purchase Agreement

AMERICAN UNITED LIFE INSURANCE COMPANY

By: /s/ Michael I. Bullock

Michael I. Bullock

Its: Vice President, Private Placements

First Amendment to 2007 Note Purchase Agreement

THE STATE LIFE INSURANCE COMPANY

By:    American United Life Insurance Company,

its agent

By: /s/ Michael I. Bullock

Michael I. Bullock

Its: Vice President, Private Placements

First Amendment to 2007 Note Purchase Agreement

THE LAFAYETTE LIFE INSURANCE COMPANY

By:    /s/ James J. Vance

Name: James J. Vance

Its: Vice President

By:    /s/ Kevin L. Howard

Name: Kevin L. Howard

Its: Vice President

First Amendment to 2007 Note Purchase Agreement

FARM BUREAU LIFE INSURANCE COMPANY OF

MICHIGAN

By:    American United Life Insurance Company,

its agent

By: /s/ Michael I. Bullock

Michael I. Bullock

Its: Vice President, Private Placements

First Amendment to 2007 Note Purchase Agreement

AMERICAN FAMILY LIFE INSURANCE COMPANY

By: /s/ David Voge

David Voge

Senior Fixed Income Analyst

First Amendment to 2007 Note Purchase Agreement

ASSURITY LIFE INSURANCE COMPANY

By: /s/ Victor Weber

Name: Victor Weber

Title: Senior Director-Investments

First Amendment to 2007 Note Purchase Agreement

SCHEDULE 1

FEE SCHEDULE

The Prudential Insurance Company of America	$	19,965.00
The Prudential Insurance Company of America	$	15,770.00
Prudential Retirement Insurance and Annuity Company	$	13,000.00
Universal Prudential Arizona Reinsurance Company	$	5,065.00
Zurich American Insurance Company	$	6,200.00
American International Group, Inc.	$	40,000.00
ING USA Annuity and Life Insurance Company	$	12,000.00
ING USA Annuity and Life Insurance Company	$	6,000.00
ReliaStar Life Insurance Company	$	1,200.00
ReliaStar Life Insurance Company	$	1,000.00
Security Life of Denver Insurance Company	$	2,700.00
ING Life Insurance and Annuity Company	$	3,000.00
Reliastar Life Insurance Company of New York	$	1,100.00
The Guardian Life Insurance Company of America	$	20,000.00
Principal Life Insurance Company	$	17,000.00
United of Omaha Life Insurance Company	$	10,000.00
Allianz Life Insurance Company of North America	$	10,000.00
The State Life Insurance Company	$	2,000.00
Farm Bureau Life Insurance Company of Michigan	$	3,300.00
Lafayette Life Insurance Company	$	1,700.00
America United Life Insurance Company	$	3,000.00
American Family Life Insurance Company	$	4,000.00
Assurity Life Insurance Company	$	2,000.00
Total	$	200,000.00

SCHEDULE 5

PROJECT DEBT

Entity's Name	Lender	Interest	Terms	Maturity	Balance as of 6/30/12
McCormick Woods	Washington Federal	4.50%	Development Loan, interest accrued to principal, due on maturity	2/28/13	10,439,163
Summer Sycamore	Preston State Bank	6.00%	Interest only, payable monthly, principal due at maturity	1/6/14	921,492
GLC-Lake Goodwin Assemblage	Whidbey Island Bank	7.00%	Monthly Interest plus quarterly amortized payments	1/30/15	4,284,128
GLC-Lake Goodwin Assemblage	Washington Federal	3.75%	Interest only. Paid to 12/31/2012	12/31/12	3,769,275
GLC-Lake Goodwin Assemblage	Washington Federal	4.00%	Interest only. Paid to 12/31/2012	12/31/12	1,593,475
Subtotal - Consolidated Entities Project Debt					$	21,007,533
Realty Capital Belmont	Park Cities Bank	4.25%	2014 maturity with 3 1-yr ext. options (to 2017) with cumulative principal reduction requirements to extend. Monthly interest payments required	12/28/14	16,731,206
Realty Capital Argyle	Northstar Bank	6.50%	Interest pre-funded and scheduled principal payment required each year	7/27/16	2,460,894
Realty Capital Argyle	Northstar Bank	6.50%	Interest pre-funded and scheduled principal payment required each year	7/27/16	1,414,895
Highpoint Oaks	First United Bank	6.00%	Interest pre-funded and scheduled principal payment required each year	5/26/14	4,176,433
Granite Regional Park	Rabobank	6.04%	Principal & interest payable monthly, fully amortized	1/5/18	14,060,391
Granite Regional Park	Bank of Sacramento	7.00%	Principal & interest payable monthly, fully amortized	10/6/12	20,445
Granite Regional Park	ING	4.85%	Principal & interest payable monthly, fully amortized	1/1/23	14,381,747
Granite Regional Park	SAC County	6.19%	Semi-annual principal and interest (BOND)	9/1/22	3,085,117
XS Ranch	Steiner Family	7.00%	Interest only, payable quarterly, principal due at maturity	12/19/14	10,000,000
Subtotal - Nonconsolidated Limited Partnerships Project Debt					$	66,331,118
Total Debt, GLC Investees					$	87,338,651

SCHEDULE 5.4

SUBSIDIARIES AND AFFILIATES OF THE COMPANY;

OWNERSHIP OF SUBSIDIARY STOCK; DIRECTORS AND EXECUTIVE OFFICERS

Company	Formation		Capital Structure		Related Entities
	Date*	State	Type		Name(s)	Owner (%)	Position
Granite Construction Incorporated	1/24/1990	DE	C Corp	Parent	—	Parent	—
GILC Incorporated	5/22/1995	CA	C Corp	Subsidiary	GCI	100	Investor	—
Granite Construction Company	1/4/1922	CA	C Corp	Subsidiary	GCI	100	Investor	—
ABC Marine L.L.C.	9/15/2006	LA	LLC		GCC	41	Manager
Ames-Granite Joint Venture	7/15/2009	MN	JV	True	GCC	50	Partner
Audubon Bridge Constructors, a Joint Venture	10/31/2005	LA	JV	Integrated	GCC .	25	Partner
California Corridor Constructors, a Joint Venture	7/31/1991	CA	JV	True	GCC	30	Partner
Copper Hills Constructors, a Joint Venture	6/10/2009	DE	JV	True	GCC	45	Manager
Eastside Corridor Constructors	9/16/2010	WA	JV	True	GCC	60	Sponsor
FCI Constructors/Granite, A Joint Venture	10/17/2005	CA	JV	Line-item	GCC	60	Manager Partner
Gateway Constructors	10/11/2006	CA	JV	??	GCC	50	Sponsor
GCC/MCM, A Joint Venture	10/25/2010	CA	JV	Line-item	GCC	70.4	Sponsor
Granite-Archer Western, a Joint Venture	10/1/2005	MS	JV	True	GCC	60	Manager
Granite-McCrossan	9/18/2003	MN	JV	True	GCC .	60	Manager
Granite-Myers-Rados, A Joint Venture	9/17/2002	CA	JV	True	GCC	55	Sponsor
Granite Northwest, Inc.	9/22/2006	WA	C Corp	Subsidiary	GCC	100	Investor
Granite/PCL, A Joint Venture	12/2000	FL	JV	Line-item	GCC PCL Civil Constructors	60	Manager
Granite/Rizzani de Eccher, A Joint Venture	8/3/2000	FL	JV	True	GCC	60	Sponsor
Granite Hensel Phelps JV (Prison Hospitals)	11/17/2010	DE	JV	Line-Item	GCC	24.2	Partner
Hensel Phelps-Granite JV (Mamizu)	3/26/2011	DE	JV	True	GCCG	49	Partner
Hensel Phelps Granite Hangar Joint Venture        (Hangar Project - Miramar Naval Air Station)	3/13/2011	DE	JV	True	GCC	25	Partner
Hill Country Constructors	9/1/2004	TX	JV	True	GCC JD Abrams LP	70	Sponsor
Houston Rapid Transit, a Joint Venture	11/6/2008	TX	JV	True	. GCC	33	Manager
Intercounty Constructors	11/30/2006	MD	JV		GCC	55	Manager
Largo Constructors (LGS), A Joint Venture	9/5/2000	MD	JV	True	GCC .	30	Partner
Las Vegas Monorail Team	9/20/2000	NV	JV	Line-item	GCC	44.8	Partner
Market Street Constructors	10/28/2002	PA	JV	True	GCC	69	Sponsor
Minnesota Transit Constructors	5/26/2000	MN	JV	True	GCC	56.5	Sponsor

Old Pueblo Trackworks (ARRA - Tucson Modern Streetcar Project)	12/12/2011	CA	JV	Line-Item	GCC	80	Managing
Pulice-Granite JV	3/5/2010	AZ	JV		GCC	25	Member
Raleigh-Durham Roadbuilders	5/17/2008	SC	JV	True	GCC	40	Partner
Riverside Motorsports Park, LLC			LLC		GCC	2.5	Member
South Corridor Constructors, (A Joint Venture)	9/22/2003	OR	JV	True	GCC	25	Partner
SSP Holding LLC	6/10/2010	DE	LLC		GCC	Variable	Member
TGM Constructors	6/12/2002	KY	JV	True	GCC	25	Partner
Thermwest Development, LLC	2/7/2003		LLC		GCC	9.8	Member
Tri-County Rail Constructors, A Joint Venture	04/2001	FL	JV	True	GCC	30	Partner
Virginia Approach Constructors	2/11/2003	VA	JV	True	GCC	79	Sponsor
Wasatch Constructors, A Joint Venture	6/25/1996	UT	JV	True	GCC	57	Partner
Washington County Constructors	6/5/2009	UT	JV	True	GCC	40	Partner
Weber County Constructors	9/15/2005	UT	JV	True	GCC	75	Manager
Yaquina River Constructors, A Joint Venture	2/3/2005	OR	JV		GCC GNW	99 1	Manager
Granite Construction International	7/31/1997	CA	C Corp	Subsidiary	GCI	100	Investor	—
Granite Construction Company Guam	9/19/2011	GU	C Corp	Subsidiary	GC Int'l	100	Investor	—
Granite Construction Northeast, Inc.	3/6/1989	NY	C Corp	Subsidiary	GCI	100	Investor	—
Granite Halmar-Fujitec America A Joint Venture	11/11/2003	NY	JV	Line-item	GNE	44.9	Manager
Granite-Traylor-Frontier Joint Venture	11/5/2008	NY	JV	True	GNE	42.5	Manager
Phoenix Constructors	7/15/2005	NY	JV	True	GNE	20	Partner
Schiavone-Granite Halmar, A Joint Venture		NY	JV		GNE	40	Partner
Skanska/Granite/Skanska JV	1/21/2010	NY	JV	True	GNE	20	Partner
Granite Land Company	4/28/1993	CA	C Corp	Subsidiary	GCI	100	Investor
GGV Greenwood, LLC	8/30/2006	CA	LLC		GLC	91.98	Manager
GGV Missouri Flat, LLC	11/16/2007	CA	LLC		GLC	91.22	Manager
GLC Argyle 114, Ltd.	6/23/2006	TX	LP		GLC	99.8	Class A LP
Realty Capital Argyle 114, Ltd.	6/23/2006	TX	LP		GLC Argyle 114, Ltd	48.00	LP
GLC Belmont, Ltd.	10/6/2005	TX	LP		GLC	99.8	Class A LP
Realty Capital Belmont, Ltd.	10/6/2005	TX	LP		GLC Belmont, Ltd.	41.67	LP
Belmont 407, LLC	12/29/2011	TX	LLC		Realty capital Belmont, Ltd.	95.39	Member
GLC/EPC McCormick Woods, LLC	9/9/2003	WA	LLC		GLC	99.9	Manager
GEM1, LLC	9/9/2003	WA	LLC		GLC/EPC M Woods, LLC	70	Manager
GLC/Foothill Monterey, LLC	9/29/2006	CA	LLC		GLC	99	Manager
GLC/Foothill Monterey II, LLC	5/13/2008	CA	LLC		GLC	99	Manager
GLC Fort Worth, LLC	12/23/2002	TX	LLC		GLC	100	Sole member
Presidio Vista I, Ltd.	1/8/2003	TX	LP		GLC	89	LP
GLC Hometown Apartments, Ltd.	11/2/2007	TX	LP		GLC	99.89	Class A LP
Hometown Urban Partners, Ltd.	9/25/2007	TX	LP		GLC Hometown Apts., Ltd.	49.9	LP
GLC-LGA, LLC	4/28/2008	WA	LLC		GLC	100	Sole Member

LGAJV, LLC	4/28/2008	WA	LLC		GLC-LGA, LLC	64.38	Manager
GLC/LP Rancho Road, LLC	7/31/2006	CA	LLC		GLC	99	Manager
GLC Summer Creek, LLC	7/27/2006	TX	LLC		GLC	100	Sole Member
Summer Sycamore I, Ltd.	7/27/2006	TX	LP		GLC	89	LP
GLC Vista Crossroads, LLC	10/8/2004	TX	LLC		GLC	100	Sole Member
Vista Crossroads I, Ltd.	10/8/2004	TX	LP		GLC	89	LP
Granite Grado Ventures, LLC	5/23/2003	CA	LLC		GLC	100	Sole Member
Granite Grado Ventures Project I, LLC	5/23/2003	CA	LLC		Granite Grado Vent's, LLC	100	Manager
Granite Grado Ventures Project II, LLC	8/17/2003	CA	LLC		GLC	89.4	Manager
Granite/PBC Pajaro, LLC	1/14/2005	CA	LLC		GLC	62.26	Manager
Highpoint Oaks, Ltd.	9/1/2004	TX	LP		GLC .	76.2	LP
Lodi Victor Ventures, LLC	8/10/2007	CA	LLC		GLC	91.1	Manager
Main Street Ventures, LLC	1/21/2003	CA	LLC		GLC	99.9	Manager
Main Street Ventures-Project II, LLC	10/13/2006	CA	LLC		Main Street Ventures, LLC	100	Sole Member
RCP Belmont, Ltd. (Note: Entity has interest in Realty Capital Belmont, Ltd. - See listing under GLC Belmont, Ltd., above)	09/07/2005 (GLC share purchased 01/31/2009)	TX	LP		GLC	17.8	Class A LP
Regional Park Limited Partnership	11/16/1995	CA	LP		GLC	25	LP
XS Ranch Fund VI, L.P.	1/8/2007	DE	LP		GLC	5.58	LP
Granite SR 91 Corporation	6/23/1993	CA	C Corp	Subsidiary	GCI	100	Investor	—
Granite SR 91, LP	7/7/1993	CA	LP		GCI	99	LP	—
Intermountain Slurry Seal, Inc.	4/23/1982	WY	C Corp	Subsidiary	GCI	100	Investor	—
Paramount-Nevada Asphalt Company, LLC		NV	LLC		GCI	50	Member	—
Pozzolan Products Company (P.P.C.)	1/2/1976	UT	C Corp	Subsidiary	GCI	100	Investor	—

			GRANITE CONSTRUCTION INCORPORATED (and subsidiaries)
Directors: W.H. Powell, Chair C.G. Bjork J.W. Bradford, Jr. G.M. Cusumano W.G. Dorey	D.H. Kelsey R.A. McDonald J.H. Roberts G.H. Vasquez1	Officers: J.H. Roberts - Pres & CEO *L.J. Krzeminski - VP, CFO *M.F. Donnino - Senior VP& Group Manager *T.S. Case - VP & Group Manager *J.A. Franich - VP & Group Manager			*P.M. DeCocco - VP of Human Resources *+J. Desai - VP & Treasurer *+R.L. Gatto - VP & Controller *K.H. Marshall - VP & Dir of Development & Strategy		*J.L McQuillen, Jr. - VP & Group Manager R.A. Watts - VP, General Counsel, Corp Compliance Officer & Secretary S.D. Wolcott - VP of Land & Quarry
Granite Construction                      Company Material Subsidiary Heavy/Highway Construction and                   Material Sales Directors: W.H. Powell, Chair C.G. Bjork J.W. Bradford G.M. Cusumano W.G. Dorey D.H. Kelsey R.A. McDonald J.H. Roberts G.H. Vasquez (1) Officers: J.H. Roberts-Pres & CEO *L.J. Krzeminski-VP & CFO *M.F. Donnino-Sr VP & Grp Mgr *T.S. Case-VP & Grp Mgr *J.A. Franich-VP & Grp Mgr *P.M. DeCocco, VP of HR *+J. Desai-VP & Treas *+R.L. Gatto-VP, Controller *K.H. Marshall-VP & Dir of Dev & Strat *J.L. McQuillen, Jr.-VP & Grp Mgr R.A. Watts-VP, Genl Counsel, Corp Compl Off & Secretary S.D. Wolcott-VP of Land & Quarry *K.M. Smith-Grp Counsel *J.M. Jasper-Grp Counsel				Granite Construction Northeast, Inc. Material Subsidiary 120 White Plains Road, Ste. 310 Tarrytown, NY 10591 Heavy/Highway Construction Director: J.H. Roberts, Chair Officers: J.H. Roberts -Pres & CEO * L.J. Krzeminski-VP & CFO *M.F. Donnino-Sr VP *T.S. Case-VP *J.A. Franich-VP *P.M. DeCocco, VP of HR *+J. Desai-VP & Treas *+R.L. Gatto-VP, Controller *K.H. Marshall-VP *J.L. McQuillen, Jr.-VP R.A. Watts-VP, Genl Cnsl & Secy *K.M. Smith *J.M. Jasper *R.F. McTavish		GILC Incorporated Material Subsidiary Equipment Leasing Director: J.H. Roberts, Chair Officers: L.J. Krzeminski- Pres & CEO J. Desai- VP & CFO R.A. Watts- VP, General Counsel & Secy		Intermountain Slurry           Seal, Inc. Material Subsidiary Heavy/Highway Construction Non-Union Crusher/Asphalt Plant Directors: T. Coppinger, Chair D.J. Brunton D.S. Beevor Officers: K.T. Larkin-Pres *K. Schreckengost-VP & Treas D.S. Beevor-VP, Controller & Secy *D.J. Brunton *C.P. Johnson *D.L. Larson

¹Appointed effective October 1, 2012

SCHEDULE 6

MORTGAGED PROPERTIES

	Project #	Address	City	County	State
1	L05008	Elder Creek Road	Sacramento	Sacramento	CA
2	L07004	999 Mission Rock Road	Santa Paula	Ventura	CA
3	L08001/ L08002		Oroville	Butte	CA
4	L06003	Fulton & Frank Road	Esparto	Yolo	CA
5	L14003	Highway 33	Coalinga	Fresno	CA
6	L26004	7131 N. Railroad Avenue	Pasco	Franklin	WA
7	L32009	E. Selah Rd	Yakima	Yakima	WA
8	L26002	W. Gill Station Rd	Coso Junction	Inyo	WA
9	L32011	Nelpar Drive	East Wenatchee	Douglas	WA
10	L07003	400 S. Hwy 101	Buellton	Santa Barbara	CA
11	L03002	Hwy 175	Lakeport	Lake	CA
12	L16010	10600 I-80 East	Lockwood	Washoe	NV
13	L16001	1900 Glendale Avenue	Sparks	Washoe	NV
14	L93005	701 East Main Street	Lewisville	Denton	TX
15	L03001	825 W. Warm Springs Road	Salt Lake City	Salt Lake	UT
16	L30012	South 1900 West	West Haven	Weber	UT
17	L12001	3001 James Road	Bakersfield	Kern	CA
18	L14008	Hildreth Quarry	Tracy	Madera	CA
19	L15002	South Bird Road	Modesto	San Joaquin	CA
20	L15006	Blewett Road	Modesto	San Joaquin	CA
21	L15001	Harlan Road	Stockton	San Joaquin	CA
22	L21901	715 Comstock Street	Santa Clara	Santa Clara	CA
23	L02004	580/582/680 West Beach Street	Watsonville	Santa Cruz	CA
24	L05024A	Bradshaw Road	Sacramento	Sacramento	CA
25	L17007	(7 parcels)	Marana	Pima	AZ
26	L11003	Hwy 138	Black Butte	Los Angeles	CA
27	L11004	Pearblossom Hwy	Little Rock	Los Angeles	CA
28	L25016	4 Parcels/ Monroe Street	Indio	Riverside	CA
29	L91001 / L91005	585 W. Beach Street	Watsonville	Santa Cruz	CA

SCHEDULE 10.4

EXISTING DEBT

Borrower	Lender	Interest Rate	Maturity	Balance		Description
Granite Construction Incorporated	Private Placement Note Holders	6.96%	5/13/13	$	8,333,337	Notes issued to refinance debt and for general corporate purposes
Granite Construction Incorporated	Private Placement Note Holders	6.11%	12/12/19	200,000,000		Notes issued to refinance debt and for general corporate purposes
Granite Construction Company	Anderson/Watson	6.50%	12/15/19	114,864		Real estate property
Granite Construction Company	Linda Watson	6.50%	12/22/19	71,092		Real estate property
Granite Construction Company	Anchorage Sand & Gravel Co.	6.00%	9/30/12	750,000		Hot Plant
				$	209,269,293
McCormick Woods	Washington Federal	4.50%	2/28/13	10,439,163		Project Debt
Summer Sycamore	Preston State Bank	6.00%	1/6/14	921,492		Project Debt
GLC-Lake Goodwin Assemblage	Whidbey Island Bank	7.00%	1/30/15	4,284,128		Project Debt
GLC-Lake Goodwin Assemblage	Washington Federal	3.75%	12/31/12	3,769,275		Project Debt
GLC-Lake Goodwin Assemblage	Washington Federal	4.00%	12/31/12	1,593,475		Project Debt
Subtotal - Consolidated Entities Project Debt				$	21,007,533
Realty Capital Belmont	Park Cities Bank	4.25%	12/28/14	16,731,206		Project Debt
Realty Capital Argyle	Northstar Bank	5.75%	7/27/16	2,460,894		Project Debt
Realty Capital Argyle	Northstar Bank	5.75%	7/27/16	1,414,895		Project Debt
Highpoint Oaks	First United Bank	6.00%	5/26/14	4,176,433		Project Debt
Granite Regional Park	Rabobank	6.04%	1/5/18	14,060,381		Project Debt
Granite Regional Park	Bank of Sacramento	7.00%	10/6/12	20,445		Project Debt
Granite Regional Park	ING	4.85%	1/1/23	14,381,747		Project Debt
Granite Regional Park	SAC County (Bond)	6.19%	9/1/22	3,085,117		Project Debt
XS Ranch	Steiner Family	7.00%	12/19/14	10,000,000		Project Debt
Subtotal - Nonconsolidated Limited Partnerships Project Debt				$	66,331,118

Principal	Insurer	Description	Penal Sum		Cost to complete		Maturity
Granite Construction Incorporated and Subsidiaries	Federal Insurance Company, Travelers Casualty and Surety Company, Zurich American Insurance Company	Payment and Performance Bonds for Construction Projects	$	8,714,666,497	$	1,789,690,000	Various
Granite Construction Incorporated and Subsidiaries	Federal Insurance Company	Miscellaneous bonds in support of permitting, reclamation and licensing	$	51,736,480	$	51,736,480	Various
Granite Construction Incorporated	Shell Energy North America (US), L.P.	International Swap Dealers Association Master Agreement Dated as of 3/16/2010
Granite Construction Incorporated	Merrill Lynch Commodities, Inc.	Amendment as of 11/29/2011 to International Swap Dealers Association Master Agreement Dated as of 6/12/2009

SCHEDULE 10.6(a)

RESTRICTIONS ON DIVIDENDS OF SUBSIDIARIES

Section 7.2 of the Amended and Restated Credit Agreement dated as of October 11, 2012, as in effect on the date hereof

First Amendment to 2007 Note Purchase Agreement dated December 12, 2007

Second Amendment to 2001 Note Purchase Agreement dated May 1, 2001

EXHIBIT 10.11

EXISTING TRANSACTIONS WITH AFFILIATES

None

EXHIBIT PA

FORM OF PLEDGE AGREEMENT

EXHIBIT SA

FORM OF SECURITY AGREEMENT

EXHIBIT SR

SUPPLEMENTAL REPRESENTATIONS

For purposes of Section 2.1(i) of the First Amendment, the following representations and warranties supersede the representations and warranties contained in the Note Purchase Agreement with the corresponding section references.

The Company represents and warrants to each Noteholder that:

Section 5.4Organization and Ownership of Shares of Subsidiaries.

(d)    No Subsidiary is a party to, or otherwise subject to, any legal, regulatory, contractual or other restriction (other than this Agreement, the agreements listed on Schedule 10.6 to the First Amendment and customary limitations imposed by corporate law or similar 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 5.8Litigation; Observance of Agreements, Statutes and Orders.

(a)    Except as set forth on Schedule 5.8 to these Supplemental Representations, there are no actions, suits, investigations or proceedings pending or, to the knowledge of the Company, threatened against or affecting the Company or 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 5.15Existing Debt.

(a)    Schedule 10.4 to the First Amendment sets forth a complete and correct list of all outstanding Debt of the Company and its Subsidiaries as of the First Amendment Effective Date (including a description of the obligors and obligees, principal amount outstanding and collateral therefor, if any, and Guaranty thereof, if any). 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 5.16Existing Investments. Schedule 5.16 to these Supplemental Resolutions sets forth a complete and correct list of all outstanding Investments of the Company and its Subsidiaries as of the First Amendment Effective Date.

Section 5.19Environmental Matters.

(a)    Neither the Company nor any Subsidiary has knowledge of any claim or has received any notice of any claim, and no proceeding has been instituted raising any 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, in each case, that could reasonably be expected to have a Material Adverse Effect.

(b)    Neither the Company nor any Subsidiary has knowledge of any facts which would give rise to any claim, public or private, or 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, in each case, that could reasonably be expected to have a Material Adverse Effect.

(d)    Neither the Company nor any Subsidiary (1) has stored any Hazardous Materials on real properties now or formerly owned, leased or operated by any of them in a manner contrary to any Environmental Laws, 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.

(e) All buildings on all real properties now owned, leased or operated by the Company or any Subsidiary are in material compliance with applicable Environmental Laws except to the extent that failure to so comply could not reasonably be expected to have a Material Adverse Effect.

SCHEDULE 5.8 TO SUPPLEMENTAL REPRESENTATIONS

EXISTING LITIGATION

Grand Avenue Project DBE Issues: On March 6, 2009, the U.S. Department of Transportation, Office of Inspector General (“OIG”) served upon our wholly-owned subsidiary, Granite Construction Northeast, Inc. (“Granite Northeast”), a United States District Court Eastern District of New York subpoena to testify before a grand jury by producing documents. The subpoena seeks all documents pertaining to the use of a DBE firm (the “Subcontractor”), and the Subcontractor's use of a non-DBE lower tier subcontractor/consultant, on the Grand Avenue Bus Depot and Central Maintenance Facility for the Borough of Queens Project, a Granite Northeast project.  The subpoena also seeks any documents regarding the use of the Subcontractor as a DBE on any other projects and any other documents related to the Subcontractor or to the lower-tier subcontractor/consultant.  We have received two follow-up requests from the USDOJ for additional information and documents.  We have complied with the subpoena and the requests, and are fully cooperating with the OIG’s investigation. To date, Granite Northeast has not been notified that it is either a subject or target of the OIG’s investigation. Accordingly, we do not know whether any criminal charges or civil lawsuits will be brought against any party as a result of the investigation. We cannot, however, rule out the possibility of civil or criminal actions or administrative sanctions being brought against Granite Northeast.

SCHEDULE 5.16 TO SUPPLEMENTAL REPRESENTATIONS

EXISTING INVESTMENTS

Company	Descriptions	Book
		July 31, 2012
Paramount-Nevada Asphalt	LLP	$	10,005,781
		$	10,005,781
		July 31, 2012
ABC Marine	Joint Venture	209,100
Halmar/Egis	Joint Venture	12,770,626
Market Street	Joint Venture	5,576,643
Vaginia Approach	Joint Venture	4,902,778
Granite Myers/Rados	Joint Venture	19,313,625
Hill Country Constructors	Joint Venture	9,310,000
Audubon Bridge Constructors	Joint Venture	6,250,000
Skanska, GCN, Skanska Builders	Joint Venture	4,000,000
Eastside Corridor Constructors	Joint Venture	7,500,000
SSP Holdings	Joint Venture	2,416,335
Hensel Phelps - Granite Miramar Hangars	Joint Venture	50,000
Hensel Phelps - Granite Guam (Mamizu)	Joint Venture	241,793
		$	72,540,900
Granite Land Company	Descriptions	Book
		May 31, 2012
Granite Grado II	LLC	371,335
McCormick Woods	LLC	18,658,468
Summer Creek	LLC	5,438,892
Rancho Road	LLC	570,293
GGV Greenwood	LLC	405,517
Missouri Flat Road	LLC	1,006,795
LGAJV, LLC	LLC	(1,168,817		)
Highpoint Oaks	LP	1,914,853
Belmont - Including Investment II in RCP Belmont	LP	7,089,382
Argyle 114	LP	2,329,408
GLC Hometown Apartments	LP	88,600
XS Ranch	LP	2,130,484
		$	38,835,210

EXHIBIT P-C

POST-CLOSING ITEMS

(a)    Real Property Matters.    To the extent not previously delivered to the holders of the Notes, by the date that is 120 days after the date hereof, deliver the following:

(i)    Mortgages and Assignment of Leases and Rents. An executed Mortgage with respect to each Mortgaged Property listed on Schedule I hereto in recordable form.

(ii)    Uniform Commercial Code Financing Statements. To the extent necessary under applicable Law, for filing in the appropriate county land office(s), Uniform Commercial Code financing statements covering fixtures, if required, in each case appropriately completed.

(iii)    Mortgage Policies. Mortgage policies of title insurance (which, if satisfactory to the Required Holders, may be in the form of a mark-up of pro forma mortgage policies which are satisfactory to the Required Holders subsequently to be followed by mortgage policies) relating to each Mortgage of the Mortgaged Property referred to above, issued by a title insurer reasonably satisfactory to the Required Holders (the “Title Company”), in an insured amount satisfactory to the Required Holders and insuring the Collateral Agent that the Mortgage on each such Mortgaged Property is a valid and enforceable first priority mortgage lien on such Mortgaged Property, free and clear of all defects and encumbrances except Liens permitted by Section 10.5 of the Note Purchase Agreement, with each such mortgage policy (A) to be in form and substance satisfactory to the Required Holders, (B) not to include any exception(s) for mechanic's liens, and (C) to provide for affirmative insurance and endorsements (to the extent applicable and available in the relevant jurisdiction) as the Collateral Agent may reasonably request.

(iv)    Evidence of Payment. evidence (which may be satisfied by appropriate instructions in the funds flow memorandum) of payment to the title insurer of all expenses and premiums of the title insurer in connection with the issuance of such policies and endorsements and payment to the Title Company of an amount equal to any fees or taxes, including recording, mortgage, intangible and stamp taxes payable in connection with recording the Mortgages and Uniform Commercial Code financing statements covering fixtures, if applicable, in the appropriate county or state land office(s).

(v)    Legal Opinions. In connection with any Mortgage, customary opinions of counsel in the jurisdiction where each Mortgaged Property is located.

(b)    Vehicle Titles.    To the extent not previously delivered to the holders of the Notes, by the date that is 120 days after the date hereof, deliver to the holders of the Notes all applications for certificates of title or ownership indicating the Collateral Agent's first priority Lien (subject to any Permitted Liens) on each motor vehicle listed on Schedule II hereto (as such requirements are further set forth in Section 3(d) of the Security Agreement), and any other necessary documentation which the Collateral Agent shall deem reasonably advisable to perfect its Liens on such motor vehicles subject to a certificate of title.

SCHEDULE I to EXHIBIT P-C

(Mortgaged Property)

GRANITE REAL ESTATE PROPERTIES
	Address	City	County	State
1	999 Mission Rock Rd	Santa Paula	Ventura	CA
2	Unknown	Oroville	Butte	CA
3	38940 Highway 33	Coalinga	Fresno	CA
4	110 Blewett Road	Tracy	San Joaquin	CA
5	715 Comstock Street	Santa Clara	Santa Clara	CA
6	585 W. Beach Street	Watsonville	Santa Cruz	CA
7	825 W. Warm Springs Road (825 West 1000 Street)	Salt Lake City	Salt Lake	UT
8	1900 Glendale Avenue	Sparks	Washoe	NV
9	10500 S. Harlan Road	French Camp	San Joaquin	CA
10	701 East Main Street	Lewisville	Denton	TX
11	7131 N. Railroad Ave.	Pasco	Franklin	WA
12a	5497 Enterprise Dr and 5665 Nelpar Drive	East Wenatchee	Douglas	WA
12b	5719 Nelpar Dr	East Wenatchee	Douglas	WA
13	580/582/680 West Beach Street	Watsonville	Santa Cruz	CA
14	NW 1/2 of Sec 29 T10S R20E MDB&M	N/A	Merced	CA
15	7005 Pearblossom Hwy	Littlerock	Los Angeles	CA
16	1555 South 1900 West	West Haven	Weber	UT
17	3001 James Road	Bakersfield	Kern	CA
18	10600 I-80 East	Lockwood	Washoe	NV
19a	Canada De Capay Land Grant near Sec 713 T10N R2W MDB&M	Esparto	Yolo	CA
19b	26410 Fulton and Frank Ln	Esparto	Yolo	CA
20	38000 Monroe Street	Indio	Riverside	CA
21	37400 S. Bird Road	Vernalis	San Joaquin	CA
22	Elder Creek Rd; Hedge Ave; Mayhew Rd; 6360 Mayhew Rd; 9300 and 9400 Fruitridge Rd	Sacramento	Sacramento	CA
23	9601 W Benta Vista St and related parcels	Marana	Pima	AZ
24	4220 Hwy 175	Lakeport	Lake	CA
25	4001 Bradshaw Road	Sacramento	Sacramento	CA
26	State Hwy 138 and 155th Street East	Black Butte	Los Angeles	CA
27	400 S Hwy 101	Buellton	Santa Barbara	CA
28	E. Selah Road	Yakima	Yakima	WA
29	1157 W. Gill Station Road (Nik and Nik Bishop)	Coso Junction	Inyo	CA

SCHEDULE II to EXHIBIT P-C

(Vehicle Titles)

RBU	ST	Equipment Number	VIN/serial number	Description	Eq St	Acquired Date	Received
3831	NY	4.1790	1NPTL00XXAD797183	PETRB 367 BOOM	PK	9/8/2009
3600	NY	4.1789	1NPTL00X8AD797182	PETRB 367 BOOM	WK	8/14/2009
1650	UT	4.1813	1NPTL4EX8BD117296	PETRB 367 3X NURSE TRK	WK	5/25/2010
2058		5.11410	1M2B225C24M005017	MACK 3AX CONC AGITATOR TRUCK	WK	4/17/2012
2058		5.11411	1M2B225C44M005018	MACK 3AX CONC AGITATOR TRK	WK	4/17/2012

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

I, James H. Roberts, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Granite Construction Incorporated;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	November 7, 2012	/s/ James H. Roberts
		James H. Roberts
		President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER

I, Laurel J. Krzeminski, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Granite Construction Incorporated;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated:	November 7, 2012	/s/ Laurel J. Krzeminski
		Laurel J. Krzeminski
		Vice President and Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATION OF CHIEF EXECUTIVE OFFICER AND

CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned officers of Granite Construction Incorporated (the “Company”) does hereby certify that, to such officers’ knowledge:

(i) The report on Form 10-Q for the quarter ended September 30, 2012 of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, and (ii) the information contained in the report on Form 10-Q fairly presents in all material respects the financial condition and results of operations of the Company as of and for the periods expressed in the report on Form 10-Q.

Dated:	November 7, 2012	/s/ James H. Roberts
		James H. Roberts
		President and Chief Executive Officer
Dated:	November 7, 2012	/s/ Laurel J. Krzeminski
		Laurel J. Krzeminski
		Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signatures that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Granite Construction Incorporated and will be retained by Granite Construction Incorporated and furnished to the Securities and Exchange Commission or its staff upon request.

EX-95

Exhibit 95

MINE SAFETY DISCLOSURE

We operate surface mines in the western United States to produce construction aggregates. The operation of our mines is subject to regulation by the federal Mine Safety and Health Administration (“MSHA”) under the Federal Mine Safety and Health Act of 1977 (the “Mine Act”). MSHA conducted 17 and 25 inspections at 15 and 19 of our mines during the three months ended September 30, 2012 and 2011, respectively. There were no reportable citations or orders following 15 and 22 of those inspections during the three months ended September 30, 2012 and 2011, respectively. The chart below presents the total number of violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a coal or other mine safety or health hazard under Section 104 of the Mine Act for which the operator received a citation from the MSHA during the three months ended September 30, 2012 and 2011. With respect to this information, it should be noted that: (i) the number of citations and orders will vary depending on the size of the mine, (ii) the number of citations issued will vary from inspector to inspector and mine to mine, and (iii) citations and orders can be contested and appealed, and in that process, may be reduced in severity and amount or dismissed.

	Three Months Ended September 30,
Name of Mine	2012	2011
Circle T Ranch	—	2
Coalinga Pit	—	3
Conrock North Pit	1	—
Twenty-nine Palms	1	—
Total	2	5

During the three months ended September 30, 2012 and 2011, with respect to our mines:

• MSHA did not issue any orders requiring persons to be withdrawn from the areas affected by the alleged violations of mandatory health or safety standards under Section 104(b) of the Mine Act.

• MSHA did not issue any citations or orders for unwarrantable failure of the mine operator to comply with mandatory health or safety standards under section104(d) of the Mine Act.

• MSHA did not identify any flagrant violations under Section 110(b)(2) of the Mine Act.

• MSHA did not issue any imminent danger orders requiring immediate withdrawal from the affected areas under Section 107(a) of the Mine Act.

• We did not experience any mining-related fatalities.

• We did not receive written notice of a pattern of violations of mandatory health or safety standards from MSHA under Section 104(e) of the Mine Act or of the potential to have a pattern of violations of mandatory health or safety standards from MSHA.

• There were no legal actions pending before the Federal Mine Safety and Health Review Commission, and there were no such legal actions instituted or resolved.

• Proposed assessments from the MSHA during the three months ended September 30, 2012 were $324. There were no proposed assessments from the MSHA during the three months ended September 30, 2011.

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Equity (Tables)

9 Months Ended

Sep. 30, 2012

Stockholders' Equity Note [Abstract]

Schedule of Stockholders Equity

The following tables summarize our equity activity for the periods presented:

(in thousands)	Granite Construction Incorporated			Noncontrolling Interests			Total Equity
Balance at December 31, 2011	$	799,197		$	28,466		$	827,663
Purchase of common stock1	(4,521		)	—			(4,521		)
Other transactions with shareholders3	7,690			—			7,690
Transactions with noncontrolling interests, net4	—			(8,022		)	(8,022		)
Net income	27,297			14,249			41,546
Dividends on common stock	(15,082		)	—			(15,082		)
Balance at September 30, 2012	$	814,581		$	34,693		$	849,274

(in thousands)
Balance at December 31, 2010	$	761,031		$	34,604		$	795,635
Purchase of common stock2	(3,840		)	—			(3,840		)
Other transactions with shareholders3	7,589			—			7,589
Transactions with noncontrolling interests, net4	—			(17,489		)	(17,489		)
Net income	32,407			8,886			41,293
Dividends on common stock	(15,078		)	—			(15,078		)
Balance at September 30, 2011	$	782,109		$	26,001		$	808,110

¹Represents 154,000 shares purchased in connection with employee tax withholding for shares/units granted under our Amended and Restated 1999 Equity Incentive Plan.

²Represents 138,000 shares purchased in connection with employee tax withholding for shares/units granted under our Amended and Restated 1999 Equity Incentive Plan.

³Amounts are comprised primarily of amortized restricted stock and units.

⁴Amounts are comprised primarily of distributions to noncontrolling partners.

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Intangible Assets - Finite Lived Intangible Assets (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Finite-Lived Intangible Assets [Line Items]
Total amortized intangible assets, Gross Value	$ 34,370,000	$ 34,370,000	$ 34,370,000	$ 34,370,000	$ 34,370,000
Total amortized intangible assets, Accumulated Amortization	(14,938,000)	(11,074,000)	(14,938,000)	(11,074,000)	(11,574,000)
Total amortized intangible assets, Net Value	19,432,000	23,296,000	19,432,000	23,296,000	22,796,000
Amortization expense	1,200,000	500,000	3,300,000	1,500,000
Future amortization expense, Remainder of Fiscal Year	400,000		400,000
Future amortization expense, Year One	1,300,000		1,300,000
Future amortization expense, Year Two	1,100,000		1,100,000
Future amortization expense, Year Three	1,100,000		1,100,000
Future amortization expense, Year Four	1,000,000		1,000,000
Future amortization expense, after Year Four	14,500,000		14,500,000
Permits [Member]
Finite-Lived Intangible Assets [Line Items]
Total amortized intangible assets, Gross Value	29,713,000	29,713,000	29,713,000	29,713,000	29,713,000
Total amortized intangible assets, Accumulated Amortization	(10,588,000)	(7,205,000)	(10,588,000)	(7,205,000)	(7,573,000)
Total amortized intangible assets, Net Value	19,125,000	22,508,000	19,125,000	22,508,000	22,140,000
Customer Lists [Member]
Finite-Lived Intangible Assets [Line Items]
Total amortized intangible assets, Gross Value	2,198,000	2,198,000	2,198,000	2,198,000	2,198,000
Total amortized intangible assets, Accumulated Amortization	(2,113,000)	(1,885,000)	(2,113,000)	(1,885,000)	(1,942,000)
Total amortized intangible assets, Net Value	85,000	313,000	85,000	313,000	256,000
Covenants not to compete [Member]
Finite-Lived Intangible Assets [Line Items]
Total amortized intangible assets, Gross Value	1,588,000	1,588,000	1,588,000	1,588,000	1,588,000
Total amortized intangible assets, Accumulated Amortization	(1,541,000)	(1,439,000)	(1,541,000)	(1,439,000)	(1,476,000)
Total amortized intangible assets, Net Value	47,000	149,000	47,000	149,000	112,000
Other [Member]
Finite-Lived Intangible Assets [Line Items]
Total amortized intangible assets, Gross Value	871,000	871,000	871,000	871,000	871,000
Total amortized intangible assets, Accumulated Amortization	(696,000)	(545,000)	(696,000)	(545,000)	(583,000)
Total amortized intangible assets, Net Value	$ 175,000	$ 326,000	$ 175,000	$ 326,000	$ 288,000

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Construction and Line Item Joint Ventures - Consolidated Construction Joint Ventures (Details) (USD $)	3 Months Ended				9 Months Ended
	Sep. 30, 2012		Sep. 30, 2011		Sep. 30, 2012		Sep. 30, 2011		Dec. 31, 2011		Dec. 31, 2010
Construction Joint Venture [Line Items]
Cash and cash equivalents	$ 287,322,000		$ 193,099,000		$ 287,322,000		$ 193,099,000		$ 256,990,000		$ 252,022,000
Other current assets	13,974,000		29,526,000		13,974,000		29,526,000		35,171,000
Total current assets	1,019,908,000		990,994,000		1,019,908,000		990,994,000		909,722,000
Other noncurrent assets	78,375,000		80,709,000		78,375,000		80,709,000		80,616,000
Total assets	1,598,635,000		1,618,469,000		1,598,635,000		1,618,469,000		1,547,799,000
Accounts payable	209,683,000		216,600,000		209,683,000		216,600,000		158,660,000
Billings in excess of costs and estimated earnings	91,348,000		89,505,000		91,348,000		89,505,000		90,845,000
Accrued expenses and other current liabilities	167,166,000		185,624,000		167,166,000		185,624,000		166,790,000
Total current liabilities	493,261,000		516,770,000		493,261,000		516,770,000		448,468,000
Construction	385,744,000		431,101,000		748,803,000		784,393,000
Net Cash Provided by (Used in) Operating Activities					20,163,000		2,018,000
Line Item Joint Venture [Member]
Construction Joint Venture [Line Items]
Number of Active Joint Venture Projects	5				5
Partnership Interest [Member] | Unconsolidated Construction Joint Venture [Member]
Construction Joint Venture [Line Items]
Revenue Remaining to be Recognized on Unconsolidated Construction Joint Ventures	1,600,000,000				1,600,000,000
Joint Venture Consolidated [Member] | Consolidated Construction Joint Venture [Member]
Construction Joint Venture [Line Items]
Cash and cash equivalents	74,020,000	[1]	65,350,000	[1]	74,020,000	[1]	65,350,000	[1]	75,122,000	[1]
Other current assets	32,379,000		31,215,000		32,379,000		31,215,000		33,750,000
Total current assets	106,399,000		96,565,000		106,399,000		96,565,000		108,872,000
Other noncurrent assets	6,661,000		9,821,000		6,661,000		9,821,000		8,671,000
Total assets	113,060,000	[2]	106,386,000	[2]	113,060,000	[2]	106,386,000	[2]	117,543,000	[2]
Accounts payable	30,975,000		36,660,000		30,975,000		36,660,000		38,193,000
Billings in excess of costs and estimated earnings	13,955,000	[1]	17,116,000	[1]	13,955,000	[1]	17,116,000	[1]	22,251,000	[1]
Accrued expenses and other current liabilities	3,495,000		5,997,000		3,495,000		5,997,000		5,129,000
Total current liabilities	48,425,000		59,773,000		48,425,000		59,773,000		65,573,000
Noncurrent liabilities	0		33,000		0		33,000		4,000
Total liabilities	48,425,000	[2]	59,806,000	[2]	48,425,000	[2]	59,806,000	[2]	65,577,000	[2]
Number of Active Joint Venture Projects	2				2
Joint Venture Unconsolidated [Member] | Unconsolidated Construction Joint Venture [Member]
Construction Joint Venture [Line Items]
Number of Active Joint Venture Projects	8				8
Reporting Entitys Interest in Joint Venture [Member] | Unconsolidated Construction Joint Venture [Member]
Construction Joint Venture [Line Items]
Revenue Remaining to be Recognized on Unconsolidated Construction Joint Ventures	600,000,000				600,000,000
Other Partners Interest in Partnerships [Member] | Unconsolidated Construction Joint Venture [Member]
Construction Joint Venture [Line Items]
Revenue Remaining to be Recognized on Unconsolidated Construction Joint Ventures	1,000,000,000				1,000,000,000
Minimum [Member] | Joint Venture Consolidated [Member] | Consolidated Construction Joint Venture [Member]
Construction Joint Venture [Line Items]
Construction Contract Value	245,100,000				245,100,000
Proportionate Share of the Consolidated Joint Ventures Equity Owned by or Beneficial Interest in the Reporting Entity Directly or Indirectly	45.00%				45.00%
Construction	77,400,000		73,900,000		174,000,000		171,100,000
Net Cash Provided by (Used in) Operating Activities					16,100,000		6,000,000
Minimum [Member] | Joint Venture Unconsolidated [Member] | Unconsolidated Construction Joint Venture [Member]
Construction Joint Venture [Line Items]
Construction Contract Value	59,400,000				59,400,000
Proportionate Share of the Consolidated Joint Ventures Equity Owned by or Beneficial Interest in the Reporting Entity Directly or Indirectly	20.00%				20.00%
Minimum [Member] | Joint Venture Unconsolidated [Member] | Line Item Joint Venture [Member]
Construction Joint Venture [Line Items]
Construction Contract Value	42,000,000				42,000,000
Minimum [Member] | Reporting Entitys Interest in Joint Venture [Member] | Unconsolidated Construction Joint Venture [Member]
Construction Joint Venture [Line Items]
Revenue Remaining to be Recognized on Unconsolidated Construction Joint Ventures	400,000				400,000
Minimum [Member] | Reporting Entitys Interest in Joint Venture [Member] | Line Item Joint Venture [Member]
Construction Joint Venture [Line Items]
Construction Contract Value	21,900,000				21,900,000
Maximum [Member] | Joint Venture Consolidated [Member] | Consolidated Construction Joint Venture [Member]
Construction Joint Venture [Line Items]
Construction Contract Value	334,300,000				334,300,000
Proportionate Share of the Consolidated Joint Ventures Equity Owned by or Beneficial Interest in the Reporting Entity Directly or Indirectly	60.00%				60.00%
Maximum [Member] | Joint Venture Unconsolidated [Member] | Unconsolidated Construction Joint Venture [Member]
Construction Joint Venture [Line Items]
Construction Contract Value	1,200,000,000				1,200,000,000
Proportionate Share of the Consolidated Joint Ventures Equity Owned by or Beneficial Interest in the Reporting Entity Directly or Indirectly	50.00%				50.00%
Maximum [Member] | Joint Venture Unconsolidated [Member] | Line Item Joint Venture [Member]
Construction Joint Venture [Line Items]
Construction Contract Value	133,200,000				133,200,000
Maximum [Member] | Reporting Entitys Interest in Joint Venture [Member] | Unconsolidated Construction Joint Venture [Member]
Construction Joint Venture [Line Items]
Revenue Remaining to be Recognized on Unconsolidated Construction Joint Ventures	186,600,000				186,600,000
Maximum [Member] | Reporting Entitys Interest in Joint Venture [Member] | Line Item Joint Venture [Member]
Construction Joint Venture [Line Items]
Construction Contract Value	$ 55,700,000				$ 55,700,000

[1] The volume and stage of completion of contracts from our consolidated construction joint ventures may cause fluctuations in cash and cash equivalents, as well as billings in excess of costs and estimated earnings between periods.

[2] The assets and liabilities of each joint venture relate solely to that joint venture. The decision to distribute joint venture cash and cash equivalents and assets must generally be made jointly by all of the partners and, accordingly, these cash and cash equivalents and assets generally are not available for the working capital needs of Granite.

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Restructuring (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Restructuring Cost and Reserve [Line Items]
Non-cash restructuring, net	$ 0	$ 0	$ (1,782,000)	$ 1,031,000
Maximum [Member]
Restructuring Cost and Reserve [Line Items]
Expected restructuring charges			$ 8,000,000

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Fair Value Measurement - Carrying and Fair Value Amounts (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Carrying (Reported) Amount, Fair Value Disclosure [Member]
Senior Notes	$ 208.3	$ 216.7	$ 216.7
Cost-method Investments, Other than Temporary Impairment	$ 2.8

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Construction and Line Item Joint Ventures (Tables)

9 Months Ended

Sep. 30, 2012

Construction and Line Item Joint Ventures [Abstract]

Schedule of Consolidated Joint Ventures [Table Text Block]

The carrying amounts and classification of assets and liabilities of construction joint ventures we are required to consolidate are included in our condensed consolidated financial statements as follows:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Cash and cash equivalents1	$	74,020	$	75,122	$	65,350
Other current assets	32,379		33,750		31,215
Total current assets	106,399		108,872		96,565
Noncurrent assets	6,661		8,671		9,821
Total assets2	$	113,060	$	117,543	$	106,386
Accounts payable	$	30,975	$	38,193	$	36,660
Billings in excess of costs and estimated earnings1	13,955		22,251		17,116
Accrued expenses and other current liabilities	3,495		5,129		5,997
Total current liabilities	48,425		65,573		59,773
Noncurrent liabilities	—		4		33
Total liabilities2	$	48,425	$	65,577	$	59,806

¹The volume and stage of completion of contracts from our consolidated construction joint ventures may cause fluctuations in cash and cash equivalents, as well as billings in excess of costs and estimated earnings between periods.

²The assets and liabilities of each joint venture relate solely to that joint venture. The decision to distribute joint venture cash and cash equivalents and assets must generally be made jointly by all of the partners and, accordingly, these cash and cash equivalents and assets generally are not available for the working capital needs of Granite.

Schedule of Unconsolidated Joint Ventures [Table Text Block]

Following is summary financial information related to unconsolidated construction joint ventures:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Assets:
Cash and cash equivalents1	$	304,065	$	338,681	$	356,399
Other assets	273,848		264,901		265,549
Less partners’ interest	353,165		364,979		378,523
Granite’s interest	224,748		238,603		243,425
Liabilities:
Accounts payable	94,788		85,075		85,602
Billings in excess of costs and estimated earnings1	243,578		280,650		302,039
Other liabilities	8,299		8,595		9,460
Less partners’ interest	219,807		236,746		251,091
Granite’s interest	126,858		137,574		146,010
Equity in construction joint ventures	$	97,890	$	101,029	$	97,415

¹The volume and stage of completion of contracts from our unconsolidated construction joint ventures may cause fluctuations in cash and cash equivalents, as well as billings in excess of costs and estimated earnings between periods.

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2012		2011		2012		2011
Revenue:
Total1	$	286,308	$	243,654	$	776,235	$	667,920
Less partners’ interest1,2	181,679		158,079		497,743		448,357
Granite’s interest	104,629		85,575		278,492		219,563
Cost of revenue:
Total1	200,688		212,485		597,689		546,495
Less partners’ interest1,2	129,840		140,506		389,171		370,865
Granite’s interest	70,848		71,979		208,518		175,630
Granite’s interest in gross profit	$	33,781	$	13,596	$	69,974	$	43,933

¹While Granite’s interest in revenue, cost of revenue and gross profit were correctly stated, total and partners’ interest for revenue and cost of revenue for the three and six month periods ended June 30, 2012 were inadvertently misstated in our Quarterly Report for the quarter ended June 30, 2012. Total revenue, partner’s interest in revenue, total cost of revenue and partners’ interest in cost of revenue reported was (in thousands): $663,536, $563,302, $544,838 and $467,540, respectively, for the three months ended June 30, 2012, and $869,368, $695,505, $714,450 and $576,780, respectively, for the six months ended June 30, 2012. Total revenue, partner’s interest in revenue, total cost of revenue and partners’ interest in cost of revenue should have been (in thousands): $284,095, $183,861, $227,389, and $150,091, respectively, for the three months ended June 30, 2012, and $489,926, $316,064, $397,001, and $259,331, respectively, for the six months ended June 30, 2012.

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Weighted Average Shares Outstanding (Details) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Weighted Average Number of Shares Outstanding, Basic [Abstract]
Weighted average common stock outstanding	38,707	38,669	38,679	38,678
Less: weighted average unvested restricted stock outstanding	189	497	261	586
Weighted Average Number of Shares Outstanding, Basic	38,518	38,172	38,418	38,092
Effect of dilutive securities:
Stock options and restricted units excluded from calculation	623	426	595	336
Weighted Average Number of Shares Outstanding, Diluted [Abstract]
Weighted average common stock outstanding, basic	38,518	38,172	38,418	38,092
Effect of dilutive securities:
Stock options and restricted units excluded from calculation	623	426	595	336
Total weighted average shares outstanding assuming dilution	39,141	38,598	39,013	38,428

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Subsequent Events

3 Months Ended

Sep. 30, 2012

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Subsequent Events

Credit Agreement

On October 11, 2012, we entered into an Amended and Restated Credit Agreement, which provides for a $215.0 million committed revolving credit facility, with a sublimit for letters of credit of $100.0 million (the “Credit Agreement”), which expires October 11, 2016 and replaces our previous $100.0 million facility. Borrowings under the Credit Agreement bear interest at LIBOR or a base rate (at our option), plus an applicable margin based on certain financial ratios calculated quarterly. LIBOR varies based on the applicable loan term, market conditions and other external factors. The applicable margin is based upon certain financial ratios calculated quarterly. Had the terms of the Credit Agreement been in effect at September 30, 2012, the applicable margin would have been 2.00% for loans bearing interest based on LIBOR and 1.00% for loans bearing interest at the base rate. Accordingly, the effective interest rate would have been between 2.36% and 4.25% at September 30, 2012. Our obligations under the Credit Agreement are guaranteed by certain of our subsidiaries and are collateralized on an equivalent basis with the obligations under the 2013 Notes and the 2019 Notes (each defined below) by first priority liens (subject only to other liens permitted under the Credit Agreement) on substantially all of the assets of the Company and our subsidiaries that are guarantors or borrowers under the Credit Agreement. At September 30, 2012, there were no revolving loans outstanding under the predecessor to the Credit Agreement, but there were standby letters of credit totaling approximately $4.2 million. The letters of credit will expire between March and October 2013. Subsequent to September 30, 2012, total standby letters of credit increased to approximately $7.5 million.

The Credit Agreement provides for the release of the liens securing the obligations, at our option and expense, after June 30, 2013, so long as certain conditions as defined by the terms in the Credit Agreement are satisfied (“Collateral Release Period”). If, subsequently, our Consolidated Fixed Charge Coverage Ratio is less than 1.25 or our Consolidated Leverage Ratio is greater than 2.50, then we will be required to promptly re-pledge substantially all of the assets of the Company and our subsidiaries that are guarantors or borrowers under the Credit Agreement.

The most significant restrictive covenants under the terms of our Credit Agreement require the maintenance of a minimum Consolidated Tangible Net Worth, a minimum Consolidated Interest Coverage Ratio and a maximum Consolidated Leverage Ratio. The calculations and terms of such financial covenants are defined in the Credit Agreement filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q. As of September 30, 2012 and pursuant to the definitions in the Credit Agreement, our Consolidated Tangible Net Worth was $791.8 million, which exceeded the minimum of $666.6 million, the Consolidated Interest Coverage Ratio was 11.24, which exceeded the minimum of 4.00 and the Consolidated Leverage Ratio was 1.44, which did not exceed the maximum of 3.25. The maximum Consolidated Leverage Ratio decreases to 3.00 for the quarter ending December 31, 2013, and each quarter ending thereafter. During any Collateral Release Period the maximum Consolidated Leverage Ratio decreases to 2.50.

Senior Notes Payable

As of September 30, 2012, senior notes payable in the amount of $8.3 million were due to a group of institutional holders in nine equal annual installments which began in 2005 and bear interest at 6.96% per annum (“2013 Notes”). In addition, senior notes payable in the amount of $200.0 million were due to a second group of institutional holders in five equal annual installments beginning in 2015 and bear interest at 6.11% per annum (“2019 Notes”).

On October 11, 2012, we amended the note purchase agreements governing the 2013 Notes and 2019 Notes (the “2013 NPA” and the “2019 NPA,” respectively) such that our obligations under these agreements are now guaranteed by certain of our subsidiaries and are collateralized on an equivalent basis with the Credit Agreement by liens on substantially all of the assets of the Company and subsidiaries that are guarantors or borrowers under the Credit Agreement. The 2013 NPA and 2019 NPA provide for the release of liens and re-pledge of collateral on substantially the same terms and conditions as those set forth in the Credit Agreement.

The most significant restrictive covenants under the terms of the 2013 NPA and 2019 NPA require the maintenance of a minimum Consolidated Tangible Net Worth, a minimum Consolidated Interest Coverage Ratio and a maximum Consolidated Leverage Ratio, the calculations and terms of which are defined by the applicable agreement filed as Exhibit 10.6 or Exhibit 10.7 to this Quarterly Report on Form 10-Q. As of September 30, 2012 and pursuant to the definitions in the 2013 NPA and 2019 NPA our Consolidated Tangible Net Worth was $791.8 million, which exceeded the minimum of $666.6 million, the Consolidated Interest Coverage Ratio was 11.24, which exceeded the minimum of 4.00 and the Consolidated Leverage Ratio was 1.44, which did not exceed the maximum of 3.50. The maximum Consolidated Leverage Ratio decreases to 3.25 for the quarter ending December 31, 2012, and each quarter ending thereafter. During any Collateral Release Period the maximum Consolidated Leverage Ratio decreases to 2.50.

Asset Optimization

In the fourth quarter of 2012, we expect to record a gain of between $17.0 million and $18.0 million related to our process of continually optimizing our assets separate from the Enterprise Improvement Plan.

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Real Estate Entities and Investments in Affiliates - Consolidated Real Estate Entities (Details) (USD $)				9 Months Ended
	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011	Sep. 30, 2012 Real Estate Segment [Member] Real Estate Entities [Member] Variable Interest Entity, Primary Beneficiary [Member]	Sep. 30, 2011 Real Estate Segment [Member] Real Estate Entities [Member] Variable Interest Entity, Primary Beneficiary [Member] project	Sep. 30, 2012 Real Estate Segment [Member] Subsidiaries [Member]	Sep. 30, 2011 Real Estate Segment [Member] Subsidiaries [Member]	Sep. 30, 2012 Real Estate Segment [Member] Joint Venture Consolidated [Member] Real Estate Entities [Member] Variable Interest Entity, Primary Beneficiary [Member] project	Dec. 31, 2011 Real Estate Segment [Member] Joint Venture Consolidated [Member] Real Estate Entities [Member] Variable Interest Entity, Primary Beneficiary [Member] project	Sep. 30, 2011 Real Estate Segment [Member] Joint Venture Consolidated [Member] Real Estate Entities [Member] Variable Interest Entity, Primary Beneficiary [Member] project	Sep. 30, 2012 Real Estate Segment [Member] Joint Venture Consolidated [Member] Residential real estate [Member] Real Estate Entities [Member] Variable Interest Entity, Primary Beneficiary [Member] project	Dec. 31, 2011 Real Estate Segment [Member] Joint Venture Consolidated [Member] Residential real estate [Member] Real Estate Entities [Member] Variable Interest Entity, Primary Beneficiary [Member] project	Sep. 30, 2011 Real Estate Segment [Member] Joint Venture Consolidated [Member] Residential real estate [Member] Real Estate Entities [Member] Variable Interest Entity, Primary Beneficiary [Member] project	Sep. 30, 2012 Real Estate Segment [Member] Joint Venture Consolidated [Member] Commercial real estate [Member] Real Estate Entities [Member] Variable Interest Entity, Primary Beneficiary [Member] project	Dec. 31, 2011 Real Estate Segment [Member] Joint Venture Consolidated [Member] Commercial real estate [Member] Real Estate Entities [Member] Variable Interest Entity, Primary Beneficiary [Member] project	Sep. 30, 2011 Real Estate Segment [Member] Joint Venture Consolidated [Member] Commercial real estate [Member] Real Estate Entities [Member] Variable Interest Entity, Primary Beneficiary [Member] project	Sep. 30, 2012 Real Estate Segment [Member] Joint Venture Consolidated [Member] WASHINGTON Real Estate Entities [Member] Variable Interest Entity, Primary Beneficiary [Member] project	Dec. 31, 2011 Real Estate Segment [Member] Joint Venture Consolidated [Member] WASHINGTON Real Estate Entities [Member] Variable Interest Entity, Primary Beneficiary [Member] project	Sep. 30, 2011 Real Estate Segment [Member] Joint Venture Consolidated [Member] WASHINGTON Real Estate Entities [Member] Variable Interest Entity, Primary Beneficiary [Member] project	Sep. 30, 2012 Real Estate Segment [Member] Joint Venture Consolidated [Member] CALIFORNIA Real Estate Entities [Member] Variable Interest Entity, Primary Beneficiary [Member] project	Dec. 31, 2011 Real Estate Segment [Member] Joint Venture Consolidated [Member] CALIFORNIA Real Estate Entities [Member] Variable Interest Entity, Primary Beneficiary [Member] project	Sep. 30, 2011 Real Estate Segment [Member] Joint Venture Consolidated [Member] CALIFORNIA Real Estate Entities [Member] Variable Interest Entity, Primary Beneficiary [Member] project	Sep. 30, 2012 Real Estate Segment [Member] Joint Venture Consolidated [Member] TEXAS Real Estate Entities [Member] Variable Interest Entity, Primary Beneficiary [Member] project	Dec. 31, 2011 Real Estate Segment [Member] Joint Venture Consolidated [Member] TEXAS Real Estate Entities [Member] Variable Interest Entity, Primary Beneficiary [Member] project	Sep. 30, 2011 Real Estate Segment [Member] Joint Venture Consolidated [Member] TEXAS Real Estate Entities [Member] Variable Interest Entity, Primary Beneficiary [Member] project	Sep. 30, 2012 Real Estate Segment [Member] Joint Venture Consolidated [Member] OREGON Real Estate Entities [Member] Variable Interest Entity, Primary Beneficiary [Member] project	Dec. 31, 2011 Real Estate Segment [Member] Joint Venture Consolidated [Member] OREGON Real Estate Entities [Member] Variable Interest Entity, Primary Beneficiary [Member] project	Sep. 30, 2011 Real Estate Segment [Member] Joint Venture Consolidated [Member] OREGON Real Estate Entities [Member] Variable Interest Entity, Primary Beneficiary [Member] project
Variable Interest Entity [Line Items]
Increase in Financial Support Authorization				$ 0	$ 12,000,000
Authorized Investment Yet to be Contributed				3,100,000
Impairment charges related to Enterprise Improvement Plan						0	0
Number of Projects with Authorization for Increase in Financial or Other Support					3
Real estate held for development and sale	57,964,000	67,037,000	79,173,000					57,964,000	67,037,000	79,173,000	48,527,000	54,610,000	55,672,000	9,437,000	12,427,000	23,501,000	48,122,000	47,600,000	47,109,000	2,609,000	4,006,000	16,382,000	7,233,000	8,859,000	8,859,000	0	6,572,000	6,823,000
Other current assets	13,974,000	35,171,000	29,526,000					1,946,000	4,715,000	2,801,000
Total current assets	1,019,908,000	909,722,000	990,994,000
Property and equipment, net	432,293,000	447,140,000	453,822,000
Total assets								59,910,000	71,752,000	81,974,000
Current maturities of non-recourse debt	16,712,000	23,071,000	16,690,000					16,712,000	22,571,000	16,190,000
Other Liabilities, Current								404,000	1,794,000	1,901,000
Total current liabilities	493,261,000	448,468,000	516,770,000					17,116,000	24,365,000	18,091,000
Long-term non-recourse debt	4,375,000	9,912,000	27,755,000					4,375,000	9,912,000	27,755,000
Other long-term liabilities	47,913,000	49,221,000	46,985,000					0	74,000	278,000
Total liabilities								$ 21,491,000	$ 34,351,000	$ 46,124,000
Number of projects								7	9	12	3	4	5	4	5	7	2	2	2	4	5	8	1	1	1	0	1	1

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Marketable Securities - Carrying Amounts of Marketable Securities (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Schedule of Marketable Securities [Line Items]
Short-term marketable securities	$ 47,185	$ 70,408	$ 77,389
Long-term marketable securities	37,802	79,250	59,509
Held-to-Maturity [Member]
Schedule of Marketable Securities [Line Items]
Short-term marketable securities	47,185	70,408	77,389
Long-term marketable securities	37,802	79,250	59,509
Total marketable securities	84,987	149,658	136,898
U.S. Government and agency obligations [Member] | Held-to-Maturity [Member]
Schedule of Marketable Securities [Line Items]
Short-term marketable securities	15,062	40,240	40,218
Long-term marketable securities	36,103	65,109	45,268
Commercial paper [Member] | Held-to-Maturity [Member]
Schedule of Marketable Securities [Line Items]
Short-term marketable securities	19,976	24,980	29,978
Municipal bonds [Member] | Held-to-Maturity [Member]
Schedule of Marketable Securities [Line Items]
Short-term marketable securities	7,082	2,057	4,036
Long-term marketable securities	1,699	8,909	8,952
Corporate bonds [Member] | Held-to-Maturity [Member]
Schedule of Marketable Securities [Line Items]
Short-term marketable securities	5,065	3,131	3,157
Long-term marketable securities	$ 0	$ 5,232	$ 5,289

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Weighted Average Shares Outstanding (Tables)

9 Months Ended

Sep. 30, 2012

Weighted Average Number of Shares Outstanding Reconciliation [Abstract]

Schedule of Weighted Average Number of Shares [Table Text Block]

A reconciliation of the weighted average shares outstanding used in calculating basic and diluted net income per share in the accompanying condensed consolidated statements of operations is as follows:

	Three Months Ended September 30,		Nine Months Ended September 30,
(in thousands)	2012	2011	2012	2011
Weighted average shares outstanding:
Weighted average common stock outstanding	38,707	38,669	38,679	38,678
Less: weighted average unvested restricted stock outstanding	189	497	261	586
Total basic weighted average shares outstanding	38,518	38,172	38,418	38,092
Diluted weighted average shares outstanding:
Weighted average common stock outstanding, basic	38,518	38,172	38,418	38,092
Effect of dilutive securities:
Common stock options and restricted stock units	623	426	595	336
Total weighted average shares outstanding assuming dilution	39,141	38,598	39,013	38,428

XML

Property and Equipment, Net (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Property, Plant and Equipment [Line Items]
Property and equipment	$ 1,168,304	$ 1,169,828	$ 1,182,148
Accumulated depreciation and depletion	736,011	722,688	728,326
Property and equipment, net	432,293	447,140	453,822
Land and land improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	125,842	124,216	122,728
Quarry property [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	177,814	175,612	175,431
Building and leasehold improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	80,916	81,272	81,217
Equipment and vehicles [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	718,965	733,158	753,776
Office furniture and equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	$ 64,767	$ 55,570	$ 48,996

XML

Business Segment Information (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Segment Reporting Information [Line Items]
Revenue from reportable segments	$ 811,050	$ 815,981	$ 1,718,714	$ 1,614,746
Elimination of intersegment revenue	(82,568)	(87,403)	(140,457)	(144,763)
Revenue from external customers	728,482	728,578	1,578,257	1,469,983
Gross profit	101,099	93,893	177,951	168,837
Depreciation, Depletion and Amortization, Nonproduction	11,760	12,229	35,307	36,415
Assets	1,598,635	1,618,469	1,598,635	1,618,469	1,547,799
Reconciliation from Segment Totals to Consolidated [Abstract]
Gross profit	101,099	93,893	177,951	168,837
Selling, general and administrative expenses	41,280	39,112	125,274	121,277
Gain on sales of property and equipment	1,622	5,598	6,493	11,572
Other income (expense), net	1,418	(2,894)	(2,184)	(5,866)
Income (loss) before provision for (benefit from) income taxes	62,859	57,485	56,986	53,266
Operating Segments [Member]
Segment Reporting Information [Line Items]
Assets	631,236	678,004	631,236	678,004
Construction [Member]
Segment Reporting Information [Line Items]
Revenue from reportable segments	385,744	431,101	748,803	784,393
Elimination of intersegment revenue	0	0	0	0
Revenue from external customers	385,744	431,101	748,803	784,393
Gross profit	33,273	58,540	59,814	87,482
Depreciation, Depletion and Amortization, Nonproduction	3,160	3,437	9,973	11,362
Assets	110,402	114,359	110,402	114,359
Reconciliation from Segment Totals to Consolidated [Abstract]
Gross profit	33,273	58,540	59,814	87,482
Large Project Construction [Member]
Segment Reporting Information [Line Items]
Revenue from reportable segments	255,918	213,320	648,645	513,478
Elimination of intersegment revenue	0	0	0	0
Revenue from external customers	255,918	213,320	648,645	513,478
Gross profit	57,814	25,557	108,302	69,513
Depreciation, Depletion and Amortization, Nonproduction	1,102	1,259	3,279	3,316
Assets	109,114	108,272	109,114	108,272
Reconciliation from Segment Totals to Consolidated [Abstract]
Gross profit	57,814	25,557	108,302	69,513
Construction Materials [Member]
Segment Reporting Information [Line Items]
Revenue from reportable segments	169,350	170,574	316,211	309,846
Elimination of intersegment revenue	(82,568)	(87,403)	(140,457)	(144,763)
Revenue from external customers	86,782	83,171	175,754	165,083
Gross profit	9,984	9,554	9,034	10,754
Depreciation, Depletion and Amortization, Nonproduction	7,498	7,487	22,055	21,594
Assets	353,756	368,141	353,756	368,141
Reconciliation from Segment Totals to Consolidated [Abstract]
Gross profit	9,984	9,554	9,034	10,754
Real Estate Segment [Member]
Segment Reporting Information [Line Items]
Revenue from reportable segments	38	986	5,055	7,029
Elimination of intersegment revenue	0	0	0	0
Revenue from external customers	38	986	5,055	7,029
Gross profit	28	242	801	1,088
Depreciation, Depletion and Amortization, Nonproduction	0	46	0	143
Assets	57,964	87,232	57,964	87,232
Reconciliation from Segment Totals to Consolidated [Abstract]
Gross profit	$ 28	$ 242	$ 801	$ 1,088

XML

Receivables, Net (Details) (USD $)	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts, Notes, Loans and Financing Receivable, Gross, Current	$ 365,880,000	$ 254,718,000	$ 360,421,000
Allowance for Accounts, Notes, Loans and Financing Receivable, Current	2,425,000	2,880,000	2,614,000
Receivables, net	363,455,000	251,838,000	357,807,000
Notes, Loans and Financing Receivable, Net, Noncurrent	1,900,000	2,000,000	2,100,000
Construction Contracts [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts, Notes, Loans and Financing Receivable, Gross, Current	297,455,000	200,025,000	298,087,000
Completed and in Progress [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts, Notes, Loans and Financing Receivable, Gross, Current	228,865,000	122,987,000	223,292,000
Retentions [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts, Notes, Loans and Financing Receivable, Gross, Current	68,590,000	77,038,000	74,795,000
Escrow [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts, Notes, Loans and Financing Receivable, Gross, Current	42,297,000	43,378,000	38,517,000
Non Escrow [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts, Notes, Loans and Financing Receivable, Gross, Current	26,293,000	33,660,000	36,278,000
Financing Receivable, Recorded Investment, Aging [Abstract]
Non-escrow retention receivable - current	23,825,000	27,125,000	29,568,000
Non-escrow retention receivable - 0 to 90 days past due	1,115,000	3,277,000	3,047,000
Non-escrow retention receivable - over 90 days past due	1,353,000	3,258,000	3,663,000
Construction Material Sales [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts, Notes, Loans and Financing Receivable, Gross, Current	59,396,000	30,356,000	52,157,000
Other Business Products and Services [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts, Notes, Loans and Financing Receivable, Gross, Current	9,029,000	24,337,000	10,177,000
Federal [Member] | Non Escrow [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts, Notes, Loans and Financing Receivable, Gross, Current	2,569,000	2,811,000	2,148,000
Financing Receivable, Recorded Investment, Aging [Abstract]
Non-escrow retention receivable - current	2,012,000	2,462,000	1,976,000
Non-escrow retention receivable - 0 to 90 days past due	0	326,000	77,000
Non-escrow retention receivable - over 90 days past due	557,000	23,000	95,000
State [Member] | Non Escrow [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts, Notes, Loans and Financing Receivable, Gross, Current	3,595,000	5,453,000	6,046,000
Financing Receivable, Recorded Investment, Aging [Abstract]
Non-escrow retention receivable - current	3,177,000	2,751,000	3,880,000
Non-escrow retention receivable - 0 to 90 days past due	239,000	860,000	1,397,000
Non-escrow retention receivable - over 90 days past due	179,000	1,842,000	769,000
Local [Member] | Non Escrow [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts, Notes, Loans and Financing Receivable, Gross, Current	12,003,000	14,708,000	17,666,000
Financing Receivable, Recorded Investment, Aging [Abstract]
Non-escrow retention receivable - current	11,141,000	12,313,000	13,801,000
Non-escrow retention receivable - 0 to 90 days past due	555,000	1,326,000	1,465,000
Non-escrow retention receivable - over 90 days past due	307,000	1,069,000	2,400,000
Private [Member] | Non Escrow [Member]
Accounts, Notes, Loans and Financing Receivable [Line Items]
Accounts, Notes, Loans and Financing Receivable, Gross, Current	8,126,000	10,688,000	10,418,000
Financing Receivable, Recorded Investment, Aging [Abstract]
Non-escrow retention receivable - current	7,495,000	9,599,000	9,911,000
Non-escrow retention receivable - 0 to 90 days past due	321,000	765,000	108,000
Non-escrow retention receivable - over 90 days past due	$ 310,000	$ 324,000	$ 399,000

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Revisions in Estimates

9 Months Ended

Sep. 30, 2012

Change in Accounting Estimate [Abstract]

Change In Accounting Estimate [Text Block]

Revisions in Estimates

Our profit recognition related to construction contracts is based on estimates of costs to complete each project. These estimates can vary in the normal course of business as projects progress and uncertainties are resolved. We do not recognize revenue on contract change orders or claims until we have a signed agreement; however, we do recognize costs as incurred and revisions to estimated total costs as soon as the obligation to perform is determined. Approved change orders and claims, as well as changes in related estimates of costs to complete, are considered revisions in estimates. We use the cumulative catch-up method applicable to construction contract accounting to account for revisions in estimates. Under this option, revisions in estimates are accounted for in their entirety in the period of change. As of September 30, 2012, we had no revisions in estimates that are reasonably certain to impact future periods.

Construction

The net changes in project profitability from revisions in estimates, both increases and decreases, that individually had an impact of $1.0 million or more on gross profit were net decreases of $6.0 million and $9.4 million for the three and nine months ended September 30, 2012, respectively. The net changes for the three and nine months ended September 30, 2011 were a net decrease of $1.3 million and a net increase of $1.6 million, respectively. The projects are summarized as follows:

Increases

		Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in millions)		2012		2011		2012		2011
Number of projects with upward estimate changes		1		2		4		4
Range of increase in gross profit from each project, net	$	1.6	$	1.3 - 1.4	$	1.0 - 3.0	$	1.1 - 2.9
Increase on project profitability	$	1.6	$	2.7	$	7.1	$	7.0

The increases during the three and nine months ended September 30, 2012 were due to lower than anticipated costs and settlement of outstanding issues with contract owners. The increases during the three and nine months ended September 30, 2011 were primarily due to improved salvage prices for excess material, the settlement of outstanding cost issues and owner directed scope changes.

Decreases

		Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in millions)		2012		2011		2012		2011
Number of projects with downward estimate changes		4		2		6		3
Range of reduction in gross profit from each project, net	$	1.1 - 3.9	$	1.4 - 2.6	$	1.1 - 6.3	$	1.4 - 2.6
Decrease on project profitability	$	7.6	$	4.0	$	16.5	$	5.4

The decreases during the three and nine months ended September 30, 2012 were due to lower productivity than originally anticipated. The decreases during the three and nine months ended September 30, 2011 were due to lower productivity than anticipated and unanticipated rework costs.

Large Project Construction

The net changes in project profitability from revisions in estimates, both increases and decreases, that individually had an impact of $1.0 million or more on gross profit were net increases of $35.9 million and $48.9 million for the three and nine months ended September 30, 2012, respectively. The net changes for the three and nine months ended September 30, 2011 were net increases of $2.7 million and $7.9 million, respectively. Amounts attributable to noncontrolling interests were $5.7 million and $6.6 million of the net increases for the three and nine months ended September 30, 2012, respectively, and were $1.0 million and $0.6 million of the net increases for the three and nine months ended September 30, 2011, respectively. The projects are summarized as follows:

Increases

		Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in millions)		2012		2011		2012		2011
Number of projects with upward estimate changes		8		5		8		6
Range of increase in gross profit from each project, net	$	1.1 - 12.6	$	1.0 - 2.6	$	1.1 - 16.3	$	1.4 - 4.2
Increase on project profitability	$	35.9	$	8.8	$	54.7	$	17.7

The increases during the three and nine months ended September 30, 2012 were due to owner directed scope changes and lower than anticipated construction costs. The increases during the three and nine months ended September 30, 2011 were due to the settlement of outstanding issues with a contract owner, owner directed scope change, lower than anticipated construction costs and the resolution of a project claim.

Decreases

		Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in millions)		2012		2011		2012		2011
Number of projects with downward estimate changes		—		3		2		2
Range of reduction in gross profit from each project, net	$	—	$	1.7 - 2.4	$	1.7 - 4.1	$	4.2 - 5.6
Decrease on project profitability	$	—	$	6.1	$	5.8	$	9.8

There were no downward estimate changes during the three months ended September 30, 2012. The downward estimate changes during the nine months ended September 30, 2012 were due to lower productivity than anticipated. The downward estimate changes during the three and nine months ended September 30, 2011 were due to increased costs to resolve project uncertainties and lower productivity than anticipated.

XML

Subsequent Events (Details) (USD $) In Millions, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Debt Instrument [Line Items]
Debt Instrument, Basis Spread on Variable Rate, LIBOR Loans	2.00%
Debt Instrument, Basis Spread on Variable Rate, Base Rate Loans	1.00%
Letters of Credit Outstanding, Amount	$ 4.2
Letters of Credit Outstanding, Amount, Subsequent	7.5
Consolidated Fixed Charge Coverage Ratio, Minimum, Collateral Release Period	1.25
Consolidated Leverage Ratio, Maximum, Collateral Release Period	2.50
Consolidated Tangible Net Worth, Actual	791.8
Consolidated Tangible Net Worth, Covenant	666.6
Consolidated Interest Coverage Ratio, Covenant	4.00
Consolidated Leverage Ratio, Covenant	3.25
Consolidated Leverage Ratio, Maximum, Quarter Ending December 31, 2013	3.00
Senior Notes	208.3	216.7	216.7
Minimum [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Interest Rate at Period End	2.00%
Expected Gain	17.0
Maximum [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Interest Rate at Period End	4.00%
Expected Gain	18.0
Institutional Group One [Member]
Debt Instrument [Line Items]
Consolidated Leverage Ratio, Covenant	3.50
Senior Notes	8.3
Debt Instrument, Interest Rate, Stated Percentage	7.00%
Institutional Group Two [Member]
Debt Instrument [Line Items]
Senior Notes	200.0
Debt Instrument, Interest Rate, Stated Percentage	6.10%
Institutional Groups One and Two [Member]
Debt Instrument [Line Items]
Consolidated Leverage Ratio, Maximum, Collateral Release Period	2.50
Consolidated Tangible Net Worth, Actual	791.8
Consolidated Tangible Net Worth, Covenant	666.6
Consolidated Interest Coverage Ratio, Actual	11.24
Consolidated Interest Coverage Ratio, Covenant	4.00
Consolidated Leverage Ratio, Actual	1.44
Consolidated Leverage Ratio, Maximum, Quarter Ending December 31, 2013	3.25
Letter of Credit [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	100.0
Line of Credit Facility, Maximum Borrowing Capacity, Previous	100.0
Line of Credit [Member]
Debt Instrument [Line Items]
Line of Credit Facility, Maximum Borrowing Capacity	$ 215.0

XML

Marketable Securities - Maturities of Held to Maturity Investments (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012
Marketable Securities [Abstract]
Held-to-maturity investments, maturities due within one year	$ 47,185
Held-to-maturity investments, maturities due in one to five years	37,802
Held-to-maturity investments, total maturities due	$ 84,987

XML

Revisions in Estimates (Tables)

9 Months Ended

Sep. 30, 2012

Construction [Member]

Change in Accounting Estimate [Line Items]

Schedule of Change in Accounting Estimate

Decreases

		Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in millions)		2012		2011		2012		2011
Number of projects with downward estimate changes		4		2		6		3
Range of reduction in gross profit from each project, net	$	1.1 - 3.9	$	1.4 - 2.6	$	1.1 - 6.3	$	1.4 - 2.6
Decrease on project profitability	$	7.6	$	4.0	$	16.5	$	5.4

The projects are summarized as follows:

Increases

		Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in millions)		2012		2011		2012		2011
Number of projects with upward estimate changes		1		2		4		4
Range of increase in gross profit from each project, net	$	1.6	$	1.3 - 1.4	$	1.0 - 3.0	$	1.1 - 2.9
Increase on project profitability	$	1.6	$	2.7	$	7.1	$	7.0

Large Project Construction [Member]

Change in Accounting Estimate [Line Items]

Schedule of Change in Accounting Estimate

Decreases

		Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in millions)		2012		2011		2012		2011
Number of projects with downward estimate changes		—		3		2		2
Range of reduction in gross profit from each project, net	$	—	$	1.7 - 2.4	$	1.7 - 4.1	$	4.2 - 5.6
Decrease on project profitability	$	—	$	6.1	$	5.8	$	9.8

The projects are summarized as follows:

Increases

		Three Months Ended September 30,				Nine Months Ended September 30,
(dollars in millions)		2012		2011		2012		2011
Number of projects with upward estimate changes		8		5		8		6
Range of increase in gross profit from each project, net	$	1.1 - 12.6	$	1.0 - 2.6	$	1.1 - 16.3	$	1.4 - 4.2
Increase on project profitability	$	35.9	$	8.8	$	54.7	$	17.7

XML

Real Estate Entities and Investments in Affiliates Real Estate Entities and Investments in Affiliates (Policies)

9 Months Ended

Sep. 30, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Consolidation, Variable Interest Entity, Policy [Policy Text Block]

We have determined that certain of these joint ventures are variable interest entities (“VIEs”) as defined by Accounting Standards Codification (“ASC”) Topic 810, Consolidation, and related standards. To ascertain if we are required to consolidate the VIE, we continually evaluate whether we are the VIE’s primary beneficiary. The factors we consider in determining whether we are a VIE’s primary beneficiary include the decision authority of each partner, which partner manages the day-to-day operations of the project and the amount of our equity investment in relation to that of our partners.

We have determined that certain of the real estate joint ventures are VIEs as defined by ASC Topic 810, Consolidation, and related standards. To ascertain if we are required to consolidate the VIE, we continually evaluate whether we are the VIE’s primary beneficiary. The factors we consider in determining whether we are a VIE’s primary beneficiary include the decision authority of each partner, which partner manages the day-to-day operations of the project and the amount of our equity investment in relation to that of our partners.

Impairment or Disposal of Long-Lived Assets, Policy [Policy Text Block]

To determine if impairment charges should be recognized, the carrying amount of each consolidated real estate development project is reviewed on a quarterly basis in accordance with ASC Topic 360, Property, Plant, and Equipment, and each real estate development project accounted for under the equity method of accounting is reviewed in accordance with ASC Topic 323, Investments - Equity Method and Joint Ventures. The review of each project includes an evaluation of entitlement status, market conditions, existing offers to purchase, cost of construction, debt load, development schedule, status of joint venture partners and other factors specific to each project to determine if events or changes in circumstances indicate that a project’s carrying amount may not be recoverable. If events or changes in circumstances indicate that a consolidated project’s carrying amount may not be recoverable, the future undiscounted cash flows are estimated and compared to the project’s carrying amount. In the event that the project’s estimated future undiscounted cash flows are not sufficient to recover the carrying amounts, it is written down to its estimated fair value. The projects accounted for under the equity method are evaluated for impairment using the other-than-temporary impairment model, which requires an impairment charge to be recognized if the project’s carrying amount exceeds its fair value, and the decline in fair value is deemed to be other than temporary. In the event that the estimated fair value is not sufficient to recover the carrying amount of a project, it is written down to its estimated fair value.

XML

Covenants and Events of Default (Details)	9 Months Ended
	Sep. 30, 2012
Debt Disclosure [Abstract]
Covenant Compliance	We were in compliance with the covenants contained in our senior note agreements and Credit Agreement.

XML

Fair Value Measurement - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2012 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 1 [Member]		Dec. 31, 2011 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 1 [Member]		Sep. 30, 2011 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 1 [Member]		Sep. 30, 2012 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 2 [Member]		Dec. 31, 2011 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 2 [Member]		Sep. 30, 2011 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 2 [Member]		Sep. 30, 2012 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 3 [Member]		Dec. 31, 2011 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 3 [Member]		Sep. 30, 2011 Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 3 [Member]		Sep. 30, 2012 Fair Value, Measurements, Recurring [Member] Estimate of Fair Value, Fair Value Disclosure [Member]	Dec. 31, 2011 Fair Value, Measurements, Recurring [Member] Estimate of Fair Value, Fair Value Disclosure [Member]	Sep. 30, 2011 Fair Value, Measurements, Recurring [Member] Estimate of Fair Value, Fair Value Disclosure [Member]	Sep. 30, 2012 Estimate of Fair Value, Fair Value Disclosure [Member] Fair Value, Inputs, Level 1 [Member]		Dec. 31, 2011 Estimate of Fair Value, Fair Value Disclosure [Member] Fair Value, Inputs, Level 1 [Member]		Sep. 30, 2011 Estimate of Fair Value, Fair Value Disclosure [Member] Fair Value, Inputs, Level 1 [Member]		Sep. 30, 2012 Estimate of Fair Value, Fair Value Disclosure [Member] Fair Value, Inputs, Level 2 [Member]		Dec. 31, 2011 Estimate of Fair Value, Fair Value Disclosure [Member] Fair Value, Inputs, Level 2 [Member]		Sep. 30, 2011 Estimate of Fair Value, Fair Value Disclosure [Member] Fair Value, Inputs, Level 2 [Member]		Sep. 30, 2012 Estimate of Fair Value, Fair Value Disclosure [Member] Fair Value, Inputs, Level 3 [Member]		Dec. 31, 2011 Estimate of Fair Value, Fair Value Disclosure [Member] Fair Value, Inputs, Level 3 [Member]		Sep. 30, 2011 Estimate of Fair Value, Fair Value Disclosure [Member] Fair Value, Inputs, Level 3 [Member]		Sep. 30, 2012 Estimate of Fair Value, Fair Value Disclosure [Member]	Dec. 31, 2011 Estimate of Fair Value, Fair Value Disclosure [Member]	Sep. 30, 2011 Estimate of Fair Value, Fair Value Disclosure [Member]	Sep. 30, 2012 Money Market Funds [Member] Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 1 [Member]		Dec. 31, 2011 Money Market Funds [Member] Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 1 [Member]		Sep. 30, 2011 Money Market Funds [Member] Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 1 [Member]		Sep. 30, 2012 Money Market Funds [Member] Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 2 [Member]		Dec. 31, 2011 Money Market Funds [Member] Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 2 [Member]		Sep. 30, 2011 Money Market Funds [Member] Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 2 [Member]		Sep. 30, 2012 Money Market Funds [Member] Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 3 [Member]		Dec. 31, 2011 Money Market Funds [Member] Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 3 [Member]		Sep. 30, 2011 Money Market Funds [Member] Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 3 [Member]		Sep. 30, 2012 Money Market Funds [Member] Fair Value, Measurements, Recurring [Member] Estimate of Fair Value, Fair Value Disclosure [Member]	Dec. 31, 2011 Money Market Funds [Member] Fair Value, Measurements, Recurring [Member] Estimate of Fair Value, Fair Value Disclosure [Member]	Sep. 30, 2011 Money Market Funds [Member] Fair Value, Measurements, Recurring [Member] Estimate of Fair Value, Fair Value Disclosure [Member]	Sep. 30, 2012 Commercial paper [Member] Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 1 [Member]		Dec. 31, 2011 Commercial paper [Member] Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 1 [Member]		Sep. 30, 2011 Commercial paper [Member] Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 1 [Member]		Sep. 30, 2012 Commercial paper [Member] Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 2 [Member]		Dec. 31, 2011 Commercial paper [Member] Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 2 [Member]		Sep. 30, 2011 Commercial paper [Member] Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 2 [Member]		Sep. 30, 2012 Commercial paper [Member] Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 3 [Member]		Dec. 31, 2011 Commercial paper [Member] Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 3 [Member]		Sep. 30, 2011 Commercial paper [Member] Fair Value, Measurements, Recurring [Member] Fair Value, Inputs, Level 3 [Member]		Sep. 30, 2012 Commercial paper [Member] Fair Value, Measurements, Recurring [Member] Estimate of Fair Value, Fair Value Disclosure [Member]	Dec. 31, 2011 Commercial paper [Member] Fair Value, Measurements, Recurring [Member] Estimate of Fair Value, Fair Value Disclosure [Member]	Sep. 30, 2011 Commercial paper [Member] Fair Value, Measurements, Recurring [Member] Estimate of Fair Value, Fair Value Disclosure [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cost-method Investments, Other than Temporary Impairment	$ 2,800,000
Assets, Fair Value Disclosure [Abstract]
Cash equivalents																																												185,586,000	[1]	178,174,000	[1]	149,966,000	[1]	0	[2]	0	[2]	0	[2]	0	[3]	0	[3]	0	[3]	185,586,000	178,174,000	149,966,000	14,495,000	[1]	4,999,000	[1]	4,997,000	[1]	0	[2]	0	[2]	0	[2]	0	[3]	0	[3]	0	[3]	14,495,000	4,999,000	4,997,000
Held-to-maturity Securities, Fair Value Disclosure																							85,133,000	[1]	149,979,000	[1]	137,194,000	[1]	0	[2]	0	[2]	0	[2]	0	[3]	0	[3]	0	[3]	85,133,000	149,979,000	137,194,000
Assets, Fair Value Disclosure		285,214,000	[1]	333,152,000	[1]	292,157,000	[1]	0	[2]	0	[2]	0	[2]	0	[3]	0	[3]	0	[3]	285,214,000	333,152,000	292,157,000
Liabilities, Fair Value Disclosure [Abstract]
Senior Notes Payable, Fair Value Disclosure																							0	[1]	0	[1]	0	[1]	0	[2]	0	[2]	0	[2]	243,219,000	[3]	250,541,000	[3]	242,698,000	[3]	243,219,000	250,541,000	242,698,000
Liabilities, Fair Value Disclosure		$ 0	[1]	$ 0	[1]	$ 0	[1]	$ 0	[2]	$ 0	[2]	$ 0	[2]	$ 243,219,000	[3]	$ 250,541,000	[3]	$ 242,698,000	[3]	$ 243,219,000	$ 250,541,000	$ 242,698,000

[1] Quoted prices in active markets for identical assets or liabilities.

[2] Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

[3] Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

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Marketable Securities (Tables)

9 Months Ended

Sep. 30, 2012

Marketable Securities [Abstract]

Schedule of Marketable Securities

All marketable securities were classified as held-to-maturity for the dates presented and the carrying amounts of held-to-maturity securities were as follows:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
U.S. Government and agency obligations	$	15,062	$	40,240	$	40,218
Commercial paper	19,976		24,980		29,978
Municipal bonds	7,082		2,057		4,036
Corporate bonds	5,065		3,131		3,157
Total short-term marketable securities	47,185		70,408		77,389
U.S. Government and agency obligations	36,103		65,109		45,268
Municipal bonds	1,699		8,909		8,952
Corporate bonds	—		5,232		5,289
Total long-term marketable securities	37,802		79,250		59,509
Total marketable securities	$	84,987	$	149,658	$	136,898

Held-to-maturity Securities

Scheduled maturities of held-to-maturity investments were as follows (in thousands):

September 30, 2012
Due within one year	$	47,185
Due in one to five years	37,802
Total	$	84,987

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Fair Value Measurement (Tables)

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Abstract]

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

The following tables summarize each class of assets and liabilities measured at fair value on a recurring basis as well as assets and liabilities that are disclosed but not recorded at fair value: 

September 30, 2012	Fair Value Measurement at Reporting Date Using
(in thousands)	Level 11		Level 22		Level 33		Total
Cash equivalents
Money market funds	$	185,586	$	—	$	—	$	185,586
Held-to-maturity commercial paper	14,495		—		—		14,495
Marketable securities
Held-to-maturity marketable securities	85,133		—		—		85,133
Total assets	$	285,214	$	—	$	—	$	285,214
Long-term debt (including current maturities)
Senior notes payable	$	—	$	—	$	243,219	$	243,219
Total liabilities	$	—	$	—	$	243,219	$	243,219

December 31, 2011	Fair Value Measurement at Reporting Date Using
(in thousands)	Level 11		Level 22		Level 33		Total
Cash equivalents
Money market funds	$	178,174	$	—	$	—	$	178,174
Held-to-maturity commercial paper	4,999		—		—		4,999
Marketable securities
Held-to-maturity marketable securities	149,979		—		—		149,979
Total assets	$	333,152	$	—	$	—	$	333,152
Long-term debt (including current maturities)
Senior notes payable	$	—	$	—	$	250,541	$	250,541
Total liabilities	$	—	$	—	$	250,541	$	250,541

September 30, 2011	Fair Value Measurement at Reporting Date Using
(in thousands)	Level 11		Level 22		Level 33		Total
Cash equivalents
Money market funds	$	149,966	$	—	$	—	$	149,966
Held-to-maturity commercial paper	4,997		—		—		4,997
Marketable securities
Held-to-maturity marketable securities	137,194		—		—		137,194
Total assets	$	292,157	$	—	$	—	$	292,157
Long-term debt (including current maturities)
Senior notes payable	$	—	$	—	$	242,698	$	242,698
Total liabilities	$	—	$	—	$	242,698	$	242,698

¹Quoted prices in active markets for identical assets or liabilities.

²Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

³Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

Schedule of Cash and Cash Equivalents [Table Text Block]

A reconciliation of money market funds to consolidated cash and cash equivalents is as follows:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Money market funds	$	185,586	$	178,174	$	149,966
Held-to-maturity commercial paper	14,495		4,999		4,997
Cash	87,241		73,817		38,136
Total cash and cash equivalents	$	287,322	$	256,990	$	193,099

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Recently Issued Accounting Pronouncements

9 Months Ended

Sep. 30, 2012

Accounting Changes and Error Corrections [Abstract]

Description of New Accounting Pronouncements Not yet Adopted [Text Block]

Recently Issued Accounting Pronouncements

In December 2011, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. This ASU requires companies to disclose both gross and net information about financial instruments that have been offset on the consolidated balance sheet. This ASU will be effective commencing with our quarter ending March 31, 2013. We do not expect the adoption of this ASU to have an impact on our consolidated financial statements.

In July 2012, the FASB issued ASU No. 2012-02, Intangibles - Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment. This ASU gives companies the option to first assess qualitative factors to determine whether it is more likely than not that the indefinite-lived intangible asset is impaired. If it is determined that it is more likely than not the indefinite-lived intangible asset is impaired, a quantitative impairment test is required. However, if it is concluded otherwise, the quantitative test is not necessary. This ASU will be effective commencing with our quarter ending March 31, 2013. We do not expect the adoption of this ASU to have an impact on our consolidated financial statements.

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Receivables, Net (Tables)

9 Months Ended

Sep. 30, 2012

Receivables [Abstract]

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

Receivables, net

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Construction contracts:
Completed and in progress	$	228,865	$	122,987	$	223,292
Retentions	68,590		77,038		74,795
Total construction contracts	297,455		200,025		298,087
Construction material sales	59,396		30,356		52,157
Other	9,029		24,337		10,177
Total gross receivables	365,880		254,718		360,421
Less: allowance for doubtful accounts	2,425		2,880		2,614
Total net receivables	$	363,455	$	251,838	$	357,807

Schedule Of Escrow and Non Escrow Retention Receivable [Table Text Block]

We segregate our retention receivables into two categories: escrow and non-escrow. The balances in each category were as follows:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Escrow	$	42,297	$	43,378	$	38,517
Non-escrow	26,293		33,660		36,278
Total retention receivables	$	68,590	$	77,038	$	74,795

Schedule of Non Escrow Receivables [Table Text Block]

The following table summarizes the amount of our non-escrow retention receivables within each category:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Federal	$	2,569	$	2,811	$	2,148
State	3,595		5,453		6,046
Local	12,003		14,708		17,666
Private	8,126		10,688		10,418
Total	$	26,293	$	33,660	$	36,278

Aging of Financing Receivables [Table Text Block]

The following tables present the aging of our non-escrow retention receivables (in thousands):

September 30, 2012	Current		1 - 90 Days Past Due		Over 90 Days Past Due		Total
Federal	$	2,012	$	—	$	557	$	2,569
State	3,177		239		179		3,595
Local	11,141		555		307		12,003
Private	7,495		321		310		8,126
Total	$	23,825	$	1,115	$	1,353	$	26,293

December 31, 2011	Current		1 - 90 Days Past Due		Over 90 Days Past Due		Total
Federal	$	2,462	$	326	$	23	$	2,811
State	2,751		860		1,842		5,453
Local	12,313		1,326		1,069		14,708
Private	9,599		765		324		10,688
Total	$	27,125	$	3,277	$	3,258	$	33,660

September 30, 2011	Current		1 - 90 Days Past Due		Over 90 Days Past Due		Total
Federal	$	1,976	$	77	$	95	$	2,148
State	3,880		1,397		769		6,046
Local	13,801		1,465		2,400		17,666
Private	9,911		108		399		10,418
Total	$	29,568	$	3,047	$	3,663	$	36,278

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Business Segment Information (Tables)

9 Months Ended

Sep. 30, 2012

Segment Reporting [Abstract]

Schedule of Segment Reporting Information

Summarized segment information is as follows:

	Three Months Ended September 30,
(in thousands)	Construction		Large Project Construction		Construction Materials			Real Estate		Total
2012
Total revenue from reportable segments	$	385,744	$	255,918	$	169,350		$	38	$	811,050
Elimination of intersegment revenue	—		—		(82,568		)	—		(82,568		)
Revenue from external customers	385,744		255,918		86,782			38		728,482
Gross profit	33,273		57,814		9,984			28		101,099
Depreciation, depletion and amortization	3,160		1,102		7,498			—		11,760
2011
Total revenue from reportable segments	$	431,101	$	213,320	$	170,574		$	986	$	815,981
Elimination of intersegment revenue	—		—		(87,403		)	—		(87,403		)
Revenue from external customers	431,101		213,320		83,171			986		728,578
Gross profit	58,540		25,557		9,554			242		93,893
Depreciation, depletion and amortization	3,437		1,259		7,487			46		12,229

	Nine Months Ended September 30,
(in thousands)	Construction		Large Project Construction		Construction Materials			Real Estate		Total
2012
Total revenue from reportable segments	$	748,803	$	648,645	$	316,211		$	5,055	$	1,718,714
Elimination of intersegment revenue	—		—		(140,457		)	—		(140,457		)
Revenue from external customers	748,803		648,645		175,754			5,055		1,578,257
Gross profit	59,814		108,302		9,034			801		177,951
Depreciation, depletion and amortization	9,973		3,279		22,055			—		35,307
Segment assets	110,402		109,114		353,756			57,964		631,236
2011
Total revenue from reportable segments	$	784,393	$	513,478	$	309,846		$	7,029	$	1,614,746
Elimination of intersegment revenue	—		—		(144,763		)	—		(144,763		)
Revenue from external customers	784,393		513,478		165,083			7,029		1,469,983
Gross profit	87,482		69,513		10,754			1,088		168,837
Depreciation, depletion and amortization	11,362		3,316		21,594			143		36,415
Segment assets	114,359		108,272		368,141			87,232		678,004

Reconciliation of Operating Profit (Loss) from Segments to Consolidated

A reconciliation of segment gross profit to consolidated income before provision for income taxes is as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
(in thousands)	2012		2011			2012			2011
Total gross profit from reportable segments	$	101,099	$	93,893		$	177,951		$	168,837
Selling, general and administrative expenses	41,280		39,112			125,274			121,277
Gain on sales of property and equipment	1,622		5,598			6,493			11,572
Other income (expense), net	1,418		(2,894		)	(2,184		)	(5,866		)
Income before provision for income taxes	$	62,859	$	57,485		$	56,986		$	53,266

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Intangible Assets - Indefinite Lived Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012		Dec. 31, 2011		Sep. 30, 2011
Indefinite-lived Intangible Assets by Major Class [Line Items]
Total unamortized intangible assets	$ 10,293		$ 10,293		$ 11,219
Contractual Rights [Member]
Indefinite-lived Intangible Assets by Major Class [Line Items]
Use rights and other	393		393		1,319
Construction [Member]
Indefinite-lived Intangible Assets by Major Class [Line Items]
Goodwill	$ 9,900	[1]	$ 9,900	[1]	$ 9,900	[1]

[1] Goodwill for all periods presented primarily relates to our Construction segment.

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CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Current Assets
Cash and cash equivalents ($74,020, $75,122, and $65,350 related to consolidated construction joint ventures (CCJV))	$ 287,322	$ 256,990	$ 193,099
Short-term marketable securities	47,185	70,408	77,389
Receivables, net ($31,028, $30,332 and $28,493 related to CCJVs)	363,455	251,838	357,807
Costs and estimated earnings in excess of billings	49,548	37,703	45,884
Inventories	63,999	50,975	57,987
Real estate held for development and sale	57,964	67,037	79,173
Deferred income taxes	38,571	38,571	52,714
Equity in construction joint ventures	97,890	101,029	97,415
Other current assets	13,974	35,171	29,526
Total current assets	1,019,908	909,722	990,994
Property and equipment, net ($6,661, $8,671 and $9,821 related to CCJVs)	432,293	447,140	453,822
Long-term marketable securities	37,802	79,250	59,509
Investments in affiliates	30,257	31,071	33,435
Other noncurrent assets	78,375	80,616	80,709
Total assets	1,598,635	1,547,799	1,618,469
Current liabilities
Current maturities of long-term debt	8,352	9,102	8,351
Current maturities of non-recourse debt	16,712	23,071	16,690
Accounts payable ($30,975, $38,193 and $36,660 related to CCJVs)	209,683	158,660	216,600
Billings in excess of costs and estimated earnings ($13,955, $22,251 and $17,116 related to CCJVs)	91,348	90,845	89,505
Accrued expenses and other current liabilities ($3,495, $5,129 and $5,997 related to CCJVs)	167,166	166,790	185,624
Total current liabilities	493,261	448,468	516,770
Long-term debt	200,168	208,501	208,519
Long-term non-recourse debt	4,375	9,912	27,755
Other long-term liabilities	47,913	49,221	46,985
Deferred income taxes	3,644	4,034	10,330
Equity
Preferred stock, $0.01 par value, authorized 3,000,000 shares, none outstanding	0	0	0
Common stock, $0.01 par value, authorized 150,000,000 shares; issued and outstanding 38,706,966 shares as of September 30, 2012, 38,682,771 shares as of December 31, 2011 and 38,664,403 shares as of September 30, 2011	387	387	387
Additional paid-in capital	114,917	111,514	108,096
Retained earnings	699,277	687,296	673,626
Total Granite Construction Incorporated shareholders' equity	814,581	799,197	782,109
Noncontrolling interests	34,693	28,466	26,001
Total equity	849,274	827,663	808,110
Total liabilities and equity	$ 1,598,635	$ 1,547,799	$ 1,618,469

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Fair Value Measurement - Cash and Cash Equivalents (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011	Dec. 31, 2010
Cash Equivalents, at Carrying Value [Abstract]
Money market funds	$ 185,586	$ 178,174	$ 149,966
Held-to-maturity commercial paper	14,495	4,999	4,997
Cash	87,241	73,817	38,136
Total cash and cash equivalents	$ 287,322	$ 256,990	$ 193,099	$ 252,022

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CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Operating Activities
Net income	$ 41,546	$ 41,293
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization	43,651	45,691
Non-cash restructuring, net	(1,782)	1,031
Other non-cash impairment charges	3,101	0
Gain on sales of property and equipment	(6,493)	(11,572)
Stock-based compensation	8,910	8,994
(Gain) loss on company owned life insurance	(1,829)	639
Changes in assets and liabilities, net of the effects of a deconsolidation:
Receivables	(115,066)	(112,790)
Costs and estimated earnings in excess of billings, net	(11,342)	(66,045)
Inventories	(13,024)	(6,969)
Increase Decrease Real Estate Held For Development And Sale	(98)	2,756
Equity in construction joint ventures	3,139	(22,699)
Other assets, net	20,312	9,359
Accounts payable	51,025	86,900
Accrued expenses and other current liabilities, net	(2,083)	30,942
Net cash provided by operating activities	20,163	2,018
Investing Activities
Purchase of marketable securities	(59,936)	(115,146)
Maturities of marketable securities	70,100	85,875
Proceeds from sale of marketable securities	55,000	33,268
Additions to property and equipment	(25,971)	(34,748)
Proceeds from sales of property and equipment	8,368	20,071
Other investing activities, net	1,165	2,313
Net cash provided by (used in) investing activities	48,726	(8,367)
Financing Activities
Long-term debt principal payments	(11,584)	(17,293)
Cash dividends paid	(15,078)	(15,090)
Purchase of common stock	(4,521)	(3,840)
Distributions to noncontrolling partners, net	(8,022)	(17,489)
Other financing activities	648	1,138
Net cash used in financing activities	(38,557)	(52,574)
Increase (decrease) in cash and cash equivalents	30,332	(58,923)
Cash and cash equivalents at beginning of period	256,990	252,022
Cash and cash equivalents at end of period	287,322	193,099
Cash paid during the period for:
Interest	6,948	9,718
Income taxes	1,131	905
Non-cash investing and financing activities:
Restricted stock/units issued, net of forfeitures	11,532	6,896
Accrued cash dividends	5,032	5,026
Debt payments out of escrow from sale of assets	1,109	3,446
Debt extinguishment from joint venture interest transfer	9,115	0
Debt payment from refinance	$ 1,150	$ 0

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Income Taxes (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Effective Income Tax Rate, Continuing Operations, Tax Rate Reconciliation [Abstract]
Effective Income Tax Rate, Continuing Operations	27.20%	26.30%	27.10%	22.50%

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Property and Equipment, Net (Tables)

9 Months Ended

Sep. 30, 2012

Property, Plant and Equipment [Abstract]

Property and Equipment

Balances of major classes of assets and allowances for depreciation and depletion are included in property and equipment, net on our condensed consolidated balance sheets as follows:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Land and land improvements	$	125,842	$	124,216	$	122,728
Quarry property	177,814		175,612		175,431
Buildings and leasehold improvements	80,916		81,272		81,217
Equipment and vehicles	718,965		733,158		753,776
Office furniture and equipment	64,767		55,570		48,996
Property and equipment	1,168,304		1,169,828		1,182,148
Less: accumulated depreciation and depletion	736,011		722,688		728,326
Property and equipment, net	$	432,293	$	447,140	$	453,822

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Equity

9 Months Ended

Sep. 30, 2012

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

Equity

The following tables summarize our equity activity for the periods presented:

(in thousands)	Granite Construction Incorporated			Noncontrolling Interests			Total Equity
Balance at December 31, 2011	$	799,197		$	28,466		$	827,663
Purchase of common stock1	(4,521		)	—			(4,521		)
Other transactions with shareholders3	7,690			—			7,690
Transactions with noncontrolling interests, net4	—			(8,022		)	(8,022		)
Net income	27,297			14,249			41,546
Dividends on common stock	(15,082		)	—			(15,082		)
Balance at September 30, 2012	$	814,581		$	34,693		$	849,274

(in thousands)
Balance at December 31, 2010	$	761,031		$	34,604		$	795,635
Purchase of common stock2	(3,840		)	—			(3,840		)
Other transactions with shareholders3	7,589			—			7,589
Transactions with noncontrolling interests, net4	—			(17,489		)	(17,489		)
Net income	32,407			8,886			41,293
Dividends on common stock	(15,078		)	—			(15,078		)
Balance at September 30, 2011	$	782,109		$	26,001		$	808,110

¹Represents 154,000 shares purchased in connection with employee tax withholding for shares/units granted under our Amended and Restated 1999 Equity Incentive Plan.

²Represents 138,000 shares purchased in connection with employee tax withholding for shares/units granted under our Amended and Restated 1999 Equity Incentive Plan.

³Amounts are comprised primarily of amortized restricted stock and units.

⁴Amounts are comprised primarily of distributions to noncontrolling partners.

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Intangible Assets (Tables)

9 Months Ended

Sep. 30, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Indefinite-lived Intangible Assets by Segment [Table Text Block]

Indefinite-lived Intangible Assets:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Goodwill1	$	9,900	$	9,900	$	9,900
Use rights and other	393		393		1,319
Total unamortized intangible assets	$	10,293	$	10,293	$	11,219

¹Goodwill for all periods presented primarily relates to our Construction segment.

Schedule of Finite-Lived Intangible Assets by Major Class

Amortized Intangible Assets:

September 30, 2012			Accumulated
(in thousands)	Gross Value		Amortization			Net Value
Permits	$	29,713	$	(10,588	)	$	19,125
Customer lists	2,198		(2,113		)	85
Covenants not to compete	1,588		(1,541		)	47
Other	871		(696		)	175
Total amortized intangible assets	$	34,370	$	(14,938	)	$	19,432

December 31, 2011
(in thousands)
Permits	$	29,713	$	(7,573	)	$	22,140
Customer lists	2,198		(1,942		)	256
Covenants not to compete	1,588		(1,476		)	112
Other	871		(583		)	288
Total amortized intangible assets	$	34,370	$	(11,574	)	$	22,796

September 30, 2011
(in thousands)
Permits	$	29,713	$	(7,205	)	$	22,508
Customer lists	2,198		(1,885		)	313
Covenants not to compete	1,588		(1,439		)	149
Other	871		(545		)	326
Total amortized intangible assets	$	34,370	$	(11,074	)	$	23,296

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Business Segment Information

9 Months Ended

Sep. 30, 2012

Segment Reporting [Abstract]

Business Segment Information

Business Segment Information

Our reportable segments are: Construction, Large Project Construction, Construction Materials and Real Estate. 

The Construction segment performs various heavy civil construction projects with a large portion of the work focused on new construction and improvement of streets, roads, highways, bridges, site work and other infrastructure projects. These projects are typically bid-build projects completed within two years with a contract value of less than $75 million.

The Large Project Construction segment focuses on large, complex infrastructure projects which typically have longer duration than our Construction segment work. These projects include major highways, mass transit facilities, bridges, tunnels, waterway locks and dams, pipelines, canals and airport infrastructure. This segment primarily includes bid-build, design-build and construction management/general contractor contracts, generally with contract values in excess of $75 million.

The Construction Materials segment mines and processes aggregates and operates plants that produce construction materials for internal use and for sale to third parties.

The Real Estate segment purchases, develops, operates, sells and invests in real estate related projects and provides real estate services for the Company’s operations. The Real Estate segment’s current portfolio consists of residential, retail and office site development projects for sale to home and commercial property developers in Washington, California and Texas. In October 2010, we announced our Enterprise Improvement Plan that includes plans to orderly divest of our real estate investment business consistent with our strategy to focus on our core business.

The accounting policies of the segments are the same as those described in the Summary of Significant Accounting Policies contained in our 2011 Annual Report on Form 10-K. We evaluate segment performance based on gross profit or loss, and do not include overhead and non-operating income or expense. Segment assets include property and equipment, intangibles, inventory, equity in construction joint ventures and real estate held for development and sale.

Summarized segment information is as follows:

	Three Months Ended September 30,
(in thousands)	Construction		Large Project Construction		Construction Materials			Real Estate		Total
2012
Total revenue from reportable segments	$	385,744	$	255,918	$	169,350		$	38	$	811,050
Elimination of intersegment revenue	—		—		(82,568		)	—		(82,568		)
Revenue from external customers	385,744		255,918		86,782			38		728,482
Gross profit	33,273		57,814		9,984			28		101,099
Depreciation, depletion and amortization	3,160		1,102		7,498			—		11,760
2011
Total revenue from reportable segments	$	431,101	$	213,320	$	170,574		$	986	$	815,981
Elimination of intersegment revenue	—		—		(87,403		)	—		(87,403		)
Revenue from external customers	431,101		213,320		83,171			986		728,578
Gross profit	58,540		25,557		9,554			242		93,893
Depreciation, depletion and amortization	3,437		1,259		7,487			46		12,229

	Nine Months Ended September 30,
(in thousands)	Construction		Large Project Construction		Construction Materials			Real Estate		Total
2012
Total revenue from reportable segments	$	748,803	$	648,645	$	316,211		$	5,055	$	1,718,714
Elimination of intersegment revenue	—		—		(140,457		)	—		(140,457		)
Revenue from external customers	748,803		648,645		175,754			5,055		1,578,257
Gross profit	59,814		108,302		9,034			801		177,951
Depreciation, depletion and amortization	9,973		3,279		22,055			—		35,307
Segment assets	110,402		109,114		353,756			57,964		631,236
2011
Total revenue from reportable segments	$	784,393	$	513,478	$	309,846		$	7,029	$	1,614,746
Elimination of intersegment revenue	—		—		(144,763		)	—		(144,763		)
Revenue from external customers	784,393		513,478		165,083			7,029		1,469,983
Gross profit	87,482		69,513		10,754			1,088		168,837
Depreciation, depletion and amortization	11,362		3,316		21,594			143		36,415
Segment assets	114,359		108,272		368,141			87,232		678,004

A reconciliation of segment gross profit to consolidated income before provision for income taxes is as follows:

	Three Months Ended September 30,					Nine Months Ended September 30,
(in thousands)	2012		2011			2012			2011
Total gross profit from reportable segments	$	101,099	$	93,893		$	177,951		$	168,837
Selling, general and administrative expenses	41,280		39,112			125,274			121,277
Gain on sales of property and equipment	1,622		5,598			6,493			11,572
Other income (expense), net	1,418		(2,894		)	(2,184		)	(5,866		)
Income before provision for income taxes	$	62,859	$	57,485		$	56,986		$	53,266

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Basis of Presentation

9 Months Ended

Sep. 30, 2012

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The condensed consolidated financial statements included herein have been prepared by Granite Construction Incorporated (“we,” “us,” “our,” “Company” or “Granite”) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and should be read in conjunction with our Annual Report on Form 10-K for the year ended December 31, 2011. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted, although we believe the disclosures which are made are adequate to make the information presented not misleading. Further, the condensed consolidated financial statements reflect, in the opinion of management, all normal recurring adjustments necessary to state fairly our financial position at September 30, 2012 and 2011 and the results of our operations and cash flows for the periods presented. The December 31, 2011 condensed consolidated balance sheet data was derived from audited consolidated financial statements, but does not include all disclosures required by U.S. GAAP.

We prepared the accompanying condensed consolidated financial statements on the same basis as our annual consolidated financial statements except for the adoption of the following new accounting guidance in the first quarter of 2012:

• Accounting Standards Update (“ASU”) No. 2011-05, Comprehensive Income (Topic 220): Presentation of Comprehensive Income, which eliminates the option to present the components of other comprehensive income as part of the statement of stockholders’ equity or as a footnote to the condensed consolidated financial statements, and provides the option of presenting comprehensive income in a continuous statement of comprehensive income. This guidance became effective for our quarter ended March 31, 2012 and requires prior year amounts to conform to current year presentation. For all periods presented comprehensive income was equal to net income; therefore, a separate or continuous statement of comprehensive income is not included in the accompanying condensed consolidated financial statements.

• ASU No. 2011-04, Fair Value Measurement (Topic 820):Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards, which clarifies the application of certain existing fair value measurement guidance and expands the disclosure requirements for fair value measurements that are estimated using significant unobservable (Level 3) inputs and for assets and liabilities disclosed but not recorded at fair value. This guidance was effective for our quarter ended March 31, 2012. As a result of this new guidance, we disclosed the level of the fair value hierarchy within which the fair value measurements of assets and liabilities disclosed but not recorded at fair value were categorized (see Note 5). Other items in this new guidance had no impact to our condensed consolidated financial statements.

• ASU No. 2011-08, Intangibles - Goodwill and Other (Topic 350): Testing Goodwill for Impairment, which gives companies the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value when assessing goodwill for impairment. If it is determined that it is more likely than not that the fair value of a reporting unit exceeds its carrying value, further impairment analysis is not necessary. However, if it is concluded otherwise, we are required to perform step one of the goodwill impairment test. This guidance was effective as of January 1, 2012 and will be applied during our annual goodwill impairment tests to be performed during the fourth quarter of 2012, and earlier if fact and circumstances indicate that an impairment has occurred. This new guidance will have no impact to our condensed consolidated financial statements for our 2012 fiscal year.

Interim results are subject to significant seasonal variations and the results of operations for the three and nine months ended September 30, 2012 are not necessarily indicative of the results to be expected for the full year.

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CONSOLIDATED BALANCE SHEETS Consolidated Balance Sheets Parenthetical (Assets and Liabilities) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012		Dec. 31, 2011		Sep. 30, 2011
Cash and cash equivalents	$ 287,322		$ 256,990		$ 193,099
Other noncurrent assets	78,375		80,616		80,709
Accounts payable	209,683		158,660		216,600
Billings in excess of costs and estimated earnings	91,348		90,845		89,505
Accrued expenses and other current liabilities	167,166		166,790		185,624
Consolidated Construction Joint Venture [Member] | Joint Venture Consolidated [Member]
Cash and cash equivalents	74,020	[1]	75,122	[1]	65,350	[1]
Receivables, Net, Current	31,028		30,332		28,493
Other noncurrent assets	6,661		8,671		9,821
Accounts payable	30,975		38,193		36,660
Billings in excess of costs and estimated earnings	13,955	[1]	22,251	[1]	17,116	[1]
Accrued expenses and other current liabilities	$ 3,495		$ 5,129		$ 5,997

[1] The volume and stage of completion of contracts from our consolidated construction joint ventures may cause fluctuations in cash and cash equivalents, as well as billings in excess of costs and estimated earnings between periods.

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Restructuring

9 Months Ended

Sep. 30, 2012

Restructuring and Related Activities [Abstract]

Restructuring

Restructuring

Selling, general and administrative expenses for the nine months ended September 30, 2012 included a net gain on restructuring of $1.8 million related to divestiture activities of our real estate investment business. We recorded no significant restructuring charges during the three months ended September 30, 2012 or during the three and nine months ended September 30, 2011. During 2013, we may record up to $8.0 million of restructuring charges, primarily related to previously planned additional consolidation efforts and assets to be held-for-sale as part of our Enterprise Improvement Plan. The ultimate amount and timing of future restructuring charges is subject to market conditions and our ability to negotiate sales of certain assets at prices acceptable to us.

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Document and Entity Information Document	9 Months Ended
	Sep. 30, 2012	Oct. 22, 2012
Entity Information [Line Items]
Entity Registrant Name	GRANITE CONSTRUCTION INC
Entity Central Index Key	0000861459
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Sep. 30, 2012
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		38,711,183

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Covenants and Events of Default

9 Months Ended

Sep. 30, 2012

Debt Disclosure [Abstract]

Long-Term Debt and Credit Arrangements

Covenants and Events of Default

Our debt and credit agreements require us to comply with various affirmative, restrictive and financial covenants. Our failure to comply with any of these covenants, or to pay principal, interest or other amounts when due thereunder, would constitute an event of default under the applicable agreements. Under certain circumstances, the occurrence of an event of default under one of our debt or credit agreements (or the acceleration of the maturity of the indebtedness under one of our agreements) may constitute an event of default under one or more of our other debt or credit agreements. Default under our debt and credit agreements could result in (1) us no longer being entitled to borrow under the agreements, (2) termination of the agreements, (3) the requirement that any letters of credit under the agreements be cash collateralized, (4) acceleration of the maturity of outstanding indebtedness under the agreements and/or (5) foreclosure on any collateral securing the obligations under the agreements.

As of September 30, 2012, we were in compliance with the covenants contained in our senior note agreements, Credit Agreement, and debt agreements related to our consolidated real estate entities. We are not aware of any non-compliance by any of our unconsolidated entities with the covenants contained in their debt agreements. Subsequent to September 30, 2012, one of our consolidated real estate entities was in default under debt agreements as a result of its failure to make a timely required payment. The affected loans are non-recourse to Granite and these defaults do not result in cross-defaults under other debt agreements under which Granite is the obligor; however, there is recourse to the real estate entity that incurred the debt. The real estate entity in default is currently in discussions with its lenders concerning disposition of the property.

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CONSOLIDATED BALANCE SHEETS Consolidated Balance Sheets Parenthetical (Equity) (USD $)	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Statement of Financial Position [Abstract]
Preferred Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01	$ 0.01
Preferred Stock, Shares Authorized	3,000,000	3,000,000	3,000,000
Preferred Stock, Shares Outstanding	0	0	0
Common Stock, Par or Stated Value Per Share	$ 0.01	$ 0.01	$ 0.01
Common Stock, Shares Authorized	150,000,000	150,000,000	150,000,000
Common Stock, Shares, Issued	38,706,966	38,682,771	38,664,403
Common Stock, Shares, Outstanding	38,706,966	38,682,771	38,664,403

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Receivables, Net

9 Months Ended

Sep. 30, 2012

Receivables [Abstract]

Receivables, Net

Receivables, net

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Construction contracts:
Completed and in progress	$	228,865	$	122,987	$	223,292
Retentions	68,590		77,038		74,795
Total construction contracts	297,455		200,025		298,087
Construction material sales	59,396		30,356		52,157
Other	9,029		24,337		10,177
Total gross receivables	365,880		254,718		360,421
Less: allowance for doubtful accounts	2,425		2,880		2,614
Total net receivables	$	363,455	$	251,838	$	357,807

Receivables include amounts billed and billable for public and private contracts and do not bear interest. The balances billed but not paid by customers pursuant to retainage provisions in construction contracts generally become due upon completion and acceptance of the contract by the owners. Included in other receivables at September 30, 2012, December 31, 2011 and September 30, 2011 were items such as notes receivable, interest receivable, fuel tax refunds and income tax refunds. No such receivables individually exceeded 10% of total net receivables at any of these dates.

Financing receivables consisted of long-term notes receivable and retentions receivable. As of September 30, 2012, December 31, 2011 and September 30, 2011, long-term notes receivable outstanding were $1.9 million, $2.0 million, and $2.1 million, respectively, and primarily related to loans made to employees and were included in other noncurrent assets in our condensed consolidated balance sheets.

We segregate our retention receivables into two categories: escrow and non-escrow. The balances in each category were as follows:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Escrow	$	42,297	$	43,378	$	38,517
Non-escrow	26,293		33,660		36,278
Total retention receivables	$	68,590	$	77,038	$	74,795

The escrow receivables include amounts due to Granite which have been deposited into an escrow account and bear interest. Typically, escrow retention receivables are held until work on a project is complete and has been accepted by the owner who then releases those funds, along with accrued interest, to us. There is minimal risk of not collecting on these amounts.

Non-escrow retention receivables are amounts that the project owner has contractually withheld that will be paid upon owner acceptance of contract completion. We evaluate our non-escrow retention receivables for collectability using certain customer information that includes the following:

• Federal - includes federal agencies such as the Bureau of Reclamation, the Army Corp of Engineers, and the Bureau of Indian Affairs. The obligations of these agencies are backed by the federal government. Consequently, there is minimal risk of not collecting the amounts we are entitled to receive.    

• State - primarily state departments of transportation. The risk of not collecting on these accounts is small; however, we have experienced occasional delays in payment as states have struggled with budget issues.

• Local - these customers include local agencies such as cities, counties and other local municipal agencies. The risk of not collecting on these accounts is small; however, we have experienced occasional delays in payment as some local agencies have struggled to deal with budget issues.       

• Private - includes individuals, developers and corporations. The majority of our collection risk is associated with these customers. We perform ongoing credit evaluations of our customers and generally do not require collateral, although the law provides us certain remedies, including, but not limited to, the ability to file mechanics’ liens on real property improved for private customers in the event of non-payment by such customers.

The following table summarizes the amount of our non-escrow retention receivables within each category:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Federal	$	2,569	$	2,811	$	2,148
State	3,595		5,453		6,046
Local	12,003		14,708		17,666
Private	8,126		10,688		10,418
Total	$	26,293	$	33,660	$	36,278

We regularly review our accounts receivable, including past due amounts, to determine their probability of collection. If it is probable that an amount is uncollectible, it is charged to bad debt expense and a corresponding reserve is established in allowance for doubtful accounts. If it is deemed certain that an amount is uncollectible, the amount is written off. Based on contract terms, non-escrow retention receivables are typically due within 60 days of owner acceptance of contract completion. We consider retention amounts beyond 60 days of owner acceptance of contract completion to be past due. The following tables present the aging of our non-escrow retention receivables (in thousands):

September 30, 2012	Current		1 - 90 Days Past Due		Over 90 Days Past Due		Total
Federal	$	2,012	$	—	$	557	$	2,569
State	3,177		239		179		3,595
Local	11,141		555		307		12,003
Private	7,495		321		310		8,126
Total	$	23,825	$	1,115	$	1,353	$	26,293

December 31, 2011	Current		1 - 90 Days Past Due		Over 90 Days Past Due		Total
Federal	$	2,462	$	326	$	23	$	2,811
State	2,751		860		1,842		5,453
Local	12,313		1,326		1,069		14,708
Private	9,599		765		324		10,688
Total	$	27,125	$	3,277	$	3,258	$	33,660

September 30, 2011	Current		1 - 90 Days Past Due		Over 90 Days Past Due		Total
Federal	$	1,976	$	77	$	95	$	2,148
State	3,880		1,397		769		6,046
Local	13,801		1,465		2,400		17,666
Private	9,911		108		399		10,418
Total	$	29,568	$	3,047	$	3,663	$	36,278

Federal, state and local agencies generally require several approvals to release payments, and these approvals often take over 90 days past contractual due dates to obtain. Amounts past due from government agencies primarily result from delays caused by paperwork processing and obtaining proper agency approvals rather than lack of funds. As of September 30, 2012, December 31, 2011 and September 30, 2011, our allowance for doubtful accounts contained no material provision related to non-escrow retention receivables as we determined there were no significant collectibility issues.

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Fair Value Measurement

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value Disclosures [Text Block]

Fair Value Measurement

Effective in 2012, we adopted a new accounting standard that expands the disclosure of our assets and liabilities disclosed, but not recorded at fair value. As of September 30, 2012, December 31, 2011, and September 30, 2011, these assets and liabilities were our held-to-maturity marketable securities and senior notes payable. The following tables summarize each class of assets and liabilities measured at fair value on a recurring basis as well as assets and liabilities that are disclosed but not recorded at fair value: 

September 30, 2012	Fair Value Measurement at Reporting Date Using
(in thousands)	Level 11		Level 22		Level 33		Total
Cash equivalents
Money market funds	$	185,586	$	—	$	—	$	185,586
Held-to-maturity commercial paper	14,495		—		—		14,495
Marketable securities
Held-to-maturity marketable securities	85,133		—		—		85,133
Total assets	$	285,214	$	—	$	—	$	285,214
Long-term debt (including current maturities)
Senior notes payable	$	—	$	—	$	243,219	$	243,219
Total liabilities	$	—	$	—	$	243,219	$	243,219

December 31, 2011	Fair Value Measurement at Reporting Date Using
(in thousands)	Level 11		Level 22		Level 33		Total
Cash equivalents
Money market funds	$	178,174	$	—	$	—	$	178,174
Held-to-maturity commercial paper	4,999		—		—		4,999
Marketable securities
Held-to-maturity marketable securities	149,979		—		—		149,979
Total assets	$	333,152	$	—	$	—	$	333,152
Long-term debt (including current maturities)
Senior notes payable	$	—	$	—	$	250,541	$	250,541
Total liabilities	$	—	$	—	$	250,541	$	250,541

September 30, 2011	Fair Value Measurement at Reporting Date Using
(in thousands)	Level 11		Level 22		Level 33		Total
Cash equivalents
Money market funds	$	149,966	$	—	$	—	$	149,966
Held-to-maturity commercial paper	4,997		—		—		4,997
Marketable securities
Held-to-maturity marketable securities	137,194		—		—		137,194
Total assets	$	292,157	$	—	$	—	$	292,157
Long-term debt (including current maturities)
Senior notes payable	$	—	$	—	$	242,698	$	242,698
Total liabilities	$	—	$	—	$	242,698	$	242,698

¹Quoted prices in active markets for identical assets or liabilities.

²Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

³Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

A reconciliation of money market funds to consolidated cash and cash equivalents is as follows:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Money market funds	$	185,586	$	178,174	$	149,966
Held-to-maturity commercial paper	14,495		4,999		4,997
Cash	87,241		73,817		38,136
Total cash and cash equivalents	$	287,322	$	256,990	$	193,099

The carrying values of receivables, other current assets, and accrued expenses and other current liabilities approximate their fair values because of the short-term nature of these instruments. In addition, the fair value measured using Level 3 inputs of non-recourse debt approximates its carrying value due to its relative short-term nature and competitive interest rates. The fair value of the senior notes payable was based on borrowing rates available to us for long-term loans with similar terms, average maturities, and credit risk. The carrying amount of senior notes payable, including current maturities, was $208.3 million, $216.7 million and $216.7 million as of September 30, 2012, December 31, 2011 and September 30, 2011, respectively. See Note 4 for the carrying amount of held-to-maturity marketable securities as of September 30, 2012, December 31, 2011 and September 30, 2011.

We measure certain nonfinancial assets and liabilities at fair value on a nonrecurring basis. During the nine months ended September 30, 2012, the only significant fair value adjustment was a $2.8 million non-cash impairment charge to write-off our cost method investment in the preferred stock of a corporation that designs and manufactures power generation equipment. The fair value was estimated based on Level 3 inputs using the expected future cash flows attributable to the asset and on other assumptions that market participants would use in determining fair value, such as liquidation preferences, market discount rates, transaction prices for other comparable assets, and other market data. No other significant fair value adjustments related to nonfinancial assets and liabilities measured at fair value on a nonrecurring basis were recorded during the three and nine months ended September 30, 2012 and 2011.

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Legal Proceedings

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

Legal Proceedings

Legal Proceedings

In the ordinary course of business, we are involved in various legal proceedings that are pending against us and our affiliates alleging, among other things, breach of contract or tort in connection with the performance of professional services, the various outcomes of which cannot be predicted with certainty. The most significant of these proceedings are as follows:

• US Highway 20 Project: Our wholly owned subsidiaries, Granite Construction Company (“GCCO”) and Granite Northwest, Inc., are members of a joint venture known as Yaquina River Constructors (“YRC”) which was contracted by the Oregon Department of Transportation (“ODOT”) to construct a new road alignment of US Highway 20 near Eddyville, Oregon. The project involved constructing seven miles of new road through steep and forested terrain in the Coast Range Mountains. During the fall and winter of 2006, extraordinary rain events produced runoff that overwhelmed installed erosion control measures and resulted in discharges to surface water and alleged violations of YRC’s stormwater permit. In June 2009, YRC was informed that the U.S. Department of Justice (“USDOJ”) had assumed the criminal investigation that the Oregon Department of Justice had initiated in connection with stormwater runoff from the project. The USDOJ has since informed YRC that the USDOJ will not criminally charge YRC or any Granite affiliate in connection with these matters. We have negotiated material terms of a consent decree, including payment of a civil penalty which will be included in documents being prepared by the government. This matter is not expected to have direct or indirect consequences that could have a material adverse effect on our financial position, results of operations, cash flow and/or liquidity.

• Grand Avenue Project Disadvantaged Business Enterprise (“DBE”) Issues: On March 6, 2009, the U.S. Department of Transportation, Office of Inspector General (“OIG”) served upon our wholly-owned subsidiary, Granite Construction Northeast, Inc. (“Granite Northeast”), a United States District Court Eastern District of New York subpoena to testify before a grand jury by producing documents. The subpoena seeks all documents pertaining to the use of a DBE firm (the “Subcontractor”), and the Subcontractor’s use of a non-DBE lower tier subcontractor/consultant, on the Grand Avenue Bus Depot and Central Maintenance Facility for the Borough of Queens Project, a Granite Northeast project.  The subpoena also seeks any documents regarding the use of the Subcontractor as a DBE on any other projects and any other documents related to the Subcontractor or to the lower-tier subcontractor/consultant.  We have received two follow-up requests from the USDOJ for additional information and documents.  We have complied with the subpoena and the requests, and are fully cooperating with the OIG’s investigation. To date, Granite Northeast has not been notified that it is either a subject or target of the OIG’s investigation. Accordingly, we do not know whether any criminal charges or civil lawsuits will be brought against any party as a result of the investigation. We cannot, however, rule out the possibility of civil or criminal actions or administrative sanctions being brought against Granite Northeast.

• Other Legal Proceedings/Government Inquiries: We are a party to a number of other legal proceedings arising in the normal course of business. From time to time, we also receive inquiries from public agencies seeking information concerning our compliance with government construction contracting requirements and related laws and regulations. We believe that the nature and number of these proceedings and compliance inquiries are typical for a construction firm of our size and scope. Our litigation typically involves claims regarding public liability or contract related issues. While management currently believes, after consultation with counsel, that the ultimate outcome of pending proceedings and compliance inquiries, individually and in the aggregate, will not have a material adverse affect on our financial position or overall trends in results of operations or cash flows, litigation is subject to inherent uncertainties. Were one or more unfavorable rulings to occur, there exists the possibility of a material adverse effect on our financial position, results of operations, cash flows and/or liquidity for the period in which the ruling occurs. In addition, our government contracts could be terminated, we could be suspended or debarred, or payment of our costs disallowed. While any one of our pending legal proceedings is subject to early resolution as a result of our ongoing efforts to settle, whether or when any legal proceeding will be resolved through settlement is neither predictable nor guaranteed.

We record amounts in our condensed consolidated balance sheets representing our estimated liability relating to legal proceedings and government inquiries. During the three and nine months ended September 30, 2012 and 2011, there were no significant additions or revisions to the estimated liability that were recorded in our condensed consolidated statements of income, or significant changes to our accrual for such ligation loss contingencies on our condensed consolidated balance sheets.

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Weighted Average Shares Outstanding

9 Months Ended

Sep. 30, 2012

Weighted Average Number of Shares Outstanding Reconciliation [Abstract]

Weighted Average Shares Outstanding

Weighted Average Shares Outstanding

A reconciliation of the weighted average shares outstanding used in calculating basic and diluted net income per share in the accompanying condensed consolidated statements of operations is as follows:

	Three Months Ended September 30,		Nine Months Ended September 30,
(in thousands)	2012	2011	2012	2011
Weighted average shares outstanding:
Weighted average common stock outstanding	38,707	38,669	38,679	38,678
Less: weighted average unvested restricted stock outstanding	189	497	261	586
Total basic weighted average shares outstanding	38,518	38,172	38,418	38,092
Diluted weighted average shares outstanding:
Weighted average common stock outstanding, basic	38,518	38,172	38,418	38,092
Effect of dilutive securities:
Common stock options and restricted stock units	623	426	595	336
Total weighted average shares outstanding assuming dilution	39,141	38,598	39,013	38,428

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Property and Equipment, Net

9 Months Ended

Sep. 30, 2012

Property, Plant and Equipment [Abstract]

Property and Equipment, Net

Property and Equipment, net

Balances of major classes of assets and allowances for depreciation and depletion are included in property and equipment, net on our condensed consolidated balance sheets as follows:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Land and land improvements	$	125,842	$	124,216	$	122,728
Quarry property	177,814		175,612		175,431
Buildings and leasehold improvements	80,916		81,272		81,217
Equipment and vehicles	718,965		733,158		753,776
Office furniture and equipment	64,767		55,570		48,996
Property and equipment	1,168,304		1,169,828		1,182,148
Less: accumulated depreciation and depletion	736,011		722,688		728,326
Property and equipment, net	$	432,293	$	447,140	$	453,822

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Equity (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012		Sep. 30, 2011
Stockholders' Equity [Roll Forward]
Stockholders' equity, beginning balance			$ 827,663		$ 795,635
Purchase of common stock			(4,521)	[1]	(3,840)	[2]
Other transactions with shareholders			7,690	[3]	7,589	[3]
Transactions with noncontrolling interests, net			(8,022)	[4]	(17,489)	[4]
Comprehensive income (loss):
Net income	45,746	42,376	41,546		41,293
Dividends on common stock			(15,082)		(15,078)
Stockholders' equity, ending balance	849,274	808,110	849,274		808,110
Shares Purchased for Tax Withholding for Share Based Compensation			154,000		138,000
Granite Construction [Member]
Stockholders' Equity [Roll Forward]
Stockholders' equity, beginning balance			799,197		761,031
Purchase of common stock			(4,521)	[1]	(3,840)	[2]
Other transactions with shareholders			7,690	[3]	7,589	[3]
Transactions with noncontrolling interests, net			0	[4]	0	[4]
Comprehensive income (loss):
Net income					32,407
Dividends on common stock			(15,082)		(15,078)
Stockholders' equity, ending balance	814,581	782,109	814,581		782,109
Noncontrolling Interest [Member]
Stockholders' Equity [Roll Forward]
Stockholders' equity, beginning balance			28,466		34,604
Purchase of common stock			0	[1]	0	[2]
Other transactions with shareholders			0	[3]	0	[3]
Transactions with noncontrolling interests, net			(8,022)	[4]	(17,489)	[4]
Comprehensive income (loss):
Net income			14,249		8,886
Dividends on common stock			0		0
Stockholders' equity, ending balance	$ 34,693	$ 26,001	$ 34,693		$ 26,001

[1] Represents 154,000 shares purchased in connection with employee tax withholding for shares/units granted under our Amended and Restated 1999 Equity Incentive Plan.

[2] Represents 138,000 shares purchased in connection with employee tax withholding for shares/units granted under our Amended and Restated 1999 Equity Incentive Plan.

[3] Amounts are comprised primarily of amortized restricted stock and units.

[4] Amounts are comprised primarily of distributions to noncontrolling partners.

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Construction and Line Item Joint Ventures

9 Months Ended

Sep. 30, 2012

Notes to Financial Statements [Abstract]

Construction and Line Item Joint Ventures

Construction and Line Item Joint Ventures

We participate in various construction joint venture partnerships. We also participate in various “line item” joint venture agreements under which each partner is responsible for performing certain discrete items of the total scope of contracted work.

Our agreements with our joint venture partners for both construction joint ventures and line item joint ventures provide that each party will pay for any losses it is responsible for under the joint venture agreement. Circumstances that could lead to a loss under our joint venture arrangements beyond our stated ownership interest include the failure of a partner to contribute additional funds to the venture in the event the project incurs a loss or additional costs that we could incur should a partner fail to provide the services and resources that it had committed to provide in the joint venture agreement. Due to the joint and several nature of the obligations under our joint venture arrangements, if one of our joint venture partners fails to perform, we and the remaining joint venture partners would be responsible for performance of the outstanding work.

At September 30, 2012, there was approximately $1.6 billion of construction revenue to be recognized on unconsolidated and line item construction joint venture contracts of which $0.6 billion represented our share and the remaining $1.0 billion represented our partners’ share.  Due to the uncertainties associated with the nature of our work, we are not able to quantify our maximum exposure on the underlying arrangements and contracts that may be required beyond the remaining cost of the work to be performed. These costs could be offset by billings to the customer or by proceeds from our partners’ corporate and/or other guarantees.

Construction Joint Ventures

Generally, each construction joint venture is formed to complete a specific contract and is jointly controlled by the joint venture partners. The joint venture agreements typically provide that our interests in any profits and assets, and our respective share in any losses and liabilities resulting from the performance of the contracts are limited to our stated percentage interest in the project. We have no significant commitments beyond completion of the contracts. Under our contractual arrangements, we provide capital to these joint ventures in return for an ownership interest. In addition, partners dedicate resources to the ventures necessary to complete the contracts and are reimbursed for their cost. The operational risks of each construction joint venture are passed along to the joint venture partners. As we absorb our share of these risks, our investment in each venture is exposed to potential losses.

We have determined that certain of these joint ventures are variable interest entities (“VIEs”) as defined by Accounting Standards Codification (“ASC”) Topic 810, Consolidation, and related standards. To ascertain if we are required to consolidate the VIE, we continually evaluate whether we are the VIE’s primary beneficiary. The factors we consider in determining whether we are a VIE’s primary beneficiary include the decision authority of each partner, which partner manages the day-to-day operations of the project and the amount of our equity investment in relation to that of our partners.

Based on our initial primary beneficiary analysis, we determined that decision making responsibility is shared between the venture partners for one construction joint venture. Therefore, this joint venture did not have an identifiable primary beneficiary partner and we continue to report the pro rata results. All other joint ventures were assigned one primary beneficiary partner. Based on our primary beneficiary assessment during the nine months ended September 30, 2012, we determined no change was required to the accounting for existing construction joint ventures.

Consolidated Construction Joint Ventures

The carrying amounts and classification of assets and liabilities of construction joint ventures we are required to consolidate are included in our condensed consolidated financial statements as follows:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Cash and cash equivalents1	$	74,020	$	75,122	$	65,350
Other current assets	32,379		33,750		31,215
Total current assets	106,399		108,872		96,565
Noncurrent assets	6,661		8,671		9,821
Total assets2	$	113,060	$	117,543	$	106,386
Accounts payable	$	30,975	$	38,193	$	36,660
Billings in excess of costs and estimated earnings1	13,955		22,251		17,116
Accrued expenses and other current liabilities	3,495		5,129		5,997
Total current liabilities	48,425		65,573		59,773
Noncurrent liabilities	—		4		33
Total liabilities2	$	48,425	$	65,577	$	59,806

¹The volume and stage of completion of contracts from our consolidated construction joint ventures may cause fluctuations in cash and cash equivalents, as well as billings in excess of costs and estimated earnings between periods.

²The assets and liabilities of each joint venture relate solely to that joint venture. The decision to distribute joint venture cash and cash equivalents and assets must generally be made jointly by all of the partners and, accordingly, these cash and cash equivalents and assets generally are not available for the working capital needs of Granite.

At September 30, 2012, we were engaged in two active consolidated construction joint venture projects with total contract values of $245.1 million and $334.3 million. Our proportionate share of the equity in these joint ventures was 45.0% and 60.0%, respectively. During the three and nine months ended September 30, 2012, total revenue of the consolidated construction joint ventures was $77.4 million and $174.0 million, respectively. During the three and nine months ended September 30, 2011, total revenue of the consolidated construction joint ventures was $73.9 million and $171.1 million, respectively. Total cash provided by consolidated construction joint venture operations was $16.1 million and $6.0 million during the nine months ended September 30, 2012 and 2011, respectively.

Unconsolidated Construction Joint Ventures

We account for our share of construction joint ventures that we are not required to consolidate on a pro rata basis in the condensed consolidated statements of income and as a single line item on the condensed consolidated balance sheets. As of September 30, 2012, these unconsolidated joint ventures were engaged in eight active construction projects with total contract values ranging from $59.4 million to $1.2 billion. Our proportionate share of the equity in these unconsolidated joint ventures ranged from 20.0% to 50.0%. As of September 30, 2012, our share of the revenue remaining to be recognized on these unconsolidated joint ventures ranged from $0.4 million to $186.6 million.

Following is summary financial information related to unconsolidated construction joint ventures:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Assets:
Cash and cash equivalents1	$	304,065	$	338,681	$	356,399
Other assets	273,848		264,901		265,549
Less partners’ interest	353,165		364,979		378,523
Granite’s interest	224,748		238,603		243,425
Liabilities:
Accounts payable	94,788		85,075		85,602
Billings in excess of costs and estimated earnings1	243,578		280,650		302,039
Other liabilities	8,299		8,595		9,460
Less partners’ interest	219,807		236,746		251,091
Granite’s interest	126,858		137,574		146,010
Equity in construction joint ventures	$	97,890	$	101,029	$	97,415

¹The volume and stage of completion of contracts from our unconsolidated construction joint ventures may cause fluctuations in cash and cash equivalents, as well as billings in excess of costs and estimated earnings between periods.

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2012		2011		2012		2011
Revenue:
Total1	$	286,308	$	243,654	$	776,235	$	667,920
Less partners’ interest1,2	181,679		158,079		497,743		448,357
Granite’s interest	104,629		85,575		278,492		219,563
Cost of revenue:
Total1	200,688		212,485		597,689		546,495
Less partners’ interest1,2	129,840		140,506		389,171		370,865
Granite’s interest	70,848		71,979		208,518		175,630
Granite’s interest in gross profit	$	33,781	$	13,596	$	69,974	$	43,933

¹While Granite’s interest in revenue, cost of revenue and gross profit were correctly stated, total and partners’ interest for revenue and cost of revenue for the three and six month periods ended June 30, 2012 were inadvertently misstated in our Quarterly Report for the quarter ended June 30, 2012. Total revenue, partner’s interest in revenue, total cost of revenue and partners’ interest in cost of revenue reported was (in thousands): $663,536, $563,302, $544,838 and $467,540, respectively, for the three months ended June 30, 2012, and $869,368, $695,505, $714,450 and $576,780, respectively, for the six months ended June 30, 2012. Total revenue, partner’s interest in revenue, total cost of revenue and partners’ interest in cost of revenue should have been (in thousands): $284,095, $183,861, $227,389, and $150,091, respectively, for the three months ended June 30, 2012, and $489,926, $316,064, $397,001, and $259,331, respectively, for the six months ended June 30, 2012.

²Partners’ interest represents amounts to reconcile total revenue and total cost of revenue as reported by our partners to Granite’s interest, adjusted to reflect our accounting policies.

Line Item Joint Ventures

The revenue for each line item joint venture partner’s discrete items of work is defined in the contract with the project owner and each venture partner bears the profitability risk associated with its own work. There is not a single set of books and records for a line item joint venture. Each partner accounts for its items of work individually as it would for any self-performed contract. We account for our portion of these contracts as project revenues and costs in our accounting system and include receivables and payables associated with our work in our condensed consolidated financial statements. As of September 30, 2012, we had five active line item joint venture construction projects with total contract values ranging from $42.0 million to $133.2 million of which our portions ranged from $21.9 million to $55.7 million. As of September 30, 2012, our share of revenue remaining to be recognized on these line item joint ventures ranged from $2.5 million to $29.0 million.

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Real Estate Entities and Investments in Affiliates

9 Months Ended

Sep. 30, 2012

Notes to Financial Statements [Abstract]

Real Estate Entities and Investments in Affiliates

Real Estate Entities and Investments in Affiliates

The operations of our Real Estate segment are conducted through our wholly owned subsidiary, Granite Land Company (“GLC”). Generally, GLC participates with third-party partners in entities that are formed to accomplish specific real estate development projects. The agreements with GLC’s partners in these real estate entities define each partner’s management role and financial responsibility in the project. If one of GLC’s partners is unable to fulfill its management role or make its required financial contribution, GLC may assume full management or financial responsibility for the project. This may result in the consolidation of entities that are accounted for under the equity method in our consolidated financial statements. The amount of GLC’s exposure is limited to GLC’s equity investment in the real estate joint venture.

Substantially all the assets of these real estate entities in which we are participants through our GLC subsidiary are classified as real estate held for development and sale. All outstanding debt of these entities is non-recourse to Granite. However, there is recourse to our real estate affiliates that incurred the debt. Our real estate affiliates include limited partnerships or limited liability companies of which we are a limited partner or member. In the fourth quarter of 2010, we publicly announced our work in progress on our Enterprise Improvement Plan which includes business plans to orderly divest of our real estate investment business by the end of 2013, subject to market conditions and our ability to negotiate sales of certain assets at prices acceptable to us. In 2011, development activities were curtailed for the majority of our real estate development projects as divestiture efforts increased. During the nine months ended September 30, 2012, we recorded amounts associated with the sale or other disposition of two real estate projects, the impact of which was not significant to our results of operations. Subsequent to the sale or other disposition of these projects, GLC had no significant continuing involvement with the associated entities.

GLC receives authorization to provide additional financial support for certain of its real estate entities in increments to address changes in business plans.  During the nine months ended September 30, 2012, GLC was not authorized to increase its financial support to consolidated real estate entities and during the nine months ended September 30, 2011, GLC was authorized to increase its financial support to consolidated real estate entities by $12.0 million on three separate projects. As of September 30, 2012, $3.1 million of the total authorized investment had yet to be contributed to the consolidated entities.

We have determined that certain of the real estate joint ventures are VIEs as defined by ASC Topic 810, Consolidation, and related standards. To ascertain if we are required to consolidate the VIE, we continually evaluate whether we are the VIE’s primary beneficiary. The factors we consider in determining whether we are a VIE’s primary beneficiary include the decision authority of each partner, which partner manages the day-to-day operations of the project and the amount of our equity investment in relation to that of our partners. Based on our ongoing primary beneficiary assessments, there were no changes to our determinations of whether we are the VIE’s primary beneficiary for existing real estate entities during the nine months ended September 30, 2012 and 2011.

To determine if impairment charges should be recognized, the carrying amount of each consolidated real estate development project is reviewed on a quarterly basis in accordance with ASC Topic 360, Property, Plant, and Equipment, and each real estate development project accounted for under the equity method of accounting is reviewed in accordance with ASC Topic 323, Investments - Equity Method and Joint Ventures. The review of each project includes an evaluation of entitlement status, market conditions, existing offers to purchase, cost of construction, debt load, development schedule, status of joint venture partners and other factors specific to each project to determine if events or changes in circumstances indicate that a project’s carrying amount may not be recoverable. If events or changes in circumstances indicate that a consolidated project’s carrying amount may not be recoverable, the future undiscounted cash flows are estimated and compared to the project’s carrying amount. In the event that the project’s estimated future undiscounted cash flows are not sufficient to recover the carrying amounts, it is written down to its estimated fair value. The projects accounted for under the equity method are evaluated for impairment using the other-than-temporary impairment model, which requires an impairment charge to be recognized if the project’s carrying amount exceeds its fair value, and the decline in fair value is deemed to be other than temporary. In the event that the estimated fair value is not sufficient to recover the carrying amount of a project, it is written down to its estimated fair value.

Based on our quarterly evaluations of each project’s business plan and our review of each project, we recorded no significant impairment charges to our real estate development projects or investments during the three and nine months ended September 30, 2012 and 2011.

Consolidated Real Estate Entities

The carrying amounts and classification of assets and liabilities of real estate entities we are required to consolidate are included in our condensed consolidated balance sheets as follows:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Real estate held for development and sale	$	57,964	$	67,037	$	79,173
Other current assets	1,946		4,715		2,801
Total assets	$	59,910	$	71,752	$	81,974
Current maturities of non-recourse debt	$	16,712	$	22,571	$	16,190
Other current liabilities	404		1,794		1,901
Total current liabilities	17,116		24,365		18,091
Long-term non-recourse debt	4,375		9,912		27,755
Other noncurrent liabilities	—		74		278
Total liabilities	$	21,491	$	34,351	$	46,124

Substantially all of the consolidated real estate entities’ real estate held for development and sale is pledged as collateral for the debt of the real estate entities. All outstanding debt of the real estate entities is recourse only to the real estate affiliate that incurred the debt (i.e. the limited partnership or limited liability company of which we are a limited partner or member). Our proportionate share of the profits and losses of these entities depends on the ultimate operating results of the entities.

Included in current assets on our condensed consolidated balance sheets is real estate held for development and sale. The breakdown by type and location of our real estate held for development and sale is summarized below:

	September 30, 2012			December 31, 2011			September 30, 2011
(dollars in thousands)	Amount		Number of Projects	Amount		Number of Projects	Amount		Number of Projects
Residential	$	48,527	3	$	54,610	4	$	55,672	5
Commercial	9,437		4	12,427		5	23,501		7
Total	$	57,964	7	$	67,037	9	$	79,173	12
Washington	$	48,122	2	$	47,600	2	$	47,109	2
California	2,609		4	4,006		5	16,382		8
Texas	7,233		1	8,859		1	8,859		1
Oregon	—		—	6,572		1	6,823		1
Total	$	57,964	7	$	67,037	9	$	79,173	12

Investments in Affiliates

We account for our share of unconsolidated real estate entities in which we have determined we are not the primary beneficiary in other income in the condensed consolidated statements of income and as a single line item on our condensed consolidated balance sheets as investments in affiliates. At September 30, 2012, these entities were engaged in real estate development projects with total assets ranging from approximately $2.7 million to $45.8 million. Our proportionate share of the profits and losses of these entities depends on the ultimate operating results of the entities.

Additionally, we have investments in non-real estate affiliates that are accounted for using the equity method. The most significant of these investments is a 50% interest in a limited liability company which owns and operates an asphalt terminal in Nevada. During the three months ended June 30, 2012, it was determined that the carrying amount of our cost method investment in a power generation equipment manufacturer exceeded its fair value, which required us to recognize a non-cash impairment charge of $2.8 million.

Our investments in affiliates balance consists of the following:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Equity method investments in real estate affiliates	$	18,873	$	16,478	$	15,856
Equity method investments in other affiliates	11,384		11,841		11,129
Total equity method investments	30,257		28,319		26,985
Cost method investments	—		2,752		6,450
Total investments in affiliates	$	30,257	$	31,071	$	33,435

The breakdown by type and location of our interests in real estate affiliates accounted for under the equity method is summarized below:

	September 30, 2012			December 31, 2011			September 30, 2011
(dollars in thousands)	Amount		Number of Projects	Amount		Number of Projects	Amount		Number of Projects
Residential	$	12,805	2	$	11,903	2	$	11,511	2
Commercial	6,068		3	4,575		3	4,345		3
Total	$	18,873	5	$	16,478	5	$	15,856	5
Texas	$	18,873	5	$	16,478	5	$	15,856	5
Total	$	18,873	5	$	16,478	5	$	15,856	5

The following table provides summarized balance sheet information for our affiliates accounted for under the equity method on a 100% combined basis:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Total assets	$	156,992	$	157,771	$	157,054
Net assets	85,162		82,511		80,306
Granite’s share of net assets	30,257		28,319		26,985

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Intangible Assets

9 Months Ended

Sep. 30, 2012

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible Assets

The balances of the following intangible assets are included in other noncurrent assets on our condensed consolidated balance sheets:

Indefinite-lived Intangible Assets:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Goodwill1	$	9,900	$	9,900	$	9,900
Use rights and other	393		393		1,319
Total unamortized intangible assets	$	10,293	$	10,293	$	11,219

¹Goodwill for all periods presented primarily relates to our Construction segment.

Amortized Intangible Assets:

September 30, 2012			Accumulated
(in thousands)	Gross Value		Amortization			Net Value
Permits	$	29,713	$	(10,588	)	$	19,125
Customer lists	2,198		(2,113		)	85
Covenants not to compete	1,588		(1,541		)	47
Other	871		(696		)	175
Total amortized intangible assets	$	34,370	$	(14,938	)	$	19,432

December 31, 2011
(in thousands)
Permits	$	29,713	$	(7,573	)	$	22,140
Customer lists	2,198		(1,942		)	256
Covenants not to compete	1,588		(1,476		)	112
Other	871		(583		)	288
Total amortized intangible assets	$	34,370	$	(11,574	)	$	22,796

September 30, 2011
(in thousands)
Permits	$	29,713	$	(7,205	)	$	22,508
Customer lists	2,198		(1,885		)	313
Covenants not to compete	1,588		(1,439		)	149
Other	871		(545		)	326
Total amortized intangible assets	$	34,370	$	(11,074	)	$	23,296

Amortization expense related to these intangible assets for the three and nine months ended September 30, 2012 was approximately$1.2 million and $3.3 million, respectively, and approximately $0.5 million and $1.5 million for the three and nine months ended September 30, 2011, respectively. Based on the amortized intangible assets balance at September 30, 2012, amortization expense expected to be recorded in the future is as follows: $0.4 million for the remainder of 2012; $1.3 million in 2013; $1.1 million in 2014; $1.1 million in 2015; $1.0 million in 2016; and $14.5 million thereafter.

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Real Estate Entities and Investments in Affiliates (Tables)

9 Months Ended

Sep. 30, 2012

Real Estate Entities and Investments in Affiliates [Abstract]

Schedule of Consolidated Real Estate Entities [Table Text Block]

The carrying amounts and classification of assets and liabilities of real estate entities we are required to consolidate are included in our condensed consolidated balance sheets as follows:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Real estate held for development and sale	$	57,964	$	67,037	$	79,173
Other current assets	1,946		4,715		2,801
Total assets	$	59,910	$	71,752	$	81,974
Current maturities of non-recourse debt	$	16,712	$	22,571	$	16,190
Other current liabilities	404		1,794		1,901
Total current liabilities	17,116		24,365		18,091
Long-term non-recourse debt	4,375		9,912		27,755
Other noncurrent liabilities	—		74		278
Total liabilities	$	21,491	$	34,351	$	46,124

Schedule of Real Estate Inventory Held For Sale [Table Text Block]

The breakdown by type and location of our real estate held for development and sale is summarized below:

	September 30, 2012			December 31, 2011			September 30, 2011
(dollars in thousands)	Amount		Number of Projects	Amount		Number of Projects	Amount		Number of Projects
Residential	$	48,527	3	$	54,610	4	$	55,672	5
Commercial	9,437		4	12,427		5	23,501		7
Total	$	57,964	7	$	67,037	9	$	79,173	12
Washington	$	48,122	2	$	47,600	2	$	47,109	2
California	2,609		4	4,006		5	16,382		8
Texas	7,233		1	8,859		1	8,859		1
Oregon	—		—	6,572		1	6,823		1
Total	$	57,964	7	$	67,037	9	$	79,173	12

Schedule of Equity and Cost Method Investments [Table Text Block]

Our investments in affiliates balance consists of the following:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Equity method investments in real estate affiliates	$	18,873	$	16,478	$	15,856
Equity method investments in other affiliates	11,384		11,841		11,129
Total equity method investments	30,257		28,319		26,985
Cost method investments	—		2,752		6,450
Total investments in affiliates	$	30,257	$	31,071	$	33,435

Breakdown of Equity Method in Real Estate Affiliates by Type and Location [Table Text Block]

The breakdown by type and location of our interests in real estate affiliates accounted for under the equity method is summarized below:

	September 30, 2012			December 31, 2011			September 30, 2011
(dollars in thousands)	Amount		Number of Projects	Amount		Number of Projects	Amount		Number of Projects
Residential	$	12,805	2	$	11,903	2	$	11,511	2
Commercial	6,068		3	4,575		3	4,345		3
Total	$	18,873	5	$	16,478	5	$	15,856	5
Texas	$	18,873	5	$	16,478	5	$	15,856	5
Total	$	18,873	5	$	16,478	5	$	15,856	5

Equity Method Investment Summarized Balance Sheet Location [Table Text Block]

The following table provides summarized balance sheet information for our affiliates accounted for under the equity method on a 100% combined basis:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
Total assets	$	156,992	$	157,771	$	157,054
Net assets	85,162		82,511		80,306
Granite’s share of net assets	30,257		28,319		26,985

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Real Estate Entities and Investments in Affiliates - Investments in Affiliates (Details) (USD $)	9 Months Ended
	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2011
Investments in and Advances to Affiliates [Line Items]
Cost-method Investments, Other than Temporary Impairment	$ 2,800,000
Investments in affiliates	30,257,000	31,071,000	33,435,000
Joint Venture Unconsolidated [Member]
Investments in and Advances to Affiliates [Line Items]
Equity Method Investment, Summarized Financial Information, Assets	156,992,000	157,771,000	157,054,000
Equity Method Investments Summarized Financial Information Net Assets	85,162,000	82,511,000	80,306,000
Cost Method Investments	0	2,752,000	6,450,000
Investments in affiliates	30,257,000	31,071,000	33,435,000
Joint Venture Unconsolidated [Member] | Other Affiliates [Member]
Investments in and Advances to Affiliates [Line Items]
Equity Method Investments	30,257,000	28,319,000	26,985,000
Joint Venture Unconsolidated [Member] | Equity Method Investments in Non Real Estate Affiliate [Member]
Investments in and Advances to Affiliates [Line Items]
Equity Method Investments	11,384,000	11,841,000	11,129,000
Real Estate Segment [Member] | Joint Venture Consolidated [Member] | Real Estate Entities [Member] | Variable Interest Entity, Primary Beneficiary [Member]
Investments in and Advances to Affiliates [Line Items]
Number of projects	7	9	12
Real Estate Segment [Member] | Joint Venture Consolidated [Member] | Residential real estate [Member] | Real Estate Entities [Member] | Variable Interest Entity, Primary Beneficiary [Member]
Investments in and Advances to Affiliates [Line Items]
Number of projects	3	4	5
Real Estate Segment [Member] | Joint Venture Consolidated [Member] | Commercial real estate [Member] | Real Estate Entities [Member] | Variable Interest Entity, Primary Beneficiary [Member]
Investments in and Advances to Affiliates [Line Items]
Number of projects	4	5	7
Real Estate Segment [Member] | Joint Venture Consolidated [Member] | TEXAS | Real Estate Entities [Member] | Variable Interest Entity, Primary Beneficiary [Member]
Investments in and Advances to Affiliates [Line Items]
Number of projects	1	1	1
Real Estate Segment [Member] | Joint Venture Consolidated [Member] | CALIFORNIA | Real Estate Entities [Member] | Variable Interest Entity, Primary Beneficiary [Member]
Investments in and Advances to Affiliates [Line Items]
Number of projects	4	5	8
Real Estate Segment [Member] | Joint Venture Consolidated [Member] | OREGON | Real Estate Entities [Member] | Variable Interest Entity, Primary Beneficiary [Member]
Investments in and Advances to Affiliates [Line Items]
Number of projects	0	1	1
Real Estate Segment [Member] | Joint Venture Consolidated [Member] | WASHINGTON | Real Estate Entities [Member] | Variable Interest Entity, Primary Beneficiary [Member]
Investments in and Advances to Affiliates [Line Items]
Number of projects	2	2	2
Real Estate Segment [Member] | Joint Venture Unconsolidated [Member] | Equity Method investments in Real Estate Affiliates [Member] | Real Estate Entities [Member] | Variable Interest Entity, Not Primary Beneficiary [Member]
Investments in and Advances to Affiliates [Line Items]
Equity Method Investments	18,873,000	16,478,000	15,856,000
Number of projects	5	5	5
Real Estate Segment [Member] | Joint Venture Unconsolidated [Member] | Residential real estate [Member] | Equity Method investments in Real Estate Affiliates [Member] | Real Estate Entities [Member] | Variable Interest Entity, Not Primary Beneficiary [Member]
Investments in and Advances to Affiliates [Line Items]
Equity Method Investments	12,805,000	11,903,000	11,511,000
Number of projects	2	2	2
Real Estate Segment [Member] | Joint Venture Unconsolidated [Member] | Commercial real estate [Member] | Equity Method investments in Real Estate Affiliates [Member] | Real Estate Entities [Member] | Variable Interest Entity, Not Primary Beneficiary [Member]
Investments in and Advances to Affiliates [Line Items]
Equity Method Investments	6,068,000	4,575,000	4,345,000
Number of projects	3	3	3
Real Estate Segment [Member] | Joint Venture Unconsolidated [Member] | TEXAS | Equity Method investments in Real Estate Affiliates [Member] | Real Estate Entities [Member] | Variable Interest Entity, Not Primary Beneficiary [Member]
Investments in and Advances to Affiliates [Line Items]
Equity Method Investments	18,873,000	16,478,000	15,856,000
Number of projects	5	5	5
Real Estate Segment [Member] | Joint Venture Unconsolidated [Member] | Minimum [Member] | Real Estate Entities [Member] | Variable Interest Entity, Not Primary Beneficiary [Member]
Investments in and Advances to Affiliates [Line Items]
Real Estate Development Projects Range of Total Assets	2,700,000
Real Estate Segment [Member] | Joint Venture Unconsolidated [Member] | Maximum [Member] | Real Estate Entities [Member] | Variable Interest Entity, Not Primary Beneficiary [Member]
Investments in and Advances to Affiliates [Line Items]
Real Estate Development Projects Range of Total Assets	$ 45,800,000

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Income Taxes

9 Months Ended

Sep. 30, 2012

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Our effective tax rate was 27.2% and 27.1% for the three and nine months ended September 30, 2012, respectively, and was 26.3% and 22.5% for the three and nine months ended September 30, 2011, respectively. The changes from the prior year were primarily due to the recognition and measurement of previously unrecognized tax benefits, which was considered a discrete item for tax provision purposes for the nine months ended September 30, 2011. The recognition and measurement of these tax benefits was the result of a favorable settlement of an income tax examination.

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Revisions in Estimates Revisions in Estimates (Policies)

9 Months Ended

Sep. 30, 2012

Revisions in Estimates [Abstract]

Revision in Estimate Method [Policy Text Block]

Our profit recognition related to construction contracts is based on estimates of costs to complete each project. These estimates can vary in the normal course of business as projects progress and uncertainties are resolved. We do not recognize revenue on contract change orders or claims until we have a signed agreement; however, we do recognize costs as incurred and revisions to estimated total costs as soon as the obligation to perform is determined. Approved change orders and claims, as well as changes in related estimates of costs to complete, are considered revisions in estimates. We use the cumulative catch-up method applicable to construction contract accounting to account for revisions in estimates. Under this option, revisions in estimates are accounted for in their entirety in the period of change.

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Construction and Line Item Joint Ventures - Unconsolidated Construction Joint Ventures (Details) (USD $)	3 Months Ended						6 Months Ended		9 Months Ended
	Sep. 30, 2012		Jun. 30, 2012		Sep. 30, 2011		Jun. 30, 2012		Sep. 30, 2012		Sep. 30, 2011		Dec. 31, 2011
Construction Joint Venture [Line Items]
Equity in construction joint ventures	$ 97,890,000				$ 97,415,000				$ 97,890,000		$ 97,415,000		$ 101,029,000
Line Item Joint Venture [Member]
Construction Joint Venture [Line Items]
Number of Active Joint Venture Projects	5								5
Partnership Interest [Member] | Unconsolidated Construction Joint Venture [Member]
Construction Joint Venture [Line Items]
Revenue Remaining to be Recognized on Unconsolidated Construction Joint Ventures	1,600,000,000								1,600,000,000
Joint Venture Consolidated [Member] | Consolidated Construction Joint Venture [Member]
Construction Joint Venture [Line Items]
Number of Active Joint Venture Projects	2								2
Joint Venture Unconsolidated [Member] | Unconsolidated Construction Joint Venture [Member]
Construction Joint Venture [Line Items]
Number of Active Joint Venture Projects	8								8
Unconsolidated Construction Joint Venture Revenue	286,308,000	[1]	284,095,000	[1]	243,654,000	[1]	489,926,000	[1]	776,235,000	[1]	667,920,000	[1]
Unconsolidated Construction Joint Venture Cost of Revenue	200,688,000	[1]	227,389,000	[1]	212,485,000	[1]	397,001,000	[1]	597,689,000	[1]	546,495,000	[1]
Reporting Entitys Interest in Joint Venture [Member] | Unconsolidated Construction Joint Venture [Member]
Construction Joint Venture [Line Items]
Unconsolidated Construction Joint Venture Assets	224,748,000				243,425,000				224,748,000		243,425,000		238,603,000
Unconsolidated Construction Joint Venture Liabilities	126,858,000				146,010,000				126,858,000		146,010,000		137,574,000
Unconsolidated Construction Joint Venture Revenue	104,629,000				85,575,000				278,492,000		219,563,000
Unconsolidated Construction Joint Venture Cost of Revenue	70,848,000				71,979,000				208,518,000		175,630,000
Unconsolidated Construction Joint Venture Gross Profit Loss	33,781,000				13,596,000				69,974,000		43,933,000
Revenue Remaining to be Recognized on Unconsolidated Construction Joint Ventures	600,000,000								600,000,000
Other Partners Interest in Partnerships [Member] | Unconsolidated Construction Joint Venture [Member]
Construction Joint Venture [Line Items]
Unconsolidated Construction Joint Venture Assets	353,165,000				378,523,000				353,165,000		378,523,000		364,979,000
Unconsolidated Construction Joint Venture Liabilities	219,807,000				251,091,000				219,807,000		251,091,000		236,746,000
Unconsolidated Construction Joint Venture Revenue	181,679,000	[1],[2]	183,861,000	[1],[2]	158,079,000	[1],[2]	316,064,000	[1],[2]	497,743,000	[1],[2]	448,357,000	[1],[2]
Unconsolidated Construction Joint Venture Cost of Revenue	129,840,000	[1],[2]	150,091,000	[1],[2]	140,506,000	[1],[2]	259,331,000	[1],[2]	389,171,000	[1],[2]	370,865,000	[1],[2]
Revenue Remaining to be Recognized on Unconsolidated Construction Joint Ventures	1,000,000,000								1,000,000,000
Minimum [Member] | Line Item Joint Venture [Member]
Construction Joint Venture [Line Items]
Revenue Per Project Remaining to be Recognized on Line Item Construction Joint Ventures	2,500,000								2,500,000
Minimum [Member] | Joint Venture Consolidated [Member] | Consolidated Construction Joint Venture [Member]
Construction Joint Venture [Line Items]
Construction Contract Value	245,100,000								245,100,000
Proportionate Share of the Consolidated Joint Ventures Equity Owned by or Beneficial Interest in the Reporting Entity Directly or Indirectly	45.00%								45.00%
Minimum [Member] | Joint Venture Unconsolidated [Member] | Unconsolidated Construction Joint Venture [Member]
Construction Joint Venture [Line Items]
Construction Contract Value	59,400,000								59,400,000
Proportionate Share of the Consolidated Joint Ventures Equity Owned by or Beneficial Interest in the Reporting Entity Directly or Indirectly	20.00%								20.00%
Minimum [Member] | Joint Venture Unconsolidated [Member] | Line Item Joint Venture [Member]
Construction Joint Venture [Line Items]
Construction Contract Value	42,000,000								42,000,000
Minimum [Member] | Reporting Entitys Interest in Joint Venture [Member] | Unconsolidated Construction Joint Venture [Member]
Construction Joint Venture [Line Items]
Revenue Remaining to be Recognized on Unconsolidated Construction Joint Ventures	400,000								400,000
Minimum [Member] | Reporting Entitys Interest in Joint Venture [Member] | Line Item Joint Venture [Member]
Construction Joint Venture [Line Items]
Construction Contract Value	21,900,000								21,900,000
Maximum [Member] | Joint Venture Consolidated [Member] | Consolidated Construction Joint Venture [Member]
Construction Joint Venture [Line Items]
Construction Contract Value	334,300,000								334,300,000
Proportionate Share of the Consolidated Joint Ventures Equity Owned by or Beneficial Interest in the Reporting Entity Directly or Indirectly	60.00%								60.00%
Maximum [Member] | Joint Venture Unconsolidated [Member] | Unconsolidated Construction Joint Venture [Member]
Construction Joint Venture [Line Items]
Construction Contract Value	1,200,000,000								1,200,000,000
Proportionate Share of the Consolidated Joint Ventures Equity Owned by or Beneficial Interest in the Reporting Entity Directly or Indirectly	50.00%								50.00%
Maximum [Member] | Joint Venture Unconsolidated [Member] | Line Item Joint Venture [Member]
Construction Joint Venture [Line Items]
Construction Contract Value	133,200,000								133,200,000
Revenue Per Project Remaining to be Recognized on Line Item Construction Joint Ventures	29,000,000								29,000,000
Maximum [Member] | Reporting Entitys Interest in Joint Venture [Member] | Unconsolidated Construction Joint Venture [Member]
Construction Joint Venture [Line Items]
Revenue Remaining to be Recognized on Unconsolidated Construction Joint Ventures	186,600,000								186,600,000
Maximum [Member] | Reporting Entitys Interest in Joint Venture [Member] | Line Item Joint Venture [Member]
Construction Joint Venture [Line Items]
Construction Contract Value	55,700,000								55,700,000
Cash and Cash Equivalents [Member] | Joint Venture Unconsolidated [Member] | Unconsolidated Construction Joint Venture [Member]
Construction Joint Venture [Line Items]
Unconsolidated Construction Joint Venture Assets	304,065,000	[3]			356,399,000	[3]			304,065,000	[3]	356,399,000	[3]	338,681,000	[3]
Other Assets, Current and Longterm [Member] | Joint Venture Unconsolidated [Member] | Unconsolidated Construction Joint Venture [Member]
Construction Joint Venture [Line Items]
Unconsolidated Construction Joint Venture Assets	273,848,000				265,549,000				273,848,000		265,549,000		264,901,000
Accounts Payable [Member] | Joint Venture Unconsolidated [Member] | Unconsolidated Construction Joint Venture [Member]
Construction Joint Venture [Line Items]
Unconsolidated Construction Joint Venture Liabilities	94,788,000				85,602,000				94,788,000		85,602,000		85,075,000
Billings in Excess of Costs and Estimated Earnings [Member] | Joint Venture Unconsolidated [Member] | Unconsolidated Construction Joint Venture [Member]
Construction Joint Venture [Line Items]
Unconsolidated Construction Joint Venture Liabilities	243,578,000	[3]			302,039,000	[3]			243,578,000	[3]	302,039,000	[3]	280,650,000	[3]
Accrued Liabilities [Member] | Joint Venture Unconsolidated [Member] | Unconsolidated Construction Joint Venture [Member]
Construction Joint Venture [Line Items]
Unconsolidated Construction Joint Venture Liabilities	8,299,000				9,460,000				8,299,000		9,460,000		8,595,000
Scenario, Previously Reported [Member] | Joint Venture Unconsolidated [Member] | Unconsolidated Construction Joint Venture [Member]
Construction Joint Venture [Line Items]
Unconsolidated Construction Joint Venture Revenue			663,536,000	[1]			869,368,000	[1]
Unconsolidated Construction Joint Venture Cost of Revenue			544,838,000	[1]			714,450,000	[1]
Scenario, Previously Reported [Member] | Other Partners Interest in Partnerships [Member] | Unconsolidated Construction Joint Venture [Member]
Construction Joint Venture [Line Items]
Unconsolidated Construction Joint Venture Revenue			563,302,000	[1],[2]			695,505,000	[1],[2]
Unconsolidated Construction Joint Venture Cost of Revenue			$ 467,540,000	[1],[2]			$ 576,780,000	[1],[2]

[1] 1While Granite’s interest in revenue, cost of revenue and gross profit were correctly stated, total and partners’ interest for revenue and cost of revenue for the three and six month periods ended June 30, 2012 were inadvertently misstated in our Quarterly Report for the quarter ended June 30, 2012. Total revenue, partner’s interest in revenue, total cost of revenue and partners’ interest in cost of revenue reported was (in thousands): $663,536, $563,302, $544,838 and $467,540, respectively, for the three months ended June 30, 2012, and $869,368, $695,505, $714,450 and $576,780, respectively, for the six months ended June 30, 2012. Total revenue, partner’s interest in revenue, total cost of revenue and partners’ interest in cost of revenue should have been (in thousands): $284,095, $183,861, $227,389, and $150,091, respectively, for the three months ended June 30, 2012, and $489,926, $316,064, $397,001, and $259,331, respectively, for the six months ended June 30, 2012.

[2] 2Partners’ interest represents amounts to reconcile total revenue and total cost of revenue as reported by our partners to Granite’s interest, adjusted to reflect our accounting policies.

[3] The volume and stage of completion of contracts from our unconsolidated construction joint ventures may cause fluctuations in cash and cash equivalents, as well as billings in excess of costs and estimated earnings between periods.

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Revisions in Estimates (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Change in Accounting Estimate [Line Items]
Financial Effect on Future Periods	$ 0		$ 0
Amount Considered Significant on Individual Project Gross Profit	1,000,000	1,000,000	1,000,000	1,000,000
Construction [Member]
Change in Accounting Estimate [Line Items]
Increase (Decrease) on Project Profitability	(6,000,000)	(1,300,000)	(9,400,000)	1,600,000
Contracts Accounted for under Percentage of Completion [Member] | Large Project Construction [Member]
Change in Accounting Estimate [Line Items]
Increase (Decrease) on Project Profitability	35,900,000	2,700,000	48,900,000	7,900,000
Contracts Accounted for under Percentage of Completion [Member] | Large Project Construction [Member] | Noncontrolling Interest [Member]
Change in Accounting Estimate [Line Items]
Increase (Decrease) on Project Profitability	5,700,000	1,000,000	6,600,000	600,000
Upward Estimate Change [Member] | Construction [Member]
Change in Accounting Estimate [Line Items]
Number of Projects with Estimate Changes	1	2	4	4
Increase (Decrease) on Project Profitability	1,600,000	2,700,000	7,100,000	7,000,000
Upward Estimate Change [Member] | Construction [Member] | Minimum [Member]
Change in Accounting Estimate [Line Items]
Range Of Effect On Gross Profit	1,600,000	1,300,000	1,000,000	1,100,000
Upward Estimate Change [Member] | Construction [Member] | Maximum [Member]
Change in Accounting Estimate [Line Items]
Range Of Effect On Gross Profit	1,600,000	1,400,000	3,000,000	2,900,000
Upward Estimate Change [Member] | Large Project Construction [Member]
Change in Accounting Estimate [Line Items]
Number of Projects with Estimate Changes	8	5	8	6
Increase (Decrease) on Project Profitability	35,900,000	8,800,000	54,700,000	17,700,000
Upward Estimate Change [Member] | Large Project Construction [Member] | Minimum [Member]
Change in Accounting Estimate [Line Items]
Range Of Effect On Gross Profit	1,100,000	1,000,000	1,100,000	1,400,000
Upward Estimate Change [Member] | Large Project Construction [Member] | Maximum [Member]
Change in Accounting Estimate [Line Items]
Range Of Effect On Gross Profit	12,600,000	2,600,000	16,300,000	4,200,000
Downward Estimate Change [Member] | Construction [Member]
Change in Accounting Estimate [Line Items]
Number of Projects with Estimate Changes	4	2	6	3
Increase (Decrease) on Project Profitability	(7,600,000)	(4,000,000)	(16,500,000)	(5,400,000)
Downward Estimate Change [Member] | Construction [Member] | Minimum [Member]
Change in Accounting Estimate [Line Items]
Range Of Effect On Gross Profit	(1,100,000)	(1,400,000)	(1,100,000)	(1,400,000)
Downward Estimate Change [Member] | Construction [Member] | Maximum [Member]
Change in Accounting Estimate [Line Items]
Range Of Effect On Gross Profit	(3,900,000)	(2,600,000)	(6,300,000)	(2,600,000)
Downward Estimate Change [Member] | Large Project Construction [Member]
Change in Accounting Estimate [Line Items]
Number of Projects with Estimate Changes	0	3	2	2
Increase (Decrease) on Project Profitability	0	(6,100,000)	(5,800,000)	(9,800,000)
Downward Estimate Change [Member] | Large Project Construction [Member] | Minimum [Member]
Change in Accounting Estimate [Line Items]
Range Of Effect On Gross Profit	0	(1,700,000)	(1,700,000)	(4,200,000)
Downward Estimate Change [Member] | Large Project Construction [Member] | Maximum [Member]
Change in Accounting Estimate [Line Items]
Range Of Effect On Gross Profit	$ 0	$ (2,400,000)	$ (4,100,000)	$ (5,600,000)

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CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Revenue
Construction	$ 385,744	$ 431,101	$ 748,803	$ 784,393
Large project construction	255,918	213,320	648,645	513,478
Construction materials	86,782	83,171	175,754	165,083
Sales of Real Estate	38	986	5,055	7,029
Total revenue	728,482	728,578	1,578,257	1,469,983
Cost of revenue
Construction	352,471	372,561	688,989	696,911
Large project construction	198,104	187,763	540,343	443,965
Construction materials	76,798	73,617	166,720	154,329
Real estate	10	744	4,254	5,941
Total cost of revenue	627,383	634,685	1,400,306	1,301,146
Gross profit	101,099	93,893	177,951	168,837
Selling, general and administrative expenses	41,280	39,112	125,274	121,277
Gain on sales of property and equipment	1,622	5,598	6,493	11,572
Operating income	61,441	60,379	59,170	59,132
Other income (expense)
Interest income	485	476	2,140	2,295
Interest expense	(2,561)	(3,418)	(8,570)	(7,653)
Equity in income of affiliates	1,481	1,881	380	1,443
Other income (expense), net	2,013	(1,833)	3,866	(1,951)
Total other income (expense)	1,418	(2,894)	(2,184)	(5,866)
Income before provision for income taxes	62,859	57,485	56,986	53,266
Provision for income taxes	17,113	15,109	15,440	11,973
Net income	45,746	42,376	41,546	41,293
Amount attributable to noncontrolling interests	(8,625)	(5,908)	(14,249)	(8,886)
Net income attributable to Granite Construction Incorporated	$ 37,121	$ 36,468	$ 27,297	$ 32,407
Net income per share attributable to common shareholders (see Note 14)
Basic	$ 0.96	$ 0.94	$ 0.71	$ 0.84
Diluted	$ 0.94	$ 0.93	$ 0.70	$ 0.83
Weighted average shares of common stock
Basic	38,518	38,172	38,418	38,092
Diluted	39,141	38,598	39,013	38,428
Dividends per common share	$ 0.13	$ 0.13	$ 0.39	$ 0.39

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Marketable Securities

9 Months Ended

Sep. 30, 2012

Marketable Securities [Abstract]

Marketable Securities [Table Text Block]

Marketable Securities

All marketable securities were classified as held-to-maturity for the dates presented and the carrying amounts of held-to-maturity securities were as follows:

(in thousands)	September 30, 2012		December 31, 2011		September 30, 2011
U.S. Government and agency obligations	$	15,062	$	40,240	$	40,218
Commercial paper	19,976		24,980		29,978
Municipal bonds	7,082		2,057		4,036
Corporate bonds	5,065		3,131		3,157
Total short-term marketable securities	47,185		70,408		77,389
U.S. Government and agency obligations	36,103		65,109		45,268
Municipal bonds	1,699		8,909		8,952
Corporate bonds	—		5,232		5,289
Total long-term marketable securities	37,802		79,250		59,509
Total marketable securities	$	84,987	$	149,658	$	136,898

Scheduled maturities of held-to-maturity investments were as follows (in thousands):

September 30, 2012
Due within one year	$	47,185
Due in one to five years	37,802
Total	$	84,987

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Earnings Per Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Earnings Per Share, Basic, Two Class Method [Abstract]
Net income attributable to Granite, Earnings Per Share, Basic	$ 37,121	$ 36,468	$ 27,297	$ 32,407
Participating Securities, Distributed and Undistributed Earnings	181	469	184	491
Net Income (Loss) Available to Common Stockholders, Basic	36,940	35,999	27,113	31,916
Weighted Average Number of Shares Outstanding, Basic	38,518	38,172	38,418	38,092
Net income (loss) per share, basic	$ 0.96	$ 0.94	$ 0.71	$ 0.84
Earnings Per Share, Diluted, Two Class Method [Abstract]
Net income attributable to Granite, Earnings per Share, Diluted	37,121	36,468	27,297	32,407
Undistributed Earnings Allocated to Participating Securities	178	462	181	487
Net Income (Loss) Available to Common Stockholders, Diluted	$ 36,943	$ 36,006	$ 27,116	$ 31,920
Weighted average common shares outstanding, diluted	39,141	38,598	39,013	38,428
Net income (loss) per share, diluted	$ 0.94	$ 0.93	$ 0.70	$ 0.83

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Receivables, Net Accounts Receivable Policy (Policies)

9 Months Ended

Sep. 30, 2012

5. Receivables, Net [Abstract]

Retention Receivable Policy [Policy Text Block]

Non-escrow retention receivables are amounts that the project owner has contractually withheld that will be paid upon owner acceptance of contract completion. We evaluate our non-escrow retention receivables for collectability using certain customer information that includes the following:

• Federal - includes federal agencies such as the Bureau of Reclamation, the Army Corp of Engineers, and the Bureau of Indian Affairs. The obligations of these agencies are backed by the federal government. Consequently, there is minimal risk of not collecting the amounts we are entitled to receive.    

• State - primarily state departments of transportation. The risk of not collecting on these accounts is small; however, we have experienced occasional delays in payment as states have struggled with budget issues.

• Local - these customers include local agencies such as cities, counties and other local municipal agencies. The risk of not collecting on these accounts is small; however, we have experienced occasional delays in payment as some local agencies have struggled to deal with budget issues.       

• Private - includes individuals, developers and corporations. The majority of our collection risk is associated with these customers. We perform ongoing credit evaluations of our customers and generally do not require collateral, although the law provides us certain remedies, including, but not limited to, the ability to file mechanics’ liens on real property improved for private customers in the event of non-payment by such customers.

Accounts Receivable Collection Policy [Policy Text Block]

We regularly review our accounts receivable, including past due amounts, to determine their probability of collection. If it is probable that an amount is uncollectible, it is charged to bad debt expense and a corresponding reserve is established in allowance for doubtful accounts. If it is deemed certain that an amount is uncollectible, the amount is written off. Based on contract terms, non-escrow retention receivables are typically due within 60 days of owner acceptance of contract completion. We consider retention amounts beyond 60 days of owner acceptance of contract completion to be past due.

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2012

Earnings Per Share [Abstract]

Schedule of Earnings Per Share Reconciliation [Table Text Block]

The following is a reconciliation of net income attributable to Granite and related weighted average shares of common stock outstanding for purposes of calculating basic and diluted net income per share using the two-class method:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share amounts)	2012		2011		2012		2011
Basic
Numerator:
Net income attributable to Granite	$	37,121	$	36,468	$	27,297	$	32,407
Less: net income allocated to participating securities	181		469		184		491
Net income allocated to common shareholders for basic calculation	$	36,940	$	35,999	$	27,113	$	31,916
Denominator:
Weighted average common shares outstanding, basic	38,518		38,172		38,418		38,092
Net income per share, basic	$	0.96	$	0.94	$	0.71	$	0.84
Diluted
Numerator:
Net income attributable to Granite	$	37,121	$	36,468	$	27,297	$	32,407
Less: net income allocated to participating securities	178		462		181		487
Net income allocated to common shareholders for diluted calculation	$	36,943	$	36,006	$	27,116	$	31,920
Denominator:
Weighted average common shares outstanding, diluted	39,141		38,598		39,013		38,428
Net income per share, diluted	$	0.94	$	0.93	$	0.70	$	0.83

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Earnings Per Share

9 Months Ended

Sep. 30, 2012

Earnings Per Share [Abstract]

Earnings Per Share [Text Block]

Earnings Per Share

We calculate earnings per share (“EPS”) under the two-class method by allocating earnings to both common shares and unvested restricted stock which are considered participating securities. However, net losses are not allocated to participating securities for purposes of computing EPS under the two-class method. The following is a reconciliation of net income attributable to Granite and related weighted average shares of common stock outstanding for purposes of calculating basic and diluted net income per share using the two-class method:

	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except per share amounts)	2012		2011		2012		2011
Basic
Numerator:
Net income attributable to Granite	$	37,121	$	36,468	$	27,297	$	32,407
Less: net income allocated to participating securities	181		469		184		491
Net income allocated to common shareholders for basic calculation	$	36,940	$	35,999	$	27,113	$	31,916
Denominator:
Weighted average common shares outstanding, basic	38,518		38,172		38,418		38,092
Net income per share, basic	$	0.96	$	0.94	$	0.71	$	0.84
Diluted
Numerator:
Net income attributable to Granite	$	37,121	$	36,468	$	27,297	$	32,407
Less: net income allocated to participating securities	178		462		181		487
Net income allocated to common shareholders for diluted calculation	$	36,943	$	36,006	$	27,116	$	31,920
Denominator:
Weighted average common shares outstanding, diluted	39,141		38,598		39,013		38,428
Net income per share, diluted	$	0.94	$	0.93	$	0.70	$	0.83