Exhibit 10.1

UNDERWRITING, CONTINUING INDEMNITY AND SECURITY AGREEMENT

      THIS UNDERWRITING, CONTINUING INDEMNITY AND SECURITY AGREEMENT entered
into as of the 14th day of March, 2005, by QUANTA SERVICES, INC., a Delaware
corporation, and certain of its Affiliates and Subsidiaries identified on
Exhibit A, in their capacity as named Principal under any Bond and Indemnitors,
in favor of FEDERAL INSURANCE COMPANY, an Indiana corporation. All capitalized
terms will have the meaning set out in Section 1.

W I T N E S S E T H:

      WHEREAS, Principal, operating through certain of its Affiliates and
Subsidiaries, is engaged in the business, among other things, of providing
specialized contracting services, including design, construction, maintenance,
installation and repair of network infrastructures for electric power,
telecommunications, broadband cable and gas pipelines systems;

      WHEREAS, Indemnitors recognize that bonds may be a necessary and desirable
adjunct to the business done and to be done by Principal that will directly
benefit Indemnitors and desire to accommodate the financial, security,
indemnity, exoneration, and other requirements of Surety as an inducement to
Surety to become surety upon obligations of Principal, and have therefore agreed
to be bound by this Agreement and have agreed to exercise their best efforts to
permit and require any Indemnitor to honor and perform all of the applicable
terms of this Agreement and the other Surety Credit Documents;

      WHEREAS, each of Indemnitors has determined that execution, delivery, and
performance of this Agreement by Indemnitors will inure directly to the benefit
of Indemnitors and is in the best interest of Indemnitors;

      WHEREAS, upon the express condition that this Agreement be executed,
Surety has executed or procured or will execute or procure the execution of the
Bonds, and Surety may continue previously executed Bonds and may forbear
cancellation of such Bonds in Surety’s sole and absolute discretion but only to
the extent provided for in such Bonds or permitted by law; and

      WHEREAS, Surety has agreed to act as surety or procure surety bonds for
Principal, subject to the understanding of the parties that Surety is under no
obligation to act as surety for every bond of Principal, and that Principal is
under no obligation to obtain bonds from Surety.

      NOW, THEREFORE, in consideration of the mutual agreements set forth
herein, the parties agree and bind ourselves, and our respective successors and
assigns, jointly and severally (except as herein provided otherwise), as
follows:

      1. Definitions. For the purposes of this Agreement, the following terms
will have the meanings listed below:

 

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      “Accounts” means and includes all of Indemnitors’ now owned or hereafter
acquired accounts (as defined in the UCC) and (whether included in such
definition) accounts receivable, and proceeds, including without limitation, all
insurance proceeds, proceeds of any letter of credit on which any Indemnitor is
a beneficiary, but only to the extent such accounts, accounts receivable, and
proceeds arise pursuant to a Bonded Contract, including, but not limited to
Retainage, and all forms of obligations whatsoever owing to any Indemnitor under
instruments and documents of title constituting the foregoing or proceeds
thereof; and all rights, securities, and guarantees with respect to each of the
foregoing. In no event shall “Accounts” or the proceeds thereof include
accounts, accounts receivable, contract rights, insurance proceeds, or proceeds
of any letter of credit of which any Indemnitor is a beneficiary to the extent
such assets arise from contracts other than “Bonded Contracts.”

      “Affiliate” means, with respect to any Person, any other Person or group
acting in concert with respect of such Person that, directly or indirectly,
through one or more intermediaries, controls, or is controlled by, or is under
the common control with such Person. For purposes of this definition, “control”
(including, with correlative meanings, the terms “controlled by” and “under
common control with”), as used with respect to any Person or group of Persons,
means the possession, directly or indirectly, of the power to direct or cause
the direction of management and policies of such Person, whether through the
ownership of voting securities or by contract or otherwise. Each of Indemnitors
is an Affiliate of each other of Indemnitors. None of Indemnitors is an
Affiliate of Surety.

      “Agreement” or “this Agreement” means this Underwriting, Continuing
Indemnity and Security Agreement as it may be amended, modified or supplemented
from time to time.

      “Bank Credit Document” means and includes that certain Credit Agreement,
dated as of December 19, 2003, among Quanta Services, Inc., as borrower, certain
Subsidiaries and Affiliates of the borrower as the guarantors, the lenders from
time to time party thereto and Bank of America, N.A., as administrative agent
for the lenders, together with all other loan documents, agreements, hedging
agreements, bank product, or treasury management agreements and other
instruments entered into or delivered in connection therewith (including,
without limitation, any and all security agreements, pledge agreements, letters
of credit, notes and other collateral documents of any nature), as amended,
modified, supplemented and extended from time to time, and any renewals,
restatements or replacements of any of the foregoing.

      “Bankruptcy Code” means Title 11 of the United States Code entitled
“Bankruptcy,” as now and hereafter in effect, or successor statute.

      “Bonded Contract” means any existing or future contract in respect of
which any Bond is issued on behalf of any Principal or Island Mechanical,
Hawaii.

      “Bonded Contract Balances” means all payments made, or to be made, to or
on behalf of any Principal pursuant to or arising out of any Bonded Contract,
including, without limitation, whether earned and unpaid or to be earned,
Retainage, increases in contract amounts and payments made, or to be made, as a
result of affirmative claims, including, but not limited to, claims against
Obligees, design professionals (including, but not limited to architects and

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engineers), certified public accountants, subcontractors, laborers, materialmen,
and against any of their sureties, including, without limitation, changed
condition claims or wrongful termination claims.

      “Bonds” means any surety agreements, undertakings, or instruments of
guarantee signed by Surety on behalf of any Principal, Island Mechanical,
Hawaii, or Foreign Subsidiary, whether executed before or after the execution of
this Agreement.

      “Collateral” means the Bonded Contracts and other collateral described in
Section 6.

      “Debt” means, as of any applicable date of determination and as to any
Person, without duplication, all items of indebtedness, obligation, or liability
of such Person, whether matured or unmatured, liquidated or unliquidated, direct
or indirect, absolute or contingent, joint or several, that would be classified
and presented as a liability on a balance sheet prepared in accordance with
GAAP.

      “Default Rate” means on each day of its determination the prime rate
reflected in the Money Rates section of The Wall Street Journal plus two percent
(2%).

      “Domestic Subsidiary” means any Subsidiary of Quanta Services, Inc. that
is organized under the laws of any political subdivision of the United States.

      “Equipment” means all of Indemnitors now owned or hereafter acquired
right, title, and interest with respect to equipment (as defined in the UCC) and
(whether or not included in such definition) all tangible property including all
retail store, storage, office, computer, or facility equipment and other retail,
manufacturing, and research items, computer hardware, all vehicles, goods,
machinery, chattels, tools, dies, machine tools, furniture, furnishing,
fixtures, and supplies, of every nature, wherever located, all additions,
accessories, and improvements thereto and substitutions therefor and all
accessories, parts, and equipment which may be attached to or which are
necessary for the operation and use of such personal property or fixtures,
whether or not the same will be deemed to be affixed to, arise out of, or relate
to any real property, together with all accessions thereto. For avoidance of
doubt, “Equipment” is not intended to and does not include any Licensed
Property.

      “Event of Default” means any one or more of the following:

      (a) Principal, Indemnitors, or any of them have failed or refused in a
material respect to perform any obligation under this Agreement or any other
Surety Credit Document on its part to be performed in accordance with the terms
of this Agreement or any applicable Surety Credit Document; provided, however,
the foregoing will not be deemed an Event of Default hereunder if such failure
or refusal is curable and such cure is effected within ten (10) days following
the earlier of (i) receipt by Indemnitors of notice from Surety of any such
failure or refusal, or (ii) knowledge by Indemnitors of the occurrence of any
such failure or refusal; or

      (b) any representation or warranty made or deemed made by any Indemnitor
in this Agreement or any other Surety Credit Document, or which is contained in
any certificate,

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document, opinion, or financial or other statement furnished under or in
connection with any Surety Credit Document, proves to have been incorrect in a
material respect on or as of the date made or deemed made; provided, however,
Principal will have the right to cure an Event of Default under this item (b) by
delivering to Surety cash or a letter of credit in a form and issued by a
financial institution acceptable to Surety in its sole and absolute discretion
(it being agreed that the form and issuer of the Letter of Credit referred to in
Section 5 will be acceptable to Surety) in an amount designated by Surety, in
its sole and absolute discretion, within ten (10) days of written demand having
been made by Surety for such delivery. In the event that Surety determines it is
obligated to discharge any performance Bond claim before making such demand (or
the expiration of such ten (10) day period), said action will not operate as a
defense to Surety’s rights under this Agreement; provided further, however, that
such action by Surety will not result in an Event of Default under this
Agreement if Indemnitors fully indemnify Surety within ten (10) days of receipt
of any demand by Surety for such indemnification; or

      (c) with respect to a Bond issued for an Obligee, (i) an Obligee under a
Bonded Contract has declared any Principal or Island Mechanical, Hawaii to be in
default under such Bonded Contract and such Principal or Island Mechanical,
Hawaii has failed to cure such default within any cure period provided in such
Bonded Contract or (ii) any Principal or Island Mechanical, Hawaii has
acknowledged its default under any Bonded Contract irrespective of whether such
Principal or Island Mechanical, Hawaii is actually in default of the Bonded
Contract. It will be no defense to the enforcement of this Agreement by Surety
that any Principal or Island Mechanical, Hawaii asserts that it is not in
default under the Bonded Contract; or

      (d) Surety incurs any Surety Loss (excluding items payable pursuant to
paragraph (b) of the definition of Surety Loss and other attorneys fees and
similar fees and professional fees incurred in the ordinary course of business
that are promptly reimbursed to Surety by Indemnitors); provided, however,
Principal will have the right to cure an Event of Default under this item (d) by
delivering to Surety cash or a letter of credit in a form and issued by a
financial institution acceptable to Surety in its sole and absolute discretion
(it being agreed that the form and issuer of the Letter of Credit referred to in
Section 5 will be acceptable to Surety) in an amount designated by Surety, in
its sole and absolute discretion, within ten (10) days of written demand having
been made by Surety for such delivery; or

      (e) if Surety establishes a Reserve in any amount to cover any anticipated
or actual loss on any Bond; provided, however, Principal and Indemnitors will
have the right to cure any such Event of Default under this item (e) by
delivering to Surety cash in an amount equal to such Reserve so established
(which amount Surety will specify to Indemnitors by written notice in reasonable
detail) within ten (10) days of such written notice having been made by Surety;
or

      (f) any Principal or Island Mechanical, Hawaii has failed or refused to
pay when due or is unable to pay when due claims, bills, or other Debt incurred
in, or in connection with, the performance of any Bonded Contract, and Principal
or Island Mechanical, Hawaii has failed to deliver to Surety an amount
sufficient to discharge any claim or demand made against Surety with respect to
such Bond within ten (10) days of written demand having been duly made on
Indemnitors by Surety in respect of such claim or demand. In the event that
Surety determines it is obligated to

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discharge any Bond claim before the foregoing demand by Surety is made on
Indemnitors, said action will not operate as a defense against any of Surety’s
rights under this Agreement; provided, however, that such action by Surety will
not result in an Event of Default under this Agreement if Indemnitors fully
indemnify Surety within ten (10) days of receipt of any demand by Surety for
indemnification in respect of all such amounts incurred in respect of such
action; or

      (g) Principal defaults under any banking facility or other credit
agreement to which Principal is a party in respect of any Debt having an
aggregate principal amount of more than Two Million Dollars ($2,000,000) which
results in (i) acceleration of the Debt thereunder, (ii) the foreclosure or
notice of foreclosure by the lenders thereunder or applicable agent on behalf of
such lenders of the collateral that secures such Debt thereunder; or (iii) such
lenders otherwise materially limiting the availability of the credit facility
for the business operations of Principal; or

      (h) the commencement of proceedings in bankruptcy, or for reorganization
of any Principal or Indemnitors, or for the readjustment of Debt of any
Principal or Indemnitors, in each case under the Bankruptcy Code, or any part
thereof, or under any other laws, whether state or federal, for the relief of
debtors, now or hereafter existing, by or against any Principal or Indemnitors
and any such proceedings commenced against any Principal or Indemnitors are not
dismissed, discharged, or stayed within sixty (60) days of filing; or

      (i) the appointment of a receiver or trustee for any Principal or
Indemnitors or for any substantial part of their assets, or the institution by a
Person other than any Principal or any Indemnitor or any Person acting on their
behalf of any proceedings for the dissolution or the full or partial liquidation
of any Principal or Indemnitors and such proceedings are not dismissed,
discharged, or stayed within sixty (60) days of filing, or any of Principal or
Quanta Services, Inc. will discontinue their business or materially change the
nature of their business; provided, however, that no Event of Default will occur
pursuant to this item (i) as a result of any discontinuance of or change in the
business of any Indemnitor (other than Quanta Services, Inc.) occurring in
connection with any transaction solely between or among any Indemnitors; or

      (j) any of Principal or any Indemnitor allows a judgment creditor to
obtain possession of any of the Collateral by any means, including, but without
limitation, levy, distraint, replevin, or self-help, and such possession
continues for five (5) days after written notice thereof to Principal and
Indemnitors from Surety; provided, however, Principal will have the right to
cure an Event of Default under this item (j) by delivering to Surety cash in an
amount designated by Surety, in its sole and absolute discretion, within ten
(10) days of written demand having been made by Surety for such delivery.

      “Foreign Subsidiary” means any Subsidiary of Quanta Services, Inc. that is
not a Domestic Subsidiary.

      “GAAP” means generally accepted accounting principles in the United States
of America, as 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,
consistently applied.

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      “Identified Equipment” means, whether owned or leased, any and all
(i) boom-mountable robotic arms and (ii) if one or more Bonds is in effect for
the benefit of H.L. Chapman Pipeline Construction, Inc., such company’s
following rock trenching equipment: (a) Astec Model 3000SM surface miner (two
units); (b) Trencor Model 1860HD trencher (two units); and (c) Trencor Model
1760HD trencher (two units).

      “Indebtedness” means, without duplication, any and all Surety Loss, and
the payment and performance of all other obligations and undertakings now or
hereafter owing to Surety with respect to the Bonds and/or under the Surety
Credit Documents, as same may now or hereafter be modified, replaced, extended,
or renewed, in accordance with their terms.

      “Indemnitors” means Quanta Services, Inc., a Delaware corporation, and
Principal. In addition, any parent of Principal (exclusive of any Joint Venture)
and any other Person that owns an equity interest in Principal (exclusive of any
Joint Venture), their successors and assigns, will be deemed to be an Indemnitor
under this Agreement. Thereafter, said parent of Principal (exclusive of any
Joint Venture) and any other Person that owns an equity interest in Principal
(exclusive of any Joint Venture), their successors and assigns, will be deemed
to be an Indemnitor hereunder as though they were original signatories hereto.
Notwithstanding the foregoing or anything in this Agreement or any or any other
Surety Credit Document to the contrary, in no event will any parent,
shareholder, or other equity holder of any nature in Quanta Services, Inc. be or
be deemed to be an Indemnitor for any purpose under this Agreement. The
exclusion of any parent, shareholder, or other equity holder of Quanta Services,
Inc. as an Indemnitor for the purposes of this Agreement will not limit the
indemnity obligations of any parent, shareholder, or other equity holder as may
be agreed by any such parent, shareholder, or other equity holder in any
agreement entered into by any such parent, shareholder, or other equity holder.
Notwithstanding the foregoing or anything in this Agreement or any other Surety
Credit Document (exclusive of any Surety Credit Document executed by any Foreign
Subsidiary or Joint Venture) to the contrary, in no event will any Foreign
Subsidiary or Joint Venture be an Indemnitor. The exclusion of Foreign
Subsidiaries and Joint Ventures as Indemnitors for the purposes of this
Agreement will not limit the indemnity obligations of any Foreign Subsidiary or
any Joint Venture as may be agreed to by such Foreign Subsidiary or such Joint
Venture in any agreement entered into by such Foreign Subsidiary or such Joint
Venture.

      “Indemnity Agreement” means that certain General Agreement of Indemnity
dated December 2, 1999, executed by Quanta Services, Inc., on its behalf and on
behalf of any of its subsidiaries or on behalf of any subsidiary of a subsidiary
or successive subsidiaries, direct or indirect, now existing or hereafter
created, in favor of Surety.

      “Inventory” means and includes all of Indemnitors’ now owned and hereafter
acquired inventory, including, without limitation, goods, merchandise, and other
personal property furnished under any contract of service, Bonded Contract, or
intended for sale or lease, all raw materials, work in process, finished goods
and materials, and supplies of any kind, nature, or description used or consumed
in Indemnitors’ business or used in connection with the manufacture, packaging,
shipping, advertising, selling, or finishing of such goods, merchandise, and
other personal property, all returned or repossessed goods now, or hereafter, in
the possession or under the control of Indemnitor or Surety, and all documents
of title or documents representing the same.

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      “Joint Venture” means any Person in which (i) one or more other Persons of
the type described in clauses (i), (ii), (iii), or (iv) of the definition of
“Principal” has an equity or other ownership or income participation interest
equal to or greater than twenty-five percent (25%) of the total such interest
outstanding and (ii) one or more other Persons which are not Affiliates of the
Persons described in clause (i) above have an equity or other ownership or
income participation interest.

      “Licensed Property” means all proprietary systems or software, or any
other assets of a similar nature which are employed by Principals in performing
the contractual Work that is required by the Bonded Contracts and/or the Bonds;
any and all inventions, designs, patents, patent applications, trademarks,
trademark applications, trade names, trade secrets, registrations, copyrights,
licenses, franchises, customer lists, and any associated goodwill that is
required for the completion of any Bonded Contract and/or the fulfillment of any
of Surety’s obligations under the Bonds.

      “Lien” means any mortgage, deed of trust, pledge, security interest,
hypothecation, assignment, deposit arrangement to assure payment of any debt,
encumbrance, lien (statutory or other), or preference, priority, or other
security agreement, or preferential arrangement to assure payment of any debt,
charge, or encumbrance of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the UCC or comparable
law of any jurisdiction to evidencing any of the foregoing).

      “Material Adverse Effect” means, relative to any occurrence of whatever
nature (including the adverse determination in any litigation, arbitration, or
governmental investigation or proceeding), (a) a material adverse effect on the
financial condition, business, or business operations of Principal and
Indemnitors and their Subsidiaries taken as a whole, or (b) a material
impairment of the collective ability of Principal and Indemnitors taken as a
whole to satisfy their respective obligations to Surety under the Surety Credit
Documents, or (c) a material adverse effect upon the enforceability against
Principal and Indemnitors of Surety’s security interest in the Collateral.

      “Obligee” means any named party or parties appearing on any Bond(s) in
whose favor the Bond(s) are issued, or such parties’ successors and permitted
assigns.

      “Permitted Liens” means:

      (a) Liens for taxes, assessments, or governmental charges not yet past due
or that are being contested in good faith by appropriate proceedings and for
which adequate reserves have been established in accordance with GAAP;

      (b) mechanics’, workmen’s, materialmen’s and repairmen’s Liens or other
Liens arising by operation of law in the ordinary course of business, or
pursuant to customary

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reservations or retentions of title arising in the ordinary course of business,
of any Indemnitor securing obligations that are not past due, unless contested
in good faith by appropriate proceedings or, if past due, are unfiled and no
other action has been taken to enforce the same;

      (c) any Lien granted on their assets by Indemnitors to Surety to secure
the payment of Surety Loss;

      (d) Liens in connection with workers’ compensation, unemployment insurance
or other social security, old age pension or public liability obligations not
yet due or which are being contested in good faith by appropriate proceedings
and for which adequate reserves are maintained in accordance with GAAP;

      (e) statutory Liens of landlords, and Liens of carriers, warehousemen or
suppliers, or other similar possessory Liens arising in the ordinary course of
business; provided, that, the holder of such possessory Lien does not exercise
any foreclosure right to enforce its Lien;

      (f) deposits securing, or in lieu of, any surety, appeal, or custom bonds
in proceedings to which any Indemnitor is a party, bids, trade contracts and
leases, statutory obligations, performance bonds and other obligations of a like
nature, and Liens securing judgments for the payment of money (or appeal or
other surety bonds relating to such judgments);

      (g) Liens existing on the date hereof and any renewals and extensions
thereof which Liens are described on the attached Exhibit B and any replacement,
refinancing, renewal, or extension of any such Lien in the same property
theretofore subject arising out of the extension, renewal, replacement, or
refinancing of the Debt secured thereby;

      (h) common law rights of offset and contractual rights of offset arising
in the ordinary course of business;

      (i) any common law security interest of a surety in the actual proceeds of
a project subject to the underlying bond provided by such surety;

      (j) any other Liens pursuant to any Surety Credit Document;

      (k) provided that any such Lien is subject to an intercreditor agreement
of the type described in Section 3 (c) to which Surety (or its successors and
assigns) is a party, Liens securing either Principal’s and/or Indemnitors’
(including without limitation, any combination of the foregoing) senior
facilities, as amended, modified, restated, refinanced, or supplemented from
time to time;

      (l) normal and customary rights of setoff upon deposits of cash in favor
of banks or other depository institutions;

      (m) Liens of a collection bank arising under Section 4-210 of the UCC on
items in the course of collection;

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      (n) Liens of sellers of goods to Principal or any Indemnitor arising under
Article 2 of the UCC or similar provisions of applicable law in the ordinary
course of business, covering only the goods sold and securing only the unpaid
purchase price for such goods and related expenses;

      (o) provided that any such Lien is subject to an intercreditor agreement
of the type described in Section 3 (c), any Liens pursuant to any Bank Credit
Document;

      (p) purchase money security interest Liens arising under Article 9 of the
UCC or similar provisions of applicable law in the ordinary course of business,
covering only the goods purchased and securing only the unpaid purchase price
for such goods and related expenses, which are not past due;

      (q) any interest of title of a lessor under, and Liens arising from UCC
financing statements (or equivalent filings, registrations or agreements in
foreign jurisdictions) relating to, leases or short term rentals not prohibited
by this Agreement; and

      (r) leases or subleases granted to others not interfering in any material
respect with the business of Principal or any Indemnitor.

      “Person” means any individual or entity, whether a trustee, corporation,
partnership, joint stock company, unincorporated organization, business
association or firm, joint venture, a government or any agent or instrumentality
or political subdivision thereof.

      “Principal” means (i) Quanta Services, Inc., a Delaware corporation,
(ii) those of its Domestic Subsidiaries listed on Exhibit A, (iii) any other
Domestic Subsidiaries of Quanta Services, Inc. for whom Surety executes Bonds,
(iv) any new Principal added to this Agreement by rider as provided in
Section 52, and (v) any Joint Ventures in which one or more of them are involved
(A) that is listed on Exhibit A, (B) for which a Bond is outstanding or (C) for
which a Bond is requested by Indemnitors, in each case in their respective
capacity as a named principal under any Bond, but in all events excluding any
Foreign Subsidiaries; provided, however, that a Joint Venture will not be
considered a Principal for purposes (or application) of Section 5 and Section 6
of this Agreement; provided further, however, that notwithstanding anything
herein to the contrary, Island Mechanical, Hawaii, a Hawaii general partnership
(“Island Mechanical, Hawaii”), shall not be or be deemed to be a Principal.

      “Records” means correspondence, memoranda, tapes, books, discs, papers,
magnetic storage, and other documents or information of any type, whether
expressed in ordinary or machine language relating to any Bonded Contract or
Collateral.

      “Reserve” means a sum of money that may be set aside by Surety to pay its
present and future liabilities under Bonds as required by statute.

      “Retainage” means contract proceeds periodically withheld by an Obligee to
provide further security for Principal’s or Island Mechanical, Hawaii
performance of a Bonded Contract,

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and as such are payable to Principal or Island Mechanical, Hawaii only upon a
clear demonstration of compliance with the terms of the Bonded Contract.

      “Subsidiaries” means, with respect to any Person, any corporations,
partnerships, or other entities wherein such Person owns or acquires, directly
or indirectly, more than fifty percent (50%) of the issued and outstanding
voting stock, voting securities, or other equity interest of such corporation,
partnership, or other entity, or any other corporation, partnership or other
entity the management of which is otherwise controlled, directly or indirectly,
through one or more intermediaries, or both, by any such Person.

      “Surety” means Federal Insurance Company, an Indiana corporation, its
Affiliates and Subsidiaries and any other companies writing Bonds for which this
Agreement is consideration (and other companies from whom Surety procures Bonds
for Principal), and their co-sureties and reinsurors, and their respective
successors and permitted assigns.

      “Surety Credit Documents” means the following: (i) the Bonds; (ii) the
Indemnity Agreement; (iii) this Agreement; (iv) UCC Financing Statements listing
any of Indemnitors as debtor and Surety as secured party; (v) any intercreditor
agreement by and between Surety and any banking institution party to a credit
agreement or facility with any Indemnitor relating to such credit agreement or
facility; (vi) any collateral agreement entered into by Surety and any
collateral agent named therein in accordance with Section 33; (vii) any
indemnity agreement or other agreement executed by any Foreign Subsidiary with
respect to any Bond and/or for the benefit of Surety; (viii) any confidentiality
agreement entered into between Surety or any Affiliate of Surety and an
Indemnitor; and (ix) all amendments, modifications, extensions, additions,
substitutions, or other documents hereafter executed or delivered by any of
Indemnitors or any Foreign Subsidiary, which relate to any of the foregoing
documents.

      “Surety Loss” means, without duplication:

      (a) all damages, costs, reasonable attorney fees, and liabilities
(including all reasonable expenses incurred in connection therewith) which
Surety actually incurs by reason of executing or procuring the execution of any
surety agreements, undertakings, or instrument of guarantee signed by Surety on
behalf of (i) any Principal or Island Mechanical, Hawaii and (ii) if requested
by any Indemnitor, any Affiliates and Subsidiaries of Quanta Services, Inc.,
and/or Bonds which may be already or hereafter executed on behalf of any
Principal and/or any Foreign Subsidiary, or renewal or continuation thereof; or
which Surety actually incurs by reason of making any investigation on account
thereof, prosecuting or defending any action in connection therewith, obtaining
a release, recovering, or attempting to recover any salvage in connection
therewith or enforcing by litigation or otherwise any of the provisions of this
Agreement, including, but not limited to:

          (1) money judgments, amounts paid in settlement or compromise, the
full amount of reasonable attorney and other professional fees incurred or paid
by Surety, including without limitation reasonably allocated costs of in-house
counsel (to the extent reasonably documented), accountants, and engineers, court
costs and fees, and interest at the Default Rate on all sums due it from the
date of Surety’s demand for said sums (to the extent then due), if interest has
been awarded by a court;

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          (2) any loss which Surety actually incurs as a result of any Bonded
Contract or any Bonds, whether that loss results from any activity of any
Principal, Island Mechanical, Hawaii and/or any Foreign Subsidiary individually
or as part of a joint venture, partnership, or other entity which has been or
may be formed in which Principal or any Foreign Subsidiary is involved;

          (3) any loss which Surety actually incurs as a result of any actions
taken by Surety upon information provided by any Indemnitor, Island Mechanical,
Hawaii and/or any Foreign Subsidiary with respect to the issuance of any Bonds;

          (4) any Bond premiums due from Principal, Island Mechanical, Hawaii
and/or any Foreign Subsidiary to Surety;

          (5) any amounts that have been paid to Surety to be applied to Surety
Loss that a court of competent jurisdiction determines constitute “preferences,”
within the meaning of Section 547 of the Bankruptcy Code, and by reason thereof
Surety is required to disgorge said amounts paid; and

      (b) reasonable legal, accounting, consulting, and related fees and
expenses incurred after January 15, 2005, in connection with the Bonds, the
Surety Credit Documents, and/or any application or submission by any of
Indemnitors and/or any Foreign Subsidiary for the issuance of any Bond or
renewal of any existing Bond, whether or not Surety decides to issue said Bond.
Notwithstanding the foregoing, Indemnitors will be required to reimburse Surety
for one hundred percent (100%) of any filing fees and recording taxes incurred
by Surety to perfect and continue Surety’s security interest in the Collateral
regardless of when those fees are incurred.

      “UCC” means the Uniform Commercial Code as in effect on the date hereof in
New York, as it may be amended from time-to-time provided that if by reason of
mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of a security interest in any Collateral is governed by any state
other than New York, “UCC” means the Uniform Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof relating to such
perfection or effect of perfection or non-perfection.

      “Work” means the specialized contracting services, including but not
limited to design, construction, maintenance, installation and repair of network
infrastructures for electric power, telecommunications, broadband cable and gas
pipelines systems, as the case may be, required of any Principal, Island
Mechanical, Hawaii, or Indemnitor by any Bonded Contract, whether completed or
partially completed, and includes all other labor, materials, equipment, and
services provided or to be provided by any Indemnitor, Island Mechanical,
Hawaii, or Principal to fulfill such Principal’s, Island Mechanical, Hawaii’s,
or Indemnitor’s obligations pursuant to such Bonded Contract.

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      Any collective defined term and any defined term used in the plural will
be taken to encompass individually and collectively all members of the relevant
class. Any defined term used in the singular preceded by “any” will be taken to
indicate any number of the members of the relevant class. Any defined term used
in the singular and preceded by the word “each” will indicate all members of the
relevant class, individually.

      2. Due Diligence Items Required to be Delivered by Indemnitors.
Indemnitors will deliver to Surety each of the following, in form and substance
satisfactory to Surety and its counsel:

          (a) Favorable opinions of both outside and in-house counsel to
Principal and Indemnitors substantially in the form attached hereto as
Exhibit C.

          (b) an officer’s certificate of each of Indemnitors certifying
appropriate resolutions authorizing the execution, delivery, and performance of
the applicable Surety Credit Documents, certifying that such resolutions have
been approved in accordance with each of Indemnitors’ governing documents along
with copies of such governing documents, and certifying incumbencies and true
signatures of the officers so authorized;

          (c) evidence of the good standing of each of Indemnitors in the
jurisdiction in which such Indemnitor is formed; and

          (d) such other information and documents as may reasonably be required
by Surety.

      Principal has paid Surety one-sixth of a One Hundred Fifty Thousand Dollar
($150,000) facility fee, or Twenty-Five Thousand Dollars ($25,000).
Contemporaneously with the execution of this Agreement, Principal will pay
Surety the remaining portion of the facility fee due in the amount of One
Hundred Twenty-Five Thousand Dollars ($125,000) and once the facility fee has
been paid in full, Surety will provide Principal a written receipt evidencing
payment in full of such facility fee. The delivery of said facility fee will not
reduce Surety Loss, or otherwise affect Surety’s rights under the Indemnity
Agreement or any other of the Surety Credit Documents.

      3. Bonds; Conditions Precedent to all Bonds. Subject to the terms of this
Agreement, and so long as no Event of Default has occurred and is continuing,
Surety is willing to consider the extension of additional surety credit for the
purposes set out in this Agreement. Surety reserves the right to decline to
execute any and all bonds, in Surety’s sole and absolute discretion, and if
Surety executes any Bond, Surety will not be obligated to expand or renew any
such Bond. No claim will be made, nor any cause of action asserted against
Surety as a consequence of its failure to execute any bond(s). Whether to
approve or disapprove any application of any Principal or Foreign Subsidiary for
surety credit and issue bonds in response thereto will be determined on a case
by case basis and is within Surety’s sole and absolute discretion. Without
limiting the generality of the foregoing, Indemnitors specifically acknowledge
and confirm Surety’s right to decline execution of any bond, or all bonds, as
set forth in this Agreement.

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      Without limiting the generality of the foregoing, the determination of
Surety in its sole and absolute discretion, to issue any Bond will be subject to
the further conditions precedent that on the date of such issuance each of the
following conditions will be satisfied, in the sole and absolute discretion of
Surety:

          (a) The following statements will be true and, by its request for the
issuance of such Bond, Indemnitors will be deemed to have certified to Surety
that as of the date of such issuance:

                    (1) the representations and warranties contained in this
Agreement and the Surety Credit Documents are correct in all material respects
on and as of the date of such issuance as though made on and as of such date,
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

                    (2) no Event of Default has occurred and is continuing, or
would result from the issuance of such Bond.

          (b) Surety will have received such other approvals, opinions, or
documents as Surety may reasonably request.

          (c) Any banking or other financial institutions that have any interest
in the Collateral will have entered into an intercreditor agreement with Surety
which will address: (i) Surety’s first priority security interest in the
Collateral; and (ii) Surety’s rights of equitable subrogation with respect to
all Bonds and Bonded Contracts.

          (d) Any request for a Bond will contemplate any of Indemnitors or a
Foreign Subsidiary being named as the principal.

          (e) Subject to Permitted Liens and except as otherwise permitted by
intercreditor agreements that are in effect from time to time with Surety,
Surety will be the holder of a first priority security interest in the
Collateral.

      4. Indemnity; Exoneration. Quanta Services, Inc. has full right and
authority to execute any and all current or future documents and/or amendments
on behalf of any Principals and Indemnitors without requiring the separate
signature of any such Principal and Indemnitors. Although execution will not be
necessary to bind any such Person as an Indemnitor hereunder, at the request of
Surety, Indemnitors will cause any such Person to execute this Agreement. Said
Domestic Subsidiaries and such other Person will be deemed to be an Indemnitor
hereunder as though they were original signatories hereto. Indemnitors agree to
indemnify, and keep indemnified, and hold and save harmless Surety against all
Surety Loss. The duty of Indemnitors to indemnify Surety is a continuing duty,
separate from the duty to exonerate, and survives any payments made in
exoneration of Surety. Amounts due Surety (together with interest at the Default
Rate) will be payable upon written demand.

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      Indemnitors recognize and acknowledge the common law right of Surety to be
exonerated by Indemnitors. Upon a Surety Loss, in the event Indemnitors fail or
refuse to exonerate Surety upon written demand, all Indemnitors agree, upon
demand by Surety, to exonerate Surety from Surety Loss, by satisfying
Indemnitors’ obligations under the Bonded Contracts and obtaining either a
withdrawal of all claims against Surety under the Bonds or a general release.

      Notwithstanding anything in this Agreement or any other Surety Credit
Document (exclusive of any Surety Credit Document executed by any Foreign
Subsidiary) to the contrary, no Foreign Subsidiary will be liable under this
Agreement for, or obligated to indemnify Surety or hold Surety harmless from or
against, any Surety Loss or any other amount except, with respect to a Bond
executed or procured by Surety for a specific Foreign Subsidiary in its capacity
as a named principal under such Bond, for such amounts described in subsection
(a) of the definition of Surety Loss for which such Foreign Subsidiary is
expressly obligated pursuant to such Bond. The forgoing will not limit the
indemnity obligations of any Foreign Subsidiary as may be agreed to by such
Foreign Subsidiary in any agreement entered into by such Foreign Subsidiary.

      5. Security Interest; Obligation Secured. To secure payment or other
performance of any and all Surety Loss, and the payment and performance of all
other obligations and undertakings now or hereafter owing to Surety with respect
to the Bonds and/or under the Surety Credit Documents, as same may now or
hereafter be modified, replaced, extended, or renewed, Indemnitors hereby grant
to Surety a first priority (subject to Permitted Liens) security interest in the
Collateral. The security interest created herein will attach without the
execution or delivery to Surety of any instruments, documents, assignments, or
other agreements of transfer, and in the event any such instruments, documents,
or other agreements of transfer are or will be delivered to Surety, the same are
and will be in furtherance of and in addition to the security interest created
by virtue of this Agreement. As additional security for any and all Surety Loss,
Indemnitors have caused to be delivered to Surety and named Surety as the
beneficiary of that certain Letter of Credit No. 3064365 dated July 14, 2004,
issued by Bank of America in the face amount of Ten Million Dollars
($10,000,000).

      Except as herein provided otherwise, Indemnitors will at all times keep
Surety’s security interest properly perfected and hereby designate Surety and
any collateral agent that may be designated by Surety pursuant to Section 33 as
their attorney in fact to do any acts or deeds or execute such documents
reasonably appropriate to accomplish said perfection. Said designation will be
irrevocable as long as any obligation of any of Indemnitors to Surety under this
Agreement and/or any of the Surety Credit Documents is outstanding. Surety
agrees that it will not and will cause its agents not to, process notices of
assignment or any other documentation under the Contract Disputes Act, 41 U.S.C.
§601, et. seq. and/or the Federal Acquisition Regulations unless an Event of
Default has occurred, or the agent for the lenders under the Bank Credit
Documents requests Surety to perfect, or any other Person has taken any action
to perfect, an assignment or Lien with respect to any Bonded Contracts or other
Collateral that is subject to the Contract Disputes Act, 41 U.S.C. §601, et.
seq. and/or any Federal Acquisition Regulations.

      The right is expressly granted to Surety, at Surety’s reasonable
discretion, to file in those jurisdictions where the same is permitted, one or
more financing statements under the UCC and indicating therein the types or
describing the items of the Collateral. Without the prior written

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consent of Surety, none of Indemnitors will, after the date hereof, file or
authorize or permit to be filed in any jurisdiction any financing or like
statement relating to the Collateral other than filings of or relating to
Permitted Liens. Surety’s security interest will be first and prior to any other
Liens on the Collateral except for Permitted Liens. Surety reserves all rights
to contest the validity or priority of any Lien.

      If any Accounts constituting Collateral should be evidenced by promissory
notes, trade acceptances, or other instruments for the payment of money,
Indemnitors promptly will deliver the same to Surety appropriately endorsed to
the order of Surety. Regardless of the form of each endorsement, Indemnitors
hereby waive presentment, demand, notice of dishonor, protest, and notice of
protest, and all other notices with respect thereto, except as required by this
Agreement.

      At any time, and at reasonable intervals, upon the request of Surety and
subject to the Permitted Liens, Indemnitors will: (a) give, execute, deliver,
file, and/or record any notice, statement, instrument, document, agreement, or
other papers that may be necessary or desirable, or that Surety and/or any
collateral agent designated by it pursuant to Section 33 may reasonably request
in order to create, preserve, perfect, or validate any security interest granted
herein or to enable Surety and/or such collateral agent to exercise and enforce
its rights hereunder or with respect to such security interest; and (b) permit
Surety or Surety’s representatives, upon advance written notice and, at
reasonable intervals during normal business hours, to inspect and make abstracts
from any of Indemnitors’ books and records pertaining to the Collateral.

      Upon the Indebtedness being paid and satisfied in full (including, but not
limited to, the expiration of any time period for which any latent defect or
warrant claim could be made), Surety will, with reasonable promptness, execute
all necessary documents and file same in every jurisdiction in which the
security agreement or any Surety Credit Document was filed to effectuate a
termination of said security agreement and all Liens evidenced thereby.

      6. Description of Collateral; Licensed Property. Collateral includes all
amounts that may be owing from time to time by Surety to any Indemnitor in any
capacity, including, but without limitation, any balance or share belonging to
any Indemnitor of any deposit or other account with Surety (this Lien and
security interest will be independent of any right of setoff which Surety may
have); all rights of any Principal to any distribution, right to distribution,
or other similar interest in connection with or on account of any Bond signed by
Surety on behalf of any Joint Venture; all of any Principal or Indemnitor’s
right, title, and interest in and to all Bonded Contracts; Accounts; all rights
of any Principal that is a Joint Venture to any distributions from any Person
that is a party to or has an interest in any Bonded Contract with respect to
such Bonded Contract (whether such Principal is the named Principal in such
Bonded Contract); all claims, rights, and chooses in action against any Obligee
on any Bond or against any other Person in either case on account of any Bond or
Bonded Contract; Bonded Contract Balances; to the extent assignable (provided,
that, any such prohibition on assignment would not be rendered ineffective
pursuant to Article 9 of the UCC, including, without limitation Section 9-406
and 9-408 of the UCC, or any successor provisions and further, provided, that,
any such prohibition on assignment has not otherwise been rendered ineffective,
lapsed, or terminated) all rights and actions that any Indemnitor may have or
acquire in any subcontract, purchase order, or other agreement in connection
with any Bonded Contract, and against any subcontract, purchase

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order, or other agreement with any Person furnishing or agreeing to furnish or
supply vehicles, labor, supplies, machinery, or other equipment in connection
with or on account of any Bonded Contract, and against any surety or sureties of
any such subcontractor, laborer, or other Person in connection with such Bonded
Contracts; any and all Equipment (exclusive of any Equipment owned by any Joint
Venture) which is specifically purchased for or prefabricated for the Work that
is the subject of any Bonded Contract and/or delivered to the site of such Work
to be incorporated into the Work that is the subject of any Bonded Contract
and/or that is required pursuant to the terms of any Bonded Contract to be
transferred to any Obligee on any Bond (or any assignee of such Obligee or any
other owner, or assignee of any owner, of the Work that is the subject of any
Bonded Contract) upon completion or termination of the Work; any and all
Inventory which is specifically purchased for or prefabricated for the Work that
is the subject of any Bonded Contract and/or delivered to the site of such Work
to be incorporated into the Work that is the subject of any Bonded Contract
and/or that is required pursuant to the terms of any Bonded Contract to be
transferred to any Obligee on any Bond or any assignees of any such Obligee or
any other owner or assignee of any owner, of the Work that is the subject of the
Bonded Contract upon completion or termination of the Work that is the subject
of the Bonded Contract; plans, specifications, and shop and as built drawings
utilized in or necessary to fully perform all obligations and services required
of Principal under the Bonded Contracts; and any and all proceeds and products
arising with respect thereto.

      Anything herein to the contrary notwithstanding, (i) the Collateral is not
intended to and does not include any Licensed Property or any property or assets
of any nature of any Foreign Subsidiary (except solely to the extent that a
Foreign Subsidiary executes and delivers an agreement for the benefit of Surety
designating any specified property or assets of such Foreign Subsidiary as
Collateral hereunder), (ii) Indemnitors will remain liable under any contracts
and agreements included in the Collateral, solely to the extent set forth
therein, to perform all of their duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (iii) the exercise by Surety
of any of the rights hereunder will not release any Indemnitor from any of its
duties or obligations under the contracts and agreements included in the
Collateral, and (iv) Surety will not have any obligation or liability under any
contracts and agreements included in the Collateral by reason of this Agreement,
nor will Surety be obligated to perform any of the obligations or duties of
Indemnitor thereunder or take any action to collect or enforce any claim for
payment assigned hereunder.

      Indemnitors hereby grant to Surety an irrevocable, non-exclusive,
royalty-free, and fully paid-up license and right, until the Indebtedness is
paid and satisfied in full and Surety has no exposure under any Bond, to use the
Licensed Property upon the occurrence of and during the continuance of any Event
of Default for the limited purpose of: (i) obtaining bids for the completion of
any Bonded Contract; (ii) taking possession of the Work under any Bonded
Contract; (iii) completing, or consenting to the completion of, any Bonded
Contract; and (iv) tendering the completion of any Bonded Contract to any
Obligee that has agreed to accept a tender of completion of the Bonded Contract.

      7. Representations and Warranties. Indemnitors hereby warrant, covenant,
and represent that:

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          (a) Indemnitors are the exclusive owners of the Collateral and have
good and marketable title to the Collateral and that on the date of this
Agreement the Collateral is free of any and all Liens (excluding Permitted
Liens). Neither “Coast to Coast” nor “Cooper’s Coast to Coast Hardware” referred
to as the debtor in UCC-1 Financing Statement Nos. #0009560104, 9932160429
and/or 9925160602 filed with the California Secretary of State is the same
entity as Coast to Coast, LLC, a California limited liability company and
Indemnitor hereunder.

          (b) Until such time as all of the Indebtedness has been paid and
satisfied in full, none of Indemnitors will (i) sell, transfer, convey, or
assign any of the Collateral without prior written consent of Surety, except to
any other Indemnitor or as contemplated by any Surety Credit Document
(including, without limitation, any transfers contemplated by Section 6 of this
Agreement), or (ii) permit any Lien on the Collateral (other than Permitted
Liens).

          (c) [Intentionally Omitted]

          (d) The current jurisdiction of formation as of the date of this
Agreement, of each of Principal and Indemnitors is correctly reflected on the
attached Exhibit A. Except as set forth on Exhibit A hereto, each Indemnitor
will notify Surety of any change in said Indemnitor’s name, or change in form of
organization or jurisdiction of formation or organization thirty (30) days prior
to such change.

          (e) Indemnitors are not in default with respect to any of their
existing Debt, and the making and performance of this Agreement and the Surety
Credit Documents by Principal and Indemnitors will not (immediately or with the
passage of time, the giving of notice, or both):

                    (i) Violate the charter, bylaws, or other governing document
provisions of any Indemnitor, or violate any applicable laws or result in a
default under any contract, agreement, or instrument to which any of Indemnitors
is a party or by which any of Indemnitors or their property is bound, except for
such violations or defaults that would not, individually or in the aggregate,
have a Material Adverse Effect; or

                    (ii) result in the creation or imposition of any Lien upon
any assets of any Indemnitor other than Liens in favor of Surety.

          (f) Indemnitors have the corporate or other power and authority to
enter into and perform this Agreement and the Surety Credit Documents to which
they are a party, and to incur the Indebtedness herein and therein provided for,
and have taken all corporate or other action necessary to authorize the
execution, delivery, and performance of this Agreement and such other Surety
Credit Documents.

          (g) This Agreement and each other Surety Credit Document to which
Principal and Indemnitors are a party constitute valid and binding obligations
of such Principal and Indemnitors, and are enforceable against such Principal
and such Indemnitors in accordance with their respective terms.

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          (h) Each consent, approval, or authorization of, or filing,
registration, or qualification with, any Person required to be obtained by
Indemnitors in connection with the execution and delivery of this Agreement or
the undertaking or performance of any obligation hereunder or thereunder has
been duly obtained, other than any filings to perfect the Liens on the
Collateral.

          (i) Indemnitors will promptly pay all of their taxes, assessments, and
other governmental charges prior to the date on which any penalties are attached
thereto, establish adequate reserves for the payment of taxes and assessments
and make all required withholding and other tax deposits; provided, however,
that nothing contained in this Agreement will be interpreted to require the
payment of any tax, assessment, or charge so long as its validity is being
contested in good faith (and for which adequate reserves have been established)
by appropriate proceedings and as to which foreclosure and other enforcement
proceedings will not have been commenced (unless fully bonded or otherwise
effectively stayed);

          (j) With regard to the rights with respect to the Bonded Contracts in
which Indemnitors have hereby granted Surety a security interest, Indemnitors
represent and warrant to Surety:

                    (i) Such rights arise under one or more existing binding
written contracts between a Principal and the other party or parties thereto, or
will be evidenced by a binding written contract before performance thereunder,
and do or will represent a bona fide transaction, enforceable in accordance with
its terms;

                    (ii) The title of such Principal to the Bonded Contracts is
absolute;

                    (iii) No rights of any Principal under any Bonded Contracts
have been transferred to any other Person except pursuant to Permitted Liens;

                    (iv) Indemnitors have not received any prepayment of amounts
due Surety under any Bonded Contracts;

                    (v) Indemnitors will not, without the prior written consent
of Surety, permit any material amendment, modification, settlement, compromise,
or extension to any of the Bonded Contracts if such modification, compromise,
settlement, or extension would adversely affect the interests of Surety or
extend the time of any payment required thereunder; and

                    (vi) To the best of Indemnitors’ knowledge, information, and
belief, (A) all parties to any Bonded Contracts, and other commitments that
constitute Collateral and to which any of Indemnitors are a party, have complied
in all material respects with the provisions of such Bonded Contracts and other
commitments; (B) no party is in default in any material respect under any
provision thereof; and (C) no event has occurred which, but for the giving of
notice or the passage of time, or both, would constitute a material default
thereunder (it being understood that any event described in clause (c) (i) of
the definition of Event of Default will be deemed to be a material default).

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          (k) That they have the insurance in force that is usual and customary
for those engaged in the same or similar business of Indemnitors, and that they
will maintain said insurance in force with good and substantial carriers with
insurance companies with an A- rating or better. Indemnitors further agree to
furnish Surety, upon request, with the insurance in force and with copies of the
policies of said insurance evidencing the existence of the coverage called for
by this Agreement. Indemnitors will obtain all necessary insurance coverages,
including, without limitation, workers’ compensation, liability, and other
insurance coverages, in the amounts and as required by the Bonded Contracts that
are the subject of the Bonds, protecting itself, Obligees (as applicable), and
Surety. Indemnitors will deliver to Surety copies of certificates of insurance
dated on or about the date of this Agreement showing Surety as an additional
insured for all such insurance policies which Surety has specifically requested
that it be added as an additional insured, except as to professional liability
coverages.

          (l) As of the date hereof, Principals, Indemnitors, and their
Subsidiaries, on a consolidated basis, are not insolvent within the meaning of
the Bankruptcy Code.

          (m) Principal or Indemnitors will give prompt notice to Surety of
their knowledge of any pending or threatened proceeding or claim before any
court or governmental agency or department which involves a reasonable material
risk of having a Material Adverse Effect.

          (n) Indemnitors are in material compliance with all laws, statutes and
governmental rules and regulations applicable to it or them, except for any
failure so to be in compliance which would not reasonably be expected to have a
Material Adverse Effect.

          (o) Indemnitors will not make any distributions or payments of any
kind to any Affiliate that is not an Indemnitor at any time that any Surety Loss
(exclusive of Surety Loss described in clause (b) of the definition of Surety
Loss and other attorneys fees and similar fees and professional fees incurred in
the ordinary course of business that are promptly reimbursed to Surety by
Indemnitors) exists.

      8. Use of Identified Equipment. Subject to the terms of any applicable
intercreditor agreement, following the occurrence of an Event of Default, if
Surety decides, in its sole and absolute discretion, to perform and complete, or
to cause or procure the performance or completion of any the Bonded Contracts,
Indemnitors hereby agree that Surety, or any properly licensed third party
appointed by Surety, will have full access to and use of all Identified
Equipment, reasonably necessary for the discharge of the duties, obligations,
and undertakings of Surety under the Bonds issued in relation to the Bonded
Contracts. Notwithstanding the foregoing, however, in the event Principal or
Indemnitors want to encumber such Identified Equipment, Surety agrees to permit
such encumbrance provided that the appropriate lender or other Person enters
into an Identified Equipment utilization agreement in favor of Surety providing
for Surety’s use of the Identified Equipment as provided in this Section.

      Upon a determination by Surety to utilize, or reserve for utilization, any
Identified Equipment in which any lender holds a first priority security
interest, Surety will periodically

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(and in any event no less frequently than monthly), pay such lender the fair
market rental value of the Identified Equipment for the period said Identified
Equipment is utilized, or reserved for utilization, by Surety or its appointee,
in consideration of the utilization or reservation of Identified Equipment
necessary to fulfill the Bonded Contracts.

      In the event Surety and lender cannot agree on the above referenced “fair
market rental value,” then subject to the terms of any applicable intercreditor
agreement, Surety will be entitled to utilize the Identified Equipment during
the period that the parties are endeavoring to resolve their dispute and come to
an agreement regarding the “fair market rental value.” All disputes regarding
the “fair market rental value” will be determined by appraisal. Surety and any
such lender will endeavor to agree on the selection of an appraiser of national
recognition to determine such “fair market rental value.” In the event such
lender and Surety cannot agree on an appraiser, then each of Surety and such
lender will select an appraiser to determine said “fair market rental value” and
the average of the values so determined by these appraisers will be the “fair
market rental value.” The appraiser’s determination will be deemed final and
conclusive. The cost of the appraisers will be borne by Indemnitors.

      During any period in which Surety is utilizing, or reserving for
utilization any Identified Equipment, Surety will preserve and maintain said
Identified Equipment in good repair, and will return said Identified Equipment
in as good a condition as when received by Surety, ordinary wear and tear
excepted. In addition, Surety will maintain insurance coverage relative to the
Identified Equipment during any period in which Surety is utilizing, or
reserving for utilization, Identified Equipment. Any and all reasonable costs
and expenses incurred by Surety in exercising its rights pursuant to this
Section 8 will be borne by Indemnitors.

      Surety agrees that in the event any of the Identified Equipment utilized,
or reserved for utilization, by Surety is also needed to be used in connection
with the completion and performance of contracts other than Bonded Contracts,
Surety will work with Principal to allow Principal and its Affiliates reasonable
access to and use of such Identified Equipment; provided, however, in this
event, any consideration paid by Surety for the use of such Identified Equipment
will be prorated and reduced for the time that such Identified Equipment is
utilized or reserved for utilization on any contract other than a Bonded
Contract.

      9. Preservation of the Collateral. Principal and Indemnitors will use
reasonable efforts to preserve the Collateral and defend the title and Surety’s
security interest therein, at Principal and Indemnitors’ cost and expense. Each
Principal’s principal place of business and chief executive office as of the
date of this Agreement is correctly reflected on Exhibit A. The principal place
of business and chief executive office of Quanta Services, Inc. is correctly
reflected on Exhibit A. As of the date of this Agreement, the Records of Quanta
Services, Inc. related to the Bonded Contracts and the Records of each Principal
related to the Collateral are located at locations specified on Exhibit A.
Indemnitors agree to give Surety immediate prior written notification of the
establishment of any new chief executive office or principal place of business
of any Principal and the discontinuance of any chief executive office or
principal place of business.

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      Indemnitors will give prompt written notice to Surety of the institution
of any suit or proceeding involving any of Indemnitors that might reasonably be
expected to result in a Material Adverse Effect. Indemnitors will pay and
discharge promptly all taxes, assessments, and governmental charges or levies
imposed upon the Collateral, as well as all judgment liens and all claims for
labor and materials which, if unpaid, might constitute a Lien or charge upon the
Collateral, unless and only to the extent that the same will currently be duly
contested in good faith (and for which adequate reserves have been established)
by appropriate proceedings and as to which foreclosure and other enforcement
proceedings will not have been commenced (unless fully bonded or otherwise
effectively stayed).

      Upon the occurrence and during the continuance of an Event of Default, at
its option, Surety may discharge valid taxes, Liens, security interests, or
other encumbrances at any time levied or placed on said Collateral. Indemnitors
agree to reimburse Surety, on demand, for any such payment made, or any such
expense reasonably incurred by Surety pursuant to the foregoing authorization.
Any amounts so advanced, paid or expended will be included within the defined
term “the Indebtedness,” and will bear interest from the time advanced, paid, or
expended at the Default Rate and be secured by the Collateral and its payment
enforced as if it were part of the original Indebtedness. Any sum expended,
paid, or advanced under this paragraph will be at Surety’s sole option and not
constitute a waiver of any default or right arising from the breach by
Indemnitors of any covenant or agreement contained in the Surety Credit
Documents.

      10. Indemnitors to Hold Contract Funds in Trust. Indemnitors agree and
expressly declare that all funds due or to become due under the Bonded Contracts
are trust funds, whether in possession of Indemnitors or another, for the
benefit and the payment of all Persons to whom Indemnitors incur obligations in
the performance of the Bonded Contracts, for which Surety is or may be liable
under the Bonds. If Surety discharges any such obligations, with or without a
claim asserted against Surety under the Bonds, it will be entitled to assert the
right of such Person to the trust fund. All payments received for or on account
of any Bonded Contract will be deemed to be held in a trust fund to assure the
payment of obligations incurred or to be incurred in the performance of any
Bonded Contract and for labor, materials, and services furnished in the
prosecution of the performance required by any Bonded Contract or any extension
or modification thereof. All monies due and to become due under any Bonded
Contract are also trust funds, whether in the possession of Indemnitors, or
otherwise. Such trust funds will be for the benefit and payment of all
obligations for which Surety is or may be liable under any Bonds. Such trust
funds will inure to the benefit of Surety for any liability or Surety Loss it
may have or sustain under any Bond, and this Agreement and declaration
constitute notice of such trust. The trust funds, unless otherwise restricted or
regulated by state or local laws, can be commingled with other funds, but the
trust fund nature and purpose as stated in this paragraph will not be modified
nor waived by this commingling provision.

      Upon the occurrence of an Event of Default, Indemnitors will, upon demand
of Surety, open an account(s) with a bank or similar depository designated by
Indemnitors and approved by Surety, which account(s) will be designated as trust
account(s) for the deposit of such trust funds, and will deposit therein all
monies paid or to be paid under the Bonded Contracts. Once any funds due under a
Bonded Contract are converted to cash or trust funds are co-mingled with other
funds,

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Surety will not have any “look back” or other rights with respect to any such
trust funds in such cash or co-mingled funds. Withdrawals from such account(s)
will be by check or similar instruments signed by a representative of Surety
and, at Surety’s option, countersigned by Indemnitors. Said trust(s) will
terminate on the payment by Indemnitors of all the contractual obligations for
the payment of which the trust(s) is created. The foregoing provisions of this
Section 10 are subject to the terms of any applicable intercreditor agreement.
Notwithstanding anything in this Agreement or any other Surety Credit Document
to the contrary, Surety acknowledges and agrees that absent the occurrence of an
Event of Default, Principal’s and Indemnitors’ cash management system or use of
funds will not be affected or changed in any respect by the terms of this
Agreement or any other Surety Credit Document and Principals and Indemnitors and
their Subsidiaries are not required by this Agreement or any other Surety Credit
Document (exclusive of the Bonds and Bonded Contracts) to segregate funds or
take any other action of any nature in order to comply with this Section 10.

      11. Premium Payment. Indemnitors agree to pay all premiums on the Bonds,
computed in accordance with the regular manual of rates in effect on the date
the Bond(s) are executed. The failure of any Indemnitor to pay the bond premiums
or the failure of Surety to receive premiums will not provide Indemnitors with
any defense to an action under this Agreement. Indemnitors also agree to pay all
premiums due Surety on any insurance policy(ies) issued by Surety for the
benefit of any Indemnitor.

      12. Corporate Identity and Existence. None of Principal or Indemnitors has
used any trade name (other than its legal name) or previous names within the one
(1) year period prior to the date of this Agreement other than those set forth
on Exhibit A, except for any such names that are not material to its business or
operations. Each of Principal and Indemnitors is a corporation or other legal
entity duly organized, validly existing, and in good standing under the laws of
the state and/or other jurisdiction as indicated in Exhibit A. Each of Principal
and Indemnitors has the corporate or other power to own its properties and to
engage in the business it conducts, and is duly qualified and in good standing
as a foreign corporation or other entity in the jurisdictions wherein the nature
of the business transacted by it or property owned by it makes such
qualification necessary, except where the failure to be so qualified could not
reasonably be expected to have a Material Adverse Effect. Each of Principal and
Indemnitors will maintain their formal existence (in good standing where
appropriate under state or other governing law) and remain or become duly
qualified (and in good standing where appropriate under state or other governing
law) as a foreign entity in each jurisdiction in which the conduct of their
respective businesses requires such qualification or license except where the
failure to be so qualified would not reasonably be expected to have a Material
Adverse Effect. Principal and Indemnitors will use reasonable efforts to furnish
Surety with any financial information related to Indemnitors or the Collateral
in the form and at the time reasonably appropriate and as reasonably requested
by Surety and as set out in Section 5 of this Agreement.

      13. Accounts; Financial Reporting; Books and Records. Indemnitors will:
(a) provide Surety with copies of yearly audited consolidated financial
statements as soon as reasonably practicable upon completion and in no event
later than one hundred twenty (120) days after the end of the period under
audit; and (b) furnish Surety with true copies of unaudited quarterly
consolidated financial statements for Indemnitors as soon as reasonably
practicable and in no event

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later than sixty (60) days after the end of the applicable quarterly period;
(c) provide Surety with copies of any and all financial records or similar
financial disclosures that Indemnitors provide to any lender under the terms set
out in any credit facility entered into or to be entered into by any
Indemnitors; and (d) such other financial information in a form as Surety will
reasonably require upon completion and in no event later than sixty (60) days
after the period under review; provided, however, that providing Surety with a
copy of the filing of such financial statements with the Securities and Exchange
Commission (which may be provided via e-mail to an e-mail address specified by
Surety) will be deemed to constitute satisfaction of the foregoing items (a) and
(b). These financial statements will be prepared in conformity with GAAP,
subject to normal year-end audit adjustments and the absence of footnotes as
applicable, and in each instance will present fairly and accurately the
financial condition of Indemnitors, as applicable, as of the dates of the
statements and the results of their operations for the periods then ended.
Indemnitors agree to immediately notify Surety of the occurrence of any material
change in their financial condition that would reasonably be expected to have a
Material Adverse Effect. Indemnitors represent that their books and records will
be kept accurately and in a timely manner and in accordance with good business
practices.

      Indemnitors at all times will use reasonable efforts to keep accurate and
complete Records of Indemnitors’ Accounts and Bonded Contracts, and make those
Records available for review, upon a reasonable and appropriate request by
Surety. Surety will have the right at all times during regular business hours to
free access to the papers of each Indemnitor including, without limitation, its
books, records, accounts, computer software, and other computer stored
information, licenses, copyrights, patents, and other intellectual property, for
the purpose of examining, copying, or reproducing the same. Each Indemnitor
authorizes and requests any and all depositories in which funds of any
Indemnitor may be deposited to furnish to Surety statements of account and any
other documents reflecting receipts and disbursements and any Person doing
business with Indemnitors is authorized to furnish any information requested by
Surety concerning any transaction. Surety may furnish copies of any and all
statements, agreements, and financial statements and any information which it
now has or may obtain concerning each of the Indemnitors to other Persons or
companies for the purpose of procuring co-suretyship or reinsurance, or during
the investigation of claims that may be, or have been, asserted against Surety.

      14. Representations; Duty to Notify Surety. None of Indemnitors intends to
file any proceeding in bankruptcy, or for reorganization, or for readjustment of
their debts under the Bankruptcy Code. Indemnitors acknowledge that any such
filing would be a fundamental change in circumstances. The representations and
warranties of Indemnitors contained in this Agreement are true and correct and
complete on and as of the date of this Agreement.

      Indemnitors hereby undertake the duty to notify Surety promptly of:
(i) any material change in the terms or provisions of any of the Bonded
Contracts that would materially and adversely affect Surety; and (ii) any
material change in any representation made in this Agreement or in any other
Surety Credit Document that would materially and adversely affect Surety.
Indemnitors acknowledge hereby that Surety has and will continue to rely upon
such information in undertaking its obligations to third parties under said
Bonds. Indemnitors will promptly notify Surety promptly if any of them becomes
aware of the occurrence of any Event of Default or of any fact, condition, or
event that only with the giving of notice or passage of time or both, would
become

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an Event of Default, or of the failure of Indemnitors to observe in any material
respect any of their respective undertakings hereunder and under any of the
Surety Credit Documents.

      15. Bankruptcy Court Approval. In the event: (a) any of Indemnitors file
for relief under the Bankruptcy Code; and (b) Surety determines that it is
necessary or desirable that bankruptcy court approval be obtained with respect
to this Agreement or the transactions contemplated hereunder, subject to
compliance with law and any applicable orders of the bankruptcy court, trustee,
receiver or equivalent Person, then Indemnitors will use their respective best
reasonable commercial efforts to obtain a court order which, among other things,
(i) determines that this Agreement (and any other Surety Credit Documents
entered into by Indemnitors with Surety) was proposed by Surety in good faith
and should be assumed within the meaning of Section 365 of the Bankruptcy Code;
and (ii) determines that Surety is a creditor who gave “new value” and entered
into a “contemporaneous exchange for value” with Indemnitors as contemplated by
the Bankruptcy Code, including, but not limited to, Sections 547(a)(2) and
547(c) of the Bankruptcy Code, when entering into this Agreement (and any other
documents entered into by any of Indemnitors with Surety).

      In such event, and at the request of Surety, Indemnitors, as applicable,
will promptly make any filings, take all actions, and use their respective best
efforts to obtain any and all other approvals and orders necessary or
appropriate for consummation of the transactions contemplated in this Agreement,
subject to their obligations to comply with any order of any bankruptcy court.

      In the event an appeal is taken, or a stay pending appeal is requested,
from any order entered in any bankruptcy proceeding, Indemnitors, as applicable,
will immediately notify Surety of such appeal or stay request and will provide
to Surety within one business day a copy of the related notice of appeal or
order of stay. Any of Indemnitors, as applicable, will also provide Surety with
written notice of any motion or application filed in connection with any appeal
from either of such orders.

      Indemnitors will cooperate in providing such information and evidence as
is necessary to obtain the orders described in this Section 15.

      16. [Intentionally Omitted]

      17. Use of Cash Collateral. Nothing herein will be deemed to be a consent
by Surety that Indemnitors use any “cash collateral,” within the meaning of
Section 363 of the Bankruptcy Code, including without limitation proceeds from
Bonded Contracts and the Collateral.

      18. [Intentionally Omitted]

      19. [Intentionally Omitted]

      20. One General Obligation — Default. Indemnitors will notify Surety
promptly if any of them becomes aware of the occurrence of any Event of Default
or of any fact, condition, or event that only with the giving of notice or
passage of time or both, could become an Event of Default, or of the failure of
Indemnitors in any material respect to observe any of their respective

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undertakings hereunder or under any of the Surety Credit Documents. It is
distinctly understood and agreed that all of the rights of Surety contained in
this Agreement will likewise apply insofar as applicable to any modification of
or supplement to this Agreement and to any other of the Surety Credit Documents.
Any default under the terms of this Agreement or any of the Surety Credit
Documents will constitute, likewise, a default by Indemnitors of every existing
agreement with Surety, and any default by Indemnitors of any other agreement
with Surety will constitute a default of this Agreement.

      21. Indemnitors Agree to Become Party Defendants. In the event of legal
proceedings against Surety, the subject matter of which pertains to this
Agreement, the Bonds, or any of the Bonded Contracts, Surety may apply for a
court order making any or all of Indemnitors party defendants, and each such
Indemnitor consents to the granting of such application, including consent to
the jurisdiction of the court in which the application is made, and agrees to
become such a party defendant or third-party defendant and to allow judgment, in
the event of judgment against Surety, to be rendered also against each such
Indemnitor, jointly and severally, in like amount and in favor of Surety. The
foregoing will not adversely affect the joint and several liability of each
Indemnitor to Surety for any and all Surety Loss, including, but not limited to,
any Surety Loss incurred in connection with any litigation in which such
Indemnitor is not named a third-party defendant.

      22. Indemnitors’ Waiver of Notice; Rights of Surety. Except as set forth
in Section 33, upon any execution, continuation, modification, renewal,
enlargement, or amendment of any Bond pursuant to the terms hereof or thereof,
Indemnitors waive notice of the execution, continuation, modification, renewal,
enlargement, or amendment of any Bond and of any fact, act, or information
concerning or affecting the rights or liabilities of Surety or Indemnitors
including, but not limited to, any acts giving rise to any Surety Loss under the
Bonds. Indemnitors hereby consent and agree that Surety may at any time, and
from time to time, without notice to or further consent from Indemnitors, either
with or without consideration, (i) surrender any property or other security of
any kind or nature whatsoever held by it or by any Person on its behalf or for
its account, securing any Surety; (ii) substitute for any collateral so held by
it or other collateral of like kind, or of any kind; (iii) modify the terms of
any Bonds, renewals of any UCC Financing Statements listing any of Indemnitors
as debtor and Surety as secured party, or any intercreditor agreement by and
between Surety and any banking institution party to a credit agreement or
facility with any Indemnitor relating to such credit agreement or facility, in
each case in any manner that is not in violation of the terms of this Agreement;
(iv) grant releases, compromises, and indulgences with respect to any of the
Surety Credit Documents to any Person now or hereafter liable thereunder or
hereunder; or (v) take or fail to take any action of any type whatsoever that is
not in violation of the terms of this Agreement. Notwithstanding the foregoing,
nothing contained in the above clause (iii) will limit Surety’s ability to
modify the terms of any of the Surety Credit Documents (other than this
Agreement) at any time (whether an Event of Default has occurred or is
continuing) to the extent necessary to keep Surety’s security interest in the
Collateral properly perfected pursuant to Section 5. No such action which Surety
will take or fail to take in connection with the Surety Credit Documents, or any
one of them, or any security for the payment of Surety or for the performance of
any obligations or undertakings of Indemnitors, nor any course of dealing with
Indemnitors, Surety, or any other Person, will release Indemnitors’ obligations
hereunder, affect this Agreement in any way, or afford Indemnitors any recourse
against Surety.

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      23. Indemnitors’ Knowing Consent to Agreement. Each of Indemnitors
warrants that it is specifically and beneficially interested in obtaining future
Bonds or the renewal of any existing Bonds. Indemnitors acknowledge that the
execution of this Agreement and the undertaking of indemnity was not made upon
any representation by Surety concerning the responsibility of any of Indemnitors
or concerning the competence of Indemnitors to perform. Indemnitors agree to
make no claim against Surety for any oral representations, promises, or
statements made to any of them by Surety or any of its agents or brokers, or for
the failure of Surety to disclose facts or information to Indemnitors. This
Agreement has been negotiated by the parties and each party has had the benefit
of counsel.

      24. Assignment. Surety, and only Surety, may assign or transfer, in whole
or in part, the Indebtedness and all or part of Surety’s interest in the
Collateral. The transferees will have the same rights and powers with reference
to the Collateral as are hereby given to Surety, and upon such transfer, to the
extent Surety has assigned its obligations with respect to such Collateral to
such transferee, Surety will be fully discharged from all claims with respect to
any Collateral so transferred, but will retain all rights and powers hereby
given with respect to any of the Collateral not so transferred. Indemnitors may
not assign or otherwise transfer their rights and duties under this Agreement
without Surety’s written approval. In any event, the covenants, representations,
warranties, and agreements of Indemnitors set forth herein will be binding upon
Indemnitors, their successors and assigns.

      25. Indemnitors’ Duty to Deliver and Execute Papers and Other Instruments.
Indemnitors agree upon the request of Surety, to sign, execute, file, and/or
deliver to Surety all documents, reports, papers, pleadings, and/or instruments
reasonably required to obtain and/or confirm any of Surety’s rights under this
Agreement or the Surety Credit Documents. During the term of this Agreement,
Indemnitors will furnish to Surety upon its reasonable written request and
reasonable prior notice a statement of all deposits by source and amount of all
withdrawals by payee for each project that is bonded by Surety.

      26. Indemnitors’ Representation. Quanta Services, Inc. will provide Surety
on an annual basis (and at such other intervals as Surety may reasonably require
with reasonable prior written notice) with a letter in which its Chief Financial
Officer, or equivalent officer, represents that he/she has no knowledge of the
existence of any condition, event, or act which constitutes, or which with
notice or the lapse of time, or both, would reasonably be expected to constitute
an Event of Default. If Surety feels that any such letter is overdue or has not
been timely provided, Surety may give written notice of same to Indemnitors, and
Quanta Services, Inc. agrees to provide such letter within thirty (30) days of
the date of such notice. Failure of Indemnitors to timely provide any such
letter (after such thirty (30) day cure period) or the presence of any
materially incorrect statement on such letter will constitute an Event of
Default on the part of Indemnitors after an additional fifteen (15) day written
notice from Surety unless such a letter is provided or otherwise secured within
such fifteen (15) day period. The Chief Financial Officer (or equivalent
officer) who submits such letter will have no personal liability or
responsibility of any nature to Surety, including, but not limited to, with
respect to the contents of such letter or the failure of Indemnitors to timely
provide such letter.

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      27. Payment of Labor, Material, and Other Costs. Indemnitor agrees to
first use any Bonded Contract Balances generated by Bonded Contracts to pay
valid labor, materials, and any other costs or expenses incurred when due in
connection with the performance of the Bonded Contracts; provided, that,
notwithstanding anything in this Agreement or any other Surety Credit Document
to the contrary, Surety acknowledges and agrees that absent the occurrence of an
Event of Default, Principal’s and Indemnitors’ cash management system or use of
funds will not be affected or changed in any respect by the terms of this
Agreement or any other Surety Credit Documents and Principals and Indemnitors
and their Subsidiaries are not required under the terms of this Agreement or any
other Surety Credit Document (exclusive of the Bonds and Bonded Contracts) to
segregate funds or take any other action of any nature in order to comply with
this Section 27.

      28. Rights of Surety to Take Possession of the Work. Upon the occurrence
of any Event of Default, in addition to other remedies provided herein, Surety
is authorized and empowered, but is not obligated to take possession of the Work
under any Bonded Contract and at the expense of Indemnitor to complete or to
contract for the completion of the same, or to consent to the reletting of the
completion thereof, or to take such other steps as in the discretion of Surety
may be advisable or necessary to obtain its release or to avoid Surety Loss.

      29. Rights of Surety to Perform Under the Bonded Contracts. Upon the
occurrence of any Event of Default, in addition to other remedies provided
therein, Surety is authorized and empowered, but is not obligated to take over
performance of the Work under any Bonded Contracts and at the expense of
Indemnitors to complete or to contract for the completion of the same, or to
consent to the reletting of the completion thereof, or to take such other steps
as in the discretion of Surety may be advisable or necessary to obtain its
release or to avoid Surety Loss.

      30. Right of Surety to Settle Claims. Surety will have the exclusive right
for itself and for Indemnitors to decide and determine in good faith and in a
reasonable manner whether any claim, demand, suit, or judgment on the Bonds will
be paid, settled, defended, or appealed. Any payment or determination made by
Surety that: (1) Surety was or might be liable therefor; and (2) such payments
were necessary or advisable to protect any of Surety’s rights or to avoid or
lessen Surety’s liability or alleged liability will be final, conclusive, and
binding upon Indemnitors; and any Surety Loss which may be sustained or incurred
will be paid by Indemnitors upon written demand by Surety. In the event of any
payment, settlement, compromise, or investigation, an itemized statement of
Surety Loss sworn to by an officer or authorized representative of Surety or
vouchers or other evidence of such Surety Loss will be prima facie evidence of
the fact and extent of the liability of Indemnitors to Surety in any claim or
suit and in any and all matters arising between and among Indemnitors and
Surety. Upon the occurrence of an Event of Default, Surety will have the
additional rights set out in Section 33.

      31. Authority of Surety to Make Loans to Indemnitors. In addition to the
other remedies provided herein, at the request of any Indemnitor, Surety is
authorized and empowered, but is not obligated to advance or loan money or
guarantee loans to any Indemnitors as Surety may see fit for the purpose of
completing performance of any of the Bonded Contracts, or for the purpose of
meeting operational expenses or paying other obligations, bonded or unbonded.
Such funds may be advanced or guaranteed at any time, whether before or after
default of such

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Indemnitor under the Bonded Contracts. Upon demand by Surety, Indemnitors will
be responsible to reimburse Surety for all funds advanced, loaned, or guaranteed
by Surety to any Indemnitor and all Surety Loss incurred by Surety in relation
thereto, notwithstanding the failure of such Indemnitor to so use those funds.
Indemnitors waive all notice of such advance, loan, or guarantee, and
acknowledge that whether to make any such advances, loans, or guarantees will be
made in the sole and absolute discretion of Surety.

      32. Authority of Surety to Amend Bond. Surety will have the right, and is
hereby authorized and empowered, but not required: (a) to increase or decrease
the penalty or penalties of any Bonds, to change Obligees therein, to execute
any continuation, enlargements, modifications, and renewals thereof or
substitute therefor with the same or different conditions, provisions or
Obligees, and with the same, larger, or smaller penalties, it being agreed that
this Agreement will apply to and cover such new or changed Bonds or renewals
even though the consent of Surety may or does substantially increase the
liability of the Indemnitors; or (b) to take such steps as it may deem necessary
or proper to obtain release from liability under the Bonds; or (c) to assent to
any changes in any Bonded Contract, including but not limited to, any change in
the time for completion of any Bonded Contract and to payments or advances
thereunder; or (d) to assent to or take any assignments of any Bonded Contract.
Notwithstanding anything to the contrary in this Agreement or any other Surety
Credit Document, prior to an occurrence of an Event of Default, except as may be
required by the provisions of any Bond, Bonded Contract, or applicable statute,
Surety may not amend or otherwise modify any provision of any Bond except upon
the request of a Principal or Indemnitor.

      During the continuance of any Event of Default, Indemnitors agree that
they have no right to, and will not, challenge the manner in which Surety
handles any claim under any Bond, including, but not limited to, any decision by
Surety whether to litigate, settle, or pay any claim (or any settlement or
resolution with any Obligee as to any Bonded Contract Balances) and/or assert
any defenses, set offs, back charges, etc. with respect to any claim; any such
determination with respect to any claim will be made by Surety in its sole and
absolute discretion.

      33. Rights and Remedies on Default. In addition to the rights and remedies
granted to it in this Agreement and in any other instrument or agreement
securing, evidencing, or relating to any of the Indebtedness, Surety will have
all the rights and remedies of a Surety under the UCC.

      In the event of the refusal or failure of Indemnitors to exonerate Surety
as required under the Indemnity Agreement, Indemnitors agree upon written demand
to provide to Surety a reasonable amount of money designated by Surety and/or
other collateral decided upon by Surety. Such funds and/or other collateral will
be held by Surety as collateral in addition to the indemnity and other
collateral afforded by this Agreement, with the right to use such funds and/or
other collateral or any part thereof, at any time in performance, payment, or
compromise of any obligations or liability, claims, demands, judgments, damages,
fees, and disbursements or other expenses due from Indemnitors. Said deposit
and/or provision of money and/or other collateral designated by Surety will be
required regardless of whether any Reserve has been established by Surety.
Without limiting the generality of the foregoing, in the event Surety posts a
Reserve, then Indemnitors will deliver to Surety cash in an amount equal to the
Reserve posted in addition to the Collateral.

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Demand will be sufficient if sent by certified mail, return receipt requested,
to Indemnitors at the address or addresses given herein or last known to Surety,
whether or not actually received. Indemnitors acknowledge that the failure of
Indemnitors to deposit with Surety, within five (5) days of such demand, the sum
demanded by Surety as collateral security (or, with respect to a Reserve, within
ten (10) days of such demand, the amount of such Reserve in accordance with
clause (e) of the definition of Event of Default) will cause irreparable harm to
Surety for which Surety has no adequate remedy at law. Indemnitors agree that
Surety will be entitled to injunctive relief for specific performance of the
obligations of Indemnitors to deposit with Surety the sum demanded as collateral
security and hereby waive any claims or defenses to the contrary. The deposit of
collateral pursuant to this Section 33 will not be deemed to cure any default
under the Bonded Contract(s) and Surety may, in its sole and absolute
discretion, refuse to issue any bonds; provided, however, the foregoing will not
be deemed to alter any provisions under the definition of Event of Default that
permit an Event of Default of the type described in clause (e) of the definition
of Event of Default to be cured upon the deposit of cash collateral.

      Without limiting the generality of the foregoing, upon the occurrence of
any Event of Default, Surety is entitled to require Indemnitors to deposit or
cause to be deposited, all checks, drafts, cash, and other remittances received
in payment upon any or all of the Bonded Contracts or other Collateral in a
special “lockbox” bank account at a financial institution designated by Surety,
over which account Surety alone has power of withdrawal. If an Event of Default
has occurred, or the agent for the lenders under the Bank Credit Documents
requests Surety to perfect, or any other Person has taken any action to perfect,
an assignment or Lien with respect to any Bonded Contracts or other Collateral
that is subject to the Contract Disputes Act, 41 U.S.C. §601, et. seq. and/or
any Federal Acquisition Regulations, Surety will have the right to designate a
collateral agent with respect to any such Bonded Contracts and other Collateral
that is subject to the Contract Disputes Act, 41 U.S.C. §601, et. seq. and/or
any Federal Acquisition Regulations, and said collateral agent will have the
right and authority to process notices of assignment and other documentation
necessary under the Contract Disputes Act, 41 U.S.C. §601, et. seq. to perfect
the security interest in such Bonded Contracts and other items of Collateral.
During the continuance of any Event of Default, Surety and any collateral agent
may further instruct any Obligee on any Bond, on behalf of Indemnitors and/or
Surety, to pay said remittances directly to Surety. The funds in said special
bank account will be held by Surety and/or any such collateral agent as security
for all Indebtedness. Said proceeds will be deposited in precisely the form
received, except for the endorsement of Indemnitors where necessary to permit
collection, which endorsement Indemnitors agree to make and which Surety and/or
any such collateral agent is hereby irrevocably authorized to make on
Indemnitors’ behalf. Pending such deposit, Indemnitors agree that they will not
commingle any such checks, drafts, cash, and other remittances with any of
Indemnitors’ funds or property, but will hold them separate and apart therefrom
and upon an express trust for Surety until deposit thereof is made in the said
special bank account. Surety will apply, as Surety deems appropriate, any and
all of the collected funds on deposit in the said special bank account against
the Indebtedness, the order and method of such application to be in the
discretion of Surety. Indemnitors agree to execute any documents and perform any
acts necessary to assure that remittances described in this paragraph are
received by Surety and/or any collateral agent as contemplated herein,
including, but not limited to, letters of direction to remit said funds to
Surety and/or any collateral agent as contemplated herein.

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      Upon an occurrence of an Event of Default, Surety is entitled to immediate
possession of the Collateral and may dispose of all or any portion of the
Collateral pursuant to the provisions of Article 9 of the UCC and may exercise
from time to time any other rights and remedies available to it under applicable
law, and Surety may require Indemnitors to assemble the Collateral and make it
available to Surety at a place to then be designated by Surety, which is
reasonably convenient to both parties.

      Indemnitors hereby waive any right they may have under any constitution,
statute, or rule of law to notice and/or a hearing prior to seizure of the
Collateral following an occurrence of an Event of Default. Surety will have no
custodial or ministerial duties to perform with regard to the Collateral except
for its safekeeping; and by way of explanation and not by way of limitation
thereof, Surety will incur no liability for any diminution in the value of the
Collateral unless caused by its willful misconduct; or its failure to notify any
party hereto that the Collateral should be so presented or surrendered.

      34. Preservation of Surety’s Rights. Surety will have every right and
remedy which a personal surety without compensation would have, including the
right to secure its discharge from the suretyship, and notwithstanding anything
contained herein to the contrary, the parties agree that with respect to all
funds due or to become due under the Bonded Contracts nothing herein will waive,
impair, or limit any right, power, or remedy of Surety under the Indemnity
Agreement, or at law or in equity, including, without limitation, Surety’s right
of equitable subrogation, which right the parties hereby expressly recognize. No
failure on the part of Surety to exercise, and no delay in exercising, any
right, power, or remedy hereunder will operate as a waiver thereof, nor will any
single or partial exercise of any such right, power or remedy by Surety,
preclude any other or further exercise thereof, or the exercise of any other
right, power or remedy. All remedies hereunder are cumulative and are not
exclusive of any other remedies provided by law.

      35. Authority of Surety to Elect Remedies. Each right, remedy, and power
of Surety provided in this Agreement, the Surety Credit Documents, or by law,
equity, or statute will be cumulative, and the exercise by Surety of any right,
remedy, or power will not preclude Surety’s simultaneous or subsequent exercise
of any or all other rights, powers, or remedies. The failure or delay by Surety
to exercise any right, power, or remedy will not waive any right, power, or
remedy. Except as required herein, no notice or demand upon Surety by any
Indemnitor will limit or impair Surety’s right to take any action under this
Agreement or to exercise any right, power, or remedy.

      36. Validity of Agreement. Failure to execute, or defective execution, by
any party will not affect the validity of this Agreement as to any other party
executing the same and each other party will remain fully bound and liable
hereunder. Executions of any application or submission for any Bond by any
Indemnitor will not abrogate, waive, or diminish any rights of Surety under this
Agreement.

      37. Waiver. Surety will not be deemed to have waived any of Surety’s
rights hereunder or under any other agreement, instrument, or paper signed by
any Indemnitor unless such waiver be in writing and signed by Surety. No delay
or omission by Surety in exercising

30

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any right will operate as a waiver of such right or any other right. A waiver on
any one occasion will not be construed as a bar to or waiver of any right or
remedy on future occasions.

      38. Notices. It is mutually agreed that any and all notices, demands, or
other communications herein provided for must be given in writing and will be
deemed given (a) if delivered in person, when so delivered, (b) if duly
deposited in the United States Mails, postage prepaid for certified mail, return
receipt requested, three (3) business days after so mailing, or (c) if delivered
prepaid to a nationally recognized overnight carrier and marked for next
business day delivery, one (1) business day being so delivered, in each case
after being properly addressed to the party to whom given at the address of such
party shown below in this Agreement, provided however, that any party may
specify any other address in the United States by giving at least ten (10) days
written notice thereof to each other party.

         
Surety:
  Federal Insurance Company
 
  15 Mountain View Road
 
  P.O. Box 1615
 
  Warren, New Jersey 07061-1615

  Attn.:   Edward J. Reilly

      John B. Fuoss
 
       
With a copy to:
  Manier & Herod
 
  2200 First Union Tower
 
  150 Fourth Avenue, North
 
  Nashville, Tennessee 37219

  Attn.:   Sam H. Poteet, Jr.

      Mary Paty Lynn LeVan
 
       
Indemnitors:
  Quanta Services, Inc.
 
  1360 Post Oak Blvd.
 
  Suite 2100
 
  Houston, Texas 77056

  Attn:   John R. Colson, CEO

      Dana A. Gordon, General Counsel
 
       
With a copy to:
  Duane Morris LLP
 
  3200 Southwest Freeway, Suite 3150
 
  Houston, Texas 77027-7534

  Attn:   Charles E. Harrell

      Shelton M. Vaughan

      39. Failure to Execute Additional Documents — No Effect. The failure of
Surety, Indemnitors, or any other party to execute documents referenced in this
Agreement as being “anticipated to be executed,” “anticipate entering into,” “to
be executed,” or words of similar effect, will not affect the validity and
enforceability of this Agreement by and among the parties hereto. This Agreement
will be effective from the date of its execution until terminated in writing by
the parties hereto regardless of whether any other document is entered into or
executed by any Person.

31

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      40. Governing Law. This Agreement will be governed by and construed and
enforced in accordance with the laws of the State of New York (without giving
effect to its conflict of laws principles). The parties hereto irrevocably
consent to the exclusive jurisdiction of the United States District Court or to
the extent not available because the jurisdictional pre-requisites are not met,
the Supreme Court of the State of New York, in each instance located in New York
County, New York, New York for the purpose of any litigation concerning this
Agreement. No party hereto will object to or contest New York County, New York,
New York as the proper venue for any action or proceeding to enforce the terms
hereof.

      41. Jury Waiver. TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW WHICH
CANNOT BE WAIVED, EACH PARTY HERETO HEREBY WAIVES, AND COVENANTS THAT IT WILL
NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT, OR OTHERWISE), ANY RIGHT TO TRIAL
BY JURY IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION, OR CAUSE OF
ACTION ARISING OUT OF OR BASED UPON THIS AGREEMENT, ANY OTHER OF THE SURETY
CREDIT DOCUMENTS, OR THE SUBJECT MATTER HEREOF, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING OR WHETHER IN CONTRACT OR TORT OR OTHERWISE. EACH
PARTY HERETO ACKNOWLEDGES THAT IT HAS BEEN INFORMED THAT THE PROVISIONS OF THIS
SECTION 42 CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH THE OTHER PARTIES HAVE
RELIED, ARE RELYING, AND WILL RELY IN ENTERING INTO THIS AGREEMENT. THE PARTIES
HERETO MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION 42 WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF SUCH OTHER PARTY TO THE WAIVER OF
ITS RIGHTS TO TRIAL BY JURY.

      42. Waiver by Indemnitors; No Marshaling of Assets. Surety may proceed
against any Collateral securing the Indebtedness and against parties liable
therefor in such order as it may elect, and neither Indemnitors, nor any surety
or guarantor for any Indemnitor nor, to the extent allowable by law, any
creditor of any Indemnitor will be entitled to require Surety to marshal assets.
The benefit of any rule of law or equity to the contrary is hereby expressly
waived.

      To the maximum extent permitted by applicable laws, Indemnitors:

          (a) Waive: (i) protest of all commercial paper at any time held by
Surety on which any Indemnitor is in any way liable; and (ii) notice (except as
otherwise required hereunder) and opportunity to be heard before exercise by
Surety of the remedies of self-help, setoff, or of other summary procedures
permitted by any applicable laws or by any agreement with any Indemnitor, and,
except where required hereby or by any applicable laws, notice of any other
action taken by Surety;

          (b) release Surety, its officers, directors, attorneys, employees, and
agents from (i) any and all claims, causes of action, or liabilities of any
nature whatsoever, fixed or

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contingent, liquidated or non-liquidated, caused by or related to any act of
omission, negligence, or other violation of law or breach of contract or other
duty on the part of any of them, occurring up to the date of this Agreement,
whether known or unknown, and whether discovered or reasonably capable of being
discovered; and (ii) any and all claims, causes of action, or liabilities of any
nature whatsoever caused by or relating to any act of omission, negligence, or
other violation of law or breach of contract or other duty on the part of any of
them, except for willful misconduct;

          (c) waive any defense arising by reason of, and agree that the rights
of Surety and the Indebtedness of Indemnitors will be absolute and unconditional
irrespective of: (i) any disability or other defense of any other Person;
(ii) the unenforceability or cessation from any cause whatsoever, other than the
indefeasible payment in full, of the Indebtedness; (iii) the application by any
of Indemnitors of the proceeds of any Collateral for purposes other than the
purposes represented by Indemnitors to Surety; (iv) any modification of the
Indebtedness in any form whatsoever, including without limitation the renewal,
extension, acceleration, or other changes in the time for payment of
Indebtedness, or other change in the terms of the Indebtedness or any part
thereof, including any increase or decrease of the rate of interest thereon in
accordance with this Agreement; (v) any right to deferral or modification of
Indemnitors’ obligations hereunder by reason of any bankruptcy, reorganization,
arrangement, moratorium, or other debtor relief proceeding; and (vi) any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, any other Person in respect to the Indebtedness;

          (d) waive any right to enforce any remedy that Surety now has or may
hereafter have against any other Person, and waive any benefit of, or any right
to participate in, any security whatsoever now or hereafter held by Surety; and

          (e) waive all claims, direct or indirect, absolute or contingent,
against any other borrower, guarantor, endorser, or surety arising from or
relating to this Agreement, any of the Surety Credit Documents, and/or the
Indebtedness. Without limiting the foregoing, Indemnitors waive all rights of
reimbursement, exoneration, indemnification, and/or contribution from any other
borrower, guarantor, endorser, or surety under or relating to this Agreement,
any of the Surety Credit Documents, and/or the secured indebtedness and waives
all rights of subrogation to the claims of Surety which may otherwise arise from
such payment. Surety may proceed against any Collateral securing the
Indebtedness and against parties liable therefor in such order as it may elect,
and neither Indemnitors nor any surety or guarantor for any Indemnitor nor, to
the extent allowable by law, any creditor of any Indemnitor will be entitled to
require Surety to marshal assets. The benefit of any rule of law or equity to
the contrary is hereby expressly waived.

      43. Entire Agreement. This Agreement and the Surety Credit Documents
represent the entire agreement between the parties concerning the subject matter
hereof, and all oral discussions and prior agreements are merged herein.

      44. Security Agreement. This Agreement constitutes a security agreement to
Surety and also a financing statement, both in accordance with the provisions of
the Uniform Commercial Code of every jurisdiction wherein such Code is in
effect, but the filing or recording of this Agreement, or an abstract hereof or
financing statement will be solely at the option of

33

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Surety and the failure to do so will not release or excuse any of the
obligations of Indemnitor under this Agreement. For the purpose of recording
this Agreement, a photocopy acknowledged before a Notary Public to be a true
copy hereof will be regarded as an original.

      45. Further Assurances. Indemnitors agree to do such further acts and
things, and to execute and deliver such additional conveyances, assignments,
agreements, and instruments, as Surety may at any time request in connection
with the administration and enforcement of this Agreement, and the other Surety
Credit Documents or any part thereof or in order better to assure and confirm
unto Surety its rights and remedies hereunder and thereunder.

      46. Binding Agreement; Assignment. This Agreement, and the terms,
covenants, and conditions hereof, will be binding upon the parties hereto and
their respective successors and assigns, and will inure to the benefit of the
parties, and their respective successors and assigns, except that Indemnitors
will not be permitted to assign this Agreement or any interest herein. Surety
agrees that no co-surety (exclusive of any surety of a joint venture partner)
will be entitled to rely on this Agreement without the written consent of Quanta
Services, Inc.

      47. Amendments, Miscellaneous. This Agreement may not be amended or
modified, except by a writing signed by or on behalf of the parties hereto. This
Agreement supersedes all prior agreements and proposals with respect to this
transaction whether written or oral, made by Surety or anyone acting with its
authorization. No modification of this Agreement will be valid unless made in
writing and signed by an authorized officer of Surety. This Agreement is not
assignable, and no party other than Principal and Indemnitors will be entitled
to rely on this Agreement except as herein provided otherwise.

      48. Severability. Should any provision of this Agreement be invalid or
unenforceable for any reason, the remaining provisions hereof will remain in
full effect.

      49. Time of Essence. Time is of the essence in this Agreement, and all
dates and time periods specified herein will be strictly observed, except that
Surety may permit specific deviations therefrom by its written consent.

      50. Captions Not Controlling. Captions and headings have been included in
this Agreement for the convenience of the parties, and will not be construed as
affecting the content of the respective paragraphs.

      51. Counterparts. This Agreement may be executed by the parties
independently in any number of counterparts, all of which together will
constitute but one and the same instrument which is valid and effective as if
all parties had executed the same counterpart.

      52. Additional Principals and/or Indemnitors. Indemnitors and Principals
acknowledge this Agreement can be amended via rider executed by Quanta Services,
Inc. to add other Persons as Indemnitor and/or Principal to this Agreement and
Indemnitors and Principals waive any and all notice in connection with the
addition of additional Indemnitors and Principals and further acknowledge the
rights and obligations provided herein will apply to all Indemnitors and
Principals whenever made a party to this Agreement. Quanta Services, Inc. has
full right and

34

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

 

authority to execute any and all documents on behalf of any Principals and
Indemnitors to be added to this Agreement without requiring the separate
signature of any such additional Principal and Indemnitors.

      53. Power of Attorney. Each Principal and Indemnitor hereby irrevocably
constitutes and appoints Quanta Services, Inc. (and all officers, employees, or
agents designated by Quanta Services, Inc.), with full power of substitution, as
such Principal’s and/or Indemnitor’s true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of such Principal and/or
Indemnitor and in the name of such Principal and/or Indemnitor or in its own
name, from time to time in Quanta Services, Inc.’s discretion, to take any and
all appropriate action and to execute and deliver any and all documents and
instruments which may be necessary or desirable to accomplish the purpose of
this Agreement and to amend, modify, or supplement this Agreement or other
Surety Credit Documents in any manner. Each Principal and Indemnitor hereby
ratifies and agrees to be bound by all that Quanta Services, Inc. will lawfully
do or cause to be done by virtue hereof.

35

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

 

      IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above written.

            SURETY:

FEDERAL INSURANCE COMPANY
      By:   /s/ Edward J. Reilly   Name:   Edward J. Reilly     Title:  
Assistant Secretary       PRINCIPAL & INDEMNITORS:

QUANTA SERVICES, INC.
      By:   /s/ Dana A. Gordon       Name:   Dana A. Gordon      Title:   Vice
President        ARBY CONSTRUCTION, INC.
AUSTIN TRENCHER, INC.
CCLC, INC.
CONTI COMMUNICATIONS, INC.
CROCE ELECTRIC COMPANY, INC.
DILLARD SMITH CONSTRUCTION COMPANY
DRIFTWOOD ELECTRICAL CONTRACTORS, INC.
GLOBAL ENERCOM MANAGEMENT, INC.
GOLDEN STATE UTILITY CO.
H.L. CHAPMAN PIPELINE CONSTRUCTION, INC.
MANUEL BROS., INC.
MEARS GROUP, INC.
NETWORK ELECTRIC COMPANY
NORTH SKY COMMUNICATIONS, INC.
PARKSIDE SITE & UTILITY COMPANY CORPORATION
PARKSIDE UTILITY CONSTRUCTION CORP.
each a Delaware corporation
      By:   /s/ Dana A. Gordon       Name:   Dana A. Gordon      Title:   Vice
President     

36

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            QUANTA DELAWARE, INC.
QUANTA GOVERNMENT SERVICES, INC.
QUANTA GOVERNMENT SOLUTIONS, INC.
QUANTA UTILITY INSTALLATION
COMPANY, INC.
R.A. WAFFENSMITH & CO., INC.
SOUTHEAST PIPELINE CONSTRUCTION, INC.
SOUTHWESTERN COMMUNICATIONS, INC.
SPALJ CONSTRUCTION COMPANY
SUMTER UTILITIES, INC.
TOM ALLEN CONSTRUCTION COMPANY
UNDERGROUND CONSTRUCTION CO., INC.
UTILITY LINE MANAGEMENT SERVICES, INC.
VCI TELCOM, INC.
W.C. COMMUNICATIONS, INC.,
each a Delaware corporation
      By:   /s/ Dana A. Gordon       Name:   Dana A. Gordon      Title:   Vice
President        ADVANCED TECHNOLOGIES AND INSTALLATION CORPORATION,
ALLTECK LINE CONTRACTORS (USA), INC.
POTELCO, INC.,
each a Washington corporation
      By:   /s/ Dana A. Gordon       Name:   Dana A. Gordon      Title:   Vice
President        BRADFORD BROTHERS, INCORPORATED
TTM, INC.,
each a North Carolina corporation
      By:   /s/ Dana A. Gordon       Name:   Dana A. Gordon      Title:   Vice
President     

37

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            CMI SERVICES, INC.
TRAWICK CONSTRUCTION COMPANY, INC.,
each a Florida corporation
      By:   /s/ Dana A. Gordon       Name:   Dana A. Gordon      Title:   Vice
President        CROWN FIBER COMMUNICATIONS, INC.,
a Virginia corporation
      By:   /s/ Dana A. Gordon       Name:   Dana A. Gordon      Title:   Vice
President        ENVIRONMENTAL PROFESSIONAL ASSOCIATES,LIMITED
a California corporation
      By:   /s/ Dana A. Gordon       Name:   Dana A. Gordon      Title:   Vice
President        FIVE POINTS CONSTRUCTION CO.
MEJIA PERSONNEL SERVICES, INC.
TRANS TECH ACQUISITION, INC.
SOUTHWEST TRENCHING COMPANY, INC.
each a Texas corporation
      By:   /s/ Dana A. Gordon       Name:   Dana A. Gordon      Title:   Vice
President        INTERMOUNTAIN ELECTRIC, INC.,
a Colorado corporation
      By:   /s/ Dana A. Gordon       Name:   Dana A. Gordon      Title:   Vice
President     

38

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            IRBY CONSTRUCTION COMPANY,
a Mississippi corporation
      By:   /s/ Dana A. Gordon       Name:   Dana A. Gordon      Title:   Vice
President        METRO UNDERGROUND SERVICES, INC. OF ILLINOIS,
PROFESSIONAL TELECONCEPTS, INC.,
each an Illinois corporation
      By:   /s/ Dana A. Gordon       Name:   Dana A. Gordon      Title:   Vice
President        PAR ELECTRICAL CONTRACTORS, INC.,
a Missouri corporation
      By:   /s/ Dana A. Gordon       Name:   Dana A. Gordon      Title:   Vice
President        PROFESSIONAL TELECONCEPTS, INC.,
a New York corporation
      By:   /s/ Dana A. Gordon       Name:   Dana A. Gordon      Title:   Vice
President        THE RYAN COMPANY, INC.,
a Massachusetts corporation
      By:   /s/ Dana A. Gordon       Name:   Dana A. Gordon      Title:   Vice
President     

39

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            TOTAL QUALITY MANAGEMENT SERVICES, LLC,
a Delaware limited liability company
COAST TO COAST, LLC,
a California limited liability company
      By:   Environmental Professional Associates,
Limited, Its Sole Member
      By:   /s/ Dana A. Gordon       Name:   Dana A. Gordon      Title:   Vice
President        QUANTA UTILITY SERVICES, LLC,
a Delaware limited liability company
      By:   PAR Electrical Contractors, Inc.,
Its Sole Member
      By:   /s/ Dana A. Gordon       Name:   Dana A. Gordon      Title:   Vice
President        TJADER, L.L.C.
OKAY CONSTRUCTION COMPANY, LLC
each a Delaware limited liability company
      By:   Spalj Construction Company,
Its Sole Member
      By:   /s/ Dana A. Gordon       Name:   Dana A. Gordon      Title:   Vice
President     

40

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            MEARS/CPG LLC
MEARS ENGINEERING/ LLC
MEARS/HDD, LLC
MEARS SERVICES LLC
each a Michigan limited liability company
      By:   By Mears Group, Inc., The Sole Member of each of the foregoing
limited liability companies
      By:   /s/ Dana A. Gordon       Name:   Dana A. Gordon      Title:   Vice
President        S.K.S. PIPELINERS, LLC,
a Delaware limited liability company
      By:   Arby Construction, Inc., Its Sole Member
      By:   /s/ Dana A. Gordon       Name:   Dana A. Gordon      Title:   Vice
President        TNS-VA, LLC,
a Delaware limited liability company
      By:   Professional Teleconcepts, Inc., Its Sole Member
      By:   /s/ Dana A. Gordon       Name:   Dana A. Gordon      Title:   Vice
President     

41

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            NORTH HOUSTON POLE LINE, L.P.
LINDSEY ELECTRIC, L.P.
DIGCO UTILITY CONSTRUCTION, L.P.
each a Texas limited partnership
      By:   Mejia Personnel Services, Inc., Its General Partner
      By:   /s/ Dana A. Gordon       Name:   Dana A. Gordon      Title:   Vice
President        QUANTA SERVICES MANAGEMENT PARTNERSHIP, L.P.
a Texas limited partnership
      By:   QSI, Inc., Its General Partner
      By:   /s/ Dana A. Gordon       Name:   Dana A. Gordon      Title:   Vice
President        TRANS TECH ELECTRIC, L.P.,
a Texas limited partnership
      By:   TTGP, Inc., Its General Partner
      By:   /s/ Dana A. Gordon       Name:   Dana A. Gordon      Title:   Vice
President     

42

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EXHIBIT A

PRINCIPAL

(Attached)

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

 

EXHIBIT B

ADDITIONAL PERMITTED LIENS

(Attached)

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

 

EXHIBIT C

FORM OF OPINION LETTERS

(Attached)

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

 

EXHIBIT A

                          LOCATION OF CHIEF EXECUTIVE             JURISDICTION  
OFFICE AND PRINCIPAL         PRINCIPAL   OF FORMATION   PLACE OF BUSINESS   TAX
ID NO.   PRIOR NAMES OR TRADE NAMES
 
Quanta Services, Inc.
  Delaware   1360 Post Oak Blvd., Suite 2100 Houston, Texas 77056   74-2851603  
None
 
Advanced Technologies and Installation Corporation
  Washington   655 Glennville
Richardson, TX 75081   91-1528002   Telecom Network Specialists, Inc.
JT Communications, Inc.
 
Allteck Line Contractors (USA), Inc.
  Washington   4940 Still Creek Avenue
Burnaby, British Columbia
Canada, V5C 4E4   98-0198185   None
 
Arby Construction, Inc.
  Delaware   19705 W. Lincoln Avenue
New Berlin, WI 53146   76-0605516   None
 
Austin Trencher, Inc.
  Delaware   9250 FM 2243
Leander, TX 78641   76-0598342   None
 
Bradford Brothers, Incorporated
  North Carolina   11712 Statesville Road
Huntersville, NC 28078   56-0861169   Lake Norman Pipeline, LLC
 
CCLC, Inc.
  Delaware   5 Johnson Drive, Suite 4
Raritan, NJ 08869   74-2947665   None
 
Coast to Coast, LLC
  California   1441 Garden Highway
Yuba City, CA 95991   68-0386826   None
 
CMI Services, Inc.
  Florida   1555 South Blvd.
Chipley, FL 32428   59-3371172   Communication Manpower, Inc.
 
Conti Communications, Inc.
  Delaware   5 Johnson Drive, Suite 4
Raritan, NJ 08869   76-0605511   Delaware Conti Communications, Inc.

1

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                          LOCATION OF CHIEF EXECUTIVE             JURISDICTION  
OFFICE AND PRINCIPAL         PRINCIPAL   OF FORMATION   PLACE OF BUSINESS   TAX
ID NO.   PRIOR NAMES OR TRADE NAMES
 
Croce Electric Company, Inc.
  Delaware   2 Betty Street
Everett, MA 02149   76-0605518   None
 
Crown Fiber Communications, Inc.
  Virginia   800 Satellite Blvd. Suwanee, GA 30024   54-1612812   Fiber
Technology
 
              World Fiber
 
               

              DeltaComm
 
               

              Marlboro Cablevision

              Constructors
 
               

              Choice Optics Communications
 
               

              Myers Cable, Inc.
 
               

              Sycamore Shoals

              Communications, Inc.
 
Digco Utility Construction, L.P.
  Delaware   1608 Margaret Street
Houston, TX 77093   76-0612176   None
 
Dillard Smith Construction Company
  Delaware   4001 Industry Dr. Chattanooga, TN 37416   76-0589264   P.D.G.
Electric

              Power Engineering & Testing
 
               

              Haines Construction Company
 
               

              Dillard Smith Construction

              Company (Delaware)
 

2

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                          LOCATION OF CHIEF EXECUTIVE             JURISDICTION  
OFFICE AND PRINCIPAL         PRINCIPAL   OF FORMATION   PLACE OF BUSINESS   TAX
ID NO.   PRIOR NAMES OR TRADE NAMES
 
Driftwood Electrical Contractors, Inc.
  Delaware   2004 Stanford Road
Lancaster, KY 40444   76-0589278   Maddux Communications
 
Environmental Professional
Associates, Limited
  California   1441 Garden Highway
Yuba City, CA 95991   68-0248659   Provco

Tip Top Arborists, Inc.
 
Five Points Construction Co.
  Texas   5145 Industrial Way
Benicia, CA 94510   94-2738636   None
 
Global Enercom Management, Inc.
  Delaware   2500 Wilcrest Drive, Suite 100 Houston, TX 77042   76-0598339   GEM
Engineering Co., Inc.
 
Golden State Utility Co.
  Delaware   2001 West Tuolomne Road
Turlock, CA 95380   76-0567490   Sanders Construction Company

              North Pacific Construction Co., Inc.
 
               

              Delaware North Pacific Construction Co.
 
H. L. Chapman Pipeline Construction, Inc.
  Delaware   9250 FM 2243
Leander, TX 78641   76-0598341   DB Utilities

              Sullivan Welding
 
Intermountain Electric, Inc.
  Colorado   602 South Lipan Street
Denver, CO 80223   84-0906573   Colorado IM Electric
 
Irby Construction Company
  Mississippi   817 S. State Street
Jackson, MS 39201   64-0902002   None
 
Lindsey Electric, L.P.
  Texas   1608 Margaret Street
Houston, TX 77093   02-0557008   None
 
Manuel Bros., Inc.
  Delaware   908 Taylorville Road, Suite 104 Grass Valley, CA 95949   76-0577087
  Renaissance Construction

              Western Directional
 

3

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

 

                          LOCATION OF CHIEF EXECUTIVE             JURISDICTION  
OFFICE AND PRINCIPAL         PRINCIPAL   OF FORMATION   PLACE OF BUSINESS   TAX
ID NO.   PRIOR NAMES OR TRADE NAMES
 
Mears Engineering/ LLC
  Michigan   4500 N. Mission Road Rosebush, MI 48878   N/A   None
 
Mears Group, Inc.
  Delaware   4500 N. Mission Road Rosebush, MI 48878   76-0612167   None
 
Mears/HDD, LLC
  Michigan   4500 N. Mission Road Rosebush, MI 48878   N/A   None
 
Mears Services LLC
  Michigan   4500 N. Mission Road Rosebush, MI 48878   N/A   None
 
Mears/CPG LLC
  Michigan   4500 N. Mission Road Rosebush, MI 48878   N/A   None
 
Mejia Personnel Services, Inc.
  Texas   431 West Bedford-Euless Road Suite F Hurst, TX 76053   75-2575734  
None
 
Metro Underground Services, Inc. of Illinois
  Illinois   901 Ridgeway Avenue
Aurora, IL 60506   36-4125701   Metro Underground Services, Inc.
 
Network Electric Company
  Delaware   5425 Louis Lane
Reno, NV 89511   76-0598345   DE Network Electric Company
 
North Houston Pole Line, L.P.
  Texas   1608 Margaret Street
Houston, TX 77093   74-1675857   North Houston Pole Line Corp.

Lindsey Electric
 
North Sky Communications, Inc.
  Delaware   120 N.E. 136th Avenue Vancouver, WA 98684   76-0605490   None
 
Okay Construction Company, LLC
  Delaware   208 Rum River Drive
Princeton, MN 55371   76-0612169   None
 

4

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

 

                          LOCATION OF CHIEF EXECUTIVE             JURISDICTION  
OFFICE AND PRINCIPAL         PRINCIPAL   OF FORMATION   PLACE OF BUSINESS   TAX
ID NO.   PRIOR NAMES OR TRADE NAMES
 
PAR Electrical Contractors, Inc.
  Missouri   4770 North Belleview Avenue Suite 300 Kansas City, MO 64116  
44-0591890   Riggin & Diggin

              Harker & Harker
 
               

              Union Power Construction
Company
 
               

              Seaward Corporation
 
               

              Mustang Line Contractors, Inc.
 
               

              Lineco Leasing, LLC
 
               

              Par Infrared Consultants
 
Parkside Site & Utility Company
Corporation
  Delaware   123 King Phillip Street
Johnston, RI 02919   76-0612181   None
 
Parkside Utility Construction Corp.
  Delaware   123 King Phillip Street
Johnston, RI 02919   76-0612160   None
 
Potelco, Inc.
  Washington   14103 8th Street East
Sumner, WA 98390   91-0784248   Kingston Constructors

              Kuenzi Construction
 
               

              NorAm Telecommunications
 
               

              Potelco, Incorporated
 
Professional Teleconcepts, Inc.
  Illinois   Route 12 South
Norwich, NY 13815   36-3785874   None
 
Professional Teleconcepts, Inc.
  New York   Route 12 South
Norwich, NY 13815   16-1246233   Airlan Telecom Services, L.P.
 

5

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

 

                          LOCATION OF CHIEF EXECUTIVE             JURISDICTION  
OFFICE AND PRINCIPAL         PRINCIPAL   OF FORMATION   PLACE OF BUSINESS   TAX
ID NO.   PRIOR NAMES OR TRADE NAMES
 
Quanta Delaware, Inc.
  Delaware   300 Delaware Avenue
9th Floor
Wilmington, DE 19801   51-6508285   None
 
Quanta Government Services, Inc.
  Delaware   1360 Post Oak Blvd. Suite 2100 Houston, Texas 77056   76-0605504  
None
 
Quanta Government Solutions, Inc.
  Delaware   1360 Post Oak Blvd. Suite 2100 Houston, Texas 77056   76-0612166  
Quanta LI Acquisition, Inc.
 
Quanta Services Management Partnership, L.P.
  Texas   1360 Post Oak Blvd. Suite 2100 Houston, Texas 77056   76-0574732  
None
 
Quanta Utility Installation Company, Inc.
  Delaware   1360 Post Oak Blvd. Suite 2100 Houston, Texas 77056   76-0592449  
None
 
Quanta Utility Services, LLC
  Delaware   4770 North Belleview Avenue Suite 300
Kansas City, MO 64116   76-0589263   Great Western Enterprises, Inc.

Bore Specialists
 
               

              TVS Systems, Inc.
 
               

              Netcom Management Group, Inc.
 
               

              Northern Line Layers, LLC
 
R.A. Waffensmith & Co., Inc.
  Delaware   2042 N. Kelty Road
Franktown, CO 80116   76-0589266   Dahl Trenching
 
S.K.S. Pipeliners, LLC
  Delaware   19705 W. Lincoln Avenue
New Berlin, WI 53146   76-0605517   None
 

6

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

 

                          LOCATION OF CHIEF EXECUTIVE             JURISDICTION  
OFFICE AND PRINCIPAL         PRINCIPAL   OF FORMATION   PLACE OF BUSINESS   TAX
ID NO.   PRIOR NAMES OR TRADE NAMES
 
Southeast Pipeline Construction, Inc.
  Delaware   245 N. Main Street
Jasper, GA 30143   76-0612175   None
 
Southwestern Communications, Inc.
  Delaware   15427 E. Fremont Drive Englewood, CO 80112   76-0612171   NetCom
Management Group
 
Southwest Trenching Company, Inc.
  Texas   1608 Margaret St.
Houston, Texas 77093   76-0106600   None
 
Spalj Construction Company
  Delaware   22360 County Road 12
Deerwood, MN 56444   76-0567489   Span-Con of Deerwood

              Wilson Roadbores
 
               

              Dot 05 Optical
Communications
 
               

              Smith Contracting
 
               

              Thorstad Brothers Tiling
 
               

              Tjader & Highstrom
 
               

              Dot 05, LLC
 
Sumter Utilities, Inc.
  Delaware   1151 North Pike West
Sumter, SC 29153   76-0577089   Utilco, Inc.

              Old Lesco Corporation, Inc.
 
The Ryan Company, Inc.
  Massachusetts   25 Constitution Drive
Taunton, MA 02780   04-2387367   Eastern Communications

              The Ryan Company Inc. of Massachusetts
 
               

              The Ryan Company of Massachusetts
 
               

              Ryan Company Inc. (The)
 
               

              The Ryan Company Incorporated of Massachusetts
 
               
 

7

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

 

                          LOCATION OF CHIEF EXECUTIVE             JURISDICTION  
OFFICE AND PRINCIPAL         PRINCIPAL   OF FORMATION   PLACE OF BUSINESS   TAX
ID NO.   PRIOR NAMES OR TRADE NAMES
 
Tjader, L.L.C.
  Delaware   541 Industrial Drive
New Richmond, WI 54017   76-0654709   None
 
TNS-VA, LLC
  Delaware   Route 12 South
Norwich, NY 13815   N/A   None
 
Tom Allen Construction Company
  Delaware   3775 Tosovsky Lane
Edwardsville, IL 62025   76-0589277   TA Construction

              Specialty Drilling Technology, Inc.
 
               

              T&S Construction Company
 
               

              Taylor Built, Inc.
 
Total Quality Management Services, LLC
  Delaware   1441 Garden Highway
Yuba City, CA 95991   48-1278515   None
 
Trans Tech Acquisition, Inc.
  Texas   1360 Post Oak Blvd., Ste. 2100 Houston, TX 77056   74-2983032   None
 
Trans Tech Electric, L.P.
  Texas   4601 Cleveland Road
South Bend, IN 46628   35-1553093   None
 
Trawick Construction Company, Inc.
  Florida   1555 South Blvd.
Chipley, FL 32428   59-0907078   None
 
TTM, Inc.
  North Carolina   6135 Lakeview Road Suite 500 Charlotte, NC 28269   56-1356956
  TTM of North Carolina, Inc.

              TTMF, Inc.
 

8

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

 

                          LOCATION OF CHIEF EXECUTIVE             JURISDICTION  
OFFICE AND PRINCIPAL         PRINCIPAL   OF FORMATION   PLACE OF BUSINESS   TAX
ID NO.   PRIOR NAMES OR TRADE NAMES
 
Underground Construction Co., Inc.
  Delaware   5145 Industrial Way
Benicia, CA 94510   76-0575471   Underground Construction Co.
 
               

              Delaware Underground Construction Co.
 
               

              Metro Underground Construction Co.
 
               

              Underground Electric
Construction Company
 
               

              Hudson & Poncetta, Inc.
 
Utility Line Management Services, Inc.
  Delaware   4770 North Belleview Avenue, Suite 300 Kansas City, Missouri
64116-2188   76-0612162   Quanta LIV Acquisition, Inc.
 
VCI Telcom, Inc.
  Delaware   1921 West Eleventh Street
Upland, CA 91786   76-0589274   None
 
W. C. Communications, Inc.
  Delaware   1921 West Eleventh Street
Upland, CA 91786   76-0598348   West Coast Communications
 

9

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

 

EXHIBIT B
LIENS EXISTING ON THE CLOSING DATE

                  Company   Secured Party   Jurisdiction   Type of Filing  
Filing Information
 
PAR Electrical Contractors, Inc.
  Alcan Aluminum
Corporation   Missouri Secretary of State   Original   #20020113972J filed
10/15/02
 
Arby Construction, Inc.
  Associated Bank N.A.   Delaware Secretary of State   Original   #11661573
filed 11/13/01
 
Arby Construction, Inc.
  Associated Bank N.A.   Wisconsin Secretary of State   Original   #020000945018
filed 1/10/02
 
Arby Construction, Inc.
  Associated Bank N.A.   Wisconsin Secretary of State   Original   #020002935423
filed 2/08/02
 
Mears HDD, Inc.
  Bank One, Michigan   Michigan Secretary of State   Original   #D613308 filed
1/27/00
 
Mears/CPG, Inc.
  Bank One, Michigan   Michigan Secretary of State   Original   #D613309 filed
1/27/00
 
PAR Electrical Contractors, Inc.
  BCL Capital   Nevada Secretary of State   Original   #0108999 filed 6/19/01
 
Sumter Utilities, Inc.
  Blanchard Machinery
Company   Delaware Secretary of State   Original   #40900375 filed 3/31/04
 
Sumter Utilities, Inc.
  Blanchard Machinery
Company   South Carolina Secretary of State   Original   #1501324 filed 10/4/02
 
Sumter Utilities, Inc.
  Blanchard Machinery
Company   South Carolina Secretary of State   Original   #1408088 filed 5/16/03
 
Sumter Utilities, Inc.
  Blanchard Machinery
Company   South Carolina Secretary of State   Original   #0910232 filed 4/7/03
 
Sumter Utilities, Inc.
  Blanchard Machinery
Company   South Carolina Secretary of State   Original   #1205188 filed 1/22/02
 
Sumter Utilities, Inc.
  Blanchard Machinery
Company   South Carolina Secretary of State   Original   #110616C filed 3/9/01
 
Sumter Utilities, Inc.
  Blanchard Machinery
Company   South Carolina Secretary of State   Original   #1408179 filed 5/16/03
 
Bradford Brothers, Inc.
  Briggs Construction Equipment, Inc.   North Carolina Secretary of State  
Original
************
amendment   #20030025813F filed 3/17/03
*******************
#20030088548K filed 9/2/03
 
Bradford Brothers,
Incorporated
  Briggs Construction Equipment, Inc.   North Carolina Secretary of State  
Original   #20030023411H filed 3/10/03
 
Trawick Construction Company Inc.
  Canon Financial Services, Inc.   Florida Secretary of State   Original  
#200100101846 filed 5/9/01
 
PAR Electrical Contractors, Inc.
  Canyon State Oil
Company   Arizona Secretary of State   Original   #20011186461-4 filed 8/21/01
 
PAR Electrical Contractors, Inc.
  Canyon State Oil
Company   Nevada Secretary of State   Original   #0015437 filed 10/16/00
 
Bradford Brothers, Inc.
  Carolina Tractor and Equipment Company   North Carolina Secretary of State  
Original   #20040014973A filed 2/13/04
 
Bradford Brothers, Inc.
  Carter Machinery Co., Inc.   North Carolina Secretary of State   Original  
#20030077097G filed 7/31/03
 
Bradford Brothers, Inc.
  Carter Machinery Company, Inc.   North Carolina Secretary of State   Original
  #20010524852C filed 9/21/01
 
Bradford Brothers, Inc.
  Carter Machinery Company, Inc.   North Carolina Secretary of State   Original
  #20020038512C filed 4/2/02
 
Bradford Brothers,
Incorporated
  Carter Machinery Company, Inc.   North Carolina Secretary of State   Original
  #20010508233E filed 8/6/01
 

1

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

 

                  Company   Secured Party   Jurisdiction   Type of Filing  
Filing Information
 
Bradford Brothers,
Incorporated
  Carter Machinery Company, Inc.   North Carolina Secretary of State   Original
  #20010508065G filed 8/6/01
 
Bradford Brothers, Inc.
  Carter Machinery Co., Inc.   North Carolina Secretary of State   Original  
#20020085382C filed 8/5/02
 
Bradford Brothers, Inc.
  Carter Machinery Co., Inc.   North Carolina Secretary of State   Original  
#200200974999L filed 9/9/02
 
Bradford Brothers, Inc.
  Carter Machinery Co., Inc.   North Carolina Secretary of State   Original  
#20040003787B filed 1/13/04
 
Bradford Brothers, Inc.
  Carter Machinery Co., Inc.   North Carolina Secretary of State   Original  
#20040099238J filed 10/11/04
 
PAR Electrical Contractors, Inc.
  Carter Machinery Co., Inc.   Missouri Secretary of State   Original  
#20040051919B filed 5/10/04
 
Golden State Utility Co.
  Case Corporation   California Secretary of State   Original   #200115160788
filed 5/31/01
 
Quanta Services, Inc.
  Case Corporation   Texas Secretary of State   Original
Amendment
Correction   #04-0044924047 filed 10/15/03
#400608281 filed 03/17/04
#400637610 filed 04/12/04
 
Dillard Smith
Construction Company
  CCA Financial, LLC   Delaware Secretary of State   Original   #32903626 filed
11/5/03
 
Dillard Smith
Construction Company
  Cecil I. Walker Machinery Co.   North Carolina Secretary of State   Original  
#20000021026 filed 2/28/00
 
Dillard Smith
Construction Company
  Cecil I. Walker Machinery Co.   North Carolina Secretary of State   Original  
#20000021025 filed 2/28/00
 
Dillard Smith
Construction Company
  Cecil I. Walker Machinery Co.   North Carolina Secretary of State   Original  
#20000021024 filed 2/28/00
 
Dillard Smith
Construction Company
  Cecil I. Walker Machinery Co.   North Carolina Secretary of State   Original  
#20000021023 filed 2/28/00
 
Dillard Smith
Construction Company
  Cecil I. Walker Machinery Co.   Mecklenburg County,
North Carolina   Original   #200001772 filed 2/29/00
 
Dillard Smith
Construction Company
  Cecil I. Walker Machinery Company   Mecklenburg County,
North Carolina   Original   #200001773 filed 2/29/00
 
Bradford Brothers, Inc. d/b/a Edwards Pipeline Company
  Charlotte Tractor
Company   North Carolina Secretary of State   Original   #20030084777K filed
8/21/03
 
Global Enercom Management, Inc.
  CitiCorp Vendor Finance, Inc.   Delaware Secretary of State   Original  
#43372226 filed 12/1/04
 
R.A. Waffensmith & Co., Inc.
  Clarity Credit
Corporation   Colorado Secretary of State   Original   #20012019935 M filed
3/14/01
 
Quanta Services, Inc.
  CNH Capital America
LLC   Texas Secretary of State   Original   #50000452915 filed 1/6/2005
 
PAR Electrical Contractors, Inc.
  Colorado Machinery   Colorado Secretary of State   Original   #2003F074233
filed 7/9/03
 
PAR Electrical Contractors, Inc.
  Construction Machinery, Inc.   Nevada Secretary of State   Original   #0102750
filed 2/26/01
 

2

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

 

                  Company   Secured Party   Jurisdiction   Type of Filing  
Filing Information
 
Golden State Utility Co.
  Continental Resources Inc.   California Secretary of State   Original  
#199910260248 filed 4/2/99
 
Golden State Utility Co.
  Continental Resources Inc.   California Secretary of State   Original  
#200003160553 filed 1/25/00
 
The Ryan Company, Inc.
  David C. Varisco   Plymouth County
Superior Court,
Massachusetts   Civil Trial- Misc. Contract   Case 01 204624 filed 7/12/02
 
Golden State Utility Co.
  Danielson Construction, Inc.   California Secretary of State   Original  
#199907460676 filed 3/5/99
 
Quanta Services, Inc.
  De Lage Landen Financial Services, Inc.   Delaware Secretary of State  
Original   #41174335 filed 04/27/04
 
Mears, CPG, LLC
  FirstBank   Michigan Secretary of State   Original
************
Continuation   #D330575 filed 1/26/98
*******************
#2002031404-9 filed 12/4/02 –
continuation
 
Mears/HDD, Inc.
  FirstBank   Michigan Secretary of State   Original
************
Continuation   #D211493 filed 3/21/97
*******************
#D870862 filed 2/5/02 –
continuing
#D211493 filed 3/21/97
 
Mears/HDD, Inc.
  FirstBank   Michigan Secretary of State   Original
continuation   #D507420 filed 4/22/99
#2004047100-7 filed 03/04/04
 
R.A. Waffensmith & Co., Inc.
  Fleet Business
Credit, LLC   Colorado Secretary of State   Original   #20022092857 M filed
9/3/02
 
Dillard Smith
Construction Company
  Fleet Capital
Corporation   Delaware Secretary of State   Original   #21637374 filed 6/3/02
 
PAR Electrical Contractors, Inc.
  Hawthorne Machinery Co.   California Secretary of State   Original  
#0009660608 filed 3/31/00
 
H.L. Chapman Pipeline Construction, Inc.
  Holt Texas Ltd., dba Holt Company of Texas   Delaware Secretary of State  
Original   #11791818 filed 11/21/01
 
Potelco, Inc.
  IOS Capital, LLC   Washington Secretary of State   Original   #200325363938
filed 9/9/03
 
Mears/ CPG, LLC
  Irwin Union Bank and Trust Company   Michigan Secretary of State   Original  
#D674193 filed 7/13/00
 
Bradford Brothers, Inc.
  J.W. Burress, Inc.   North Carolina Secretary of State   Original  
#20010503538I filed 7/24/01
 
Bradford Brothers, Inc.
  J.W. Burress, Inc.   North Carolina Secretary of State   Original  
#20010506576H filed 7/9/01
 
Northern Line Layers,
LLC
  JCB Finance LLC   Delaware Secretary of State   Original   #22029555 filed
8/1/02
 
Quanta Services, Inc.
  Key Equipment Finance, a Division of Key Corporate Capital   Delaware
Secretary of State   Original   #20112304 filed 12/10/01
 
PAR Electrical Contractors, Inc.
  Kirby-Smith Machinery Inc.   Oklahoma Co., OK   Original   #0009820 filed
2/20/01
 
H.L. Chapman Pipeline Construction, Inc.
  Komatsu Financial L.P.   Delaware Secretary of State   In Lieu- original
filed in TX   #20861348 filed 3/13/02
 
H.L. Chapman Pipeline Construction, Inc.
  Komatsu Financial LP   Texas Secretary of State   Original   #01-003074 filed
1/5/01
 

3

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

 

                  Company   Secured Party   Jurisdiction   Type of Filing  
Filing Information
 
Sumter Utilities, Inc.
  Kubota Credit Corporation U.S.A.   South Carolina Secretary of State  
Original   #040903-1408168 filed 9/3/04
 
Sumter Utilities
  Kubota Credit Corporation U.S.A.   South Carolina Secretary of State  
Original   #1044516 filed 5/29/03
 
Sumter Utilities
  Kubota Credit Corporation U.S.A.   South Carolina Secretary of State  
Original   #1010530 filed 4/30/03
 
Sumter Utilities
  Kubota Credit Corporation U.S.A.   South Carolina Secretary of State  
Original   #1010438 filed 4/30/03
 
Sumter Utilities
  Kubota Credit Corporation U.S.A.   South Carolina Secretary of State  
Original   #1010290 filed 4/30/03
 
The Ryan Company, Inc.
  LaChance Financial Services, Inc. Assigned to:   Massachusetts Secretary of
State   Original   #00739745 filed 8/25/00

  GE Capital Colonial
Pacific            
 
PAR Electrical Contractors, Inc.
  Les Schwab Tire Center of Boise, Inc.   Washington Secretary of State  
Original   #200214971572 filed 5/28/02
 
PAR Electrical Contractors, Inc.
  Les Schwab Tire Center of Boise, Inc.   Missouri Secretary of State   Original
  #20040034270C filed 3/29/04
 
PAR Electrical Contractors, Inc.
  Les Schwab Tire Center of Boise, Inc.   Missouri Secretary of State   Original
  #20040114871K filed 11/1/04
 
Intermountain Electric
  Liebert North
America Corporation   Colorado Secretary of State   Original   #20012112389
filed 12/5/01
 
R.A. Waffensmith & Co., Inc.
  Minnwest Capital
Corporation   Colorado Secretary of State   Original   #20022085210 M filed
8/9/02
 
Quanta Services, Inc.
  Mirex   Texas Secretary of State   Original   #02-0032952528 filed 6/7/02
 
Sumter Utilities, Inc.
  Navistar Financial Corp.   South Carolina Secretary of State   Original  
#105127A filed 10/23/01
 
Potelco, Inc.
  NC Machinery Co   Washington Secretary of State   Original   #2004-260-3042-5
filed 9/16/04
 
Spalj Construction
Company
  New Holland Credit
Company   Minnesota Secretary of State   Original   #2227706 filed 5/15/00
 
Spalj Construction
Company
  New Holland Credit
Company   Minnesota Secretary of State   Original   #2236567 filed 6/15/00
 
Manuel Bros., Inc.
  Nikon Inc., Instrument Group   California Secretary of State   Original  
#0023560499 filed 8/21/00
 
Golden State Utility Co.
  Nixon-Egli Equipment Company of Southern California, Inc.   California
Secretary of State   Original   #200004860682 filed 2/14/00
 
Spalj Construction
Company
  NMHG Financial Services, Inc.   Minnesota Secretary of State   Original  
#2271895 filed 11/2/00
 
The Ryan Company, Inc.
  Peterson Tractor Co.   Massachusetts Secretary of State   Original  
#200208423380 filed 1/18/02
 
PAR Electrical Contractors, Inc.
  Portable Tool Sales & Service, Inc. Assigned to Associates Commercial
Corporation   Clay Co., Missouri   Original
**********
Amendment   #H170564 filed 9/24/99
******************
#A-H170564 filed 11/29/99
 

4

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

 

                  Company   Secured Party   Jurisdiction   Type of Filing  
Filing Information
 
PAR Electrical Contractors, Inc.
  Rasmussen Equipment Co.   Colorado Secretary of State   Original  
#20012002964 filed 1/11/01
 
PAR Electrical Contractors, Inc.
  Redburn Tire Co.   Nevada Secretary of State   Original   #0009471 filed
6/20/00
 
Dillard Smith
Construction Company
  Ringhaver Equipment
Company   Florida Secretary of State   Original   #200100114112 filed 5/23/01
 
Dillard Smith
Construction Company
  Ringhaver Equipment
Company   Florida Secretary of State   Original   #200100125788 filed 6/8/01
 
PAR Electrical Contractors, Inc.
  Rish Equipment
Company   Missouri Secretary of State   Original   #20040007266J filed 1/20/04
 
PAR Electrical Contractors, Inc.
  Rish Equipment
Company   Missouri Secretary of State   Original   #20040007267K filed 1/20/04
 
PAR Electrical Contractors, Inc.
  Rish Equipment
Company   Missouri Secretary of State   Original   #20040025494A filed 3/9/04
 
PAR Electrical Contractors, Inc.
  Rish Equipment
Company   Missouri Secretary of State   Original   #20040031174C filed 3/22/04
 
PAR Electrical Contractors, Inc.
  Rish Equipment
Company   Missouri Secretary of State   Original   #20040050840E filed 5/04/04
 
PAR Electrical Contractors, Inc.
  Rish Equipment
Company   Missouri Secretary of State   Original   #20040051904G filed 5/10/04
 
PAR Electrical Contractors, Inc.
  Rish Equipment
Company   Missouri Secretary of State   Original   #20040068030E filed 6/21/04
 
PAR Electrical Contractors, Inc.
  Rish Equipment
Company   Missouri Secretary of State   Original   #20040068031F filed 6/21/04
 
PAR Electrical Contractors, Inc.
  River City Petroleum, Inc.   Nevada Secretary of State   Original  
#2001012642-8 filed 12/5/01
 
Mears/CPG, LLC
  Roland Machinery
Company   Michigan Secretary of State   Original   #D627375 filed 3/6/00
 
Mears/CPG, LLC
  Roland Machinery
Company   Michigan Secretary of State   Original   #D627376 filed 3/6/00
 
Mears/CPG, LLC
  Roland Machinery
Company   Michigan Secretary of State   Original   #D658629 filed 5/26/00
 
Dillard Smith
Construction Company
  Rudd Equipment Co.   Mecklenburg County,
North Carolina   Original   #199906939 filed 7/19/99
 
Dillard Smith
Construction Company
  Rudd Equipment
Company   Mecklenburg County,
North Carolina   Original   #199906627 filed 7/8/99
 
Trans Tech Electric, L.P.
  Rudd Equipment
Company   Texas Secretary of State   Original   #03-0034559392 filed 7/15/03
 
H.L. Chapman Pipeline Construction, Inc.
  Safeco Credit Company, Inc.   Delaware Secretary of State   In Lieu  
#30271703 filed 1/14/03
 
H.L. Chapman Pipeline Construction, Inc.
  Safeco Credit Company, Inc.   Delaware Secretary of State   In Lieu – Original
filed in TX   #22861510 filed 10/31/02
 
Sumter Utilities, Inc.
  Safeco Credit Company, Inc.   Delaware Secretary of State   In Lieu – Original
filed in SC   #42349100 filed 8/17/04
 
Parkside Site and Utility Company Corporation
  Schmidt Equipment Inc.   Rhode Island Secretary of State   Original   #027012
filed 10/23/03
 

5

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

 

                  Company   Secured Party   Jurisdiction   Type of Filing  
Filing Information
 
PAR Electrical Contractors, Inc.
  Steelcase Financial Services, Inc.   Missouri Secretary of State   Original  
#20018069813E filed 12/28/01
 
Arby Construction, Inc.
  St. Francis Bank   Delaware Secretary of State   Original   #11138960 filed
9/11/01
 
Crown Fiber Communications, Inc.
  Textron Financial
Corporation   Barrow Co., GA   Original   #007-99-003034 filed 3/22/99
 
PAR Electrical Contractors, Inc.
  The CIT Group/Equipment Financing, Inc.   California Secretary of State  
Original   #0127060381 filed 9/26/01
 
Trawick Construction Company, Inc.
  Thompson Tractor Co., Inc.   Florida Secretary of State   Original  
#200408256484 filed 11/5/04
 
The Ryan Company, Inc.
  Tom Growney Equipment, Inc.   Massachusetts Secretary of State   Original  
#200213672140 filed 7/29/02
 
Arby Construction, Inc.
  Tractor Loader Sales   Wisconsin Secretary of State   Original   #040015153419
filed 9/27/04
 
H.L. Chapman Pipeline Construction, Inc.
  Trencor, Inc.   Texas Secretary of State   Original   #00-436961 filed 2/22/00
 
Croce Electric Company, Inc.
  Trinity Capital
Corporation   Massachusetts Secretary of State   Original   #01768453 filed
1/4/01
 
Ryan Company
  Tyler Equipment
Corporation   Massachusetts Secretary of State   Original   #200103470830 filed
6/25/01
 
Spalj Construction
Company
  U.S. Bancorp   Delaware Secretary of State   Original   #11664346 filed
11/13/01
 
Dillard Smith
Construction Company
  U.S. Bancorp Equipment Finance, Inc.   Delaware Secretary of State   Original
  #32506783 filed 9/26/03
 
Coast to Coast & Howard O Brown & Mary Kathleen Brown
  U.S. Small Business Administration   California Secretary of State   Original
************
Continuation   #94089846 filed 5/9/94 ******************* #99111C0068 filed
4/19/99 – continuation of #94089846 filed 5/9/94
 
Arby Construction, Inc.
  United Leasing Associates of America   Delaware Secretary of State   Original
  #41685918 filed 6/18/04
 
Arby Construction, Inc.
  United Leasing Associates of America   Delaware Secretary of State   Original
  #43577782 filed 12/20/04
 
Intermountain Electric Inc.
  Universal Tractor Co   Colorado Secretary of State   Original   #20002067174
filed 7/25/00
 
Intermountain Electric
  Universal Tractor Co.   Colorado Secretary of State   Original   #20002067173
filed 7/25/00
 
H.L. Chapman Pipeline Construction, Inc.
  Vermeer Equipment of Texas, Inc.   Texas Secretary of State   Original  
#0000596713 filed 10/02/00
 
H.L. Chapman Pipeline Construction, Inc.
  Vermeer Equipment of Texas, Inc.   Texas Secretary of State   Original  
#00-576707 filed 8/31/00
 
North Houston Pole Line, L.P.
  Vermeer Equipment of Texas, Inc.   Texas Secretary of State   Original  
#443354 filed 3/01/00
 
North Houston Pole Line, L.P.
  Vermeer Equipment of Texas, Inc.   Texas Secretary of State   Original  
#443355 filed 3/01/00
 

6

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

 

                  Company   Secured Party   Jurisdiction   Type of Filing  
Filing Information
 
Trawick Construction Company Inc.
  Vermeer Sales & Service, Inc.   Florida Secretary of State   Original  
#200000141496 filed 6/19/00
 
Trawick Construction Company Inc.
  Vermeer Sales & Service, Inc.   Florida Secretary of State   Original  
#200000127141 filed 6/1/00
 
Trawick Construction Company Inc.
  Vermeer Sales & Service, Inc.   Florida Secretary of State   Original  
#200000141495 filed 6/19/00
 
Dillard Smith
Construction Company
  Whayne Supply
Company   Tennessee Secretary of State   Original   #200043087 filed 12/1/00
 
Dillard Smith
Construction Company
  Whayne Supply
Company   Tennessee Secretary of State   Original   #201046652 filed 1/4/01
 
Potelco, Inc.
  Wells Fargo Bank Northwest, N.A.   Washington Secretary of State   Original  
#200223849091 filed 8/26/02
 
Dillard Smith
Construction Company
  Whayne Supply
Company   Delaware Secretary of State   Original   #11479216 filed 10/22/01
 
Dillard Smith
Construction Company
  Whayne Supply
Company   Delaware Secretary of State   Original   #11751051 filed 11/19/01
 
Dillard Smith
Construction Company
  Whayne Supply
Company   Delaware Secretary of State   Original   #41084963 filed 4/19/04
 
Dillard Smith
Construction Company
  Whayne Supply
Company   Delaware Secretary of State   Original   #42254680 filed 8/11/04
 
Dillard Smith
Construction Company
  Caterpillar
Financial Services   Delaware Secretary of State   Original   #42341610 filed
8/19/04
 
Dillard Smith
Construction Company
  Whayne Supply
Company   Delaware Secretary of State   Original   #42726943 filed 9/29/04
 
Dillard Smith
Construction Company
  Whayne Supply
Company   Delaware Secretary of State   Original   #43196518 filed 11/12/04
 
Dillard Smith
Construction Company
  Whayne Supply
Company   Delaware Secretary of State   Original   #50062712 filed 1/06/05
 
Dillard Smith
Construction Company
  Whayne Supply
Company   Delaware Secretary of State   Original   #50151432 filed 1/13/05
 
Dillard Smith
Construction Company
  Whayne Supply
Company   Kentucky Secretary of State   Original   #1606150 filed 12/29/00
 
Dillard Smith
Construction Company
  Whayne Supply
Company   Kentucky Secretary of State   Original   #1606772 filed 2/22/01
 
Dillard Smith
Construction Company
  Whayne Supply
Company   Tennessee Secretary of State   Original   #992-023809 filed 5/24/99
 
Dillard Smith
Construction Company
  Whayne Supply
Company   Tennessee Secretary of State   Original   #992-023810 filed 5/24/99
 

7

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

 

                  Company   Secured Party   Jurisdiction   Type of Filing  
Filing Information
 
Dillard Smith
Construction Company
  Whayne Supply
Company   Tennessee Secretary of State   Original   #992-029789 filed 6/28/99
 
Dillard Smith
Construction Company
  Whayne Supply
Company   Tennessee Secretary of State   Original   #993-020628 filed 4/20/99
 
Dillard Smith
Construction Company
  Whayne Supply
Company   Tennessee Secretary of State   Original   #993-027729 filed 5/18/99
 
Dillard Smith
Construction Company
  Whayne Supply
Company   Tennessee Secretary of State   Original   #993-027730 filed 5/18/99
 
Dillard Smith
Construction Company
  Whayne Supply
Company   Tennessee Secretary of State   Original   #101022520 filed 4/02/01
 
PAR Electrical Contractors, Inc.
  Williams Scotsman, Inc.   Missouri Secretary of State   Original  
#20040104448J filed 10/1/04
 
PAR Electrical Contractors, Inc.
  Williams Scotsman, Inc.   Missouri Secretary of State   Original  
#20040104681H filed 10/4/04
 
PAR Electrical Contractors, Inc.
  Williams Scotsman, Inc.   Missouri Secretary of State   Original  
#20040106182F filed 10/7/04
 
PAR Electrical Contractors, Inc.
  Williams Scotsman, Inc.   Missouri Secretary of State   Original  
#20040106183G filed 10/7/04
 
PAR Electrical Contractors, Inc.
  Williams Scotsman, Inc.   Missouri Secretary of State   Original  
#20040106185J filed 10/7/04
 
PAR Electrical Contractors, Inc.
  Williams Scotsman, Inc.   Missouri Secretary of State   Original  
#20040106189B filed 10/7/04
 
PAR Electrical Contractors, Inc.
  Williams Scotsman, Inc.   Missouri Secretary of State   Original  
#20040106191F filed 10/7/04
 
PAR Electrical Contractors, Inc.
  Williams Scotsman, Inc.   Missouri Secretary of State   Original  
#20040106192G filed 10/7/04
 
PAR Electrical Contractors, Inc.
  Williams Scotsman, Inc.   Missouri Secretary of State   Original  
#20040106734J filed 10/8/04
 
Potelco, Inc.
  William Scotsman
Mobile Offices
Assigned to:
LaSalle National
Leasing Corporation   California Secretary of State   Original
**********
assignment
assignment   #0228960952 filed 10/15/02
*****************
#03218C0300 filed 7/31/03
#03-324C0098 filed 11/14/03
 
The Ryan Company, Inc.
  William Scotsman
Mobile Offices   Massachusetts Secretary of State   Original   #200208218580
filed 1/10/02
 
Quanta Services
  Yokohama Tire
Corporation   Texas Secretary of State   Original   #00-579046 filed 9/5/00
 

8

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EXHIBIT C

March 14, 2005

Federal Insurance Company
15 Mountain View Rd.
P.O. Box 1615
Warren, New Jersey 07061-1615

Ladies and Gentlemen:

      I am General Counsel of Quanta Services, Inc., a Delaware corporation (the
“Company”), and am delivering this opinion pursuant to Section 2(a) of the
Underwriting, Continuing Indemnity and Security Agreement, dated as of March 14,
2005 (the “Underwriting Agreement”), among Federal Insurance Company, an Indiana
corporation (“Federal”), the Company and the Affiliates and Subsidiaries of the
Company identified on Exhibit A to the Underwriting Agreement, in their capacity
as named Principal and Indemnitors (such Affiliates and Subsidiaries
collectively, together with the Company, the “Indemnitors”). Capitalized terms
defined in the Underwriting Agreement and used (but not otherwise defined)
herein are used herein as so defined.

      In so acting, I have examined originals or copies (certified or otherwise
identified to my satisfaction) of (a)(i) the Underwriting Agreement and (ii) the
Intercreditor Agreement, dated March 14, 2005, among the Indemnitors, Federal
and Bank of America, N.A., as administrative agent for the lenders under the
Credit Agreement, dated as of December 19, 2003, as amended, among the Company,
certain subsidiaries of the Company as guarantors, and the lenders and other
agents party thereto and (b) such corporate records, agreements, documents and
other instruments, and such certificates or comparable documents of public
officials and of officers and representatives of the Company and its
Subsidiaries and Affiliates, and have made such inquiries of such officers and
representatives, as I have deemed relevant and necessary as a basis for the
opinions hereinafter set forth.

      In such examination, I have assumed the legal capacity of all natural
persons, the authenticity of all documents submitted to me as originals, the
conformity to original documents of all documents submitted to me as certified,
conformed or photostatic copies and the authenticity of the originals of such
latter documents. As to all questions of fact material to these opinions that
have not been independently established, I have relied upon certificates or
comparable documents of officers and representatives of the Company and its
Subsidiaries and Affiliates and upon the representations and warranties of the
Indemnitors contained in the Surety Credit Documents.

 

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

 

      Based on the foregoing, and subject to the qualifications stated herein, I
am of the opinion that:

      1. Each Indemnitor identified on Schedule I hereto is a corporation,
partnership or limited liability company validly existing and, if a corporation,
in good corporate standing under the laws of the jurisdiction set forth in
column 2 on Schedule I hereto beside the name of such Subsidiary.

      2. Each Indemnitor identified on Schedule I hereto has all requisite
corporate (or, if applicable, partnership or limited liability company) power
and authority to execute and deliver the Specified Documents to which such
Indemnitor is a party and to perform its obligations thereunder. The execution,
delivery and performance of the respective Specified Documents by the
Subsidiaries and Affiliates of the Company identified on Schedule I hereto have
been duly authorized by all necessary corporate (or, if applicable, partnership
or limited liability company) action on the part of each such Subsidiary or
Affiliate. Each of the Specified Documents to which each such Subsidiary or
Affiliate is a party has been duly and validly executed and delivered by each of
such Subsidiaries or Affiliates party thereto.

      3. The execution and delivery by each Subsidiary or Affiliate of the
Company identified on Schedule I hereto of the Specified Documents to which such
Subsidiary or Affiliate is a party, and the performance by such Subsidiary or
Affiliate of its obligations thereunder, will not conflict with, constitute a
default under or violate (a) any of the terms, conditions or provisions of the
Articles or Certificate of Incorporation, Certificate of Formation (or
comparable formation documents) or bylaws (or comparable governing documents) of
such Subsidiary or Affiliate, (b) any of the terms, conditions or provisions of
any agreement for indebtedness, determined in accordance with United States
generally accepted accounting principles, which exceeds $25 million to which
such Subsidiary or Affiliate is a party or by which it is bound of which I am
aware, (c) any Texas or Delaware corporate law or federal law or regulation
(other than federal and state securities or blue sky laws as to which I express
no opinion, and state trust fund laws, as to which I express no opinion) that I
am aware to be binding on such Subsidiary or Affiliate or to be applicable to
its business, properties or assets or (d) any writ, injunction, decree or order
of any governmental authority binding on such Subsidiary or Affiliate of which I
am aware.

      4. To my knowledge, there is no litigation, proceeding or governmental
investigation pending or overtly threatened against the Company or any other
Indemnitor that relates to any of the transactions contemplated by the Surety
Credit Documents.

      5. Assuming the filing and proper indexing of the Financing Statements and
the payment of appropriate filing fees with the Secretary of State of the
respective State set forth on Schedule II, such security interest will be
perfected, to the extent a security interest in the Collateral of such
Indemnitors may be perfected by the filing of a financing statement under the
law of the Commonwealth of Massachusetts or the States of California, Colorado,
Florida, Illinois, Michigan, Mississippi, Missouri, New York, Washington, North
Carolina and Virginia UCC (collectively, “the UCC”) in effect in the respective
States set forth on Schedule II (but excluding copyrights, tradenames,
trademarks, service marks and patent rights). Except as provided in UCC
Sections 9-109 and 9-311, “accounts,” “equipment” and “inventory,” as each

2

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

 

such term is defined in the applicable UCC, are types of collateral in which a
security interest may be perfected by the filing of a financing statement under
the applicable UCC in effect in the respective States set forth on Schedule II.

      The foregoing opinions are subject to the following qualifications:

      (a) My opinions expressed herein are limited to the matters expressly
stated herein and no opinion is implied or may be inferred beyond the matters
expressly stated.

      (b) My opinions expressed herein are rendered as of the date hereof and
are based on existing law which is subject to change. Where my opinions
expressed herein refer to events to occur at a future date, I have assumed that
there will have been no changes in the relevant law or facts between the date
hereof and such future date. I do not undertake to advise you of any changes in
the opinions expressed herein from matters that may hereafter arise or be
brought to my attention or to revise or supplement such opinions should the
present laws of any jurisdiction be changed by legislative action, judicial
decision or otherwise.

      (c) In rendering the opinion set forth in paragraph (5) above:

      (i) I have assumed that the law in the specified jurisdictions is
identical to the law of Delaware;

      (ii) I express no opinion as to any Collateral that may be included within
the definition of Collateral but is not a Bonded Contract or is not specifically
described in Section 6 of the Underwriting Agreement;

      (iii) I express no opinion as to any Collateral (A) that consists of
accounts receivable which are or will be due from the United States of America
or any agency or department thereof or from any state government or agency or
department thereof or (B) that consists of commingled goods, letter-of-credit
rights, money, deposit accounts, electronic chattel paper, investment property,
letter of credit rights, electronic documents or insurance proceeds or which is
or may become a fixture or a commercial tort claim;

      (iv) I have assumed: (A) the existence of the Collateral and that each
Indemnitor has rights in the Collateral; (B) that there is no agreement between
the Indemnitors and the Surety which postpones the attachment of the security
interest in the Collateral; (C) that reasonably equivalent value has been given
for all security interests created pursuant to the Underwriting Agreement; and
(D) that each Financing Statement correctly sets forth the name and address of
the secured party noted therein from which information about the security
interests may be obtained and correctly sets forth the address of the applicable
debtor noted therein;

      (v) I express no opinion as to the priority of any lien or security
interest granted pursuant to the Underwriting Agreement;

3

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      (vi) in the case of nonidentifiable cash proceeds, continuation of
perfection of the security interests of the Surety is limited to the extent set
forth in the UCC as enacted in each applicable state;

      (vii) I express no opinion as to the continuation of a security interest
in property which has been sold, transferred, assigned, exchanged or otherwise
disposed of or as to the continuation or preservation of perfected security
interests;

      (viii) I express no opinion as to the validity, perfection or
enforceability of any security interest in, or any collateral assignment of, any
contract right which by its terms may not be assigned or subjected to a security
interest; and

      (ix) I have assumed that all filings will be timely made and duly filed as
necessary (A) in the event of a change in the name, identity or corporate
structure of any Indemnitor, (B) in the event of a change in the location of any
Indemnitor and (C) to continue to maintain the effectiveness of the original
filings and, for informational purposes only, I call your attention to the fact
that the perfection of any security interest perfected by the filing of the
Financing Statements may lapse or terminate (X) if the effectiveness of any
filed Financing Statement lapses due to any secured party’s failure to file a
properly completed continuation statement under the UCC as enacted in the
applicable state within the time period required thereunder, (Y) by a change in
the jurisdiction of incorporation of any Indemnitor listed on any Financing
Statement or (Z) as to any Collateral acquired by any Indemnitor more than four
months after such Indemnitor changes its name, identity or corporate structure
so as to make any Financing Statement as to such Indemnitor seriously
misleading, unless new appropriate financing statements containing the new name
of the Indemnitor are properly filed before the expiration of such four month
period.

      (d) My opinion in paragraph (5) is further subject to: (i) the limitations
on perfection of security interests in proceeds resulting from the operation of
Section 9-315 of the UCC; (ii) the limitations with respect to buyers in the
ordinary course of business imposed by Sections 9-318 and 9-320 of the UCC;
(iii) the limitations with respect to documents, instruments and securities
imposed by Sections 8-302, 9-312 and 9-331 of the UCC; (iv) the provisions of
Section 9-203 of the UCC relating to the time of attachment; and (v) Section 552
of Title 11 of the United States Code (the “Bankruptcy Code”) with respect to
any Collateral acquired by the Indemnitor subsequent to the commencement of a
case against or by the Indemnitor under the Bankruptcy Code.

      The opinions expressed herein are limited to the laws of the State of
Texas, the General Corporation Law of the State of Delaware, the corporation
laws of the States of California, Colorado, Florida, Illinois, Michigan,
Mississippi, Missouri, New York, North Carolina, Virginia, Washington, the
Massachusetts Business Corporation Act, and the federal laws of the United
States; provided that, as to the corporation laws of the States of California,

4

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

 

Colorado, Florida, Illinois, Michigan, Mississippi, Missouri, New York, North
Carolina, Virginia, Washington, and the Massachusetts Business Corporation Act,
I have assumed that such laws are identical to the corporation laws of the State
of Delaware. I express no opinion with respect to the laws of any other
jurisdiction, whether applicable directly or through the foregoing laws, and I
have assumed, with your permission and without independent verification, that
the laws of the state of incorporation or organization of each Subsidiary or
Affiliate of the Company identified on Schedule I hereto that is not
incorporated or organized in the State of Texas or the State of Delaware are
identical to those of the State of Texas.

5

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

 

      The opinions expressed herein are rendered solely for Surety’s benefit in
connection with the transactions described herein. Those opinions may not be
used or relied upon by any other person, nor may this letter or any copies
hereof be furnished to a third party, filed with a governmental agency, quoted,
cited or otherwise referred to, without my prior written consent.

Very truly yours,

6

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Schedule I

Corporate Good Standing

      COLUMN 1   COLUMN 2
Advanced Technologies and Installation Corporation
  Washington
Allteck Line Contractors (USA), Inc.
  Washington
Arby Construction, Inc.
  Delaware
Austin Trencher, Inc.
  Delaware
Bradford Brothers, Incorporated
  North Carolina
CCLC, Inc.
  Delaware
Coast to Coast, LLC
  California
CMI Services, Inc.
  Florida
Conti Communications, Inc.
  Delaware
Croce Electric Company, Inc.
  Delaware
Crown Fiber Communications, Inc.
  Virginia
Digco Utility Construction, L.P.
  Delaware
Dillard Smith Construction Company
  Delaware
Driftwood Electrical Contractors, Inc.
  Delaware
Environmental Professional Associates, Limited
  California
Five Points Construction Co.
  Texas
Global Enercom Management, Inc.
  Delaware
Golden State Utility Co.
  Delaware
H. L. Chapman Pipeline Construction, Inc.
  Delaware
Intermountain Electric, Inc.
  Colorado
Irby Construction Company
  Mississippi
Lindsey Electric, L.P.
  Texas
Manuel Bros., Inc.
  Delaware
Mears Engineering/LLC
  Michigan
Mears Group, Inc.
  Delaware
Mears/HDD, LLC
  Michigan
Mears Services LLC
  Michigan
Mears/CPG LLC
  Michigan

7

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      COLUMN 1   COLUMN 2
Mejia Personnel Services, Inc.
  Texas
Metro Underground Services, Inc. of Illinois
  Illinois
Network Electric Company
  Delaware
North Houston Pole Line, L.P.
  Texas
North Sky Communications, Inc.
  Delaware
Okay Construction Company, LLC
  Delaware
PAR Electrical Contractors, Inc.
  Missouri
Parkside Site and Utility Company Corporation
  Delaware
Parkside Utility Construction Corp.
  Delaware
Potelco, Inc.
  Washington
Professional Teleconcepts, Inc.
  Illinois
Professional Teleconcepts, Inc.
  New York
Quanta Delaware, Inc.
  Delaware
Quanta Government Services, Inc.
  Delaware
Quanta Government Solutions, Inc.
  Delaware
Quanta Services Management Partnership, L.P.
  Texas
Quanta Utility Installation Company, Inc.
  Delaware
Quanta Utility Services, LLC
  Delaware
R.A. Waffensmith & Co., Inc.
  Delaware
S.K.S. Pipeliners, LLC
  Delaware
Southeast Pipeline Construction, Inc.
  Delaware
Southwestern Communications, Inc.
  Delaware
Southwest Trenching Company, Inc.
  Texas
Spalj Construction Company
  Delaware
Sumter Utilities, Inc.
  Delaware
Tjader, L.L.C.
  Delaware
TNS-VA, LLC
  Delaware
Tom Allen Construction Company
  Delaware
Total Quality Management Services, LLC
  Delaware
Trans Tech Acquisition, Inc.
  Texas

8

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      COLUMN 1   COLUMN 2
Trawick Construction Company, Inc.
  Florida
TTM, Inc.
  North Carolina
Utility Line Management Services, Inc.
  Delaware
VCI Telcom, Inc.
  Delaware
W. C. Communications, Inc.
  Delaware

9

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Schedule II

UCC Filings

Texas
Delaware
Massachusetts
California
Colorado
Florida
Illinois
Michigan
Mississippi
Missouri
New York
Washington
North Carolina
Virginia

10

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www.duanemorris.com

 

March 14, 2005

 

Federal Insurance Company
15 Mountain View Rd.
P.O. Box 1615
Warren, New Jersey 07061-1615

(DUANEMORRIS LETTERHEAD) [h23479h2347947.gif]

      Ladies and Gentlemen:

      We have acted as counsel to (i) Quanta Services, Inc., a Delaware
corporation (the “Company”), (ii) Underground Construction Co., Inc., a Delaware
corporation (“Underground Construction”), (iii) The Ryan Company, Inc., a
Massachusetts corporation (“The Ryan Company”), and (iv) Trans Tech Electric,
L.P., a Texas limited partnership (“Trans Tech”), in connection with the
execution and delivery of, and the consummation of the transactions contemplated
by, the Underwriting, Continuing Indemnity and Security Agreement, dated as of
March 14, 2005 (the “Underwriting Agreement”), among Federal Insurance Company,
an Indiana corporation (“Federal”), the Company and the Affiliates and
Subsidiaries of the Company identified on Exhibit A to the Underwriting
Agreement, in their capacity as named Principal and Indemnitors (such Affiliates
and Subsidiaries collectively, together with the Company, the “Indemnitors”).
Underground Construction, The Ryan Company, and Trans Tech are collectively
referred to as the “WIP Entities”. Capitalized terms defined in the Underwriting
Agreement and used (but not otherwise defined) herein are used herein as so
defined.

      In so acting, we have examined originals or copies (certified or otherwise
identified to our satisfaction) of (a)(i) the Underwriting Agreement and
(ii) the Intercreditor Agreement, dated March 14, 2005 (together with the
Underwriting Agreement, the “Specified Documents”), among the Indemnitors,
Federal and Bank of America, N.A., as administrative agent for the lenders under
the Credit Agreement, dated as of December 19, 2003, as amended (the “Credit
Agreement”), among the Company, certain subsidiaries of the Company as
guarantors, and the lenders and other agents party thereto, (b) Uniform
Commercial Code financing statements on Form UCC-1 attached hereto as Schedule I
(the “Financing Statements”) and (c) such corporate records, agreements,
documents and other instruments, and such certificates or comparable documents
of public officials and of officers and representatives of the Company, and have
made such inquiries of such officers and representatives, as we have deemed
relevant and necessary as a basis for the opinions hereinafter set forth.

      Duane Morris llp       3200 SOUTHWEST FREEWAY, SUITE 3150 HOUSTON, TX
77027-7534   PHONE: 713.402.3900 FAX: 713.402.3901

 

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(DUANEMORRIS LOGO) [h23479h2347948.gif]

Federal Insurance Company
March 14, 2005
Page 2

      In such examination, we have assumed the genuineness of all signatures,
the legal capacity of all natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such latter documents. As to all questions of
fact material to these opinions that have not been independently established, we
have relied upon certificates or comparable documents of officers and
representatives of the Company and upon the representations and warranties of
the Indemnitors contained in the Surety Credit Documents. We have also assumed,
with respect to each Indemnitor other than the Company, (i) the valid existence
of such Indemnitor, (ii) that such Indemnitor has the requisite corporate or
other power and authority to enter into and perform each Specified Document to
which it is party and (iii) the due authorization, execution and delivery by
such Indemnitor of each Specified Document to which such Indemnitor is party. We
have also assumed that each of the Specified Documents has been duly authorized,
executed and delivered by the parties thereto other than the Indemnitors and
constitutes the legal, valid and binding obligation of such other parties,
enforceable against such other parties in accordance with its terms. As used
herein, “of which we are aware” or similar phrase means the conscious awareness
of facts or other information by any lawyer in our firm actively involved in the
transactions contemplated by the Specified Documents.

      Based on the foregoing, and subject to the qualifications stated herein,
we are of the opinion that:

            1. Each of the Company and Underground Construction is a corporation
validly existing and in good standing under the laws of the State of Delaware.
The Ryan Company is a corporation validly existing and in good corporate
standing under the laws of the Commonwealth of Massachusetts. Trans Tech is
validly existing under the laws of the State of Texas.

            2. The Company and each of the WIP Entities has all requisite
corporate power and authority to execute and deliver the Specified Documents and
to perform its obligations thereunder.

            3. The execution, delivery and performance of the Specified
Documents by the Company have been duly authorized by all necessary corporate
action on the part of the Company and the WIP Entities.

            4. Each of the Specified Documents has been duly and validly
executed and delivered by the Company and the WIP Entities.

            5. Each of the Specified Documents constitutes the legal, valid and
binding obligation of each of the Indemnitors signatory thereto, enforceable
against each such Indemnitor

 

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Federal Insurance Company
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in accordance with its terms, except (a) as the foregoing may be limited by
(i) applicable bankruptcy, insolvency, fraudulent conveyance or transfer,
reorganization, moratorium and similar laws affecting creditors’ rights and
remedies generally and (ii) general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless of whether
enforcement is sought in a proceeding at law or in equity), (b) that rights to
indemnification and contribution thereunder may be limited by federal or state
securities laws and the public policy relating thereto, (c) that we express no
opinion (except as specifically provided in paragraph (8) below) as to the
attachment, perfection or priority of any liens granted pursuant to any
Specified Document and (d) that certain remedial provisions of the Specified
Documents are or may be unenforceable in whole or in part under the laws of the
State of New York, but the inclusion of such remedial provisions does not affect
the validity of the Specified Documents, and the Specified Documents contain
adequate provisions for the practical realization of the rights and benefits
afforded thereby.

            6. (a) The execution and delivery by the Company of the Specified
Documents and the performance by the Company of its obligations thereunder will
not conflict with, constitute a default under or violate (a) any of the terms,
conditions or provisions of the Certificate of Incorporation or Bylaws of the
Company, (b) any of the terms, conditions or provisions of any agreement listed
on Schedule II hereto, (c) any New York law, the Delaware General Corporation
Law or any federal law or regulation (other than federal and state securities or
blue sky laws, as to which we express no opinion, and state trust fund laws, as
to which we express no opinion) that we are aware is binding on the Company or
applicable to its business, properties or assets or (d) any judgment, writ,
injunction, decree, order or ruling of any court or governmental authority
binding on the Company of which we are aware.

                  (b) The execution and delivery by Underground Construction of
the Specified Documents and the performance by Underground Construction of its
obligations thereunder will not conflict with, constitute a default under or
violate (a) any of the terms, conditions or provisions of the Certificate of
Incorporation or Bylaws of Underground Construction, (b) any of the terms,
conditions or provisions of any agreement listed on Schedule II hereto, or
(c) any Delaware General Corporation Law or any federal law or regulation (other
than federal and state securities or blue sky laws, as to which we express no
opinion, and state trust fund laws, as to which we express no opinion) that we
are aware is binding on Underground Construction or applicable to its business,
properties or assets or (d) any judgment, writ, injunction, decree, order or
ruling of any court or governmental authority binding on Underground
Construction of which we are aware.

                  (c) The execution and delivery by The Ryan Company of the
Specified Documents and the performance by The Ryan Company of its obligations
thereunder will not conflict with, constitute a default under or violate (a) any
of the terms, conditions or provisions of the Articles of Organization, as
amended, or Bylaws of The Ryan Company, (b)

 

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Federal Insurance Company
March 14, 2005
Page 4

any of the terms, conditions or provisions of any agreement listed on
Schedule II hereto, or (c) the Massachusetts Business Corporation Act or any
federal law or regulation (other than federal and state securities or blue sky
laws, as to which we express no opinion, and state trust fund laws, as to which
we express no opinion) that we are aware is binding on The Ryan Company or
applicable to its business, properties or assets or (d) any judgment, writ,
injunction, decree, order or ruling of any court or governmental authority
binding on The Ryan Company of which we are aware.

                  (d) The execution and delivery by Trans Tech of the Specified
Documents and the performance by Trans Tech of its obligations thereunder will
not conflict with, constitute a default under or violate (a) any of the terms,
conditions or provisions of its limited partnership agreement, (b) any of the
terms, conditions or provisions of any agreement listed on Schedule II hereto,1
or (c) any Texas limited liability partnership law or any federal law or
regulation (other than federal and state securities or blue sky laws, as to
which we express no opinion, and state trust fund laws, as to which we express
no opinion) that we are aware is binding on Trans Tech or applicable to its
business, properties or assets or (d) any judgment, writ, injunction, decree,
order or ruling of any court or governmental authority binding on Trans Tech of
which we are aware.

            7. The execution and delivery by the Indemnitors (other than the
Company) of the Specified Documents and the performance by such Indemnitors of
their respective obligations thereunder will not conflict with, constitute a
default under or violate any New York law or federal law or regulation (other
than federal and state securities or blue sky laws, as to which we express no
opinion, and state trust fund laws, as to which we express no opinion) that we
are aware is binding on such Indemnitor or applicable to its business,
properties or assets.

            8. The execution and delivery of the Underwriting Agreement by the
Indemnitors creates a valid security interest in the Collateral (as defined in
the Underwriting Agreement) in favor of the Surety, as security for any Surety
Loss (as defined in the Underwriting Agreement) to the extent that Article 9 of
the Uniform Commercial Code as in effect in the State of New York (together with
the Uniform Commercial Code as in effect in the States of Delaware and Texas,
and the Commonwealth of Massachusetts, the “UCC”) is applicable to the creation
of such security interest. Except as provided in UCC Section 9-109, “accounts,”
“equipment” and “inventory,” as each such term is defined in the applicable UCC,
are types of collateral to which the respective UCC is applicable in determining
the creation of a security interest. Assuming the filing and proper indexing of
the Financing Statements and the payment of appropriate filing fees with the
Secretary of State of the respective State set forth on Schedule III, such
security interest will be perfected, to the extent a security interest in the

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1   The Company has informed us that Schedule II contains all agreements for
indebtedness, determined in accordance with United States generally accepted
accounting principles, in excess of $25 million.

 

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Federal Insurance Company
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Collateral of such Indemnitors may be perfected by the filing of a financing
statement under the applicable UCC in effect in the respective States set forth
on Schedule III (but excluding copyrights, tradenames, trademarks, service marks
and patent rights). Except as provided in UCC Sections 9-109 and 9-311,
“accounts,” “equipment” and “inventory,” as each such term is defined in the
applicable UCC, are types of collateral in which a security interest may be
perfected by the filing of a financing statement under the applicable UCC in
effect in the respective States set forth on Schedule III.

                  The foregoing opinions are subject to the following
qualifications:

                  (a) In rendering the opinion set forth in paragraph (5) above,
we express no opinion with respect to:

      (i) any provision of any of the Specified Documents insofar as it provides
for the payment or reimbursement of costs and expenses or indemnification or
contribution (A) for claims, losses or liabilities in excess of a reasonable
amount determined by a court or other tribunal or attributable to the
indemnified party’s negligence or (B) otherwise under circumstances where such
payment, reimbursement, or indemnification or contribution is contrary to public
policy;

      (ii) the ability of any party to collect attorneys’ fees and costs in an
action involving any of the Specified Documents if such party is not the
prevailing party in such action or to the extent such fees and costs are greater
than such fees and costs as may be determined to be reasonable by a court or
other tribunal;

      (iii) the right of any person to declare a default, accelerate obligations
of any other person, or exercise remedies based on non-material breaches of any
of the Specified Documents or without notice;

      (iv) the ability of any person to obtain specific performance, injunctive
relief, liquidated damages, rescission or any similar remedy in any proceeding;

      (v) whether a court other than a court of the State of New York would give
effect to a choice of New York law;

      (vi) any provisions contained in the Specified Documents which purport to
negate or limit liabilities, duties and obligations of the Surety (including,
without limitation, those with respect to the care, maintenance, disposition,
preservation or protection of the Collateral and duties that are imposed upon
Surety by the UCC); or

 

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Federal Insurance Company
March 14, 2005
Page 6

      (vii) (A) any right of setoff under the Underwriting Agreement,
(B) Section 15 of the Underwriting Agreement (titled “Bankruptcy Court
Approval”), (C) Section 17 of the Underwriting Agreement (titled “Use of Cash
Collateral”), (D) the third sentence of Section 23 of the Underwriting Agreement
(titled “Indemnitors’ Knowing Consent to Agreement”), (E) the first two
sentences of Section 30 of the Underwriting Agreement (titled “Right of Surety
to Settle Claims”), (F) the first sentence of Section 32 of the Underwriting
Agreement (titled “Authority of Surety to Amend Bond”), (G) the last sentence of
the last paragraph of Section 33 of the Underwriting Agreement (titled “Rights
and Remedies on Default”) or (H) Section 53 of the Underwriting Agreement
(titled “Power of Attorney”).

                  (b) In rendering the opinion set forth in paragraph (5) above,
we express no opinion with respect to any provision of any of the Specified
Documents providing for:

      (i) the establishment or waiver of measures of damages or methods of
proof;

      (ii) any right to obtain possession of any property or to exercise
self-help remedies or other remedies without judicial process or in any manner
other than peaceably and by reason of the peaceable surrender of such possession
by any Indemnitor;

      (iii) any waiver or limitation concerning mitigation of damages;

      (iv) confession of judgment;

      (v) any waiver of any course of dealing or delay in action by any party or
of any rights arising from any such course of dealing or delay;

      (vi) any waiver of a right to interpose a defense, counterclaim or setoff
or to recover special or consequential damages;

      (vii) the consent to or establishment of jurisdiction or venue;

      (viii) any waiver of the right to raise a claim of an inconvenient forum
with respect to any judicial proceedings;

      (ix) the exculpation of the Surety from liability for its action or
inaction, to the extent such exculpation is contrary to public policy or law;

      (x) any waiver of statutes of limitations;

 

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Federal Insurance Company
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Page 7

      (xi) prejudgment attachment against any Indemnitor;

      (xii) the right of the Surety to institute judicial proceedings or
institute or enforce any other extraordinary remedy without first giving notice
to Indemnitors; or

      (xiii) any waiver of various defenses and rights on the part of
Indemnitors which arise as a result of actions taken by the Surety in the
enforcement of remedies or as a result of a bankruptcy filing by or against any
Indemnitor.

                  (c) We have assumed that each of the parties to the Specified
Documents other than the Indemnitors will seek to enforce its rights thereunder
in good faith and in a commercially reasonable manner.

                  (d) In rendering the opinion set forth in paragraph (8) above:

      (i) we express no opinion with respect to any Collateral as to which the
creation or perfection of a security interest is governed by the laws of any
jurisdiction other than the State of Delaware, Texas or New York or the
Commonwealth of Massachusetts;

      (ii) we express no opinion as to any Collateral that may be included
within the definition of Collateral but is not a Bonded Contract or is not
specifically described in Section 6 of the Underwriting Agreement;

      (iii) we express no opinion as to any Collateral (A) that consists of
accounts receivable which are or will be due from the United States of America
or any agency or department thereof or from any state government or agency or
department thereof or (B) that consists of commingled goods, letter-of-credit
rights, money, deposit accounts, electronic chattel paper, investment property,
letter of credit rights, electronic documents or insurance proceeds or which is
or may become a fixture or a commercial tort claim;

      (iv) we have assumed: (A) the existence of the Collateral and that each
Indemnitor has rights in the Collateral; (B) that there is no agreement between
the Indemnitors and the Surety which postpones the attachment of the security
interest in the Collateral; (C) that reasonably equivalent value has been given
for all security interests created pursuant to the Underwriting Agreement; and
(D) that each Financing Statement correctly sets forth the address of the
secured party noted therein from which information about the security interests
may be obtained

 

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Federal Insurance Company
March 14, 2005
Page 8

and correctly sets forth the name and address of the applicable debtor noted
therein;

      (v) we express no opinion as to the priority of any lien or security
interest granted pursuant to the Underwriting Agreement;

      (vi) in the case of nonidentifiable cash proceeds, continuation of
perfection of the security interests of the Surety is limited to the extent set
forth in the UCC as enacted in each applicable state;

      (vii) we express no opinion as to the continuation of a security interest
in property which has been sold, transferred, assigned, exchanged or otherwise
disposed of or as to the continuation or preservation of perfected security
interests;

      (viii) we express no opinion as to the validity, perfection or
enforceability of any security interest in, or any collateral assignment of, any
contract right which by its terms may not be assigned or subjected to a security
interest; and

      (ix) we have assumed that all filings will be timely made and duly filed
as necessary (A) in the event of a change in the name, identity or corporate
structure of any Indemnitor, (B) in the event of a change in the location of any
Indemnitor and (C) to continue to maintain the effectiveness of the original
filings and, for informational purposes only, we call your attention to the fact
that the perfection of any security interest perfected by the filing of the
Financing Statements may lapse or terminate (X) if the effectiveness of any
filed Financing Statement lapses due to any secured party’s failure to file a
properly completed continuation statement under the UCC as enacted in the
applicable state within the time period required thereunder, (Y) by a change in
the jurisdiction of incorporation of any Indemnitor listed on any Financing
Statement or (Z) as to any Collateral acquired by any Indemnitor more than four
months after such Indemnitor changes its name, identity or corporate structure
so as to make any Financing Statement as to such Indemnitor seriously
misleading, unless new appropriate financing statements containing the new name
of the Indemnitor are properly filed before the expiration of such four month
period.

                  (e) Our opinion in paragraph (8) is further subject to:
(i) the limitations on perfection of security interests in proceeds resulting
from the operation of Section 9-315 of the UCC; (ii) the limitations with
respect to buyers in the ordinary course of business imposed by Sections 9-318
and 9-320 of the UCC; (iii) the limitations with respect to documents,

 

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Federal Insurance Company
March 14, 2005
Page 9

instruments and securities imposed by Sections 8-302, 9-312 and 9-331 of the
UCC; (iv) the provisions of Section 9-203 of the UCC relating to the time of
attachment; and (v) Section 552 of Title 11 of the United States Code (the
“Bankruptcy Code”) with respect to any Collateral acquired by the Indemnitor
subsequent to the commencement of a case against or by the Indemnitor under the
Bankruptcy Code.

                  (f) Our opinions expressed herein are limited to the matters
expressly stated herein and no opinion is implied or may be inferred beyond the
matters expressly stated.

                  (g) Our opinions expressed herein are rendered as of the date
hereof and are based on existing law which is subject to change. Where our
opinions expressed herein refer to events to occur at a future date, we have
assumed that there will have been no changes in the relevant law or facts
between the date hereof and such future date. We do not undertake to advise you
of any changes in the opinions expressed herein from matters that may hereafter
arise or be brought to our attention or to revise or supplement such opinions
should the present laws of any jurisdiction be changed by legislative action,
judicial decision or otherwise.

                  The opinions expressed herein are limited to the laws of the
State of New York, the General Corporation Law of the State of Delaware,
Article 9 of the UCC as in effect in each of the State of New York, the State of
Delaware, and the Commonwealth of Massachusetts, Chapter 9 of the UCC as in
effect in the State of Texas and the federal laws of the United States, and we
express no opinion with respect to the laws of any other jurisdiction, whether
applicable directly or through the foregoing laws.

                  The opinions expressed herein are rendered solely for Surety’s
benefit in connection with the transactions described herein. Those opinions may
not be used or relied upon by any other person, nor may this letter or any
copies hereof be furnished to a third party, filed with a governmental agency,
quoted, cited or otherwise referred to, without our prior written consent.

Very truly yours,

 

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Federal Insurance Company
March 14, 2005
Page 10

Schedule I

Uniform Commercial Code Financing Statements

(Attached)

 

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Federal Insurance Company
March 14, 2005
Page 11

Schedule II

1.   That certain Subordinated Indenture dated as of July 25, 2000 as
supplemented by that certain First Supplemental Indenture dated as of July 25,
2000, in each case between the Company, as issuer, and Chase Bank of Texas,
National Association, as trustee.   2.   That certain Indenture dated as of
October 17, 2003 between the Company, as issuer, and Wells Fargo Bank, N.A., as
trustee.   3.   The Credit Agreement.

 

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Federal Insurance Company
March 14, 2005
Page 12

Schedule III

Texas

Delaware

Massachusetts