Document:

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                                                                Exhibit 10.2

                          PLEDGE AND SECURITY AGREEMENT
                          DATED AS OF  January 24, 2002

                                      AMONG

                      WASHINGTON GROUP INTERNATIONAL, INC.
                                  AS A GRANTOR

                                       AND

                               EACH OTHER GRANTOR
                         FROM TIME TO TIME PARTY HERETO

                                       AND

                           CREDIT SUISSE FIRST BOSTON
                             AS ADMINISTRATIVE AGENT

                           WEIL, GOTSHAL & MANGES LLP
                                767 FIFTH AVENUE
                          NEW YORK, NEW YORK 10153-0119

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                                                 TABLE OF CONTENTS
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                                                                                                       PAGE
<S>                                                                                                    <C>
ARTICLE I          DEFINED TERMS........................................................................1

         Section 1.1       Definitions..................................................................1
         Section 1.2       Certain Other Terms..........................................................5

ARTICLE II         GRANT OF A SECURITY INTEREST.........................................................6

         Section 2.1       Collateral...................................................................6
         Section 2.2       Grant of Security Interest in Collateral.....................................7
         Section 2.3       Cash Collateral Accounts.....................................................7

ARTICLE III        REPRESENTATIONS AND WARRANTIES.......................................................8

         Section 3.1       Title; No Other Liens........................................................8
         Section 3.2       Perfection and Priority......................................................8
         Section 3.3       Name; Jurisdiction of Organization; Chief Executive Office...................8
         Section 3.4       Inventory and Equipment......................................................8
         Section 3.5       Pledged Collateral...........................................................9
         Section 3.6       Accounts.....................................................................9
         Section 3.7       Intellectual Property........................................................9
         Section 3.8       Deposit Accounts; Control Accounts..........................................10
         Section 3.9       Government Contracts........................................................10

ARTICLE IV         COVENANTS...........................................................................10

         Section 4.1       Generally...................................................................10
         Section 4.2       Maintenance of Perfected Security Interest; Further Documentation...........11
         Section 4.3       Changes in Locations, Name, Etc.............................................11
         Section 4.4       Pledged Collateral..........................................................11
         Section 4.5       Control Accounts; Approved Deposit Accounts.................................13
         Section 4.6       Accounts....................................................................13
         Section 4.7       Delivery of Instruments and Chattel Paper...................................14
         Section 4.8       Intellectual Property.......................................................14
         Section 4.9       Vehicles....................................................................15
         Section 4.10      Payment of Obligations......................................................16
         Section 4.11      Assignable Government Contracts.............................................16
         Section 4.12      Representations and Warranties; Covenants...................................17

ARTICLE V          REMEDIAL PROVISIONS.................................................................17

         Section 5.1       Code and Other Remedies.....................................................17

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         Section 5.2       Accounts and Payments in Respect of General Intangibles.....................18
         Section 5.3       Pledged Collateral..........................................................19
         Section 5.4       Proceeds to be Turned Over To Administrative Agent..........................20
         Section 5.5       Registration Rights.........................................................20
         Section 5.6       Deficiency..................................................................21

ARTICLE VI         THE ADMINISTRATIVE AGENT............................................................21

         Section 6.1       Administrative Agent's Appointment as Attorney-in-Fact......................21
         Section 6.2       Duty of Administrative Agent................................................23
         Section 6.3       Execution of Financing Statements...........................................23
         Section 6.4       Authority of Administrative Agent...........................................24

ARTICLE VII        MISCELLANEOUS.......................................................................24

         Section 7.1       Amendments in Writing.......................................................24
         Section 7.2       Notices.....................................................................24
         Section 7.3       No Waiver by Course of Conduct; Cumulative Remedies.........................24
         Section 7.4       Successors and Assigns......................................................24
         Section 7.5       Counterparts................................................................25
         Section 7.6       Severability................................................................25
         Section 7.7       Section Headings............................................................25
         Section 7.8       Entire Agreement............................................................25
         Section 7.9       Governing Law...............................................................25
         Section 7.10      Additional Grantors.........................................................25
         Section 7.11      Release of Collateral.......................................................26
         Section 7.12      Reinstatement...............................................................26
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                             ANNEXES AND SCHEDULES(1)

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<S>                           <C>
                  Annex 1     Form of Deposit Account Control Agreement
                  Annex 2     Form of Control Account Agreement
                  Annex 3     Form of Pledge Amendment
                  Annex 4     Form of Joinder Agreement
                  Annex 5     Form of Short Form Copyright Security Agreement
                  Annex 6     Form of Short Form Patent Security Agreement
                  Annex 7     Form of Short Form Trademark Security Agreement
                  Annex 8     Form of Notice of Assignment of Government
                              Contract
                  Annex 9     Form of Assignment of Government Contract

                  Schedule 1  State of Incorporation; Principal Executive
                              Office
                  Schedule 2  Pledged Collateral
                  Schedule 3  Filings
                  Schedule 4  Location of Inventory and Equipment
                  Schedule 5  Intellectual Property
                  Schedule 6  Bank Accounts; Control Accounts
                  Schedule 7  Government Contracts
</Table>

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(1)  If you are using automatic cross-references, modify numbering and title of
     the annexes and schedules on this page only.

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            PLEDGE AND SECURITY AGREEMENT, dated as of January 24, 2002, by
WASHINGTON GROUP INTERNATIONAL, INC. (the "BORROWER") and each of the other
entities listed on the signature pages hereof or that becomes a party hereto
pursuant to SECTION 7.10 (ADDITIONAL GRANTORS) (each a "GRANTOR" and,
collectively, the "GRANTORS"), in favor of Credit Suisse First Boston ("CSFB"),
as agent for the Secured Parties (as defined in the Credit Agreement referred to
below) (in such capacity, the "ADMINISTRATIVE AGENT").

                             W I T N E S S E T H:

            WHEREAS, pursuant to the Credit Agreement, dated as of January 24,
2002 (as the same may be amended, restated, supplemented or otherwise modified
from time to time, the "CREDIT AGREEMENT"), among the Borrower, the Lenders and
Issuers party thereto and CSFB, as agent for the Lenders and Issuers, the
Lenders and the Issuers have severally agreed to make extensions of credit to
the Borrower upon the terms and subject to the conditions set forth therein;

            WHEREAS, the Grantors other than the Borrower are party to the
Guaranty pursuant to which they have guaranteed the Obligations; and

            WHEREAS, a condition precedent to the obligation of the Lenders and
the Issuers to make their respective extensions of credit to the Borrower under
the Credit Agreement is that the Grantors shall have executed and delivered this
Agreement to the Administrative Agent;

            NOW, THEREFORE, in consideration of the premises and to induce the
Lenders, the Issuers and the Administrative Agent to enter into the Credit
Agreement and to induce the Lenders and the Issuers to make their respective
extensions of credit to the Borrower thereunder, each Grantor hereby agrees with
the Administrative Agent as follows:

      ARTICLE I      DEFINED TERMS

            SECTION 1.1   DEFINITIONS

            (a) Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein have the meanings given to them in the Credit
Agreement.

            (b) Terms used herein that are defined in the UCC have the meanings
given to them in the UCC, including the following terms (which are capitalized
herein):

            "ACCOUNT DEBTOR"
            "ACCOUNTS"
            "CHATTEL PAPER"
            "COMMODITY ACCOUNT"
            "COMMODITY INTERMEDIARY"
            "DEPOSIT ACCOUNT"
            "DOCUMENTS"
            "ENTITLEMENT HOLDER"
            "ENTITLEMENT ORDER"
            "EQUIPMENT"
            "FINANCIAL ASSET"
            "GENERAL INTANGIBLES"
            "INSTRUMENTS"

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            "INVENTORY"
            "INVESTMENT PROPERTY"
            "LETTER OF CREDIT RIGHT"
            "PROCEEDS"
            "SECURITIES ACCOUNT"
            "SECURITIES INTERMEDIARY"
            "SECURITY"
            "SECURITY ENTITLEMENT"

            (c)   The following terms shall have the following meanings:

            "ADDITIONAL PLEDGED COLLATERAL" means all shares of, limited or
general partnership interests in, and limited liability company interests in,
and all securities convertible into, and warrants, options and other rights to
purchase or otherwise acquire, stock of, either (i) any Person that, after the
date of this Agreement, as a result of any occurrence, becomes a direct
Subsidiary of any Grantor or (ii) any issuer of Pledged Stock, any Partnership
or any LLC that are acquired by any Grantor after the date hereof (PROVIDED,
HOWEVER, that "ADDITIONAL PLEDGED COLLATERAL" shall in no event include 65% of
the outstanding Stock of any Subsidiary of a Grantor that is not a Domestic
Subsidiary); all certificates or other instruments representing any of the
foregoing; all Security Entitlements of any Grantor in respect of any of the
foregoing; all additional indebtedness from time to time owed to any Grantor by
any obligor on the Pledged Notes and the instruments evidencing such
indebtedness; and all interest, cash, instruments and other property or Proceeds
from time to time received, receivable or otherwise distributed in respect of or
in exchange for any of the foregoing. Additional Pledged Collateral may be
General Intangibles or Investment Property.

            "AGREEMENT" means this Pledge and Security Agreement.

            "APPROVED DEPOSIT ACCOUNT" means a Deposit Account subject to an
effective Deposit Account Control Agreement and maintained by any Grantor with a
Deposit Account Bank. "APPROVED DEPOSIT ACCOUNT" includes all monies on deposit
in such Deposit Account and all certificates and instruments, if any,
representing or evidencing such Deposit Account.

            "APPROVED SECURITIES INTERMEDIARY" means a Securities Intermediary
or Commodity Intermediary selected or approved by the Administrative Agent and
with respect to which a Grantor has delivered to the Administrative Agent an
executed Control Account Agreement.

            "ASSIGNABLE GOVERNMENT CONTRACT" means an effective Government
Contract that (a) the Grantor party thereto has the present right to assign to a
third party (other than a Subsidiary of the Borrower) pursuant to the terms
thereof, (b) pursuant to the terms of such Government Contract, can then be
reassigned by such assignee to another third party and (c) together with the
assignment thereof, meets all applicable requirements for assignments under the
Assignment of Claims Act.

            "ASSIGNMENT OF GOVERNMENT CONTRACT" means an assignment,
substantially in the form of ANNEX 9 (FORM OF ASSIGNMENT OF GOVERNMENT CONTRACT)
(with such changes as may be agreed to by the Administrative Agent) and executed
by the Grantor.

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            "CASH COLLATERAL ACCOUNT" means any Deposit Account or Securities
Account established by the Administrative Agent as provided in SECTION 2.3 (CASH
COLLATERAL ACCOUNTS) in which cash and Cash Equivalents may from time to time be
on deposit or held therein as provided in SECTION 5.2 (ACCOUNTS AND PAYMENTS IN
RESPECT OF GENERAL INTANGIBLES) or 5.4 (PROCEEDS TO BE TURNED OVER TO
ADMINISTRATIVE AGENT) or the Credit Agreement.

            "COLLATERAL" has the meaning specified in SECTION 2.1 (COLLATERAL).

            "CONTROL ACCOUNT" means a Securities Account or Commodity Account
subject of an effective Control Account Agreement and maintained by any Grantor
with an Approved Securities Intermediary. "CONTROL ACCOUNT" includes all
Financial Assets held in such Securities Account or Commodity Account and all
certificates and instruments, if any, representing or evidencing the Financial
Assets contained therein.

            "CONTROL ACCOUNT AGREEMENT" means a letter agreement, substantially
in the form of ANNEX 2 (FORM OF CONTROL ACCOUNT AGREEMENT) (with such changes as
may be agreed to by the Administrative Agent), executed by the relevant Grantor,
the Administrative Agent and the relevant Approved Securities Intermediary.

            "COPYRIGHT LICENSES" means any written agreement naming any Grantor
as licensor or licensee granting any right under any Copyright, including the
grant of any right to copy, publicly perform, create derivative works,
manufacture, distribute, exploit or sell materials derived from any Copyright.

            "COPYRIGHTS" means (a) all copyrights arising under the laws of the
United States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished, all
registrations and recordings thereof and all applications in connection
therewith, including all registrations, recordings and applications in the
United States Copyright Office or in any foreign counterparts thereof, and (b)
the right to obtain all renewals thereof.

            "DEPOSIT ACCOUNT BANK" means a financial institution selected or
approved by the Administrative Agent and with respect to which a Grantor has
delivered to the Administrative Agent an executed Deposit Account Control
Agreement.

            "DEPOSIT ACCOUNT CONTROL AGREEMENT" means a letter agreement,
substantially in the form of ANNEX 1 (FORM OF DEPOSIT ACCOUNT CONTROL AGREEMENT)
(with such changes as may be agreed to by the Administrative Agent) and executed
by the Grantor, the Administrative Agent and the relevant Deposit Account Bank.

            "FOREIGN INVENTORY AND EQUIPMENT" means Inventory and Equipment
located outside of the fifty states of the United States of America, other than
Inventory and Equipment in transit and other than mobile goods.

            "GOVERNMENT CONTRACT" means all written Contractual Obligations
between any Loan Party and any federal Governmental Authority of the United
States of America.

            "INTELLECTUAL PROPERTY" means, collectively, all rights, priorities
and privileges of any Grantor relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
Copyrights, Copyright Licenses, Patents, Patent Licenses,

                                       6
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Trademarks, Trademark Licenses and trade secrets, and all rights to sue at
law or in equity for any infringement or other impairment thereof, including
the right to receive all proceeds and damages therefrom.

            "INTERCOMPANY NOTE" means any promissory note evidencing loans made
by any Grantor to any of its Subsidiaries or another Grantor.

            "LLC" means each limited liability company in which a Grantor has an
interest, including those set forth on SCHEDULE 2 (PLEDGED COLLATERAL).

            "LLC AGREEMENT" means each operating agreement with respect to an
LLC, as each agreement has heretofore been, and may hereafter be, amended,
restated, supplemented or otherwise modified from time to time.

            "MATERIAL INTELLECTUAL PROPERTY" means Intellectual Property owned
by or licensed to a Grantor and material to such Grantor's business.

            "NOTICE OF ASSIGNMENT OF GOVERNMENT CONTRACT" means a notice of
assignment, substantially in the form of ANNEX 8 (FORM OF NOTICE OF ASSIGNMENT
OF GOVERNMENT CONTRACT) (with such changes as may be agreed to by the
Administrative Agent) prepared by the Grantor and executed by the Administrative
Agent.

            "PARTNERSHIP" means each partnership in which a Grantor has an
interest, including those set forth on SCHEDULE 2 (PLEDGED COLLATERAL).

            "PARTNERSHIP AGREEMENT" means each partnership agreement governing a
Partnership, as each such agreement has heretofore been, and may hereafter be,
amended, restated, supplemented or otherwise modified.

            "PATENTS" means (a) all letters patent of the United States, any
other country or any political subdivision thereof and all reissues and
extensions thereof, (b) all applications for letters patent of the United States
or any other country and all divisions, continuations and continuations-in-part
thereof and (c) all rights to obtain any reissues or extensions of the
foregoing.

            "PATENT LICENSE" means all agreements, whether written or oral,
providing for the grant by or to any Grantor of any right to manufacture, use,
import, sell or offer for sale any invention covered in whole or in part by a
Patent.

            "PLEDGED COLLATERAL" means, collectively, the Pledged Notes, the
Pledged Stock, the Pledged Partnership Interests, the Pledged LLC Interests, any
other Investment Property of any Grantor in excess of $1,000,000, all
certificates or other instruments representing any of the foregoing and all
Security Entitlements of any Grantor in respect of any of the foregoing. Pledged
Collateral may be General Intangibles or Investment Property.

            "PLEDGED LLC INTERESTS" means all right, title and interest of any
Grantor as a member of any LLC and all right, title and interest of any Grantor
in, to and under any LLC Agreement to which it is a party; PROVIDED, HOWEVER,
that in no event shall "PLEDGED LLC INTEREST" include more than 65% of the
outstanding Stock of any Subsidiary of any Grantor that is not a Domestic
Subsidiary.

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            "PLEDGED NOTES" means all right, title and interest of any Grantor
in the Instruments evidencing all Indebtedness owed to such Grantor, issued by
the obligors named therein.

            "PLEDGED PARTNERSHIP INTERESTS" means all right, title and interest
of any Grantor as a limited or general partner in all Partnerships and all
right, title and interest of any Grantor in, to and under any Partnership
Agreements to which it is a party; PROVIDED, HOWEVER, that in no event shall
"PLEDGED PARTNERSHIP INTERESTS" included more than 65% of the outstanding Stock
of any Subsidiary of any Grantor that is not a Domestic Subsidiary.

            "PLEDGED STOCK" means the shares of capital stock owned by each
Grantor, including all shares of capital stock listed on SCHEDULE 2 (PLEDGED
COLLATERAL); PROVIDED, HOWEVER, that in no event shall the Borrower or any
Grantor be required to pledge in excess of 65% of the outstanding Stock of any
Subsidiary that is not a Domestic Subsidiary or any of the stock of any
Subsidiary of such Subsidiary.

            "SECURITIES ACT" means the Securities Act of 1933, as amended.

            "SURETY COLLATERAL" means Collateral in which the Surety has been
granted a valid, first priority security interest in accordance with the Surety
Facility.

            "TRADEMARK LICENSE" means any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any Trademark.

            "TRADEMARKS" means (a) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, logos and other source or business identifiers, and, in each case, all
goodwill associated therewith, whether now existing or hereafter adopted or
acquired, all registrations and recordings thereof and all applications in
connection therewith, in each case whether in the United States Patent and
Trademark Office or in any similar office or agency of the United States, any
State thereof or any other country or any political subdivision thereof, or
otherwise, and all common-law rights related thereto, and (b) the right to
obtain all renewals thereof.

            "UCC" means the Uniform Commercial Code as from time to time in
effect in the State of New York; PROVIDED, HOWEVER, that, in the event that, by
reason of mandatory provisions of law, any of the attachment, perfection or
priority of the Administrative Agent's and the Secured Parties' security
interest in any Collateral is governed by the Uniform Commercial Code as in
effect in a jurisdiction other than the State of New York, the term "UCC" shall
mean the Uniform Commercial Code as in effect in such other jurisdiction for
purposes of the provisions hereof relating to such attachment, perfection or
priority and for purposes of definitions related to such provisions.

            "VEHICLES" means all vehicles covered by a certificate of title law
of any state.

            SECTION 1.2   CERTAIN OTHER TERMS

            (a) In this Agreement, in the computation of periods of time from a
specified date to a later specified date, the word "FROM" means "from and
including" and the words "TO" and "UNTIL" each mean "to but excluding" and the
word "THROUGH" means "to and including."

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            (b) The terms "HEREIN," "HEREOF," "HERETO" and "HEREUNDER" and
similar terms refer to this Agreement as a whole and not to any particular
Article, Section, subsection or clause in this Agreement.

            (c) References herein to an Annex, Schedule, Article, Section,
subsection or clause refer to the appropriate Annex or Schedule to, or Article,
Section, subsection or clause in this Agreement.

            (d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.

            (e) Where the context requires, provisions relating to any
Collateral, when used in relation to a Grantor, shall refer to such Grantor's
Collateral or any relevant part thereof.

            (f) Any reference in this Agreement to a Loan Document shall include
all appendices, exhibits and schedules thereto, and, unless specifically stated
otherwise all amendments, restatements, supplements or other modifications
thereto, and as the same may be in effect at any time such reference becomes
operative.

            (g) The term "INCLUDING" means "INCLUDING WITHOUT LIMITATION" except
when used in the computation of time periods.

            (h) The terms "LENDER," "ISSUER," "ADMINISTRATIVE AGENT" and
"SECURED PARTY" include their respective successors.

            (i) References in this Agreement to any statute shall be to such
statute as amended or modified and in effect from time to time.

      ARTICLE II     GRANT OF A SECURITY INTEREST

            SECTION 2.1   COLLATERAL

            For the purposes of this Agreement, all of the following property
now owned or at any time hereafter acquired by a Grantor or in which a Grantor
now has or at any time in the future may acquire any right, title or interests
is collectively referred to as the "COLLATERAL":

            (a)   all Accounts;

            (b)   all Chattel Paper;

            (c)   all Deposit Accounts;

            (d)   all Documents;

            (e)   all Equipment;

            (f)   all General Intangibles;

            (g)   all Instruments;

            (h)   all Inventory;

            (i)   all Investment Property;

            (j)   all Letter of Credit Rights;

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            (k)   all Vehicles;

            (l)   all books and records pertaining to the other property
described in this SECTION 2.1;

            (m)   all other goods and personal property of such Grantor,
whether tangible or intangible and wherever located;

            (n) all property of any Grantor held by the Administrative Agent or
any other Secured Party, including all property of every description, in the
possession or custody of or in transit to the Administrative Agent or such
Secured Party for any purpose, including safekeeping, collection or pledge, for
the account of such Grantor or as to which such Grantor may have any right or
power; and

            (o)   to the extent not otherwise included, all Proceeds.

            SECTION 2.2   GRANT OF SECURITY INTEREST IN COLLATERAL

            Each Grantor, as collateral security for the full, prompt and
complete payment and performance when due (whether at stated maturity, by
acceleration or otherwise) of the Secured Obligations of such Grantor, hereby
collaterally assigns, mortgages, pledges and hypothecates to the Administrative
Agent for the benefit of the Secured Parties, and grants to the Administrative
Agent for the benefit of the Secured Parties a lien on and security interest in,
all of its right, title and interest in, to and under the Collateral of such
Grantor.

            SECTION 2.3   CASH COLLATERAL ACCOUNTS

            The Administrative Agent has established a Deposit Account at Bank
of New York, designated as "CSFB/Washington Group Loan Account". The
Administrative Agent may establish one or more other Deposit Accounts and one or
more Securities Accounts with such depositaries and Securities Intermediaries as
it in its sole discretion shall determine. Each such account shall be for the
benefit of the Administrative Agent (but may also have words referring to the
Borrower and the account's purpose). The Borrower agrees that each such account
shall be under the sole dominion and control of the Administrative Agent. The
Administrative Agent shall be the Entitlement Holder with respect to each such
Securities Account and the only Person authorized to give Entitlement Orders
with respect thereto. Without limiting the foregoing, funds on deposit in any
Cash Collateral Account may be invested in Cash Equivalents at the direction of
the Administrative Agent and, except during the continuance of an Event of
Default, the Administrative Agent agrees with the Borrower to issue Entitlement
Orders for such investments in Cash Equivalents as requested by the Borrower;
PROVIDED, HOWEVER, that the Administrative Agent shall not have any
responsibility for, or bear any risk of loss of, any such investment or income
thereon. Neither the Borrower nor any other Loan Party or Person claiming on
behalf of or through the Borrower or any other Loan Party shall have any right
to demand payment of any funds held in any Cash Collateral Account at any time
prior to the termination of all outstanding Letters of Credit and the payment in
full of all then outstanding and payable monetary Obligations. The
Administrative Agent shall apply all funds on deposit in a Cash Collateral
Account as provided in the Credit Agreement and except during the continuance of
an Event of Default agrees to cause any funds remaining on deposit therein after
all Obligations then due and payable have been satisfied and all Letter of
Credit Obligations have been cash collateralized at 105% to be paid at the
written direction of the Borrower.

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      ARTICLE III    REPRESENTATIONS AND WARRANTIES

            To induce the Lenders, the Issuers and the Administrative Agent to
enter into the Credit Agreement, each Grantor hereby represents and warrants
each of the following to the Administrative Agent, the Lenders, the Issuers and
the other Secured Parties:

            SECTION 3.1   TITLE; NO OTHER LIENS

            Except for the Lien granted to the Administrative Agent pursuant to
this Agreement and the other Liens permitted to exist on the Collateral under
the Credit Agreement, such Grantor is the record and beneficial owner of the
Pledged Collateral pledged by it hereunder constituting Instruments or
certificated securities, is the Entitlement Holder of all such Pledged
Collateral constituting Investment Property held in a Securities Account and has
rights in or the power to transfer each other item of Collateral in which a Lien
is granted by it hereunder, free and clear of any Lien.

            SECTION 3.2   PERFECTION AND PRIORITY

            The security interest granted pursuant to this Agreement shall
constitute a valid and continuing perfected security interest in favor of the
Administrative Agent in the Collateral for which perfection is governed by the
UCC or filing with the United States Copyright Office upon (i) the completion of
the filings and other actions specified on SCHEDULE 3 (FILINGS) (which, in the
case of all filings and other documents referred to on such schedule, have been
delivered to the Administrative Agent in completed and duly executed form), (ii)
the delivery to the Administrative Agent of all Collateral consisting of
Instruments and certificated securities, in each case properly endorsed for
transfer to the Administrative Agent or in blank, (iii) the execution of Control
Account Agreements with respect to Investment Property not in certificated form
and (iv) the execution of Deposit Account Control Agreements with respect to all
Deposit Accounts (other than the Cash Collateral Account). Such security
interest shall be prior to all other Liens on the Collateral except for
Customary Permitted Liens having priority over the Administrative Agent's Lien
by operation of law or otherwise as permitted under the Credit Agreement.

            SECTION 3.3   NAME; JURISDICTION OF ORGANIZATION; CHIEF EXECUTIVE
                          OFFICE

            (a) Except as set forth on SCHEDULE 1 (STATE OF INCORPORATION;
PRINCIPAL EXECUTIVE OFFICE), within the five-year period preceding the date
hereof such Grantor has not had, or operated in any jurisdiction, under any
trade name, fictitious name or other name other than its legal name.

            (b) On the date hereof such Grantor's jurisdiction of organization,
organizational identification number, if any, and the location of such Grantor's
chief executive office or sole place of business is specified on SCHEDULE 1
(STATE OF INCORPORATION; PRINCIPAL EXECUTIVE OFFICE).

            SECTION 3.4   INVENTORY AND EQUIPMENT

            SCHEDULE 4 (LOCATION OF INVENTORY AND EQUIPMENT) sets forth
separately the aggregate net book value of (i) all Foreign Inventory and
Equipment of each Grantor and (ii) all Inventory and Equipment of a Grantor
that, on the Closing Date, is not in the possession of any Grantor, including
Inventory or Equipment in the possession of a bailee or consignee.

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            SECTION 3.5   PLEDGED COLLATERAL

            (a) The Pledged Stock, Pledged Partnership Interests and Pledged LLC
Interests pledged hereunder by such Grantor are listed on SCHEDULE 2 (PLEDGED
COLLATERAL) and constitute that percentage of the issued and outstanding equity
of all classes of each issuer thereof as set forth on SCHEDULE 2 (PLEDGED
COLLATERAL).

            (b) All of the Pledged Stock, Pledged Partnership Interests and
Pledged LLC Interests have been duly and validly issued and are fully paid and
nonassessable.

            (c) Each of the Pledged Notes constitutes the legal, valid and
binding obligation of the obligor with respect thereto, enforceable in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, and general equitable
principles (whether considered in a proceeding in equity or at law).

            (d) All Pledged Collateral and, if applicable, any Additional
Pledged Collateral, consisting of certificated securities or Instruments has
been delivered to the Administrative Agent in accordance with SECTION 4.4(a)
(PLEDGED COLLATERAL).

            (e) All Pledged Collateral held by a Securities Intermediary in a
Securities Account is in a Control Account.

            (f) Other than the Pledged Partnership Interests and the Pledged LLC
Interests that constitute General Intangibles, there is no Pledged Collateral
other than that represented by certificated securities or Instruments in the
possession of the Administrative Agent or that consisting of Financial Assets
held in a Control Account.

            SECTION 3.6   ACCOUNTS

            No amount payable to such Grantor under or in connection with any
Account is evidenced by any Instrument or Chattel Paper that has not been
delivered to the Administrative Agent, properly endorsed for transfer, to the
extent delivery is required by SECTION 4.4 (PLEDGED COLLATERAL).

            SECTION 3.7   INTELLECTUAL PROPERTY

            (a) SCHEDULE 5 (INTELLECTUAL PROPERTY) lists all Material
Intellectual Property of such Grantor on the date hereof, separately identifying
that owned by such Grantor and that licensed to such Grantor. The Material
Intellectual Property set forth on SCHEDULE 5 (INTELLECTUAL PROPERTY) for such
Grantor constitutes all of the intellectual property rights necessary to conduct
its business.

            (b) On the date hereof, all Material Intellectual Property owned by
such Grantor is valid, subsisting, unexpired and enforceable, has not been
adjudged invalid and has not been abandoned and the use thereof in the business
of such Grantor does not infringe the intellectual property rights of any other
Person.

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<Page>

            (c) Except as set forth in SCHEDULE 5 (INTELLECTUAL PROPERTY), on
the date hereof, none of the Material Intellectual Property owned by such
Grantor is the subject of any licensing or franchise agreement pursuant to which
such Grantor is the licensor or franchisor.

            (d) No holding, decision or judgment has been rendered by any
Governmental Authority that would limit, cancel or question the validity of, or
such Grantor's rights in, any Material Intellectual Property.

            (e) No action or proceeding seeking to limit, cancel or question the
validity of any Material Intellectual Property owned by such Grantor or such
Grantor's ownership interest therein is on the date hereof pending or, to the
knowledge of such Grantor, threatened. There are no claims, judgments or
settlements to be paid by such Grantor relating to the Material Intellectual
Property.

            SECTION 3.8   DEPOSIT ACCOUNTS; CONTROL ACCOUNTS

            The only Deposit Accounts or Securities Accounts maintained by any
Grantor on the date hereof are those listed on SCHEDULE 6 (BANK ACCOUNTS;
CONTROL ACCOUNTS), which sets forth such information separately for each
Grantor.

            SECTION 3.9   GOVERNMENT CONTRACTS

            The only Government Contracts to which the Borrower or any
Subsidiary is party that as of the date hereof have a value in excess of
$5,000,000 are listed on SCHEDULE 7 (GOVERNMENT CONTRACTS), and all
documentation necessary for compliance with the Assignment of Claims Act has
been executed and delivered by the Borrower and each Subsidiary, as applicable,
to the Administrative Agent with respect to each Government Contract.

      ARTICLE IV     COVENANTS

            Each Grantor agrees with the Administrative Agent to the following,
as long as any Obligation or Commitment remains outstanding and unless the
Requisite Lenders otherwise consent in writing:

            SECTION 4.1   GENERALLY

            Such Grantor shall (a) except for the security interest created by
this Agreement, not create or suffer to exist any Lien upon or with respect to
any Collateral, except Liens permitted under SECTION 8.2 (LIENS, ETC.) of the
Credit Agreement, (b) not use or permit any Collateral to be used unlawfully or
in violation of any provision of this Agreement, any other Loan Document, any
Requirement of Law or any policy of insurance covering the Collateral, (c) not
sell, transfer or assign (by operation of law or otherwise) any Collateral
except as permitted under the Credit Agreement, (d) not enter into any agreement
or undertaking that lawfully restricts the right or ability of such Grantor or
the Administrative Agent to sell, assign or transfer any Collateral if such
restriction would have a Material Adverse Effect and (e) promptly notify the
Administrative Agent of its entry into any agreement or assumption of
undertaking that lawfully restricts the ability to sell, assign or transfer any
Collateral regardless of whether or not it has a Material Adverse Effect.

                                       13

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            SECTION 4.2 MAINTENANCE OF PERFECTED SECURITY INTEREST; FURTHER
                        DOCUMENTATION

            Such Grantor shall maintain the security interest created by this
Agreement as a perfected security interest having at least the priority
described in SECTION 3.2 (PERFECTION AND PRIORITY) and shall defend such
security interest against the claims and demands of all Persons.

            SECTION 4.3 CHANGES IN LOCATIONS, NAME, ETC.

            (a) Except upon 15 days' prior written notice to the Administrative
Agent and delivery to the Administrative Agent of all additional executed
financing statements and other documents reasonably requested by the
Administrative Agent to maintain the validity, perfection and priority of the
security interests provided for herein, such Grantor shall not do any of the
following:

            (i) change its jurisdiction of organization or the location of its
      chief executive office or sole place of business from that referred to in
      SECTION 3.3 (NAME; JURISDICTION OF ORGANIZATION; CHIEF EXECUTIVE OFFICE);
      or

            (ii) change its name, identity or corporate structure to such an
      extent that any financing statement filed in connection with this
      Agreement would become misleading.

            (b) Promptly after request by the Administrative Agent (and in no
event later than 15 Business Days after receipt thereof), each Grantor shall
provide to the Administrative Agent a list, in form and substance reasonably
satisfactory to the Administrative Agent and certified by a Responsible Officer
of such Grantor as true, correct and complete, of all locations of Inventory and
Equipment, other than Inventory and Equipment in transit and other than mobile
goods.

            (c) Such Grantor shall keep and maintain at its own cost and expense
satisfactory and complete records of the Collateral, including a record of all
payments received and all credits granted with respect to the Collateral and all
other dealings with the Collateral. If requested by the Administrative Agent,
the security interest of the Administrative Agent shall be noted on the
certificate of title of each Vehicle.

            SECTION 4.4 PLEDGED COLLATERAL

            (a) Subject to SECTION 4.4(d), such Grantor shall (i) deliver to the
Administrative Agent, all certificates and Instruments representing or
evidencing any Pledged Collateral (including Additional Pledged Collateral),
and, at the Collateral Agent's reasonable request, all Instruments, whether now
existing or hereafter acquired, in suitable form for transfer by delivery or, as
applicable, accompanied by such Grantor's endorsement, where necessary, or duly
executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Administrative Agent, together, in respect of any
Additional Pledged Collateral, with a Pledge Amendment, duly executed by the
Grantor, in substantially the form of ANNEX 3 (FORM OF PLEDGE AMENDMENT) or such
other documentation acceptable to the Administrative Agent and (ii) maintain all
other Pledged Collateral constituting Investment Property in a Control Account.
Such Grantor authorizes the Administrative Agent to attach each Pledge Amendment
to this Agreement. The Administrative Agent shall have the right, at any time in
its discretion and without notice to the Grantor, to transfer to or to register
in its name or

                                       14
<Page>

in the name of its nominees any Pledged Collateral. The Administrative Agent
shall have the right at any time to exchange any certificate or instrument
representing or evidencing any Pledged Collateral for certificates or
instruments of smaller or larger denominations.

            (b) Except as provided in ARTICLE V (REMEDIAL PROVISIONS), such
Grantor shall be entitled to receive all cash dividends paid in respect of the
Pledged Collateral (other than liquidating or distributing dividends) with
respect to the Pledged Collateral. Any sums paid upon or in respect of any
Pledged Collateral upon the liquidation or dissolution of any issuer of any
Pledged Collateral, any distribution of capital made on or in respect of any
Pledged Collateral or any property distributed upon or with respect to any
Pledged Collateral pursuant to the recapitalization or reclassification of the
capital of any issuer of Pledged Collateral or pursuant to the reorganization
thereof shall, unless otherwise subject to a perfected security interest in
favor of the Administrative Agent, be delivered to the Administrative Agent to
be held by it hereunder as additional collateral security for the Secured
Obligations. If any sum of money or property so paid or distributed in respect
of any Pledged Collateral shall be received by such Grantor, such Grantor shall,
until such money or property is paid or delivered to the Administrative Agent,
hold such money or property in trust for the Administrative Agent, segregated
from other funds of such Grantor, as additional security for the Secured
Obligations.

            (c) Except as provided in ARTICLE V (REMEDIAL PROVISIONS), such
Grantor shall be entitled to exercise all voting, consent and corporate rights
with respect to the Pledged Collateral; PROVIDED, HOWEVER, that no vote shall be
cast, consent given or right exercised or other action taken by such Grantor
that would impair the Collateral, be inconsistent with or result in any
violation of any provision of the Credit Agreement, this Agreement or any other
Loan Document or, without prior notice to the Administrative Agent, enable or
permit any issuer of Pledged Collateral to issue any stock or other equity
securities of any nature or to issue any other securities convertible into or
granting the right to purchase or exchange for any stock or other equity
securities of any nature of any issuer of Pledged Collateral.

            (d) Such Grantor shall not grant control over any Investment
Property to any Person other than the Administrative Agent, other than, as long
as the Surety shall have a first-priority security interest therein in
accordance with the Surety Facility and the Surety Intercreditor Agreement, the
Surety Collateral.

            (e) In the case of each Grantor that is an issuer of Pledged
Collateral, such Grantor agrees to be bound by the terms of this Agreement
relating to the Pledged Collateral issued by it and shall comply with such terms
insofar as such terms are applicable to it. In the case of each Grantor that is
a partner in a Partnership, such Grantor hereby consents to the extent required
by the applicable Partnership Agreement to the pledge by each other Grantor,
pursuant to the terms hereof, of the Pledged Partnership Interests in such
Partnership and to the transfer of such Pledged Partnership Interests to the
Administrative Agent or its nominee and to the substitution of the
Administrative Agent or its nominee as a substituted partner in such Partnership
with all the rights, powers and duties of a general partner or a limited
partner, as the case may be. In the case of each Grantor member of an LLC, such
Grantor hereby consents to the extent required by the applicable LLC Agreement
to the pledge by each other Grantor, pursuant to the terms hereof, of the
Pledged LLC Interests in such LLC and to the transfer of such Pledged LLC
Interests to the Administrative Agent or its nominee and to the substitution of
the Administrative Agent or its nominee as a substituted member of the LLC with
all the rights, powers and duties of a member of the LLC in question.

                                       15
<Page>

            (f) Such Grantor shall not agree to any amendment of an LLC
Agreement or Partnership Agreement that in any way adversely affects the
perfection of the security interest of the Administrative Agent in the Pledged
Partnership Interests or Pledged LLC Interests pledged by such Grantor
hereunder, including any amendment electing to treat the membership interest or
partnership interest of such Grantor as a security under Section 8-103 of the
UCC.

            SECTION 4.5 CONTROL ACCOUNTS; APPROVED DEPOSIT ACCOUNTS

            (a) Such Grantor shall (i) transfer every Business Day to an
Approved Deposit Account all cash received by such Grantor (except, as long as
the Surety shall have a first-priority security interest therein under the
Surety Facility and the Surety Intercreditor Agreement, the Surety Collateral),
(ii) not establish or maintain any Securities Account that is not a Control
Account (except, so long as such Securities Account shall be permitted under the
Surety Facility, in connection with the Surety Facility and in accordance with
the Surety Intercreditor Agreement) and (iii) not establish or maintain any
Deposit Account other than Approved Deposit Accounts and those of a Lender or an
Affiliate and Deposit Accounts whose entire balances are transferred daily to an
Approved Deposit Account in accordance with CLAUSE (i) above; PROVIDED, HOWEVER,
that any Grantor may maintain (x) payroll, withholding tax and other fiduciary
accounts and (y) other accounts so long as the aggregate balance in all such
accounts does not exceed $30,000,000.

            (b) In the event (i) such Grantor or any Approved Securities
Intermediary or Deposit Account Bank shall, after the date hereof, terminate an
agreement with respect to the maintenance of a Control Account or Approved
Deposit Account for any reason or (ii) the Administrative Agent shall demand
such termination as a result of the failure of an Approved Securities
Intermediary or Deposit Account Bank to comply with the terms of the applicable
Control Account Agreement or Deposit Account Control Agreement, such Grantor
agrees to notify all of its obligors that were making payments to such
terminated Control Account or Approved Deposit Account, as the case may be, to
make all future payments to another Control Account or Approved Deposit Account,
as the case may be.

            SECTION 4.6 ACCOUNTS

            (a) Such Grantor shall not, other than in the ordinary course of
business consistent with its past practice, (i) grant any extension of the time
of payment of any Account, (ii) compromise or settle any Account for less than
the full amount thereof, (iii) release, wholly or partially, any Person liable
for the payment of any Account, (iv) allow any credit or discount on any Account
or (v) amend, supplement or modify any Account in any manner that could
materially adversely affect the value thereof.

            (b) The Administrative Agent shall have the right to make test
verifications of the Accounts in any manner and through any medium that it
reasonably considers advisable, and such Grantor shall furnish all such
reasonable assistance and information as the Administrative Agent may reasonably
require in connection therewith. At any time and from time to time, upon the
Administrative Agent's request and at the expense of the relevant Grantor, such
Grantor shall cause independent public accountants or others satisfactory to the
Administrative Agent to furnish to the Administrative Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, the
Accounts; PROVIDED, HOWEVER, that unless a Default or Event of Default shall be
continuing, the Administrative Agent shall request no more than four such
reports during any calendar year.

                                       16
<Page>

            SECTION 4.7 DELIVERY OF INSTRUMENTS AND CHATTEL PAPER

            If any amount in excess of $1,000,000 payable under or in connection
with any Collateral owned by such Grantor shall be or become evidenced by an
Instrument or Chattel Paper, such Grantor shall immediately deliver such
Instrument or Chattel Paper to the Administrative Agent, duly indorsed in a
manner satisfactory to the Administrative Agent, or, if consented to by the
Administrative Agent, shall mark all such Instruments and Chattel Paper with the
following legend: "This writing and the obligations evidenced or secured hereby
are subject to the security interest of Credit Suisse First Boston, as
Administrative Agent".

            SECTION 4.8 INTELLECTUAL PROPERTY

            (a) Such Grantor (either itself or through licensees) shall, subject
to past practices in the Grantor's sound business judgment, (i) continue to use
each Trademark that is Material Intellectual Property in order to maintain such
Trademark in full force and effect with respect to each class of goods for which
such Trademark is currently used, free from any claim of abandonment for
non-use, (ii) maintain as in the past the quality of products and services
offered under such Trademark, (iii) use such Trademark with the appropriate
notice of registration and all other notices and legends required by applicable
Requirements of Law, (iv) not adopt or use any mark that is confusingly similar
or a colorable imitation of such Trademark unless the Administrative Agent shall
obtain a perfected security interest in such mark pursuant to this Agreement and
(v) not (and not permit any licensee or sublicensee thereof to) do any act or
knowingly omit to do any act whereby such Trademark may become invalidated or
impaired in any way.

            (b) Subject to past practices in the Grantor's sound business
judgment, such Grantor (either itself or through licensees) shall not do any
act, or omit to do any act, whereby any Patent that is Material Intellectual
Property may become forfeited, abandoned or dedicated to the public.

            (c) Subject to past practices in the Grantor's sound business
judgment, such Grantor (either itself or through licensees) (i) shall not (and
shall not permit any licensee or sublicensee thereof to) do any act or omit to
do any act whereby any portion of the Copyrights that is Material Intellectual
Property may become invalidated or otherwise impaired and (ii) shall not (either
itself or through licensees) do any act whereby any portion of the Copyrights
that is Material Intellectual Property may fall into the public domain.

            (d) Subject to past practices in the Grantor's sound business
judgment, such Grantor (either itself or through licensees) shall not do any
act, or omit to do any act, whereby any trade secret that is Material
Intellectual Property may become publicly available or otherwise unprotectable.

            (e) Subject to past practices in the Grantor's sound business
judgment, such Grantor (either itself or through licensees) shall not do any act
that knowingly uses any Material Intellectual Property to infringe the
intellectual property rights of any other Person.

            (f) Such Grantor shall notify the Administrative Agent within 10
Business Days if it knows, or has reason to know, that any application or
registration relating to any Material Intellectual Property may become
forfeited, abandoned or dedicated to the public, or of any adverse determination
or development (including the institution of, or any such determination

                                       17
<Page>

or development in, any proceeding in the United States Patent and Trademark
Office, the United States Copyright Office or any court or tribunal in any
country) regarding such Grantor's ownership of, right to use, interest in, or
the validity of, any Material Intellectual Property or such Grantor's right
to register the same or to own and maintain the same.

            (g) Whenever such Grantor, either by itself or through any agent,
licensee or designee, shall file an application for the registration of any
Material Intellectual Property with the United States Patent and Trademark
Office, the United States Copyright Office or any similar office or agency
within or outside the United States, such Grantor shall report such filing to
the Administrative Agent within five Business Days after the last day of the
fiscal quarter in which such filing occurs. Upon request of the
Administrative Agent, such Grantor shall execute and deliver, and have
recorded, all agreements, instruments, documents and papers as the
Administrative Agent may request to evidence the Administrative Agent's
security interest in any Material Intellectual Property and the goodwill and
general intangibles of such Grantor relating thereto or represented thereby.

            (h) Subject to past practices in the Grantor's sound business
judgment, such Grantor shall take all reasonable actions necessary or
requested by the Administrative Agent, including in any proceeding before the
United States Patent and Trademark Office, the United States Copyright Office
or any similar office or agency, to maintain and pursue each application (and
to obtain the relevant registration) and to maintain each registration of any
Copyright, Trademark or Patent that is Material Intellectual Property,
including filing of applications for renewal, affidavits of use, affidavits
of incontestability and opposition and interference and cancellation
proceedings.

            (i) In the event that any Material Intellectual Property is
infringed upon or misappropriated or diluted by a third party, such Grantor
shall notify the Administrative Agent promptly after such Grantor learns
thereof. Subject to past practices in the Grantor's sound business judgment,
such Grantor shall take appropriate action in response to such infringement,
misappropriation of dilution, including promptly bringing suit for
infringement, misappropriation or dilution and to recover any damage for such
infringement, misappropriation of dilution, and shall take such other actions
may be appropriate in its reasonable judgment under the circumstances to
protect such Material Intellectual Property.

            (j) Unless otherwise agreed to by the Administrative Agent, such
Grantor shall execute and deliver to the Administrative Agent for filing in
(i) the United States Copyright Office a short-form copyright security
agreement in the form attached hereto as ANNEX 5 (FORM OF SHORT FORM
COPYRIGHT SECURITY AGREEMENT), (ii) in the United States Patent and Trademark
Office a short-form patent security agreement in the form attached hereto as
ANNEX 6 (FORM OF SHORT FORM PATENT SECURITY AGREEMENT) and (iii) the United
States Patent and Trademark Office a short-form trademark security agreement
in form attached hereto as ANNEX 7 (FORM OF SHORT FORM TRADEMARK SECURITY
AGREEMENT).

            SECTION 4.9 VEHICLES

            Upon the request of the Administrative Agent, within 15 days after
the date of such request and, with respect to any Vehicle acquired by such
Grantor subsequent to the date of any such request, within 15 days after the
date of acquisition thereof, such Grantor shall file all applications for
certificates of title or ownership indicating the Administrative Agent's first
priority security interest in the Vehicle covered by such certificate and any
other necessary

                                       18
<Page>

documentation, in each office in each jurisdiction that the Administrative
Agent shall deem advisable to perfect its security interests in the Vehicles.

            SECTION 4.10      PAYMENT OF OBLIGATIONS

            Such Grantor shall pay and discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all taxes,
assessments and governmental charges or levies imposed upon the Collateral or in
respect of income or profits therefrom, as well as all claims of any kind
(including claims for labor, materials and supplies) against or with respect to
the Collateral, except that no such charge need be paid if the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings, reserves in conformity with GAAP with respect thereto have been
provided on the books of such Grantor and such proceedings could not reasonably
be expected to result in the sale, forfeiture or loss of any material portion of
the Collateral or any interest therein.

            SECTION 4.11      ASSIGNABLE GOVERNMENT CONTRACTS

            (a) On or before the Closing Date, each Grantor shall have executed
and delivered to the Administrative Agent Notices of Assignment of Government
Contracts and three (3) original Assignments of Government Contracts
substantially in the form of ANNEX 8 (FORM OF NOTICE OF ASSIGNMENT OF GOVERNMENT
CONTRACT) and ANNEX 9 (FORM OF ASSIGNMENT OF GOVERNMENT CONTRACT) for each
Assignable Government Contract in effect on the Closing Date and having an
initial stated contract value to such Grantor in excess of $1,000,000. Upon the
filing by the Administrative Agent with (i) the proper contracting officer or
the proper agency head, as applicable, (ii) the proper disbursing officer
designated in the applicable Assignable Government Contract and (iii) where
applicable, the proper surety on any bond applicable to the Assignable
Government Contract (in each case, as specified by the Grantor with respect to
each Assignable Government Contract in accordance with this SECTION 4.11
(ASSIGNABLE GOVERNMENT CONTRACTS)), of one original and three copies of a notice
of assignment substantially in the form of ANNEX 8 (FORM OF ASSIGNMENT OF
GOVERNMENT CONTRACT) and one true copy of the instrument of assignment
substantially in the form of ANNEX 9 (FORM OF ASSIGNMENT OF GOVERNMENT CONTRACT)
with respect to each Assignable Government Contract, this Agreement shall
constitute a valid assignment of such Assignable Government Contract to the
extent that such validity and assignment are governed by the Assignment of
Claims Act.

            (b) Within 90 days after any Government Contract becomes an
Assignable Government Contract having an initial stated contract value to any
Grantor in excess of $1,000,000, such Grantor shall execute and deliver to the
Administrative Agent (i) a notice of assignment substantially in the form of
ANNEX 8 (FORM OF ASSIGNMENT OF GOVERNMENT CONTRACT) and (ii) instrument of
assignment substantially in the form of ANNEX 9 (FORM OF ASSIGNMENT OF
GOVERNMENT CONTRACT) with respect to such Assignable Government Contract. The
notices of assignment required by this CLAUSE (b) shall include with respect to
each Assignable Government Contract a notice of assignment addressed to (i) the
proper disbursing officer or the proper agency head, as applicable, (ii) the
proper disbursing officer designated in the applicable Assignable Government
Contract and (iii) where applicable, the proper surety on any bond applicable to
the Assignable Government Contract.

            (c) If an Event of Default shall have occurred and be continuing
(or, if the Obligations or the maturity thereof shall have been accelerated
pursuant to this agreement) then, the Administrative Agent may and, at the
request of the Requisite Lenders, shall, at the Grantors'

                                       19
<Page>

expense, file, deliver and record with the applicable Government Authority,
in accordance with the Assignment of Claims Act, any statement, notice,
assignment, agreement or other document executed or delivered pursuant to
this SECTION 4.11 (ASSIGNABLE GOVERNMENT CONTRACTS) with respect to
Assignable Government Contracts.

            (d) Consistent with the foregoing, each Grantor agrees to execute
such other documents and agreements and to take such other action as may be
reasonably necessary or appropriate to implement this CLAUSE (a) and the
consummation of the transactions contemplated hereby, including the assignment
of the Assignable Government Contracts and the assignment of any other
Contractual Obligation with any Governmental Authority.

            SECTION 4.12      REPRESENTATIONS AND WARRANTIES; COVENANTS

            Each Grantor hereby (a) represents and warrants, on each date as
required by SECTION 3.2(b)(i) (CONDITIONS PRECEDENT TO EACH LOAN AND LETTER OF
CREDIT) of the Credit Agreement, that the representations and warranties as to
it or Collateral held by it made in ARTICLE IV (REPRESENTATIONS AND WARRANTIES)
of the Credit Agreement are true and correct as of such date, (b) agrees to
take, or refrain from taking, as the case may be, each action necessary to be
taken or not taken, as the case may be, so that no Default or Event of Default
is caused by the Grantor's failure to take such action or to refrain from taking
such action and (c) agrees to be bound by all of the provisions of the Credit
Agreement applying to Loan Parties or to Collateral held by it.

      ARTICLE V      REMEDIAL PROVISIONS

            SECTION 5.1       CODE AND OTHER REMEDIES

            During the continuance of an Event of Default, the Administrative
Agent may exercise, in addition to all other rights and remedies granted to it
in this Agreement and in any other instrument or agreement securing, evidencing
or relating to the Secured Obligations, all rights and remedies of a secured
party under the UCC or any other applicable law. Without limiting the generality
of the foregoing, the Administrative Agent, without demand of performance or
other demand, presentment, protest, advertisement or notice of any kind (except
any notice required by law referred to below) to or upon any Grantor or any
other Person (all and each of which demands, defenses, advertisements and
notices are hereby waived), may in such circumstances forthwith collect,
receive, appropriate and realize upon any Collateral, and may forthwith sell,
lease, assign, give option or options to purchase, or otherwise dispose of and
deliver any Collateral (or contract to do any of the foregoing), in one or more
parcels at public or private sale or sales, at any exchange, broker's board or
office of the Administrative Agent or any Lender or elsewhere upon such terms
and conditions as it may deem advisable and at such prices as it may deem best,
for cash or on credit or for future delivery without assumption of any credit
risk. The Administrative Agent shall have the right upon any such public sale or
sales, and, to the extent permitted by law, upon any such private sale or sales,
to purchase the whole or any part of the Collateral so sold, free of any right
or equity of redemption in any Grantor, which right or equity is hereby waived
and released. Each Grantor further agrees, at the Administrative Agent's
request, to assemble the Collateral and make it available to the Administrative
Agent at places that the Administrative Agent shall reasonably select, whether
at such Grantor's premises or elsewhere. The Administrative Agent shall apply
the net proceeds of any action taken by it pursuant to this SECTION 5.1, after
deducting all reasonable costs and expenses of every kind incurred in connection
therewith or incidental to the care or safekeeping of any Collateral or in

                                       20
<Page>

any way relating to the Collateral or the rights of the Administrative Agent
and any other Secured Party hereunder, including reasonable attorneys' fees
and disbursements, to the payment in whole or in part of the Secured
Obligations, in such order as the Credit Agreement shall prescribe, and only
after such application and after the payment by the Administrative Agent of
any other amount required by any provision of law, need the Administrative
Agent account for the surplus, if any, to any Grantor. To the extent
permitted by applicable law, each Grantor waives all claims, damages and
demands it may acquire against the Administrative Agent or any other Secured
Party arising out of the exercise by them of any rights hereunder. If any
notice of a proposed sale or other disposition of Collateral shall be
required by law, such notice shall be deemed reasonable and proper if given
at least 15 days before such sale or other disposition.

            SECTION 5.2       ACCOUNTS AND PAYMENTS IN RESPECT OF GENERAL
                              INTANGIBLES

            (a) If required by the Administrative Agent at any time during the
continuance of an Event of Default, any payment of Accounts (except for those
Accounts that are part of the Surety Collateral, as long as the Surety shall
have a first-priority security interest therein under the Surety Facility and
the Surety Intercreditor Agreement) or payment in respect of General Intangibles
(except for General Intangibles that are part of the Surety Collateral, as long
as the Surety shall have a first-priority security interest therein under the
Surety Facility and the Surety Intercreditor Agreement), when collected by any
Grantor, shall be forthwith (and, in any event, within five Business Days)
deposited by such Grantor in the exact form received, duly indorsed by such
Grantor to the Administrative Agent if required, in a Cash Collateral Account,
subject to withdrawal by the Administrative Agent as provided in SECTION 5.4
(PROCEEDS TO BE TURNED OVER TO ADMINISTRATIVE AGENT). Until so turned over, such
payment shall be held by such Grantor in trust for the Administrative Agent,
segregated from other funds of such Grantor. Each such deposit of Proceeds of
Accounts and payments in respect of General Intangibles shall be accompanied by
a report identifying in reasonable detail the nature and source of the payments
included in the deposit.

            (b) At the Administrative Agent's request, during the continuance of
an Event of Default, each Grantor shall deliver to the Administrative Agent all
original and other documents evidencing, and relating to, the agreements and
transactions that gave rise to the Accounts or payments in respect of General
Intangibles, including all original orders, invoices and shipping receipts.

            (c) The Administrative Agent may, without notice, at any time during
the continuance of an Event of Default, limit or terminate the authority of a
Grantor to collect its Accounts (except for those Accounts that are part of the
Surety Collateral, as long as the Surety shall have a first-priority security
interest therein under the Surety Facility and the Surety Intercreditor
Agreement) or amounts due under General Intangibles (except for General
Intangibles that are part of the Surety Collateral, as long as the Surety shall
have a first-priority security interest therein under the Surety Facility and
the Surety Intercreditor Agreement) or any thereof.

            (d) The Administrative Agent in its own name or in the name of
others may at any time during the continuance of an Event of Default communicate
with Account Debtors to verify with them to the Administrative Agent's
satisfaction the existence, amount and terms of any Account or amounts due under
any General Intangible, other than Accounts or General Intangibles in which the
Surety has been granted a security interest under the Surety Facility and the
Surety Intercreditor Agreement.

                                       21
<Page>

            (e) Upon the request of the Administrative Agent at any time during
the continuance of an Event of Default, each Grantor shall notify Account
Debtors that the Accounts (other than Accounts in which the Surety has been
granted a security interest under the Surety Facility and the Surety
Intercreditor Agreement) or General Intangibles (other than General Intangibles
in which the Surety has been granted a security interest under the Surety
Facility and the Surety Intercreditor Agreement) have been collaterally assigned
to the Administrative Agent and that payments in respect thereof shall be made
directly to the Administrative Agent. In addition, the Administrative Agent may
at any time during the continuance of an Event of Default enforce such Grantor's
rights against such Account Debtors and obligors of General Intangibles.

            (f) Anything herein to the contrary notwithstanding, each Grantor
shall remain liable under each of the Accounts and payments in respect of
General Intangibles to observe and perform all the conditions and obligations to
be observed and performed by it thereunder, all in accordance with the terms of
any agreement giving rise thereto. Neither the Administrative Agent nor any
other Secured Party shall have any obligation or liability under any agreement
giving rise to an Account or a payment in respect of a General Intangible by
reason of or arising out of this Agreement or the receipt by the Administrative
Agent nor any other Secured Party of any payment relating thereto, nor shall the
Administrative Agent nor any other Secured Party be obligated in any manner to
perform any obligation of any Grantor under or pursuant to any agreement giving
rise to an Account or a payment in respect of a General Intangible, to make any
payment, to make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any party
thereunder, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts that may have been assigned
to it or to which it may be entitled at any time or times.

            SECTION 5.3       PLEDGED COLLATERAL

            (a) During the continuance of an Event of Default, upon notice by
the Administrative Agent to the relevant Grantor or Grantors, (i) the
Administrative Agent shall have the right to receive any Proceeds of the Pledged
Collateral and make application thereof to the Obligations in the order set
forth in the Credit Agreement and (ii) the Administrative Agent or its nominee
may exercise (A) any voting, consent, corporate and other right pertaining to
the Pledged Collateral at any meeting of shareholders, partners or members, as
the case may be, of the relevant issuer or issuers of Pledged Collateral or
otherwise and (B) any right of conversion, exchange and subscription and any
other right, privilege or option pertaining to the Pledged Collateral as if it
were the absolute owner thereof (including the right to exchange at its
discretion any of the Pledged Collateral upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate
structure of any issuer of Pledged Securities, the right to deposit and deliver
any Pledged Collateral with any committee, depositary, transfer agent, registrar
or other designated agency upon such terms and conditions as the Administrative
Agent may determine), all without liability except to account for property
actually received by it; PROVIDED, HOWEVER, that the Administrative Agent shall
have no duty to any Grantor to exercise any such right, privilege or option and
shall not be responsible for any failure to do so or delay in so doing.

            (b) In order to permit the Administrative Agent to exercise the
voting and other consensual rights that it may be entitled to exercise pursuant
hereto and to receive all dividends and other distributions that it may be
entitled to receive hereunder, (i) each Grantor shall promptly execute and
deliver (or cause to be executed and delivered) to the Administrative Agent all
such proxies, dividend payment orders and other instruments as the
Administrative Agent may

                                       22
<Page>

from time to time reasonably request and (ii) without limiting the effect of
CLAUSE (i) above, such Grantor hereby grants to the Administrative Agent an
irrevocable proxy to vote all or any part of the Pledged Collateral and to
exercise all other rights, powers, privileges and remedies to which a holder
of the Pledged Collateral would be entitled (including giving or withholding
written consents of shareholders, partners or members, as the case may be,
calling special meetings of shareholders, partners or members, as the case
may be, and voting at such meetings), which proxy shall be effective,
automatically and without the necessity of any action (including any transfer
of any Pledged Collateral on the record books of the issuer thereof) by any
other person (including the issuer of such Pledged Collateral or any officer
or agent thereof) during the continuance of an Event of Default and which
proxy shall only terminate upon the payment in full of the Secured
Obligations.

            (c) Each Grantor hereby expressly authorizes and instructs each
issuer of any Pledged Collateral pledged hereunder by such Grantor to (i) comply
with any instruction received by it from the Administrative Agent in writing
that (A) states that an Event of Default has occurred and is continuing and (B)
is otherwise in accordance with the terms of this Agreement, without any other
or further instructions from such Grantor, and each Grantor agrees that such
issuer shall be fully protected in so complying and (ii) unless otherwise
expressly permitted hereby, pay any dividend or other payment with respect to
the Pledged Collateral directly to the Administrative Agent

            SECTION 5.4       PROCEEDS TO BE TURNED OVER TO ADMINISTRATIVE AGENT

            All Proceeds received by the Administrative Agent hereunder shall be
held by the Administrative Agent in a Cash Collateral Account. All Proceeds
while held by the Administrative Agent in a Cash Collateral Account (or by such
Grantor in trust for the Administrative Agent) shall continue to be held as
collateral security for the Secured Obligations and shall not constitute payment
thereof until applied as provided in the Credit Agreement.

            SECTION 5.5       REGISTRATION RIGHTS

            (a) If the Administrative Agent shall determine to exercise its
right to sell any the Pledged Collateral pursuant to SECTION 5.1 (CODE AND OTHER
REMEDIES), and if in the opinion of the Administrative Agent it is necessary or
advisable to have the Pledged Collateral, or any portion thereof to be
registered under the provisions of the Securities Act, the relevant Grantor
shall cause the issuer thereof to (i) execute and deliver, and cause the
directors and officers of such issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may
be, in the opinion of the Administrative Agent, necessary or advisable to
register the Pledged Collateral, or that portion thereof to be sold, under the
provisions of the Securities Act, (ii) use its best efforts to cause the
registration statement relating thereto to become effective and to remain
effective for a period of one year from the date of the first public offering of
the Pledged Collateral, or that portion thereof to be sold and (iii) make all
amendments thereto or to the related prospectus that, in the opinion of the
Administrative Agent, are necessary or advisable, all in conformity with the
requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto. Each Grantor agrees to
cause such issuer to comply with the provisions of the securities or "Blue Sky"
laws of any jurisdiction that the Administrative Agent shall designate and to
make available to its security holders, as soon as practicable, an earnings
statement (which need not be audited) satisfying the provisions of Section 11(a)
of the Securities Act.

                                       23
<Page>

            (b) Each Grantor recognizes that the Administrative Agent may be
unable to effect a public sale of any Pledged Collateral by reason of certain
prohibitions contained in the Securities Act and applicable state securities
laws or otherwise or may determine that a public sale is impracticable or not
commercially reasonable and, accordingly, may resort to one or more private
sales thereof to a restricted group of purchasers that shall be obliged to
agree, among other things, to acquire such securities for their own account for
investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The Administrative
Agent shall be under no obligation to delay a sale of any Pledged Collateral for
the period of time necessary to permit the issuer thereof to register such
securities for public sale under the Securities Act, or under applicable state
securities laws, even if such issuer would agree to do so.

            (c) Each Grantor agrees to use its best efforts to do or cause to be
done all such other acts as may be necessary to make such sale or sales of all
or any portion of the Pledged Collateral pursuant to this SECTION 5.5 valid and
binding and in compliance with all other applicable Requirements of Law. Each
Grantor further agrees that a breach of any covenant contained in this SECTION
5.5 will cause irreparable injury to the Administrative Agent and other Secured
Parties, that the Administrative Agent and the other Secured Parties have no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this SECTION 5.5 shall be specifically
enforceable against such Grantor, and such Grantor hereby waives and agrees not
to assert any defense against an action for specific performance of such
covenants except for a defense that no Event of Default has occurred under the
Credit Agreement.

            SECTION 5.6       DEFICIENCY

            Each Grantor shall remain liable for any deficiency if the proceeds
of any sale or other disposition of the Collateral are insufficient to pay the
Secured Obligations and the fees and disbursements of any attorney employed by
the Administrative Agent or any other Secured Party to collect such deficiency.

      ARTICLE VI     THE ADMINISTRATIVE AGENT

            SECTION 6.1       ADMINISTRATIVE AGENT'S APPOINTMENT AS
                              ATTORNEY-IN-FACT

            (a) Each Grantor hereby irrevocably constitutes and appoints the
Administrative Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, for the purpose of carrying out the terms of
this Agreement, to take any appropriate action and to execute any document and
instrument that may be necessary or desirable to accomplish the purposes of this
Agreement, and, without limiting the generality of the foregoing, each Grantor
hereby gives the Administrative Agent the power and right, on behalf of such
Grantor, without notice to or assent by such Grantor, to do any of the
following:

            (i) in the name of such Grantor or its own name, or otherwise, take
      possession of and indorse and collect any check, draft, note, acceptance
      or other instrument for the payment of moneys due under any Account or
      General Intangible or

                                       24
<Page>

      with respect to any other Collateral and file any claim or take any
      other action or proceeding in any court of law or equity or otherwise
      deemed appropriate by the Administrative Agent for the purpose of
      collecting any such moneys due under any Account or General
      Intangible or with respect to any other Collateral whenever payable;

            (ii) in the case of any Intellectual Property, execute and deliver,
      and have recorded, any agreement, instrument, document and paper as the
      Administrative Agent may request to evidence the Administrative Agent's
      security interest in such Intellectual Property and the goodwill and
      General Intangibles of such Grantor relating thereto or represented
      thereby;

            (iii) pay or discharge taxes and Liens levied or placed on or
      threatened against the Collateral, effect any repair or pay or discharge
      any insurance called for by the terms of this Agreement (including all or
      any part of the premiums therefor and the costs thereof);

            (i) execute, in connection with any sale provided for in SECTION 5.1
      (CODE AND OTHER REMEDIES) or 5.5 (REGISTRATION RIGHTS), any endorsement,
      assignment or other instrument of conveyance or transfer with respect to
      the Collateral; or

            (ii) (A) direct any party liable for any payment under any
      Collateral to make payment of any moneys due or to become due thereunder
      directly to the Administrative Agent or as the Administrative Agent shall
      direct, (B) ask or demand for, collect, and receive payment of and receipt
      for, any moneys, claims and other amounts due or to become due at any time
      in respect of or arising out of any Collateral, (C) sign and indorse any
      invoice, freight or express bill, bill of lading, storage or warehouse
      receipt, draft against debtors, assignment, verification, notice and other
      document in connection with any Collateral, (D) commence and prosecute any
      suit, action or proceeding at law or in equity in any court of competent
      jurisdiction to collect the Collateral or any portion thereof and to
      enforce any other right in respect of any Collateral, (E) defend any suit,
      action or proceeding brought against such Grantor with respect to any
      Collateral, (F) settle, compromise or adjust any such suit, action or
      proceeding and, in connection therewith, give such discharges or releases
      as the Administrative Agent may deem appropriate, (G) assign any
      Copyright, Patent or Trademark (along with the goodwill of the business to
      which any such Trademark pertains) throughout the world for such term or
      terms, on such conditions, and in such manner as the Administrative Agent
      shall in its sole discretion determine, including the execution and filing
      of any document necessary to effectuate or record such assignment and (H)
      generally, sell, transfer, pledge and make any agreement with respect to
      or otherwise deal with any Collateral as fully and completely as though
      the Administrative Agent were the absolute owner thereof for all purposes,
      and do, at the Administrative Agent's option and such Grantor's expense,
      at any time, or from time to time, all acts and things that the
      Administrative Agent deems necessary to protect, preserve or realize upon
      the Collateral and the Administrative Agent's and the other Secured
      Parties' security interests therein and to effect the intent of this
      Agreement, all as fully and effectively as such Grantor might do.

Anything in this CLAUSE (a) to the contrary notwithstanding, the Administrative
Agent may not exercise any right under the power of attorney provided for in
this CLAUSE (a) unless an Event of Default shall be continuing.

                                       25
<Page>

            (b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.

            (c) The reasonable expenses of the Administrative Agent incurred in
connection with actions undertaken as provided in this SECTION 6.1, together
with interest thereon at a rate per annum equal to the rate per annum at which
interest would then be payable on past due Revolving Loans that are Base Rate
Loans under the Credit Agreement, from the date of payment by the Administrative
Agent to the date reimbursed by the relevant Grantor, shall be payable by such
Grantor to the Administrative Agent on demand.

            (d) Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security interests
created hereby are released.

            SECTION 6.2       DUTY OF ADMINISTRATIVE AGENT

            The Administrative Agent's sole duty with respect to the custody,
safekeeping and physical preservation of the Collateral in its possession shall
be to deal with it in the same manner as the Administrative Agent deals with
similar property for its own account. Neither the Administrative Agent, any
other Secured Party nor any of their respective officers, directors, employees
or agents shall be liable for failure to demand, collect or realize upon any
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of any Grantor or any
other Person or to take any other action whatsoever with regard to any
Collateral. The powers conferred on the Administrative Agent hereunder are
solely to protect the Administrative Agent's interest in the Collateral and
shall not impose any duty upon the Administrative Agent or any other Secured
Party to exercise any such powers. The Administrative Agent and the other
Secured Parties shall be accountable only for amounts that they actually receive
as a result of the exercise of such powers, and neither they nor any of their
respective officers, directors, employees or agents shall be responsible to any
Grantor for any act or failure to act hereunder, except for their own gross
negligence or willful misconduct.

            SECTION 6.3       EXECUTION OF FINANCING STATEMENTS

            Each Grantor authorizes the Administrative Agent to file or record
financing statements and other filing or recording documents or instruments with
respect to the Collateral without the signature of such Grantor in such form and
in such offices as the Administrative Agent reasonably determines appropriate to
perfect the security interests of the Administrative Agent under this Agreement.
A photographic or other reproduction of this Agreement shall be sufficient as a
financing statement or other filing or recording document or instrument for
filing or recording in any jurisdiction.

            SECTION 6.4       AUTHORITY OF ADMINISTRATIVE AGENT

            Each Grantor acknowledges that the rights and responsibilities of
the Administrative Agent under this Agreement with respect to any action taken
by the Administrative Agent or the exercise or non-exercise by the
Administrative Agent of any option, voting right, request, judgment or other
right or remedy provided for herein or resulting or arising

                                       26
<Page>

out of this Agreement shall, as between the Administrative Agent and the
other Secured Parties, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them,
but, as between the Administrative Agent and the Grantors, the Administrative
Agent shall be conclusively presumed to be acting as agent for the
Administrative Agent and the other Secured Parties with full and valid
authority so to act or refrain from acting, and no Grantor shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.

      ARTICLE VII    MISCELLANEOUS

            SECTION 7.1       AMENDMENTS IN WRITING

            None of the terms or provisions of this Agreement may be waived,
amended, supplemented or otherwise modified except in accordance with SECTION
11.1 (AMENDMENTS, WAIVERS, ETC.) of the Credit Agreement.

            SECTION 7.2       NOTICES

            All notices, requests and demands to or upon the Administrative
Agent or any Grantor hereunder shall be effected in the manner provided for in
SECTION 11.8 (NOTICES, ETC.) of the Credit Agreement; PROVIDED, HOWEVER, that
any such notice, request or demand to or upon any Grantor shall be addressed in
case of the Borrower at the Borrower's notice address set forth in such SECTION
11.8.

            SECTION 7.3       NO WAIVER BY COURSE OF CONDUCT; CUMULATIVE
                              REMEDIES

            Neither the Administrative Agent nor any other Secured Party shall
by any act (except by a written instrument pursuant to SECTION 7.1 (AMENDMENTS
IN WRITING)), delay, indulgence, omission or otherwise be deemed to have waived
any right or remedy hereunder or to have acquiesced in any Default or Event of
Default. No failure to exercise, nor any delay in exercising, on the part of the
Administrative Agent or any other Secured Party, any right, power or privilege
hereunder shall operate as a waiver thereof. No single or partial exercise of
any right, power or privilege hereunder shall preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. A
waiver by the Administrative Agent or any other Secured Party of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy that the Administrative Agent or such other Secured Party would
otherwise have on any future occasion. The rights and remedies herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any other rights or remedies provided by law.

            SECTION 7.4       SUCCESSORS AND ASSIGNS

            This Agreement shall be binding upon the successors and assigns of
each Grantor and shall inure to the benefit of the Administrative Agent and each
other Secured Party and their successors and assigns; PROVIDED, HOWEVER, that no
Grantor may assign, transfer or delegate any of its rights or obligations under
this Agreement without the prior written consent of the Administrative Agent.

                                       27
<Page>

            SECTION 7.5       COUNTERPARTS

            This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts (including by telecopy), each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Signature pages may
be detached from multiple counterparts and attached to a single counterpart so
that all signature pages are attached to the same document. Delivery of an
executed counterpart by telecopy shall be effective as delivery of a manually
executed counterpart.

            SECTION 7.6       SEVERABILITY

            Any provision of this Agreement that is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent
of such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

            SECTION 7.7       SECTION HEADINGS

            The Article and Section titles contained in this Agreement are, and
shall be, without substantive meaning or content of any kind whatsoever and are
not part of the agreement of the parties hereto.

            SECTION 7.8       ENTIRE AGREEMENT

            This Agreement together with the other Loan Documents represents the
entire agreement of the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof.

            SECTION 7.9       GOVERNING LAW

            This agreement and the rights and obligations of the parties hereto
shall be governed by, and construed and interpreted in accordance with, the law
of the State of New York.

            SECTION 7.10      ADDITIONAL GRANTORS

            If, pursuant to SECTION 7.11 (ADDITIONAL COLLATERAL AND GUARANTIES)
of the Credit Agreement, the Borrower shall be required to cause any Subsidiary
that is not a Grantor to become a Grantor hereunder, such Subsidiary shall
execute and deliver to the Administrative Agent a Joinder Agreement in the form
of ANNEX 4 (FORM OF JOINDER AGREEMENT) and shall thereafter for all purposes be
a party hereto and have the same rights, benefits and obligations as a Grantor
party hereto on the Closing Date.

            SECTION 7.11      RELEASE OF COLLATERAL

            (a) At the time provided in SECTION 10.8(b)(i) (CONCERNING THE
COLLATERAL AND THE COLLATERAL DOCUMENTS) of the Credit Agreement, the Collateral
shall be released from the Lien created hereby and this Agreement and all
obligations (other than those expressly stated to survive such termination) of
the Administrative Agent and each Grantor hereunder shall

                                       28
<Page>

terminate, all without delivery of any instrument or performance of any act
by any party, and all rights to the Collateral shall revert to the Grantors.
At the request and sole expense of any Grantor following any such
termination, the Administrative Agent shall deliver to such Grantor any
Collateral of such Grantor held by the Administrative Agent hereunder and
execute and deliver to such Grantor such documents as such Grantor shall
reasonably request to evidence such termination.

            (b) If any Collateral shall be sold or disposed of by any Grantor in
a transaction permitted by the Credit Agreement, the Collateral so sold or
disposed of shall be released from the Lien created hereby to the extent
provided in SECTION 10.8(b)(ii) or (iii) (CONCERNING THE COLLATERAL AND THE
COLLATERAL DOCUMENTS) of the Credit Agreement and, in connection therewith, the
Administrative Agent, at the request and sole expense of the Borrower, shall
execute and deliver to the Borrower all releases or other documents reasonably
necessary or desirable for the release of the Lien created hereby on such
Collateral. At the request and sole expense of the Borrower, a Grantor shall be
released from its obligations hereunder in the event that all the capital stock
of such Grantor shall be so sold or disposed; PROVIDED, HOWEVER, that the
Borrower shall have delivered to the Administrative Agent, at least ten Business
Days prior to the date of the proposed release or earlier if agreed by the
Administrative Agent in its sole discretion, a written request for release
identifying the relevant Grantor and the terms of the sale or other disposition
in reasonable detail, including the price thereof and any expenses in connection
therewith, together with a certification by the Borrower stating that such
transaction is in compliance with the Credit Agreement and the other Loan
Documents.

            SECTION 7.12      REINSTATEMENT

            Each Grantor further agrees that, if any payment made by any Loan
Party or other Person and applied to the Obligations is at any time annulled,
avoided, set aside, rescinded, invalidated, declared to be fraudulent or
preferential or otherwise required to be refunded or repaid, or the proceeds of
Collateral are required to be returned by any Secured Party to such Loan Party,
its estate, trustee, receiver or any other party, including any Grantor, under
any bankruptcy law, state or federal law, common law or equitable cause, then,
to the extent of such payment or repayment, any Lien or other Collateral
securing such liability shall be and remain in full force and effect, as fully
as if such payment had never been made or, if prior thereto the Lien granted
hereby or other Collateral securing such liability hereunder shall have been
released or terminated by virtue of such cancellation or surrender), such Lien
or other Collateral shall be reinstated in full force and effect, and such prior
cancellation or surrender shall not diminish, release, discharge, impair or
otherwise affect any Lien or other Collateral securing the obligations of any
Grantor in respect of the amount of such payment.

                            [SIGNATURE PAGES FOLLOW]

                                       29
<Page>

            IN WITNESS WHEREOF, each of the undersigned has caused this Pledge
and Security Agreement to be duly executed and delivered as of the date first
above written.

                                    WASHINGTON GROUP INTERNATIONAL, INC.,
                                    AS GRANTOR

                                        /s/ Terry K. Eller
                                    By: _____________________________________
                                        Name:  Terry K. Eller
                                        Title:  Authorized Officer

                                    EACH OF THE GRANTORS LISTED ON EXHIBIT A,
                                    AS GRANTOR

                                        /s/ Terry K. Eller
                                    By: _____________________________________
                                        Name:  Terry K. Eller
                                        Title:  Authorized Officer

ACCEPTED AND AGREED
as of the date first above written:

CREDIT SUISSE FIRST BOSTON,
AS ADMINISTRATIVE AGENT

   /s/ Robert Hetu
By:_____________________________
   Name:  Robert Hetu
   Title:

   /s/ John D. Lewis
By:_____________________________
   Name:  John D. Lewis
   Title:  Associate

    [SIGNATURE PAGE TO PLEDGE AND SECURITY AGREEMENT FOR WASHINGTON GROUP
                   INTERNATIONAL, INC.'S CREDIT AGREEMENT]

<Page>

                                    Exhibit A

<Table>
<Caption>

-------------------------------------------------------------------------------------------------------------------
                       Company Name                                              Jurisdiction
-------------------------------------------------------------------------------------------------------------------
<S>                                                         <C>
-------------------------------------------------------------------------------------------------------------------
Asia Badger, Inc.                                           Delaware
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Badger America, Inc.                                        Delaware
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Badger Energy, Inc.                                         Delaware
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Badger Middle East Inc.                                     Delaware
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Catalytic Industrial Maintenance Co., Inc.                  Delaware
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
CF Environmental Corporation                                Massachusetts
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Cia. Internacional de Ingenieria, S.A.                      Nevada
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Ebasco International Corporation                            Delaware
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Emkay Capital Investments, Inc.                             Nevada
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Energy Overseas International, Inc.                         Delaware
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Gulf Design Corporation Inc.                                Florida
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Harbert-Yeargin Inc.                                        Delaware
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
HCC Holding, Inc.                                           California
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Industrial Constructors Corp.                               Montana
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
McBride Ratcliff & Associates Inc.                          Texas
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Middle East Holdings Limited (f/k/a Raytheon Engineers &    Colorado
Constructors Middle East Limited)
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
MK Aviation Services, Inc.                                  Nevada
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
MK Capital Company                                          Nevada
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
MK Construction, Inc.                                       Nevada
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
MK Nevada LLC                                               Nevada
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
MK Train Control, Inc.                                      Nevada
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
MK-Ferguson Engineering Company                             Michigan
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
MK-Ferguson of Idaho Company                                Idaho
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
MK-Ferguson of Oak Ridge Company                            Tennessee
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Morrison Knudsen Corporation of Viet Nam                    Nevada
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Morrison Knudsen Leasing Corporation                        Nevada
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Morrison-Knudsen Company, Inc.                              Delaware
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Morrison-Knudsen Engineers, Inc.                            Nevada
-------------------------------------------------------------------------------------------------------------------

</Table>

                                       32

<Page>

<Table>

<S>                                                         <C>
-------------------------------------------------------------------------------------------------------------------
Morrison-Knudsen Services, Inc.                             Nevada
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
National Projects Southwest, Inc.                           Delaware
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
National Projects, Inc.                                     Nevada
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Pomeroy Corporation                                         California
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Raytheon Architects, Ltd.                                   Colorado
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Raytheon Engineers & Constructors (Aruba) Ltd.              Delaware
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Raytheon Engineers & Constructors (Ireland) Ltd.            Delaware
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Raytheon Engineers & Constructors (Russia) Ltd.             Massachusetts
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Raytheon Engineers & Constructors Midwest LLC               Ohio
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Raytheon Engineers & Constructors Midwest, Inc.             Delaware
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Raytheon Infrastructure, Inc.                               New York
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Raytheon Nuclear Inc.                                       Delaware
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Raytheon-Ebasco Indonesia Ltd.                              Delaware
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Raytheon-Ebasco Overseas Ltd.                               Delaware
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Raytheon-Ebasco Pakistan Ltd.                               Delaware
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Rust Constructors Puerto Rico, Inc.                         Nevada
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Rust Constructors, Inc.                                     Delaware
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Specialty Technical Services Inc.                           Pennsylvania
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Stearns Catalytic Corporation                               Delaware
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
United Engineers Far East, Ltd.                             Delaware
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
United Engineers International, Inc.                        Pennsylvania
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
United Mid-East, Inc.                                       Delaware
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Washington Architects LLC                                   Delaware
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Washington Construction Corporation                         Montana
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Washington Contractors Group, Inc.                          Montana
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Washington Demilitarization Company                         Delaware
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Washington Electrical, Inc.                                 Nevada
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Washington Engineering Quality Services Corporation         Delaware
(formerly Raytheon Engineering Quality Services
Corporation)
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Washington Group International, Inc.                        Ohio
-------------------------------------------------------------------------------------------------------------------
</Table>

                                       33

<Page>

<Table>

<S>                                                         <C>
-------------------------------------------------------------------------------------------------------------------
Washington Group Latin America, Inc. (formerly Raytheon     Delaware
Engineers & Constructors Latin America, Inc.)
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Washington Infrastructure Services, Inc.                    Colorado
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Washington International, Inc.                              Nevada
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Washington Ohio Services LLC                                Nevada
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Washington Quality Inspection Company (formerly Raytheon    Delaware
Quality Inspection Company)
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Washington Quality Programs Company                         Delaware
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Washington-Catalytic, Inc.                                  Delaware
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
WCG Holdings, Inc.                                          Montana
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
WCG Leasing, Inc.                                           Montana
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
WGCI, Inc. (formerly Raytheon Constructors International,   Delaware
Inc.)
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
WGI Panama Ltd.                                             Delaware
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
WGI Trinidad & Tobago Ltd.                                  Delaware
-------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------
Yampa Mining Co.                                            Nevada
-------------------------------------------------------------------------------------------------------------------

</Table>

                                       34<Page>

                                                                    Exhibit 10.3

                UNDERWRITING AND CONTINUING INDEMNITY AGREEMENT

      THIS UNDERWRITING AND CONTINUING INDEMNITY AGREEMENT ("this Agreement")
dated as of the 24th day of January, 2002, among WASHINGTON GROUP INTERNATIONAL,
INC., an Ohio corporation, and certain of its Subsidiaries and Affiliates listed
on Exhibit A (individually and collectively, "Principal" when named as such in
any Bond); WASHINGTON GROUP INTERNATIONAL, INC., a Delaware corporation, and
certain of its Subsidiaries and Affiliates listed on Exhibit A (individually and
collectively, "Indemnitor"); and FEDERAL INSURANCE COMPANY, an Indiana company
(individually and collectively with its Affiliates and Subsidiaries and their
respective co-sureties and reinsurors, and their respective successors and
permitted assigns, "Surety").

                             W I T N E S S E T H :

      WHEREAS, Washington Group International, Inc. and certain of its
Affiliates heretofore executed in favor of Surety certain Indemnity
Agreements (defined in Section 1);

      WHEREAS, Principal is engaged in a variety of engineering, construction,
and maintenance services in a variety of markets and Principal, individually,
jointly with others, or on behalf of any of its Subsidiaries, Affiliates, or
divisions of their Subsidiaries, Affiliates, or divisions now in existence or
hereafter formed or acquired; or on behalf of individuals, partnerships, or
corporations, may desire or be required from time to time in connection with
this business to give certain bonds;

      WHEREAS, Washington Group International, Inc. and certain of its
Affiliates and Subsidiaries commenced the Bankruptcy Case in the United
States Bankruptcy Court, District of Nevada, styled IN RE: WASHINGTON GROUP
INTERNATIONAL, INC., ET AL., Docket No. BK-N-01-31627 (GWZ);

      WHEREAS, Principal has accepted all Existing Bonded Contracts (defined in
Section 1) pursuant to Section 365 of the Bankruptcy Code, which acceptance has
been effected by Order Under 11 U.S.C. Section 365(b) Authorizing Payment of
Non-Contract Vendors and Suppliers on Projects Bonded by Federal Insurance
Company entered October 19, 2001, Order Under 11 U.S.C. Section 365(b)
Authorizing Payment of Reimbursable Expenses of Non-Contract Vendors and
Suppliers entered October 19, 2001, and Order Under U.S.C. Section 365(b)
Authorizing Payment of Non-Contract Vendors and Suppliers on Projects with the
Federal Government entered October 19, 2001;

      WHEREAS, a Plan of Reorganization (defined in Section 1) has been filed in
the above-referenced bankruptcy proceeding that contemplates Principal obtaining
bonds in connection with the performance of its business;

      WHEREAS, Indemnitor recognizes that Bonds are a necessary and desirable
adjunct to the business done and to be done by Principal and desires 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 has therefore agreed to be bound by this Agreement
and has agreed to exercise its best efforts to permit and require Principal to
honor and perform all of the terms of this Agreement; and

<Page>

      WHEREAS, upon the express condition that this Agreement be executed,
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 any bond of Principal, subject to the terms of this
Agreement, and that Principal is under no obligation to obtain bonds from
Surety.

      NOW, THEREFORE, in consideration of the mutual agreements set forth
herein, the execution or procurement of any Bond by Surety or the forbearance of
cancellation of any existing Bonds by Surety, and as an inducement to such
execution, procurement, or forbearance, we, the undersigned Principal and
Indemnitor, agree and bind ourselves, our bankruptcy estate, if any, our
successors and assigns, jointly and severally, as follows:

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

      "Accounts" means and includes all of Indemnitor's now owned or hereafter
acquired accounts (as defined in the UCC) and (whether or not included in such
definition) accounts receivable; and proceeds, including without limitation, all
insurance proceeds, proceeds of any letter of credit on which Indemnitor is a
beneficiary, in each case to the extent such accounts, accounts receivable, and
proceeds arise out of a Bonded Contract and all forms of obligations whatsoever
owing to 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.

      "Affiliate" means, with respect to any Person, whether in bankruptcy, any
other Person or group acting in concert with respect of the 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, will mean 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. Neither Principal nor Indemnitor is an Affiliate of Surety. Each
Principal and each Indemnitor are Affiliates of each other.

      "Agreement" or "this Agreement" means all amendments, modifications, and
supplements hereto and will refer to this Agreement as the same may be in effect
at the time such reference becomes operative.

      "Bankruptcy Case" means the bankruptcy case commenced by Washington Group
International, Inc. and certain of its Affiliates in the Bankruptcy Court
pursuant to the Bankruptcy Code.

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

                                       2

<Page>

      "Bankruptcy Court" means the United States District Court of Nevada in
Reno, Nevada, or such other District acceptable to Surety, having jurisdiction
over the bankruptcy filing of Indemnitor, or such other court to which any such
bankruptcy case may be transferred.

      "Bonded Contract" means any contract for which any Bond has been issued on
behalf of Principal.

      "Bonded Contract Balances" means all payments made, or to be made, to or
on behalf of Principal pursuant to, arising out of, or relating to any Bonded
Contract, including, without limitation, and 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, without limitation, changed
condition claims; wrongful termination claims; claims against any architect,
engineers, subcontractor, or Obligee).

      "Bonds" means the Joint Venture Bonds and any bonds, surety agreements,
undertakings, instruments of guaranty, and other like obligations signed by
Surety on behalf of Principal, executed, issued, or renewed on or after the
Effective Date and subject to this Agreement.

      "Business Day" means any day excluding Saturday, Sunday, and any day which
is a legal holiday under the laws of the State of New Jersey or is a day on
which banking institutions located in such state are authorized or required by
law or other governmental action to close. Notwithstanding the foregoing, the
reference to New Jersey in this definition will be replaced with a reference to
New York when determining the Effective Date.

      "Capital Lease" means, with respect to any Principal, any lease (or other
arrangement conveying the right to use) of property by Principal as lessee that
would be accounted for as a capital lease on a balance sheet of such Principal
prepared in conformity with GAAP.

      "Change of Control" means any of the following: (a) any Person other than
Dennis Washington or any group of Persons (within the meaning of the Securities
Exchange Act of 1934, as amended) other than any group including Dennis
Washington will have acquired, other than pursuant to the Plan of
Reorganization, beneficial ownership (within the meaning of Rule 13d-3
promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, as amended) of and twenty percent (20%) or more of the
issued and outstanding Voting Stock of any Indemnitor on a fully-diluted basis,
or (b) during any period of twelve consecutive calendar months, individuals who
at the beginning of such period constituted the Board of Directors of any
Washington Group International, Inc., a Delaware corporation (together with any
new directors whose election by the board of directors of any Indemnitor or
whose nomination for election by the stockholders of any Indemnitor was approved
by a vote of at least a majority of the directors then still in office who
either were directors at the beginning of such period or whose elections or
nomination for election was previously so approved) cease for any reason other
than death or disability (or transition from the interim Board of Directors to
the final Board of Directors) to constitute a majority of the directors then in
office.

                                       3

<Page>

      "Collateral Agent Agreement" means that certain Agreement Governing Bonded
Contract Proceeds and Other Collateral to be entered into, by and among Surety,
a Collateral Agent named therein, and Principal.

      "Collateral" means the Existing Collateral and the collateral described
pursuant to Section 6 of this Agreement and the terms of the Collateral Agent
Agreement and the Security Agreement and Pledge Agreement of even date.

      "Cost to Complete" means the actual and anticipated cost of materials,
labor, and other items, including, but not limited to, back charges, allocated
Overhead, and assessments or penalties for termination or late completion
(including, but not limited to, liquidated damages) required to complete the
Work required by any Bonded Contract, including, without limitation, anything
for which Surety is or may become liable under the Bonds.

      "Debt" means, as of any applicable date of determination and as to any
Person, 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 should be classified and
presented as a liability on a balance sheet prepared in accordance with GAAP.

      "Effective Date" means the Business Day on which all conditions to the
consummation of the Plan of Reorganization as set forth in the Plan of
Reorganization have been satisfied or waived as provided in the Plan of
Reorganization.

      "Eligible Line of Business" means the general nature of the business and
activities engaged in by Indemnitor or any of its Subsidiaries or Affiliates in
which Indemnitor participates on the date hereof and activities reasonably
related thereto.

      "Environmental Laws" means:  (1) Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended by the Superfund
Amendments and Reauthorization Act of 1986, 42 U.S.C. 9601 ET SEQ.
("CERCLA"); (2) Solid Waste Disposal Act, as amended by the Resource
Conservation Recovery Act of 1976, as amended by the Hazardous and Solid
Waste Amendments of 1984, 42 U.S.C. 6901 ET SEQ.; (3) Federal Water Pollution
Control Act of 1972, as amended by the Clean Water Act of 1977, as amended,
33 U.S.C. 1251 ET SEQ.; (4) Toxic Substances Control Act of 1976 as amended,
15 U.S.C. 2601 ET SEQ.; (5) Emergency Planning and Community
Right-To-Know-Act of 1986, 42 U.S.C. 11001 ET SEQ.; (6) Clean Air Act of
1966, as amended by the Clean Air Act Amendments of 1990, 42 U.S.C. 7401 ET
SEQ.; (7) National Environmental Policy Act of 1970, as amended, 42 U.S.C.
4321 ET SEQ.; (8) Rivers and Harbors Act of 1899, as amended, 33 U.S.C. 401
ET SEQ.; (9) Endangered Species Act of 1973, as amended, 16 U.S.C. 1531, ET
SEQ.; (10) Occupational Safety and Health Act of 1970, as amended, 29 U.S.C.
651 ET SEQ.; (11) Safe Drinking Water Act of 1974, as amended, 42 U.S.C.
300(f) ET SEQ.; (12) Defense Environmental Restoration Act, as amended, 10
U.S.C. 2701 ET SEQ.; (13) any similar laws enacted by any State in which the
assets or properties are located or otherwise subject to such laws; (14) all
applicable standards, rules, policies, and other binding governmental
requirements, including judicial or administrative orders; and (15) any other
federal, state, or local statute, law, ordinance, code, rule, regulation,
order, decree, or other requirement of any governmental body

                                       4

<Page>

regulating, relating to, or imposing liability or standards of conduct
concerning any hazardous materials or toxic or dangerous chemical, waste,
substance or material.

      "Equipment" means all of Indemnitor's 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, furnishings,
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, and all rights under
or arising out of present or future leases or contracts relating to the
foregoing.

      "ERISA" means Title IV of the Employee Retirement Income Security Act
of 1974, Pub. L. No. 93-406, September 2, 1974, 88 Stat. 829, 29 U.S.C.A.
Section 1001 et seq. (1975), as amended from time to time.

      "Event of Default" means any one or more of the following:

            (a)  Principal, Indemnitor, or any of them have failed or refused to
perform any obligation under this Agreement, as reasonably determined by Surety;
or

            (b)  Principal has failed or refused to perform any obligation
to Surety under the Indemnity Agreement, or otherwise, as reasonably
determined by Surety;  or

            (c)  any Obligee has declared Principal in default under any
Existing Bonded Contract or under any Bonded Contract and Principal has
failed to cure such default within any cure period provided in such Bonded
Contract or Existing Bonded Contract, as applicable; provided, however, that
Surety upon investigation has reasonably determined that Principal is in
default. It will be no defense to the enforcement of this Agreement by Surety
that Principal asserts that it is not in default under the Bonded Contract or
the Existing Bonded Contract, as applicable; or

            (d)  Principal has acknowledged in writing its default under any
Bonded Contract or Existing Bonded Contract, irrespective of whether Principal
is actually in default of the Bonded Contract or the Existing Bonded Contract,
as applicable; or

            (e)  Surety receives notice or knowledge of facts, giving rise to a
reasonable belief that it has sustained or may sustain or incur a Surety Loss,
or any loss with respect to any Existing Bonded Contract; or

            (f)  Principal has failed or refused to pay or is unable to pay
claims, bills, or other Debt incurred in, or in connection with, the performance
of any Bonded Contract or Existing Bonded Contract; or

                                       5

<Page>

            (g)  the occurrence of a material default under any document
governing the Exit Facility or any Debt in excess of One Million Dollars
($1,000,000) of any of Indemnitor, which results in acceleration of the Debt
thereunder; or the foreclosure or notice of foreclosure by Exit Lender or any
other lender or holder of any Debt in excess of One Million Dollars ($1,000,000)
of Indemnitor on any collateral that secures any Debt in excess of One Million
Dollars ($1,000,000) of Indemnitor; or

            (h)  Indemnitor fails to pay any Debt in excess of One Million
Dollars ($1,000,000) due any Person and such failure will continue beyond any
applicable grace period; or

            (i)  any Financial Statement, representation, warranty, or
certificate made or furnished by Indemnitor to Surety in connection with this
Agreement or the Surety Credit Documents, or as an inducement to Surety to enter
into this Agreement, or in any separate statement or document to be delivered
hereunder to Surety will be false, incorrect, or incomplete when made in any
material respect; or

            (j)  Indemnitor fails to give prompt notice to Surety of its
knowledge of any pending or threatened claim or suit for payment of money
aggregating in excess of One Million Dollars ($1,000,000); or

            (k)  Indemnitor allows a judgment creditor to obtain possession of
any of the Collateral with a fair market value in the aggregate of in excess of
Ten Thousand Dollars ($10,000) by any means, including, but without limitation,
levy, distraint, replevin, or self-help; or

            (l)  if Indemnitor violates, breaches, or fails to adhere to any of
the terms, conditions, or covenants of any of Surety Credit Documents, or any of
the documents related to the Exit Facility or entered into with Exit Lender or
any other lender in any material respect; or

            (m)  if Principal fails to deposit any funds into the cash
collateral account as required under the terms of the Collateral Agent
Agreement and does not cure such failure within five (5) Business Days; or

            (n)  if any Indemnitor fails to deposit any funds into the cash
management account as required under the terms of the Hudson-Bergen Agreement
and does not cure such failure within five (5) Business Days; or

            (o)  proceedings to bankruptcy, or for reorganization of Principal,
or for the readjustment of Debt to Principal, 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, will be commenced by or against Principal
after the Effective Date and such proceedings commenced against Principal are
not dismissed within forty five (45) days of filing; or

            (p)  a receiver or trustee will be appointed for any Indemnitor
after the Effective Date, or for any substantial part of its assets, or any
proceedings will be instituted for the dissolution or the full or partial
liquidation of Principal after the Effective Date and such proceedings are
not

                                       6

<Page>

dismissed within forty five (45) days of filing, or Principal will
discontinue its business or materially change the nature of their business; or

            (q)  any Indemnitor will fail to comply with the terms of the
Plan of Reorganization after the Effective Date; or

            (r)  the determination of Indemnitor, whether by vote of its
board of directors or otherwise, to suspend the operation of Indemnitor's
business in the ordinary course, liquidate all or substantially all of
Indemnitor's assets, or the filing of a motion or other application in the
Bankruptcy Case, seeking authority to do any of the foregoing;

            (s)  fails to pay any facility, commitment, success, or other
fees when due to Surety; or

            (t)  fails to reimburse Surety for any costs incurred by Surety when
due, including, but not limited to, legal fees as required under this Agreement.

      "Existing Bonded Contracts" means the contracts that are the subject of
the Existing Bonds.

      "Existing Bonds" means any surety agreements, undertakings, instruments of
guaranty, and other like obligations signed by Surety on behalf of any of
Indemnitors, as the named principal, including, but not limited to, replacement
bonds, payment bonds, performance bonds, contractor's license bonds, customs
bonds, and utility bonds, issued prior to the Effective Date.

      "Existing Collateral" means the Prepetition Letter of Credit and the
Existing Pledged Collateral.

      "Existing Pledged Collateral" means the Four Million Four Hundred Fifty
Nine Thousand Fifty Dollars ($4,459,050) cash (and interest, earnings, and
proceeds thereof) delivered to Surety pursuant to the March 23, 2001, Pledge
Agreement, and the initial Eight Hundred Thousand Three Hundred Forty Two
Dollars ($800,342) cash plus additional cash of Five Hundred Ninety Seven
Thousand One Hundred Twenty Eight 31/100 Dollars ($597,128.31) delivered
thereunder as further described on the attached Exhibit B (and interest,
earnings, and proceeds thereof) delivered to Surety pursuant to the May 24,
2001, Pledge Agreement.

      "Exit Facility" means the Senior Secured Credit Facility in an amount to
be determined by the debtors in the Bankruptcy Case, which Washington Group
International, Inc., a Delaware corporation, and certain Subsidiaries will enter
into on the Effective Date.

      "Exit Lender" means the lender(s) under the Exit Facility.

      "Facilities" means those premises, structures, buildings, warehouses,
plants on or used in association with the performance of any Bonded Contract or
where any Equipment or other Personalty used or to be used in the performance of
the Bonded Contracts or is necessary for the completion of the Bonded Contracts
is stored, maintained, or housed.

                                       7

<Page>

      "Financial Statements" means balance sheets, income statements, and other
financial data of Principal.

      "GAAP" is defined as generally accepted accounting principles 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.

      "Hazardous Materials" means any flammable materials, explosives,
radioactive materials, hazardous materials, hazardous wastes, hazardous or toxic
substances, or similar materials defined as such in any Environmental Law.

      "Hudson-Bergen Agreement" means that certain Hudson-Bergen Cash Management
Agreement to be entered into, by and between Surety and Raytheon Infrastructure,
Inc.

      "Hudson-Bergen Project" means Hudson-Bergen Light Rail Transit System, New
Jersey Transit Contract #96CT001 Change Order #5, Mos. 2 D/B Work, that is the
subject of Bond No. 8161-94-47 issued in favor of New Jersey Transit
Corporation, as the named obligee, and naming 21st Century Rail Corporation, as
the named principal.

      "Hudson-Bergen Subcontract" means that certain Goods and Services
Subcontract dated January 17, 2002, by and between 21st Century Rail Corporation
and Raytheon Infrastructure, Inc.

      "Indemnitor" means Washington Group International, Inc., its successors
and assigns, in its capacity as an indemnitor under the Indemnity Agreements. In
addition, any Subsidiaries and Affiliates of Indemnitor named as Principal on
any Bond, their successors and assigns, will be required to execute this
Agreement as an Indemnitor. Thereafter, said Subsidiaries and Affiliates, their
successors and assigns, will be deemed to be an Indemnitor hereunder as though
they were original signatories hereto. Without limiting the generality of the
forgoing, Affiliates of Indemnitor listed on Exhibit A are parties to this
Agreement and are Indemnitors hereunder. References to Indemnitor in this
Agreement will refer individually and collectively to all Persons signing this
Agreement as an Indemnitor.

      "Indemnity Agreements" means: (i) the General Agreement of Indemnity dated
October 23, 2000, executed by Washington Group International, Inc. in favor of
Surety; (ii) General Agreement of Indemnity dated August 1, 1997, executed by
Morrison Knudsen Corporation in favor of Surety (Morrison Knudsen Corporation
having changed its name to Washington Group International, Inc.); (iii) General
Agreement of Indemnity dated September 27,1997, executed by Morrison Knudsen
Corporation, Don McCoy Corporation, Donald L. McCoy, and Marcellene W. McCoy in
favor of Surety; (iv) General Agreement of Indemnity dated September 11, 1996,
executed by Morrison Knudsen Corporation in favor of Surety; (v) General
Agreement of Indemnity dated September 10, 1996, executed by Morrison Knudsen
Corporation (successor by merger to Washington Construction Group, Inc.) in
favor of Surety; (vi) General Agreement of Indemnity dated January 6, 1995,
executed by Kasler Holding Company in favor of Surety; (vii) this Agreement; and
(viii) any other agreements providing for indemnification of Surety by
Indemnitor or any of Indemnitor's Affiliates or Subsidiaries, whether now in
existence or

                                       8

<Page>

hereinafter arising. In connection with the foregoing, and for purposes of
this Agreement, Indemnitor and its Affiliates and Subsidiaries hereby ratify
and affirm their obligations to Surety under the Indemnity Agreements.

      "Joint Venture Bonded Contracts" means the Bonded Contracts that are the
subject of the Joint Venture Bonds.

      "Joint Venture Bonds" means any surety agreements, undertakings,
instruments of guaranty, and other like obligations signed by Surety on behalf
of any joint venture composed of one or more Indemnitor and one or more entities
which are not Subsidiaries of Indemnitor, including, but not limited to,
replacement bonds, payment bonds, performance bonds, contractor's license bonds,
customs bonds, and utilities bonds, issued after the Effective Date.

      "Lease Debt" means as of the applicable date of determination and as to
any Principal, an amount equal to the net present value (as determined by
Principal's independent certified public accountants of recognized standing
utilizing an assumed interest rate of nine percent (9%)) of all lease, rent, or
other payments or Debt of any character whatsoever required to be paid under all
leases or other contracts or arrangements, whether or not in writing, relating
to the use of personal property in respect of which such Principal is a lessee,
sublessee, user, or obligor and which should not be capitalized in accordance
with GAAP.

      "Lien" means any security interest, lien, pledge, charge, proxy, voting
trust or arrangement, encumbrance, lease, sublease, license, or other rights of
use by another or other interest of any character whatsoever.

      "March 23, 2001, Pledge Agreement" means that certain Pledge Agreement
dated March 23, 2001, by and between Washington Group International, Inc., an
Ohio corporation, as the pledgor, and Surety.

      "May 24, 2001, Pledge Agreement" means that certain Pledge Agreement dated
May 24, 2001, by and between Washington Group International, Inc., a Delaware
corporation, as the pledgor, and Surety.

      "Non-Recourse Debt" means Debt of a Permitted Joint Venture (a) that is on
terms and conditions reasonably satisfactory to Surety, (b) that is not, in
whole or in part, Debt of any Indemnitor (and for which no Indemnitor has
created, maintained, or assumed any obligation) and for which no holder thereof
has or could have upon the occurrence of any contingency, any recourse against
any Indemnitor or the assets thereof, (c) owing to an unaffiliated third-party
(other than, directly or indirectly, Indemnitor, any Permitted Joint Venture (or
owner of any interest therein) and any Affiliate of any of them), and (d) the
source of repayment for which is expressly limited to the assets of such
Permitted Joint Venture.

      "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 assigns.

                                       9

<Page>

      "Other Obligations" will have the meaning set out in item (ii) of the
first paragraph of Section 21.

      "Overhead" means the general operating and administrative expenses of
Principal, including, but not limited to, the cost of rent, utilities, Taxes,
and all other expenses of Principal not allocated to a specific Bonded Contract.

      "Permitted Joint Venture" means any joint venture (which may be in the
form of any limited liability company or other Person), including any domestic
Subsidiary of Indemnitor that is not a wholly-owned Subsidiary thereof, in which
Indemnitor holds stock or stock equivalents or otherwise participates or
invests; provided, that, other than in respect of the Westinghouse Subsidiaries,
the existence and activities of such joint venture are limited to the duration
and scope of the specific projects relating thereto (established to provide
engineering, construction, mining, manufacturing, development, operations and
maintenance or other services, as the case may be).

      "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) inchoate non-perfected mechanics', workmen's, and repairmen's
Liens or other like Liens arising by operation of law in the ordinary course of
business of Principal and not past due unless contested in good faith by
appropriate proceedings;

            (c) any Lien granted on its assets by Indemnitor, to Surety to
secure the payment of Surety Loss; and

            (d) Liens to secure the Exit Facility obtained on the Effective Date
that are consistent with the priorities and security interests in favor of
Surety established in this Agreement. Notwithstanding the foregoing, nothing in
this item (d) will be deemed a waiver by Surety of its right to object or
otherwise be heard with respect to any issue arising in connection with the
approval of the terms of the Exit Facility.

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

      "Personalty" means any tangible or intangible personal property of
Indemnitor that is required or necessary for Surety, or any Person appointed by
Surety, to complete performance under the Bonded Contracts that does not
constitute Equipment or Facilities, including, but not limited to, cement, sand,
and other materials utilized or to be utilized in the completion of the Bonded
Contracts.

                                       10

<Page>

      "Plan" means any employee pension benefit plan and pension plan described
in Section 3(2) of ERISA.

      "Plan of Reorganization" means the Second Amendment Joint Plan of
Reorganization dated July 24, 2001, as modified by Modification to Second
Amendment to Joint Plan of Reorganization dated August 23, 2001, as further
modified by the Second Modification to Second Joint Plan of Reorganization dated
October 11, 2001, and as further modified by the Third Modification to Second
Amendment Joint Plan of Reorganization, filed of record in the Bankruptcy Court.

      "Prepetition Letter of Credit" means that certain Irrevocable Letter
of Credit No. 3033956 dated January 9, 2001, in the aggregate amount of
Fifty Million Dollars ($50,000,000) issued by Bank of America, N.A., in
favor of Surety.

      "Principal" means Washington Group International, Inc., an Ohio
corporation, and certain of its Subsidiaries or Affiliates listed on the
Exhibit A that are named as the principal under any Bond.

      "Progress Payments" means those funds, net of Retentions, which would
otherwise be immediately due Principal in the absence of a default under a
Bonded Contract with respect to which periodic payments for completed Work are
owed.

      "Prohibited Transaction" means those transactions that are prohibited
pursuant to Section 406 of ERISA.

      "Purchase Money Debt" means as of the applicable date of determination and
as to any Principal, the capitalized amount of all obligations of such Principal
under any Capital Leases, as determined in accordance with GAAP and all Debt for
the deferred purchase price of property or services.

      "Records" means correspondence, memoranda, tapes, books, disks, paper,
magnetic storage, and other documents or information of any type, whether
expressed in ordinary or machine language.

      "Remaining Bonded Contract Balances" means Bonded Contract Balances less
Progress Payments made to Principal and excluding any and all claims for
additional compensation, or other remuneration, of Principal under any Bonded
Contract, that will not be collected within ninety (90) days of the date of
determination of Remaining Bonded Contract Balances.

      "Reportable Event" means a reportable event as defined in Section 4043 of
ERISA.

      "Reserve" means a sum of money that may be set aside by Surety to pay
present and future liabilities under Bonds. The funds posted as a Reserve by
Surety may be maintained and are unavailable for use by Surety until they are
reduced as a result of the payments made by Indemnitor to Surety as required by
the Surety Credit Documents. The effect on Surety of posting a Reserve is the
same as if Surety is required to pay Surety Loss. Reserves are treated on
Surety's financial statements in the same manner as if Surety Loss had actually
been paid by

                                       11

<Page>

Surety. The result to Surety of posting a Reserve is to reduce its surplus
and reduce in like amount Surety's overall capacity to write bonds.

      "Retentions" or "Retainage" means a specified percentage of contract
proceeds periodically withheld by an Obligee to provide further security for
Principal's performance of a Bonded Contract, and as such are payable to
Principal only upon a clear demonstration of compliance with 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, securities, or other equity interest of such corporation,
partnership, or other entity.

      "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 (i) the Indemnity Agreement; (ii) the
Bonds; (iii) Collateral Agent Agreement; (iv) Hudson-Bergen Agreement; (v) the
Security Agreement of even date entered into by Principal and Surety; (vi) the
Pledge Agreement of even date, entered into by Indemnitor and Surety; (vii) UCC
Financing Statements wherein any Indemnitor is named as the debtor and Surety is
named as the secured party; (viii) this Agreement; (ix) Intercreditor Agreement
of even date, by and between Exit Lender and Surety; and (x) all other documents
and instruments heretofore or hereafter executed by or on behalf of Indemnitor
in connection therewith, and any and all modifications, amendments,
substitutions, or other documents related thereto, whether executed by
Indemnitor.

      "Surety Loss" means any and all of the following that arises or is
incurred after the Effective Date:

            (a) All damages, loss, costs, reasonable attorneys', accountants',
engineers', and consulting fees (including all allocated costs of in-house
attorneys, accountants, engineers, and consultants), and all expenses incurred
in connection therewith, and liabilities (including without limitation any
unsatisfied liabilities under Bonded Contracts or Bonds) which Surety may
sustain, incur, or to which it is exposed by reason of executing or procuring
the execution of the Bond(s), or any other Bond(s) which may be already or
hereafter be executed on behalf of Principal, or renewal or continuation
thereof; or which may be sustained or incurred 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, court costs and fees;

                                       12

<Page>

                  (2) any loss which Surety may sustain or incurs in connection
with any contract, Bonded Contract, or Bond, whether that loss results from the
activity of Principal individually or as part of a joint venture, partnership,
or other entity which has been or may be formed;

                  (3) any loss which Surety may sustain or incurs as a result of
any actions taken by Surety upon information provided by any Indemnitor;

                  (4) all Reserves; and

                  (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.

            (b) Legal, accounting, and consulting fees (including allocated
in-house fees) and related expenses reasonably incurred in connection with any
application or submission by Principal for a proposal, bid or other bond,
whether or not Surety decides to issue said bond, including, but not limited to,
reasonable legal fees incurred in the preparation and enforcement of the Surety
Credit Documents. Notwithstanding the foregoing, and provided that Indemnitor
delivers the facility fee required under Section 2(g), attorney and consultant
fees incurred by Surety through January 31, 2002, will be excluded from Surety
Loss. The preceding sentence applies only to Federal Insurance Company and does
not bind St. Paul Fire and Marine Insurance Company, AIG Insurance Company, nor
Surety's other co-sureties to the extent that such co-sureties have incurred
such fees and expenses independently of Federal Insurance Company. All
attorneys' and consultants' fees and expenses incurred by Federal Insurance
Company after January 31, 2002, will be the responsibility of Indemnitor and
will be paid as provided in this Agreement and as a precondition to the issuance
of the Bonds.

      "Tax" or "Taxes" means any present or future tax, levy, impost, duty,
charge, assessment, fee, deduction, or withholding of any nature and whatever
called, by whomsoever, on whomsoever and wherever imposed, levied, collected,
withheld, or assessed.

      "UCC" means the Uniform Commercial Code as in effect on the date hereof in
New Jersey, 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 Pledged Collateral is governed by
any state other than New Jersey, "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.

      "Westinghouse Subsidiaries" means any Subsidiary of Westinghouse
Government Services Company, LLC, a Delaware limited liability company, in
existence on the date hereof.

      "Work" means the general construction, construction management,
procurement, engineering, design, infrastructure, and mining services required
by any Bonded Contract whether

                                       13

<Page>

completed or partially completed, of Principal, and includes all other labor,
materials, equipment, and services provided or to be provided by Principal to
fulfill Principal's obligations under any Bonded Contract.

      Any collective defined term and any defined term used in the plural will
be taken to encompass 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. Any accounting term not otherwise defined herein will be defined
in accordance with GAAP.

      2. CONDITIONS PRECEDENT TO THIS AGREEMENT. As a condition precedent to
the effectiveness of this Agreement, Indemnitor will deliver to Surety each
of the following, in form and substance satisfactory to Surety and its
counsel:

            (a) A Certificate of Secretary for each Principal and Indemnitor
certifying copies of each of Principal's and Indemnitor's articles of
incorporation, bylaws, or other governing documents, appropriate corporate
resolutions authorizing the execution, delivery, and performance of the Surety
Credit Documents and certifying incumbencies and true signatures of its officers
so authorized;

            (b) evidence of the good standing of Indemnitor in the jurisdictions
in which Indemnitor is incorporated, excluding evidence of good standing of
MK-Ferguson of Oak Ridge Company from the State of Tennessee; evidence of good
standing for MK-Ferguson of Oak Ridge Company from the State of Tennessee will
be delivered within ninety (90) days of the Effective Date;

            (c) receipt by Surety of the Security Agreement and the Pledge
Agreement referred to in Section 6, duly executed by Indemnitor;

            (d) receipt by Surety of the Collateral Agent Agreement and the
Hudson-Bergen Agreement referred to in Section 6, duly executed by Indemnitor
and the Collateral Agent and Agent, respectively, named therein;

            (e) Surety will have entered into an Intercreditor Agreement with
Exit Lender, in form and substance satisfactory to Surety and its counsel,
wherein Exit Lender acknowledges Surety's equitable subrogation rights, the
trust fund nature of proceeds of Bonded Contracts, and subordinates its Lien and
security interest to the Lien and security interest of Surety in the Collateral,
and agrees on terms acceptable to Surety for the utilization of Indemnitor's
Facilities, Equipment, Personalty, and other assets (including, but not limited
to, all plans, specifications, drawings, project records, and intellectual
property) necessary, as determined in Surety's sole and absolute discretion, to
complete the Bonded Contracts and including such other terms and conditions as
are required by Surety;

            (f) receipt by Surety of copies of all material reports, audits, and
other internal information in the possession of Indemnitor relating to
Indemnitor's compliance with

                                       14

<Page>

Environmental Laws and other material environmental matters, other than
material reports, audits, and other internal information previously provided
to Surety; provided that the foregoing items will be made available to Surety
upon its request;

            (g) Principal will have delivered to Surety a facility fee of Five
Million Dollars ($5,000,000). Surety hereby confirms and acknowledges its
receipt of a non-refundable working fee of Five Hundred Thousand Dollars
($500,000) that is to be credited against said Five Million Dollars ($5,000,000)
facility fee, resulting in Principal being required to deliver to Surety as of
the date hereof the remaining Four Million Five Hundred Thousand Dollars
($4,500,000) of said facility fee. Said facility fee is in addition to the
required premiums and fees described in Sections 4 and 5;

            (h) Indemnitor will deliver to Surety the full amount of any
unpaid premiums due in connection with the Existing Bonds;

            (i) no Event of Default will exist; and

            (j) a favorable opinion of counsel to Principal and Indemnitor in
form acceptable to Surety and its counsel, opining as to the validity, due
execution, and enforceability of the documents entered into between and among
Surety, Principal, and Indemnitor and opining to the perfection of all security
interests of Surety in any Collateral delivered by Principal and/or Indemnitor.
Said enforceability opinion will include an opinion that the execution and
delivery of the documents, the fulfillment of the respective terms and
conditions thereof, and the consummation of the respective transactions
contemplated thereby will not violate any provisions of applicable law or any
applicable order or regulation of any court or public governmental agency, and
will not conflict with or constitute a breach of a default under the charter of
incorporation, bylaws, or other governing documents of Principal and Indemnitor,
as amended, or any agreement, indenture, or other instrument to which Principal
or any Indemnitor is a party or by which Principal or any Indemnitor is bound,
or any law, ordinance, administrative regulation, or decree of court, that is
applicable to Principal or any Indemnitor, which opinion will be rendered with
respect to all signatories executing this Agreement in the capacity of Principal
or Indemnitor. For purposes of the foregoing "applicable law" will refer to the
laws of the States of New Jersey, New York, Ohio, and Delaware, and applicable
federal law.

      3. BONDS; CONDITIONS PRECEDENT TO ALL BONDS. Surety reserves the right to
decline to execute any and all bonds, in its sole and absolute discretion, and
if Surety executes any proposal or bid bond and Principal is awarded the
contracts, Surety will not be obligated to execute any bonds required to perform
the awarded contract. 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 Principal 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. The underwriting standards to
be applied by Surety in the determination of whether to issue any bond will
include, but not be limited to, a demonstration by Principal that a nonbonded
work program will not adversely impact the ability of Principal to perform its
bonded work program. Without limiting the generality of the foregoing, Principal
specifically acknowledges and confirms Surety's

                                       15

<Page>

right to decline, in its sole and absolute discretion, to execute any bond,
or all bonds, as set forth in this Agreement.

      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:

            (a) The following statements will be true and, by its request for
the issuance of such Bond, Principal 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;
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) The total aggregate penal amount of the Bonds (excluding the
Joint Venture Bonds) issued by Surety will not exceed One Hundred Million
Dollars ($100,000,000). For purposes of determining the total aggregate penal
amount of the foregoing line of surety credit that has been used by Principal,
the following penal amounts of the Bonds will be included (without duplication):
(i) the aggregate penal amount of any bid Bonds (excluding the Joint Venture
Bonds); (ii) in the event Surety issues a written consent with respect to any
bid Bonds (excluding the Joint Venture Bonds), then the full aggregate penal
amount of the resulting Bonds (excluding the Joint Venture Bonds); (iii) the
aggregate penal amount of all renewals of any Existing Bonds (excluding any
Existing Bonds that name a joint venture composed of an Indemnitor and one or
more entities which are not Subsidiaries of any Indemnitor as the principal, or
which Surety and Principal agree in writing will not be subject to this
Agreement); plus (iv) the aggregate penal amount of all other Bonds (excluding
the Joint Venture Bonds). Notwithstanding the foregoing, in the event any Joint
Venture Bonds are issued in excess of the aggregate penal amount of Four Hundred
Million Dollars ($400,000,000), pursuant to the provisions of Section 3(d), then
the aggregate penal amount of the Joint Venture Bonds in excess of said Four
Hundred Million Dollars ($400,000,000) aggregate penal amount will be included
in the foregoing calculation of the aggregate penal amount of the Bonds to be
issued under the One Hundred Million Dollar ($100,000,000) line of surety
credit.

            (d) The total aggregate penal amount of the Joint Venture Bonds
issued by Surety will not exceed Four Hundred Million Dollars ($400,000,000);
provided, however, if at any time the total amount of the line of surety credit
described in the above Section 3(c) has not been fully utilized, Principal may
make application to Surety for the issuance of a Joint Venture Bond in excess of
the aggregate penal amount Four Hundred Million Dollar ($400,000,000) limit. In
this event, said Joint Venture Bonds in excess of the aggregate penal amount of
Four Hundred Million Dollars ($400,000,000) will be included in the calculations
of the aggregate

                                       16

<Page>

penal amount of the Bonds under Section 3(c). For purposes of determining the
total aggregate penal amount of the foregoing line of surety credit that has
been used by Principal, the following penal amounts of the Joint Venture
Bonds will be included (without duplication): (i) the aggregate penal amount
of any bid Joint Venture Bonds; (ii) in the event Surety issues a written
consent with respect to any bid Joint Venture Bonds, then the full aggregate
penal amount of the resulting Joint Venture Bonds; (iii) the aggregate penal
amount of all renewals of any Existing Bonds that name a joint venture
composed of an Indemnitor and one or more entities which are not Affiliates
of any Indemnitor as the principal; plus (iv) the aggregate penal amount of
all other Joint Venture Bonds.

            (e) Surety agrees that, subject to any Principal meeting Surety's
underwriting requirements, as determined in Surety's sole and absolute
discretion, Surety will consider increasing the aggregate penal amount of the
Bond set forth in Sections 3(c) and 3(d) in the event it obtains co-surety
participation in the issuance of any such Bonds.

            (f) Any request for a Bond will contemplate Indemnitor (or a joint
venture in which Indemnitor is a venturer) being named as the principal.

            (g) The Bonds will be issued in a form acceptable to Surety in
Surety's sole and absolute discretion.

            (h) No Bonds will be issued after January 31, 2003.

      4. PREMIUM PAYMENT. Indemnitor agrees to pay all premiums on the Bonds,
computed in accordance with Surety's rates in effect on the date the Bonds are
executed. In addition, Indemnitor agrees to promptly pay any and all additional
premiums due with respect to any increase in the penal sums of any Bond computed
in accordance with Surety's rates in effect on the date the Bonds are executed.
The failure of Principal to pay the Bond premiums or the failure of Surety to
receive premiums will not provide Indemnitor with any defense to an action under
this Agreement. Indemnitor also agrees to pay all premiums due Surety on any
insurance policy(ies) issued by Surety for the benefit of Principal or
Indemnitor. Contemporaneously with the execution of this Agreement, Indemnitor
will deliver to Surety the full amount of any unpaid premiums due in connection
with the Existing Bonds.

      5. FEES. In addition to the Bond premiums due in connection with the
issuance of any Joint Venture Bond, Principal will pay to Surety a facility fee
equal to one percent (1.0%) percent of the dollar amount representing
Principal's portion of the aggregate face value of the Joint Venture Bonded
Contract. Principal will also pay to Surety a facility fee equal to one percent
(1.0%) of the dollar amount representing Principal's portion of any increase in
the aggregate face value of any Joint Venture Bonded Contract. In addition to
the Bond premiums due in connection with the issuance of any Bond (excluding
Joint Venture Bonds), Principal will pay to Surety a facility fee of two percent
(2.0%) of the face amount of the Bonded Contract. Principal will also pay to
Surety a facility fee of two percent (2.0%) of the increased face amount of any
Bonded Contract (excluding Joint Venture Bonded Contracts).

                                       17

<Page>

      At such time as the Existing Pledged Collateral, the cash delivered to
Surety pursuant to the Pledge Agreement executed contemporaneously herewith, and
any cash delivered pursuant to the Collateral Agent Agreement is returned to
Indemnitor (or the cancellation of all letters of credit delivered to Surety
under any of the March 23, 2001, Pledge Agreement, the May 24, 2001, Pledge
Agreement, and the Pledge Agreement executed contemporaneously herewith), then
Surety will be entitled to receive and retain from said cash otherwise returned
to Indemnitor a success fee equal to Two Million Five Hundred Thousand Dollars
($2,500,000). Surety will at all times retain as the Existing Pledged Collateral
and/or the cash delivered to Surety pursuant to the Pledge Agreement executed
contemporaneously herewith, cash in an amount equal to Two Million Five Hundred
Thousand Dollars ($2,500,000). The Prepetition Letter of Credit is not to be
included in the foregoing reference to letters of credit.

      6.    SECURITY FOR SURETY LOSS.  The Prepetition Letter of Credit will
continue to secure Indemnitor's obligations to Surety under the Surety Credit
Documents with respect to the following described projects:

<Table>
<Caption>

  LOCATION        PRINCIPAL            OBLIGEE              DESCRIPTION
  --------        ---------            -------              -----------
<S>           <C>                <C>                 <C>

New Jersey    21st Century Rail  New Jersey Transit  Hudson-Bergen Light Rail
              Corporation        Corporation         Transit System, New
                                                     Jersey Transit Contract
                                                     #96CT001 Change Order
                                                     #5, Mos. 2 D/B Work

California    Kiewit/Washington, Los Angeles to      Design/Build Contract
              a Joint Venture    Pasadena Metro      for the Arroyo Seco,
                                 Blue Line           13.7 Mile Long Line
                                 Construction        Constructed Along
                                 Authority           Existing Rail Right of
                                                     Way from Union Station

Nevada        Washington         Clark County        Central Plant Outfall,
              Construction       Sanitation District Project No. 377B
              Corporation

Nevada        Washington         Southern Nevada     Boulder City Water
              Construction       Water Authority     Delivery Improvements
              Corporation                            Public Works ID No.
                                                     PWP-CL-2001-98

Tennessee     Washington Group   Bechtel Jacobs      MSRE Electrical and
              International,     Company, LLC and    Mechanical Equipment
              Inc.               United States       Installation Subcontract
                                 Government          No. 23900-SC-ORO76F

Texas         Rust Constructors  US Army Corps of    Replace Roofs, Bldgs.
              Inc.               Engineers           902, 904, 907, 920 &
                                                     Replace Bldg. 902 Facade
</Table>

                                       18
<Page>

<Table>
<Caption>

  LOCATION        PRINCIPAL            OBLIGEE              DESCRIPTION
  --------        ---------            -------              -----------
<S>           <C>                <C>                 <C>

Mississippi   Rust Constructors  Mississippi State   Mississippi State Tax
              Inc.               Tax Commission      Commission - Job Sales,
                                                     Use, Income, Franchise,
                                                     Withholding, and Other
                                                     Motor Fuel (Diesel Fuel)

</Table>

      The Existing Pledged Collateral will continue to secure Indemnitor's
obligations to Surety under the March 23, 2001, Pledge Agreement and the May 24,
2001, Pledge Agreement according to their respective terms. By the execution of
this Agreement, Indemnitor hereby affirms, confirms, and acknowledges the
continued binding effect of said Pledge Agreements.

      All security interests in the Existing Collateral currently held by Surety
to secure obligations to Surety will remain in full force and effect according
to their respective terms and will continue to serve as collateral for all of
the obligations secured thereby. The Existing Collateral will also secure Surety
Loss (excluding any Surety Loss incurred with respect to the Joint Venture
Bonds); provided, however, as long as no Event of Default has occurred, or will
occur as a result of such release, the Existing Pledged Collateral will be
released upon satisfaction of the Indebtedness (as defined in each of the March
23, 2001, Pledge Agreement and the May 24, 2001, Pledge Agreement, as
applicable). Except as specifically provided in this Section 6, nothing herein
or in any Order of the Bankruptcy Court will modify, amend, expand, limit, or
otherwise affect the scope of such security interest(s) or the rights or
remedies of the respective parties under the referenced instruments or any
related document executed and/or delivered in relation thereto. To the extent
the Existing Collateral also secures, by the terms of this Agreement and/or the
existing terms of the related documentation, any obligation to be secured by the
Collateral (other than Existing Collateral), such Existing Collateral will not
be substituted for, replace, or reduce any other requirement set forth herein
regarding the collateralization of the Bonds and Surety Loss.

      All Bonded Contract Balances generated by Bonded Contracts (excluding the
Joint Venture Bonded Contracts) will be delivered to the Collateral Agent
designated in the Collateral Agent Agreement and will be encumbered and
disbursed as provided therein. All contract receivables, balances, and proceeds
generated by the Hudson-Bergen Project and payable under the Hudson-Bergen
Subcontract will be delivered to the Hudson-Bergen Account designated in the
Hudson-Bergen Agreement. Surety will not assert a Lien on the contract
receivables, balances, and proceeds of the Hudson-Bergen Project other than its
rights of equitable subrogation. Notwithstanding the foregoing, Surety will be
granted a first priority Lien on the Hudson-Bergen Subcontract pursuant to the
Hudson-Bergen Agreement. The Collateral Agent Agreement will include provisions
allowing for: (i) monthly distributions of Principal's Overhead; provided,
however, no such distribution will be permitted unless all obligations then due
with respect to the Bonded Contracts (excluding the Joint Venture Bonded
Contracts) and the Bonds (excluding the Joint Venture Bonds) have been paid and
Surety has incurred no losses (and no contingent losses are pending) associated
with said Bonded Contract (excluding the Joint Venture Bonded Contracts); (ii)
by mutual agreement of Surety and Indemnitor, Surety's agreement not to be
unreasonably withheld, the quarterly distribution of amounts representing
Principal's profit to allow Principal to continue operations and the prosecution
of the Existing Bonded Contracts, Bonded

                                         19
<Page>

Contracts, and contracts for services that are not bonded; and (iii) the
repayment of funds advanced by Washington Group International, Inc. and/or
from the Exit Facility which were used for direct labor and materials (which
will not include Overhead) for the Bonded Contracts (excluding the Joint
Venture Bonded Contracts); provided, however, no repayment will be permitted
unless all obligations then due with respect to the Bonded Contracts
(excluding the Joint Venture Bonded Contracts) and the Bonds (excluding the
Joint Venture Bonds) have been paid and Surety has incurred no losses (and no
contingent losses are pending) associated with said Bonded Contract
(excluding the Joint Venture Bonded Contracts). The distribution of Overhead
and profits from the Hudson-Bergen Project will be controlled by the
Hudson-Bergen Agreement. The Hudson-Bergen Agreement will include a provision
permitting the repayment of funds advanced by Washington Group International,
Inc. and/or from the Exit Facility which were used for direct labor and
materials (which will not include Overhead) on the Hudsen-Bergen Project;
provided, however no repayment will be permitted unless Surety has been paid
all obligations then due with respect to the Hudson-Bergen Project.n
connection with the issuance of any Bond (excluding Joint Venture Bonds),
Principal will provide to Surety: (a) a pledge of cash; or (b) letters of
credit in an amount equal to twenty percent (20%) of the penal sum of the
applicable Bond. In addition, Indemnitor agrees to promptly deliver to Surety
cash or letters of credit in an amount equal to twenty percent (20%) of any
increase in the penal sum of any such Bond. Any such letter of credit will be
in form and substance, acceptable to Surety in its sole and absolute
discretion. The terms of the pledge of the foregoing cash and delivery of any
letter of credit is subject to the terms and conditions of a Pledge Agreement
entered into contemporaneously herewith that more specifically sets out the
provisions related to this collateral requirement.

      As security for the full and timely payment of Surety Loss (exclusive of
any Surety Loss incurred under the Existing Bonds or the Joint Venture Bonds),
Indemnitor has granted to Surety (or to the Collateral Agent for Surety
identified in the Collateral Agent Agreement) a valid, binding, enforceable, and
duly perfected security interest in the Collateral, subject only to Permitted
Liens. To secure the repayment of Surety Loss (exclusive of any Surety Loss
incurred under the Existing Bonds or the Joint Venture Bonds), Indemnitor grants
to Surety a perfected first priority security interest in the Bonded Contracts
(excluding the Joint Venture Bonded Contracts); all Bonded Contract Balances and
accounts arising from the Bonded Contracts (excluding the Joint Venture Bonded
Contracts); all claims and rights against any Obligee on any Bond (excluding the
Joint Venture Bonds); all rights and actions that Principal may have or acquire
in any subcontract in connection with any Bonded Contract (excluding the Joint
Venture Bonded Contracts), and against any subcontract 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 (excluding the Joint Venture Bonded Contracts), and against any surety
or sureties of any such subcontractor, laborer, or other Person; now owned and
hereafter acquired inventory, including, without limitation, goods, merchandise,
and other personal property furnished under any Bonded Contract (excluding the
Joint Venture Bonded Contracts), or intended for sale or lease, all raw
materials, gravel, cement, sand, work in process, finished goods, and materials,
and supplies of any kind, nature, or description which are or might be used or
consumed in Principal's business or are or might be 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

                                      20
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Indemnitor or Surety, and all documents of title or documents representing
the same; any and all books, accounts, computer software, and other computer
stored information, and any and all plans, specifications, drawings, project
records, surveys, and related materials, and computer software, licenses,
copyrights, patents, and other intellectual property utilized in or necessary
for the completion of any of the Bonded Contracts (excluding the Joint
Venture Bonded Contracts), and all proceeds and products arising with respect
thereto and all Records relating to the foregoing.

      As additional security for the repayment of Surety Loss (exclusive of any
Surety Loss incurred under the Existing Bonds or the Joint Venture Bonds),
Indemnitor will grant, convey, assign, and set over to the Collateral Agent
for Surety that is identified in the Collateral Agent Agreement, a first
priority security interest in the Bonded Contracts (excluding the Joint
Venture Bonded Contracts) under the Contract Disputes Act, 41 U.S.C. Sections
601, ET. SEQ.; all Bonded Contract Balances and accounts arising from the
Bonded Contracts (excluding the Joint Venture Bonded Contracts) under the
Contract Disputes Act, 41 U.S.C. Sections 601, ET. SEQ.; all claims and
rights against any Obligee on any Bond (excluding the Joint Venture Bonds)
under the Contract Disputes Act, 41 U.S.C. Sections 601, ET. SEQ.; all rights
and actions that Principal may have or acquire in any subcontract in
connection with any Bonded Contract (excluding the Joint Venture Bonded
Contracts) under the Contract Disputes Act, 41 U.S.C. Sections 601, ET. SEQ.,
and against any subcontract 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 (excluding the Joint
Venture Bonded Contracts) under the Contract Disputes Act, 41 U.S.C. Sections
601, ET. SEQ., and against any surety or sureties of any such subcontractor,
laborer, or other Person; now owned and hereafter acquired inventory,
including, without limitation, goods, merchandise, and other personal
property furnished under any Bonded Contract (excluding the Joint Venture
Bonded Contracts) under the Contract Disputes Act, 41 U.S.C. Sections 601,
ET. SEQ., or intended for sale or lease, all raw materials, gravel, cement,
sand, work in process, finished goods, and materials, and supplies of any
kind, nature, or description which are or might be used or consumed in
Principal's business or are or might be 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, Surety, or the Collateral Agent for Surety that is identified in
the Collateral Agent Agreement, and all documents of title or documents
representing the same; any and all books, accounts, computer software, and
other computer stored information, and any and all plans, specifications,
drawings, project records, surveys, and related materials, and computer
software, licenses, copyrights, patents, and other intellectual property
utilized in or necessary for the completion of any of the Bonded Contracts
(excluding the Joint Venture Bonded Contracts) under the Contract Disputes
Acts, 41 U.S.C. Sections 601, ET. SEQ., and all proceeds and products arising
with respect thereto and all Records relating to the foregoing.

      Indemnitor will execute a Pledge Agreement, Security Agreement, and the
Collateral Agent Agreement in form acceptable to Surety with respect to such
security interest.

      7. PERFECTION OF SECURITY INTERESTS. At the request of Surety, Indemnitor
will execute and deliver to Surety documentation reasonably satisfactory to
Surety evidencing the security interests and Liens granted by the Surety Credit
Documents, and providing for the perfection of such Liens, including, without
limitation, financing statements. Notwithstanding the foregoing,

                                      21
<Page>

Indemnitor hereby authorizes Surety to file any necessary financing
statements or other documents to perfect the aforedescribed Liens without the
signature of Indemnitor. Indemnitor hereby irrevocably makes, constitutes,
and appoints Surety (and all other Persons designated by Surety for the
purpose) as Indemnitor's true and lawful agent and attorney in fact to sign
Indemnitor's name on any such agreements, instruments, and documents referred
to in this Section 7 and to deliver such agreements, instruments, and
documents to such Persons as Surety in its sole and absolute discretion may
elect. Indemnitor agrees to pay on demand any recording tax, filing fees, or
other costs incurred by Surety in connection with recording or filing any
documentation requested in this Section 7. Neither Principal nor Indemnitor
will reduce any Accounts arising out of, or related to any of the Collateral
to a promissory note, or other instruments for the payment of money, without
providing Surety with prior written notice of same and delivering any such
instrument to Surety.

      8. CORPORATE IDENTITY AND EXISTENCE. Each Indemnitor hereby represents and
warrants to Surety that it is a validly existing corporation, limited liability
company, or other entity in the state of its formation and each other
jurisdiction in which it is required by law to be qualified and authorized to do
business except to the extent where the failure to be so qualified could not
reasonably be expected to have a material adverse effect. Indemnitor will
maintain its corporate existence (in good standing where appropriate under state
law) and remain or become duly qualified or licensed (and in good standing where
appropriate under state law) as a foreign corporation in each jurisdiction in
which the conduct of their respective businesses requires such qualification or
license except to the extent where the failure to be so qualified could not
reasonably be expected to have a material adverse effect. Neither Principal nor
Indemnitor will change their state of formation or redomesticate without giving
Surety forty-five (45) days prior written notice of such intent.

      9. FINANCIAL RECORDS AND REPORTS. Principal's fiscal year end is on or
about December 31. Principal will advise Surety in writing of any change to its
fiscal year end and in the event any of the reporting, payment of Surety Loss,
or other provisions of this Agreement or the Surety Credit Documents are
affected by the change in Principal's fiscal year end, then Indemnitor agrees to
execute, and will execute any and all amendments and other modifications as are
necessary or desirable to this Agreement and the Surety Credit Documents as a
result of the change of Principal's fiscal year end.

      During the term of this Agreement, and thereafter for so long as any
Surety Loss exists, unless otherwise waived by Surety in writing, Principal will
deliver to Surety without demand:

            (a) within thirty (30) days after the end of each month,
consolidated Financial Statements, including a consolidated statement of cash
flow and a consolidated contract activity (work in process) report, prepared by
Principal and certified by Washington Group International, Inc.'s Senior Vice
President and Controller;

            (b) within thirty (30) days after the end of each month, a work in
process schedule for all Bonded Contracts (separate from other contracts)
prepared by Washington Group International, Inc.;

                                      22
<Page>

            (c) within one hundred eighty (180) days after the close of the
November 30, 2001, fiscal quarter, within ninety (90) days after the March 29,
2002, fiscal quarter, and within sixty (60) days after the close of each fiscal
quarterly period (other than fiscal year end), a copy of the quarterly
consolidated unaudited Financial Statements of Washington Group International,
Inc., including a statement of cash flow, prepared in accordance with GAAP and
reviewed by Deloitte & Touche, LLP; and

            (d) within one hundred eight (180) days after the close of the 2001
fiscal year and within ninety (90) days after the close of each fiscal year
thereafter, a copy of the annual audited Financial Statements of Washington
Group International, Inc., including a consolidated statement of cash flow,
prepared in accordance with GAAP and reviewed and certified by a certified
public accountant acceptable to Surety.

      These financial documents will be prepared in conformity with GAAP (except
in the case of monthly reports, the absence of footnote disclosure and normal
year end audit adjustments) applied on a basis consistent with that of the
preceding fiscal year, and in each instance will present fairly and accurately
the financial condition of the Principal as of the dates of the statements and
the results of their operations for the periods then ended. Indemnitor
represents and warrants in favor of Surety that the November 2, 2001, Contract
Activity (Work in Process) Report is true and correct in all material respects
and fairly and accurately presents the financial status of the work in process
of Principal as of said date.

      Indemnitor agrees to immediately notify Surety of the occurrence of any
material change in its financial condition. Indemnitor represents that its books
and records will be kept accurately and in a timely manner and in accordance
with good business practices.

      10. PRINCIPAL'S REPRESENTATION. Principal will notify Surety immediately
if it becomes aware of the occurrence of any Event of Default or of any fact,
condition, or event that with the giving of notice or passage of time or both,
reasonably could be excepted to become an Event of Default, or of the failure of
the Principal to observe any of its undertakings hereunder. Washington Group
International, Inc., a Delaware corporation, on behalf of itself and the other
Principals, will provide Surety on an annual basis (and at such other intervals
as Surety may reasonably require) with a letter in which its Chief Financial
Officers represent that it 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 constitute an Event of Default.

      11. BOOKS AND RECORDS. Surety will have the right upon two (2) Business
Days notice and during regular business hours to free access to the papers of
Indemnitor including, without limitation, its books, Records, accounts, computer
software, and other computer stored information, and all plans, specifications,
drawings, project Records, surveys, and related materials, and computer
software, licenses, copyrights, patents, and other intellectual property related
to or needed for the performance of any Bonded Contract, for the purpose of
using, examining, copying, or reproducing same for the purpose of examining,
copying, or reproducing the same. Surety will not be required to make any
payment to Principal or Indemnitor (or any other Person) for the use of any of
the items described in the foregoing sentence. Indemnitor authorizes and
requests any and all depositories in which funds of Indemnitor may be deposited
to furnish to Surety statements of

                                         23
<Page>

account and any other documents reflecting receipts and disbursements and any
Person doing business with Indemnitor is authorized to furnish any
information requested by Surety concerning any transaction related to or
needed for the performance of any Bonded Contract. Surety may furnish copies
of any and all such statements, agreements, and Financial Statements and any
information which it now has or may obtain concerning Indemnitor 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.

      12. LITIGATION. As of the date hereof, there is no action, suit, or
proceeding pending against, or to the knowledge of Indemnitor threatened against
or affecting Indemnitor or any of its Subsidiaries before any court or
arbitrator or any government body, agency, or official in which there is a
reasonable possibility of an adverse decision which could reasonably be expected
to materially adversely affect the business, financial position, or results of
operations of Indemnitor or any of its Subsidiaries or which in any manner draws
into question the validity of this Agreement except those referred to in the
attached Exhibit B. Indemnitor will promptly give notice in writing to Surety of
any litigation filed or threatened against any Indemnitor or any of its
Subsidiaries involving an amount in excess of One Million Dollars ($1,000,000).

      13. TAXES. Principal will promptly pay all of its Taxes, assessments, and
other governmental charges or levies 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 herein contained 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 adequate reserves have been established in
accordance with GAAP. Indemnitor will pay or cause to be paid all such Taxes,
assessments, charges, or levies forthwith whenever foreclosure on any Lien that
attaches (or security therefor) appears imminent.

      14. INSURANCE. Indemnitor represents that it has public liability
insurance and fire and extended coverage insurance on all assets owed by it and
other insurance in force that is usual and customary for those engaged in the
same or similar business of Indemnitor, and that it will maintain said insurance
in force with good and substantial carriers acceptable to Surety. Indemnitor
further agrees 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. Upon the demand of Surety, Indemnitor
will name Surety as an additional insured to such policies to the extent such
policies are related to any of the Bonded Contracts. Indemnitor hereby agrees
that, in the event it fails to pay or cause to be paid the premiums on any such
insurance that Surety deems is necessary to protect its rights under the Surety
Credit Documents, Surety may do so and be reimbursed by Indemnitor therefor. If
Surety pays any premiums on insurance, Indemnitor hereby assigns to Surety any
returned or unearned premiums on those insurance policies that may be due
Indemnitor upon cancellation of any such policies for any reason whatsoever and
direct the insurers to pay Surety any amounts so due.

      15. SUBSIDIARIES AND AFFILIATES AS INDEMNITOR. Indemnitor will cause any
and all of its Subsidiaries and Affiliates that are named as Principal on any
Bond to execute this Agreement. Said Subsidiaries and Affiliates will be deemed
to be a Principal and an Indemnitor, as appropriate, hereunder as though they
were original signatories hereto.

                                        24
<Page>

      16. EXONERATION. Indemnitor recognizes and acknowledges the common law
right of Surety to be exonerated by Principal. In the event Principal fails or
refuses to exonerate Surety upon written demand, Indemnitor agrees, upon demand
by Surety, to exonerate Surety from Surety Loss, by satisfying Principal's
obligations under the Bonded Contracts and the Surety Credit Documents and
obtaining either a withdrawal of all claims against Surety under the Bonds or a
general release.

      17. ADDITIONAL DEPOSIT OF CASH OR OTHER COLLATERAL. Upon the occurrence of
an Event of Default described in item (b) of the definition of Event of Default
under Section 1, and the refusal or failure of Indemnitor to exonerate Surety,
Indemnitor agrees upon written demand to provide to Surety a reasonable amount
of money designated by Surety and/or other collateral decided upon by Surety;
said money and/or other collateral to be in addition to the Collateral. Such
funds and/or other collateral will be held by Surety as collateral in addition
to the Collateral (and any other collateral in which Principal or any of
Indemnitors grant Surety a security interest) and 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. 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
Indemnitor will deliver to Surety cash in an amount equal to the Reserve posted
in addition to the Collateral. 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. Indemnitor
acknowledges that the failure of Principal and/or Indemnitor to deposit with
Surety, immediately upon demand, the sum demanded by Surety as collateral
security will cause irreparable harm to Surety for which Surety has no adequate
remedy at law. Indemnitors agrees 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
17 will not be deemed to cure any Event of Default and Surety may in its sole
and absolute discretion refuse to issue any bonds.

      18. 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, Cost to Complete, and any other costs or expenses
incurred when due in connection with the performance of the Bonded Contracts.

      19. REGULATORY COMPLIANCE. Indemnitor, and any Plan which Indemnitor
sponsors, or under which Indemnitor is a participant, is in material compliance
with all statutes and governmental rules and regulations applicable to it,
including without limitation, ERISA insofar as such Act applies to it, except as
disclosed on Exhibit C. No condition exists or event of transaction has occurred
in connection with any such Plan governed by ERISA which could result in any
material liability, fine, penalty, or equitable remedy being asserted against
Indemnitor, except as disclosed on Exhibit C. If Indemnitor has in effect, or
hereafter adopts any Plan, or if any of Indemnitor's employees become
participants under a Plan, then the following warranties and covenants will be
applicable during such period as any such Plan will be in effect: (i) Indemnitor

                                      25
<Page>

hereby warrants that no fact that might constitute grounds for the termination
of the Plan, or for the appointment by the appropriate United States District
Court of plan administrator or a trustee to administer the Plan, exists at the
time of execution of this Agreement, except as disclosed on Exhibit C; (ii)
Indemnitor hereby covenants that throughout the existence of the Plan,
contributions under the Plan will meet the minimum funding standards required by
Section 412 of its Code or Section 302 of ERISA and, if applicable, Indemnitor
and its Subsidiaries will make all contributions they are obligated to make to a
multi-employer plan made under the term of that plan or under the terms of a
collectively bargained agreement; (iii) no Reportable Event or Prohibited
Transaction has occurred with respect to any Plan, except as disclosed on
Exhibit C; (iv) Indemnitor hereby covenants that the Plan's annual financial and
actuarial statements and the Plan's annual Internal Revenue Service Form 5500
information return will be filed with Surety no later than thirty (30) days
after the due date thereof for filing with its Internal Revenue Service; (v)
Indemnitor covenants that it will send to Surety a copy of any notice of a
Reportable Event (as defined in Section 4043(c) of ERISA) required by ERISA to
be filed with the Labor Department or the Pension Benefit Guaranty Corporation,
at the time that such notice is so filed; and (vi) with respect to a Plan which
is an employee pension plan within the meaning of Section 3(2)(A), Indemnitor
will apply for and obtain a favorable determination letter from the Internal
Revenue Service that the Plan is qualified under Section 401(a) of the Code and
the Plan's associated trust is tax-exempt under Section 50(a) of the Code, and
that such Plan will remain qualified under and be so operated in accordance
with, said Code Sections.

      Indemnitor warrants, covenants, and represents as follows:

            (a) Except strictly in accordance with all applicable Environmental
Laws: (1) except as set forth on the attached Exhibit C, no Hazardous Materials
are located on or, to Indemnitor's knowledge, have been stored, processed, or
disposed of on or released or discharged from (including ground water
contamination) any of its properties, and no aboveground or underground storage
tanks exist on any of its properties; (2) Indemnitor will not allow any
Hazardous Materials to be stored, located, discharged, possessed, managed,
processed, or otherwise handled on any of its properties, unless otherwise
authorized by the appropriate regulatory authority. Indemnitor will comply
strictly with all Environmental Laws affecting any of its properties; and (3) no
property now or previously owned, leased, or operated by Indemnitor, nor any
property to which Indemnitor has, directly or indirectly, transported or
arranged for the transportation of any Hazardous Substances, is listed or, to
the knowledge of Indemnitor, proposed for listing, on the National Priorities
List promulgated pursuant to CERCLA, on CERCLIS (as defined in CERCLA) or on any
similar federal, state, or foreign list of sites requiring investigation or
clean up;

            (b) There has been no material environmental investigation, study,
audit, test, review, or other analysis conducted prior to the date hereof of
which Indemnitor has control or possession in relation to the current or prior
business of Indemnitor or any property or facility now or previously owned,
leased, or operated by Indemnitor, which has not been delivered to Surety at
least five days prior to the date hereof;

            (c) Indemnitor will notify Surety should it become aware of (1) any
material environmental problems or liability with respect to any of its
properties, including, but not limited

                                      26
<Page>

to, the release of any contaminant which requires cleanup or remediation
under applicable Environmental Laws, or a material breach of any
Environmental Laws; (2) any lien, action, or notice of the nature described
in subparagraph (1) above. Said notification will be made on the first (1st)
day of each month and will include all notices of the nature described in
subparagraphs (1) and (2) above that occurred since the prior notification
made to Surety. Indemnitor will, at Indemnitor's own cost and expense, take
all actions as will be required for the clean-up of any of its properties,
including all identification, investigation, removal, containment, and
remedial actions in accordance with all applicable Environmental Laws (and in
all events in a manner reasonably satisfactory to Surety), and will further
pay or cause to be paid at no expense to Surety all clean-up, administrative,
and enforcement costs of applicable government agencies or third parties
which may be asserted against any of its properties or the owner of any
properties for which Indemnitor is held responsible. All costs, including,
without limitation, those costs set forth above, damages, liabilities,
losses, claims, expenses (including reasonable attorneys' fees and
disbursements) which are incurred by Surety, without requirement of waiting
for the ultimate outcome of any litigation, claim, or other proceedings, will
be paid by Indemnitor to Surety as incurred within ten (10) days after notice
from Surety itemizing the amounts incurred to date of such notice;

            (d)   Surety will not participate in any operational or
environmental compliance decisions related to Principal's business; and

            (e)   Surety will not be deemed an "arranger," "owner," or
"operator," as defined in "CERCLA."

      20.   LIENS.  Indemnitor will not create, incur, assume, or suffer to
exist any Lien upon (i) any of the Collateral now owned or hereafter
acquired, except for Permitted Liens; and (ii) any of the Existing
Collateral, except for Liens in favor of Surety.

      21. DEBT, ASSUMPTIONS, GUARANTEES. Indemnitor will not and will not allow
any Permitted Joint Venture to (i) create, incur, assume, or suffer to exist any
Debt, Lease Debt (other than pursuant to a real property lease), or (ii) other
than pursuant to a real property lease, assume, guarantee, endorse, or otherwise
become contingently liable, including without limitation, liable by way of
agreement, contingent, or otherwise, to purchase assets, to provide funds for
payment, to maintain net worth or working capital, to supply funds to or invest
in any debtor, or otherwise to assure any creditor against loss from any
obligation of any Person (collectively "Other Obligations"), except:

            (a) Debt, Lease Debt, Purchase Money Debt, and Other Obligations
existing at the effective date of this Agreement and disclosed in the Financial
Statements or otherwise disclosed in writing prior to the effective date of this
Agreement, provided that the terms thereof are not amended or modified so as to
impose materially more burdensome terms on Indemnitor;

            (b)   guaranties by endorsement of negotiable instruments for
deposit or collection in the ordinary course of business;

            (c)   guaranties in connection with third party leases,
repurchase agreements, or purchases in the ordinary course of business;

                                        27
<Page>

            (d) Non-Recourse Debt and other Obligations incurred by a Permitted
Joint Ventures engaged in an Eligible Line of Business; provided that if such
Permitted Joint Venture is party to a Joint Venture Bonded Contract, such
Permitted Joint Venture presents a cost projection to complete its obligations
under such Joint Venture Bonded Contract and timely reports to Surety any
material deviation from such projected cost

            (e) Lease Debt incurred to finance the acquisition of Equipment and
fixed assets in the ordinary course of business; provided, however, Indemnitor
will give Surety prior written notice of its intent to incur Lease Debt that is
in an aggregate outstanding principal amount greater than an additional
Thirty-Five Million Dollars ($35,000,000) in excess of the aggregate of Lease
Debt as of the date hereof;

            (f) Purchase Money Debt of an Indemnitor incurred to finance the
acquisition of Equipment and fixed assets in the ordinary course of business in
an aggregate outstanding principal amount not greater than an additional Twenty
Million Dollars ($20,000,000) in excess of the aggregate of Purchase Money Debt
as of the date hereof;

            (g)   trade debt incurred in the ordinary course of business;

            (h) Debt incurred under the Exit Facility; provided, however, the
foregoing will not be deemed a waiver by Surety of its right to object or
otherwise be heard with respect to any issue in connection with the approval of
the Exit Facility;

            (i)   guaranties of Debt permitted by this Agreement;

            (j)   Debt for any letter of credit issued for the benefit of
Surety;

            (k) unsecured Debt not otherwise permitted under this Agreement,
provided such unsecured Debt does not exceed Ten Million Dollars ($10,000,000)
in the aggregate (at any one time) on terms and conditions satisfactory to
Surety and subordinated in right of payment to the payment and satisfaction in
full of all Surety Loss and obligations to Surety;

            (l) Debt arising from intercompany loans (i) between Indemnitors,
(ii) from a Subsidiary to an Indemnitor, (iii) between an Indemnitor and any
Permitted Joint Venture engaged in an Eligible Line of Business (provided that
(y) such Permitted Joint Venture is party to a Joint Venture Bonded Contract,
Indemnitor shall timely report to Surety any material deviation from the
projected cost to complete such Joint Venture Bonded Project reported to Surety
at the time of issuing such Bond, and (z) the Indemnitor will be permitted to
make such intercompany loan under Section 22), or (iv) between Subsidiaries that
are neither Indemnitors nor Permitted Joint Ventures engaged in an Eligible Line
of Business (provided that (y) the aggregate outstanding amount of intercompany
loans permitted by this clause (iv) will not exceed Twenty Million Dollars
($20,000,000) at any time and (z) will be permitted to make such intercompany
loan under Section 22);

            (m) Other Obligations incurred pursuant to any operating lease
entered into in

                                     28
<Page>

the ordinary course of business consistent with past practices; provided,
that, if such party incurs obligations in excess of Five Million Dollars
($5,000,000) under an operating lease and such operating lease is or will be
used in connection with any Bonded Contract, then such party may enter into
such operating lease only if such party (i) ensures that such operating lease
is assignable for Surety's benefit if Surety is required to perform under any
Bonded Contract on the same terms and conditions that apply to the relevant
Indemnitor or Permitted Joint Venture or (ii) obtains Surety's written
consent to enter into such operating lease, which consent will not be
unreasonably withheld; and

            (n) refinancings, renewals, and extensions of any Debt described in
the foregoing causes (a) through (m) that do not result in a violation of any
other provision of this Agreement

      Notwithstanding any provision of this Agreement or the other Surety Credit
Documents, Indemnitor and any Permitted Joint Venture are prohibited from
incurring Purchase Money Debt (other than Debt under the Exit Facility) under
any agreement with obligations in excess of Two Million Dollars ($2,000,000) for
the purchase of Equipment to be used, or reasonably anticipated to be used, in
the performance of any Bonded Contract (or Existing Bonded Contract) unless (i)
such agreement is assignable to Surety if Surety is required to perform under
such Bonded Contract (or Existing Bonded Contract) on the same terms and
conditions that apply to the relevant Indemnitor or Permitted Joint Venture, or
(ii) Indemnitor or the Permitted Joint Venture obtains Surety's written consent,
which consent will not be unreasonably withheld. Notwithstanding the provisions
of this paragraph, any Purchase Money Debt under an agreement for the purchase
of Equipment to be used, or reasonably anticipated to be used, in the
performance of any Bonded Contract (or Existing Bonded Contract) in the amount
of Five Million Dollars ($5,000,000) or more will not be incurred without the
Surety's written consent which will not be unreasonably withheld.

      22. INVESTMENTS. Indemnitor will not, without Surety's prior consent, make
or enter into any agreement to make any acquisition or make or suffer to exist
any investment in any Person or entity, whether in the form of equity or Debt
(other than credit extended in connection with the rendering of services in the
ordinary course of business), or make any dividend or other distribution to any
other Person except:

            (a) Certificates of Deposit with maturities of less than one (1)
year of any commercial banks or of United States commercial banks with capital,
surplus, and undivided profits of One Hundred Million Dollars ($100,000,000);

            (b)   direct obligations of the United States Government maturing
within one (1) year from the date of acquisition thereof;

            (c) commercial paper or municipal bonds rated at least A2 or Aa,
respectively, (or the equivalent thereof), by Moody's Investors Service, Inc.,
or rated at least A2, or Aa, respectively, by Standard and Poor's Corporation,
or commercial paper or municipal bonds receiving an equivalent rating from any
other nationally recognized rating agency; and

                                          29
<Page>

            (d)   travel advances to officers and employees made in the
ordinary course of business;

            (e) investments existing at the effective date of this Agreement and
disclosed in the Financial Statements or otherwise disclosed in writing prior to
the effective date of this Agreement;

            (f) investments in Accounts, contract rights, and chattel paper,
notes receivable and other similar items arising or acquired from the sale of
inventory in the ordinary course of business;

            (g)   investments received in settlement of amounts due to
Indemnitor in the ordinary course of business;

            (h) investments by Indemnitor in (i) any other Indemnitor, (ii) a
Permitted Joint Venture engaged in an Eligible Line of Business (provided that
if such Permitted Joint Venture is party to a Joint Venture Bonded Contract,
Indemnitor presents a cost projection to complete the obligations under such
Joint Venture Bonded Contract and timely reports to Surety any material
deviation from the projected cost to complete such Bonded Contract, or (iii) in
any Subsidiary that is neither a Permitted Joint Venture engaged in an Eligible
Line of Business nor an Indemnitor (provided that the aggregate amount of all
such investments pursuant to this clause (iii) may not exceed Twenty Million
Dollars ($20,000,000) in the aggregate at any one time;

            (i)   loans or advances to employees of Indemnitor in the
ordinary course of business up to an aggregate of One Million Dollars
($1,000,000);

            (j)   investments constituting guaranties permitted by Section
21; and

            (k) investments not otherwise permitted hereby; provided such
investments may not exceed an aggregate of Five Million Dollars ($5,000,000) at
any time.

      23.   MERGERS.  Principal will not merge or consolidate with or into
any Person without having first obtained Surety's consent in writing.

      24.   RESTRICTIONS ON CONTRACTS WITH AFFILIATES.  Principal will not
enter into contracts, equipment leases, or other agreements with any
Affiliate, other than on arms length terms, without the prior written consent
of Surety.

      25. NATURE OF BUSINESS. Principal will not change the nature or conduct of
its business without the written consent of Surety first obtained in advance,
nor will Principal permit a Change in Control or change in management to occur.
Principal likewise agrees to use its best efforts to cause Subsidiaries to
perform in accordance with this representation; provided, however, that nothing
in this Section will be construed or enforced so as to limit: (i) Principal's
attempt to reorganize in accordance with the terms of the Plan of Reorganization
and related disclosure statement currently on file with the Bankruptcy Court; or
(ii) the discretion of the Bankruptcy

                                       30
<Page>

Court to require modifications or amendments to same as part of the approval
and confirmation process.

      26. BANKRUPTCY COURT APPROVAL. In the event Principal or any Indemnitor
files for relief under the Bankruptcy Code after the Effective Date and Surety
determines that it is necessary or desirable that bankruptcy court approval be
obtained with respect to this Agreement or the transactions contemplated
hereunder, each Indemnitor will use its best efforts to obtain a court order
which, among other things, (i) determines that this Agreement (and any other
documents entered into by Principal and any Indemnitor with Surety) was proposed
by Surety in good faith and should be approved; (ii) determines that Surety is a
creditor who gave "new value" and entered into a "contemporaneous exchange for
value" with Indemnitor 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 Principal
and any Indemnitor with Surety) and that the transfers made by Principal and any
Indemnitor do not constitute preferences under the provisions of Section 547 of
the Bankruptcy Code; (iii) authorizes and directs Indemnitor, as applicable, to
ratify this Agreement (and any other documents entered into by Principal and any
Indemnitor with Surety); (iv) authorizes and directs Indemnitor, as applicable,
to execute, deliver, perform under, consummate, and implement, this Agreement,
together with all additional instruments and documents that may be reasonably
necessary or desirable to implement the transactions contemplated in this
Agreement; (v) authorizes claims and recourse by Surety against any Collateral
for any reason set forth in this Agreement (and any other documents entered into
by Principal and any Indemnitor with Surety); and (vi) approves any post
petition security interest, as provided in Section 552 of the Bankruptcy Code.
The provisions of this Section 26 will apply regardless of whether Principal or
any Indemnitor is a debtor in any bankruptcy cases.

      In such event, and at the request of Surety, Indemnitor, 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 its 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, Principal and any
Indemnitor, 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. Principal and 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.

      Indemnitor will cooperate in providing such information and evidence as is
necessary to obtain the orders described in this Section 26.

      27.   ADDITIONAL ADEQUATE ASSURANCE OF FUTURE PERFORMANCE.  Regardless
of whether an Event of Default has occurred, Indemnitor agrees that in the
event of a filing by or against Principal or any Indemnitor of a proceeding
under the Bankruptcy Code:

                                        31
<Page>

            (a) Surety is the holder of a "claim" and is a claimant within the
meaning of Section 101(5) of the Bankruptcy Code and is a "party in interest"
within the meaning of Sections 362(d) and 1109(b) of the Bankruptcy Code. Surety
has standing as a party in interest to be heard in all matters including,
without limitation, the right to seek relief pursuant to Sections 361-365 of the
Bankruptcy Code (Surety reserves the right to petition any bankruptcy court for
additional adequate protection with respect to collateralization of Surety Loss
and to retain all rights under the Bankruptcy Code, or otherwise);

            (b) an Event of Default will be deemed to continue to exist and will
not be deemed to be cured notwithstanding the payment by Surety pursuant to the
Bonds of claims, bills, or other Surety Loss incurred in or in connection with
the performance of the Bonded Contracts;

             (c) time is of the essence in any Principal's acceptance or
rejection of a Bonded Contract pursuant to Section 365 of the Bankruptcy Code,
and any delay in any Principal's prompt acceptance or rejection of same may
materially increase Surety Loss; and

            (d) with respect to any Bonded Contract assumed by Principal
pursuant to Section 365 of the Bankruptcy Code, the cure of any default and the
adequate assurance of future performance to which Surety will be entitled will
include, but not be limited to: (i) payment by Principal or Indemnitor to Surety
in an amount not less than any Reserve which Surety may be required by statute
or otherwise deem necessary to establish with respect to the Bonded Contract so
assumed; or (ii) Principal or Indemnitor may provide Surety with an irrevocable
letter of credit, financial guarantee, or surety bond in a form and from a
financial institution or corporate surety reasonably acceptable to Surety in an
amount no less than any Reserve which Surety may be required by statute or
otherwise deem necessary to establish with respect to the Bonded Contract so
assumed. Indemnitor represents and agrees with Surety that the Collateral, the
Indemnity Agreement, and any collateral and assurances provided for in the
Surety Credit Documents is insufficient for purposes of providing adequate
assurance of future performance to Surety with respect to any Bonded Contract
assumed by Principal pursuant to Section 365 of the Bankruptcy Code.

      28. TERMINATION OF AUTOMATIC STAY. Subject to the provisions set forth in
this Section, Surety and Obligees are entitled to the automatic and absolute
lifting of the automatic stay as to the termination by an Obligee of any Bonded
Contract, including specifically but not limited to the stay imposed by Section
362 of the Bankruptcy Code. Indemnitor hereby consents to the immediate lifting
of such automatic stay, and will not contest any motion by Surety or any Obligee
to lift such stay, upon a showing that: (i) the Cost to Complete a Bonded
Contract exceeds Remaining Bonded Contract Balances on such Bonded Contract; or
(ii) the aggregate of the Cost to Complete all Bonded Contracts exceeds the
aggregate of Remaining Contract Balances. Principal stipulates that in the event
that the Cost to Complete a Bonded Contract exceeds Remaining Bonded Contract
Balances on such Bonded Contract, then such Bonded Contract is not necessary to
an effective reorganization of Principal within the meaning of Section 362 of
the Bankruptcy Code.

      29. CONTRACT PROCEEDS AS CASH COLLATERAL - PRIORITY. Surety and Principal
expressly agree that the proceeds arising from Bonded Contracts constitute "cash
collateral" as that term is

                                      32
<Page>

defined under Section 363 of the Bankruptcy Code. Surety and Principal
further agree that Surety will have a claim to the proceeds arising from such
Bonded Contracts, and said claim will have priority over all expenses of the
kind specified or ordered pursuant to Sections 105, 326, 330, 331, 503(b),
503(c), 507(a), 507(b), 546(c), or 726 of the Bankruptcy Code, and will also
have priority over any other priority claims. Principal further acknowledges
that this claim of Surety will at all times be senior to the rights of
Principal or any Trustee in any case or proceeding in which Principal becomes
a debtor or debtor-in-possession under the Bankruptcy Code.

      30. USE OF CASH COLLATERAL. Nothing herein will be deemed to be a consent
by Surety that Principal or Indemnitor use any "cash collateral," associated
with the Surety Credit Documents, within the meaning of Section 363 of the
Bankruptcy Code, including without limitation proceeds from Bonded Contracts,
the Existing Pledged Collateral, and any other cash delivered to Surety as
collateral. In the event that a court of competent jurisdiction determines that,
notwithstanding the foregoing, Principal or Indemnitors may use any such "cash
collateral" associated with the Surety Credit Documents, then Indemnitors
stipulate that the "cash collateral" associated with the Surety Credit Documents
so used will be disbursed first to the payment of amounts for which Surety is or
may become liable under the Bonds, including the payment of bona fide claims for
labor, services, and supplies incurred in connection with Bonded Contracts; and
second, subject to the availability of periodic surplusages of remaining
proceeds from Bonded Contracts, to the payment of Overhead on Bonded Contracts
which is ordinary and necessary; provided, however, a stringent standard will be
used when determining what constitutes "ordinary and necessary" Overhead.

      31. INDEMNITOR APPOINT SURETY AS ATTORNEY-IN-FACT. Indemnitor irrevocably
nominates and appoints Surety or any other Persons designated by Surety true and
lawful attorney-in-fact of Indemnitor, with full right and authority, upon and
during the occurrence of an Event of Default to execute on behalf of, and sign
the names of Indemnitor to any voucher, release, satisfaction, check, government
warrant, application for payment, bill of sale of any or all property assigned
by this Agreement to Surety or any other paper or contract necessary or desired
to carry into effect the purposes of this Agreement, with full right and
authority, to satisfy the performance of the Bonded Contracts by reletting the
same in the name of Principal or otherwise; and each Indemnitor ratifies and
confirms all that such attorney-in-fact or Surety may lawfully do in the
premises and further authorizes and empowers Surety and such attorney-in-fact
and each of them to enter upon and take possession of the tools, plant,
equipment, materials, and subcontracts and all other collateral security
mentioned in this Agreement or in any other of the Surety Documents and enforce,
use, employ, and dispose thereof for the purposes set forth in this Agreement.
Indemnitor recognizes that the appointment of such attorney-in-fact constitutes
a power coupled with an interest, and that the appointment survives the death or
incapacity of any Indemnitor.

      32. REAFFIRMATION OF INDEMNITY AGREEMENTS; INDEMNITY; WAIVER OF CLAIMS.
Indemnitor by the execution of this Agreement reaffirm all of their obligations
to Surety under the Indemnity Agreements and confirm and acknowledge that the
Indemnity Agreements remain in full force and effect as originally written. The
failure of Surety to insist that companies listed on the attached Exhibit E join
in the execution of this Agreement will not affect the indemnity obligations of
such companies. Indemnitors executing this Agreement hereby confirm and
acknowledge that the Indemnity Agreements remain in full force and effect as
originally written

                                       33

<Page>

with respect to all Indemnitors, including those listed on the attached
Exhibit E. Each Indemnitor agrees that it will sign and deliver to Surety
Surety's preprinted standard form General Agreement of Indemnity at Surety's
request.

      Indemnitor specifically agrees to protect, indemnify, and hold harmless
Surety and its attorney-in-fact against any and all Surety Loss that may in any
way arise out of the exercise of the assignments contained in this Agreement and
the powers herein granted. Indemnitor agrees to indemnify, and keep indemnified,
and hold and save harmless Surety against all Surety Loss. The duty of
Indemnitor to indemnify Surety is a continuing duty, separate from the duty to
exonerate, and survives any payments made in exoneration of Surety.
Notwithstanding any provision of this Agreement or any of the other Surety
Credit Documents (exclusive of the Indemnity Agreements) to the contrary, any
Person that is an Indemnitor (or an Indemnitor in the future) hereunder or
thereunder only by virtue of the fact that it is a Principal under a Joint
Venture Bond will not be jointly and severally liable for Surety Loss incurred
with respect to Bonds unless such Indemnitor is listed as the principal under
the Bond. The forgoing will not be interpreted to modify any indemnity
obligations that arise under the Indemnity Agreements or under any preprinted
standard form General Agreement of Indemnity delivered by any Indemnitor to
Surety.

      Amounts due Surety (together with the maximum amount of legal interest)
will be payable upon written demand. Notwithstanding the requirement that Surety
Loss is payable upon demand, Indemnitors will be permitted fifteen (15) days
following receipt of an invoice for attorney's and consultant's fees and related
expenses from Surety to reimburse Surety for such reasonable attorney's and
consultants' fees and related expenses. In the event Surety is currently holding
interest income as a part of the Existing Pledged Collateral or in connection
with any additional cash collateral delivered to Surety pursuant to the terms of
the Pledge Agreement executed contemporaneously herewith, in an amount that is
sufficient to pay the foregoing attorneys' fees, then Surety, with Indemnitors'
consent, may pay the attorneys' fees from the interest income being held by
Surety. Any interest income which Surety is holding after all fees and expenses
(including reasonable attorneys' fees) have been reimbursed to Surety will be
paid to Indemnitor as further provided in the Pledge Agreement to be entered
into contemporaneously herewith.

      To the maximum extent permitted by applicable laws, Indemnitor:

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

            (b) hereby releases Surety, its officers, directors, attorneys,
accountants, consultants, employees, and agents from: (i) any and all claims,
causes of action or liabilities of any nature whatsoever, fixed or 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 from the beginning of time to the date of this
Agreement, whether known or unknown, and whether discovered or reasonably
capable of being discovered, except for willful misconduct; and (ii) any and all
claims, causes of action, or liabilities of any nature whatsoever

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<Page>

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
occurring in the future, except for willful misconduct; and

            (c)   waives any cause of action against Surety for its failure
to issue any bond.

      33. INDEMNITOR TO HOLD CONTRACT FUNDS IN TRUST. Indemnitor agrees and
expressly declares that all funds due or to become due under the Bonded
Contracts (excluding the Joint Venture Bonded Contracts) will immediately become
trust funds, whether in possession of Indemnitor or another, for the benefit and
the payment of all Persons to whom Principal incurs obligations in the
performance of the Bonded Contracts (excluding the Joint Venture Bonded
Contracts), for which Surety is or may be liable under the Bonds (excluding the
Joint Venture Bonds). If Surety discharges any such obligations, with or without
a claim asserted against Surety under the Bonds (excluding the Joint Venture
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 (excluding
any Joint Venture Bonded Contract) will be held in a trust fund to assure the
payment of obligations incurred or to be incurred in the performance of any
Bonded Contract (excluding any Joint Venture Bonded Contract) and for labor,
materials, and services furnished in the prosecution of the Work in any Bonded
Contract (excluding any Joint Venture Bonded Contract) or any extension or
modification thereof. All monies due and to become due under any Bonded Contract
(excluding any Joint Venture Bonded Contract) are also trust funds, whether in
the possession of Principal, Indemnitor, or otherwise. The trust funds will be
for the benefit and payment of all obligations for which Surety is or may be
liable under any Bonds (excluding the Joint Venture Bonds). The trust funds will
inure to the benefit of Surety for any liability or Surety Loss it may have or
sustain under any Bond (excluding any Joint Venture 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. The rights of
Surety set out in this paragraph are in addition to the rights granted surety
under the Collateral Agent Agreement. It is not contemplated that Surety will
exercise its rights under this paragraph unless Surety determines, in its sole
and absolute discretion, to amend or modify the Collateral Agent Agreement (any
such amendment or modification to be made with the consent of Principal).

      Indemnitor agrees and expressly declares that all funds due or to become
due under each of the Joint Venture Bonded Contracts will immediately become
trust funds, whether in possession of Indemnitor or another, for the benefit and
the payment of all Persons to whom Principal incurs obligations in the
performance of each such Joint Venture Bonded Contract, for which Surety is or
may be liable under each such Joint Venture Bond. If Surety discharges any such
obligations, with or without a claim asserted against Surety under any of the
Joint Venture Bonds, it will be entitled to assert the right of such Person to
the trust fund. All payments received for or on account of each Joint Venture
Bonded Contract will be held in a trust fund to assure the payment of
obligations incurred or to be incurred in the performance of each such Joint
Venture Bonded Contract and for labor, materials, and services furnished in the
prosecution of the Work in such Joint Venture Bonded Contract or any extension
or modification thereof. The trust funds from each Joint Venture Bonded Contract
will be for the benefit and payment of all obligations for which Surety is or
may be liable under each such Joint Venture Bond. The trust funds will inure to
the benefit of Surety for

                                       35

<Page>

any liability or Surety Loss it may have or sustain under any Joint Venture
Bonds, 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.

      In the event the Collateral Agent Agreement is not in effect and an Event
of Default occurs, Indemnitor will, upon demand of Surety, open and will open an
account(s) with a bank or similar depository designated by Indemnitor 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 (excluding the Joint Venture Bonded
Contracts). Withdrawals from such accounts will be by check or similar
instruments signed by a representative of Surety and, at Surety's option,
countersigned by an Indemnitor. Said trust will terminate on the payment by
Indemnitor of all the contractual obligations for the payment of which the trust
is created.

      In the event an Event of Default occurs, Indemnitor will, upon demand of
Surety, open and will open an account(s) with a bank or similar depository
designated by Indemnitor 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 such Joint Venture Bonded
Contract. Withdrawals from such accounts will be by check or similar instruments
signed by a representative of Surety and, at Surety's option, countersigned by
an Indemnitor. Said trust will terminate on the payment by Indemnitor of all the
contractual obligations for the payment of which the trust is created.

      34. INDEMNITOR AGREES TO BECOME PARTY DEFENDANT. 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, at the request of Surety,
Indemnitor agrees to become a party defendant or third-party defendant and allow
judgment, in the event of judgment against Surety, to be rendered also against
Indemnitor in like amount and in favor of Surety.

      35. INDEMNITOR'S WAIVER OF NOTICE. Indemnitor waives 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 Indemnitor including, but not limited to, any acts
giving rise to any Surety Loss under the Bonds.

      36. INDEMNITOR'S DUTY TO DELIVER AND EXECUTE PAPERS AND OTHER INSTRUMENTS.
Indemnitor agrees to sign, execute, file, and/or deliver to Surety all
documents, reports, papers, pleadings, and/or instruments required to obtain
and/or perfect any of Surety's rights under this Agreement or the Surety Credit
Documents. During the term of this Agreement, Indemnitor will furnish to Surety
upon its reasonable request a statement of all deposits by source and amount of
all withdrawals by payee and amount and all beginning and ending balances for
all bank accounts maintained by any Indemnitor. Furthermore, Surety will be
allowed access to all of Principal's business records during regular business
hours.

      37. 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

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<Page>

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 by, 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.

      38. USE OF FACILITIES, PERSONALTY, AND EQUIPMENT. In the event that any
Obligee has declared Principal in default under any Bonded Contract and
Principal has failed to cure such default within any cure period provided in
such Bonded Contract (it will be no defense to the enforcement of this Agreement
by Surety that Principal asserts that it is not in default under the Bonded
Contract) or Principal has acknowledged in writing its default under any Bonded
Contract (irrespective of whether Principal is actually in default of the Bonded
Contract), and thereafter Surety decides, in its sole and absolute discretion,
to perform and complete, or to cause or procure the performance and completion
of any of the Bonded Contracts, Indemnitor hereby agrees that Surety, or any
properly licensed third party appointed by Surety, will have full access to and
use of all Equipment, Personalty, and Facilities reasonably necessary for the
discharge of the duties, obligations, and undertakings of Surety under the Bonds
issued in relation to the Bonded Contracts. Unless otherwise agreed to in
writing by Surety, Surety will not be required to make any payment to any
Principal or Indemnitor (or any other Person) for the use of any of the
Equipment, Personalty, or Facilities. Without limiting the restrictions on the
incurrence of Liens set forth in the Surety Credit Documents, Indemnitor will
not, without the prior written consent of Surety, permit any Person other than
Exit Lender, or any agent on behalf of Exit Lender, to have a Lien on any of the
Facilities, Personalty, or Equipment, unless such Person agrees to be bound by
the terms and provisions of this Section 36 and Section 11 of this Agreement.
Surety hereby states that it is its intention to not conduct or participate in
the management of Indemnitor's business. Indemnitor represents and warrants in
favor of Surety that as of the date hereof, other Exit Lender or an agent on its
behalf, the Permitted Liens, no other Person has a Lien on any of the Equipment,
Personalty, or Facilities.

      39. RIGHT OF SURETY TO SETTLE CLAIMS. Surety will have the exclusive right
for itself and for Indemnitor to decide and determine, reasonably and in good
faith, 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 Indemnitor; and any Surety Loss which may be sustained or incurred will be
paid by Indemnitor 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 Indemnitor to Surety in any claim or suit and in any
and all matters arising between Indemnitor and Surety.

      40. AUTHORITY OF SURETY TO MAKE LOANS TO PRINCIPAL. In addition to the
other remedies provided herein, at the request of Principal, Surety is
authorized and empowered, but is not obligated to advance or loan money or
guarantee loans to Principal as Surety may see fit for the purpose 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

                                       37

<Page>

time, whether before or after default of Principal under the Bonded
Contracts. Upon demand by Surety, Indemnitor will be responsible to reimburse
Surety for all funds advanced, loaned, or guaranteed by Surety to Principal
and all Surety Loss incurred by Surety in relation thereto, notwithstanding
the failure of the Principal to so use those funds. Indemnitor waives all
notice of such advance, loan, or guarantee.

      41. 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 thereon, 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 Indemnitor and Principal; 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.

      42. 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 nothing in this Agreement
will waive, abridge, or diminish any right which Surety might have if this
Agreement were not executed, including without limitation the right of equitable
subrogation, which Indemnitor expressly recognizes. 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.

      43. 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.

      44. JURISDICTION FOR SUITS UNDER THIS AGREEMENT. This Agreement will be
deemed to be a contract under the laws of the State of New Jersey and for all
purposes will be governed by and construed and enforced in accordance with the
laws of such State. Unless the jurisdictional prerequisites are not met, the
parties hereto irrevocably consent to the exclusive jurisdiction of the United
States District Courts of New Jersey state courts, for the purpose of any
litigation concerning this Agreement. No party hereto will object to or contest
New Jersey as the proper venue for any action or proceeding to enforce the terms
hereof. Notwithstanding the foregoing, all disputes regarding the enforcement or
interpretation of the Plan of Reorganization will be heard and determined by the
Bankruptcy Court.

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      45. 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. Invalidity of any portion or provision of this Agreement by reason of
the laws of any state or for any other reason will not render the other
provisions or portions invalid. Executions of any application or submission for
any Bond by Principal, or of any other indemnity agreement by any Indemnitor for
the Principal will not abrogate, waive, or diminish any rights of Surety under
this Agreement. This Agreement may be executed simultaneously in one or more
counterparts, each of which will be an original, but all of which together will
constitute one and the same instrument.

      46. ENTIRE AGREEMENT; ORAL MODIFICATIONS INEFFECTIVE. This Agreement
represents the entire agreement between the parties concerning the subject
matter hereof, and all oral discussions and prior agreements are merged herein.
Without limiting the generality of the forgoing, this Agreement supercedes the
provisions of the November 21, 2001, term sheet. This Agreement may not be
changed or modified orally. No change or modification to this Agreement will be
effective unless specifically agreed to in writing and executed by Surety and
Indemnitor.

      47. 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 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.

      48. EQUIPMENT LISTS. Principal represents that it will furnish Surety with
a current list of equipment describing each item of major equipment owned by it
within ten (10) days of the date of this Agreement. Principal will update this
list semi annually and provide Surety with an updated list on or before July 10
and January 10 of each calendar year.

      49. REPRESENTATIONS. The representations and warranties of Indemnitor
contained in this Agreement are true and correct and complete on and as of the
date of this Agreement. Indemnitor hereby undertakes the duty to notify Surety
at the earliest practicable moment of any material change in any representation
made in this Agreement or in any document or other communication made to Surety
in connection with its obligations of suretyship. Indemnitor acknowledges hereby
that Surety has and will continue to rely upon such information in determining
whether to issue any Bonds and in undertaking its obligations to third parties
under said Bonds.

      50. NOTICES. It is mutually agreed that any and all notices herein
provided for must be given in writing and will be deemed given if and when
delivered in person or duly deposited in the United States Mails, postage
prepaid for regular or certified mail, properly addressed to the party to whom
given at the address of such party shown in this Agreement, provided however,
that any party may specify any other post office address in the United States by
giving at least five (5) days written notice thereof to the other party.

                                       39

<Page>

      Surety:                       Federal Insurance Company
                                    15 Mountain View Road
                                    P.O. Box 1615
                                    Warren, New Jersey  07061-1615
                                    Attn.:   Richard E. Towle
                                             Edward J. Reilly

      WITH A COPY TO:               Manier & Herod
                                    2200 First Union Tower
                                    150 Fourth Avenue, North
                                    Nashville, Tennessee  37219
                                    Attn.:  J. Michael Franks
                                            Sam H. Poteet, Jr.

      Principal/Indemnitor:         Washington Group International, Inc.
                                    720 Park Blvd.
                                    Boise, Idaho   83712
                                    Attn.:  George H. Juetten
                                            Edwin V. Apel, Jr.

      WITH A COPY TO:               Jones, Day, Reavis & Pogue
                                    77 West Wacker
                                    Chicago, Illinois  60601-1692
                                    Attn.:  Robert J. Graves

      Any such communication will be deemed received at the earliest to occur
of: (i) personal receipt; (ii) the date of promised delivery of a regularly
scheduled overnight air courier service; or (iii) five days after deposit in the
United States mail. Any of the foregoing addresses may be changed by means of a
notice furnished in the manner provided herein.

      51. 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 51 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 51 WITH ANY
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF SUCH OTHER PARTY TO THE WAIVER OF
ITS RIGHTS TO TRIAL BY JURY.

                                       40

<Page>

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

      53. NO CONTRARY ACTION. Indemnitor will not apply to the Bankruptcy Court
for the authority to take any action that is prohibited by the terms of this
Agreement or any of the other Surety Credit Documents or refrain from taking any
action that is required to be taken by the terms of this Agreement or any of the
other Surety Credit Documents. Indemnitor will not make or permit to be made any
changes, amendments, or modifications, or any application or motion for any
change, amendments, or modifications to any Order approving this Agreement and
the Surety Credit Documents that has been consented to by Surety prior to its
entry.

      54. UNAUTHORIZED RECORDING. The unauthorized recording by any means now
known or created in the future of any conversations between Surety and/or
Principal and/or Indemnitor or any of its representatives is hereby expressly
prohibited. No authorization for recording of conversations will be implied; any
such authorization must be in writing by a duly authorized representative of
Surety. Principal and Indemnitor hereby confirm and acknowledge that they will
not make any unauthorized recordings of Surety nor any of its representatives.
Principal and Indemnitor further recognize that any unauthorized recording of
any conversations of Surety and any of its representatives will constitute a
material breach under the terms of this Agreement.

      IN WITNESS WHEREOF, this Agreement is executed by the parties on the day
and date first set forth above.

                              SURETY:

                              FEDERAL INSURANCE COMPANY

                              By:  /s/ Richard E. Towle
                                   --------------------------------
                                   Richard E. Towle

                              Its: Assistant Secretary
                                   --------------------------------

                                       41

<Page>

                              PRINCIPAL/INDEMNITOR:

                              WASHINGTON GROUP INTERNATIONAL, INC. (DELAWARE
                                 CORPORATION)
                              WASHINGTON GROUP INTERNATIONAL, INC. (OHIO
                                 CORPORATION)
                              ASIA BADGER, INC.
                              BADGER AMERICA, INC.
                              BADGER ENERGY, INC.
                              BADGER MIDDLE EAST, INC.
                              CATALYTIC INDUSTRIAL MAINTENANCE CO., INC.
                              CF ENVIRONMENTAL CORPORATION
                              CIA. INTERNACIONAL DE INGENIERIA, S.A.
                              EBASCO INTERNATIONAL CORPORATION
                              ENERGY OVERSEAS INTERNATIONAL, INC.
                              EMKAY CAPITAL INVESTMENTS, INC.
                              GULF DESIGN CORPORATION, INC.
                              HARBERT-YEARGIN INC.
                              HCC HOLDING, INC.
                              MCBRIDE, RATCLIFF & ASSOCIATES, INC.
                              MIDDLE EAST HOLDINGS LIMITED (FORMERLY RAYTHEON
                                 ENGINEERS & CONSTRUCTORS MIDDLE EAST LIMITED)
                              MK AVIATION SERVICES, INC.
                              MK CAPITAL COMPANY
                              MK NEVADA LLC
                              MK TRAIN CONTROL, INC.
                              MK-FERGUSON ENGINEERING COMPANY
                              MK-FERGUSON OF IDAHO COMPANY
                              MK-FERGUSON OF OAK RIDGE COMPANY
                              MORRISON KNUDSEN CORPORATION OF VIET
                                 NAM
                              MORRISON-KNUDSEN COMPANY, INC.
                              MORRISON-KNUDSEN SERVICES, INC.
                              MORRISON-KNUDSEN ENGINEERS, INC.
                              WGCI, INC. (FORMERLY RAYTHEON CONSTRUCTORS
                                 INTERNATIONAL, INC.)
                              RAYTHEON ARCHITECTS, LTD.
                              RAYTHEON-EBASCO OVERSEAS LTD.
                              RAYTHEON-EBASCO PAKISTAN LTD.
                              RAYTHEON-EBASCO INDONESIA LTD.
                              WASHINGTON ENGINEERING QUALITY SERVICES
                                 CORPORATION (FORMERLY RAYTHEON ENGINEERING
                                 QUALITY SERVICES CORPORATION)

                                       42

<Page>

                              RAYTHEON ENGINEERS & CONSTRUCTORS (IRELAND) LTD.
                              WASHINGTON GROUP LATIN AMERICA, INC. (FORMERLY
                                 RAYTHEON ENGINEERS & CONSTRUCTORS LATIN
                                 AMERICA, INC.)
                              RATHEON ENGINEERS & CONSTRUCTORS (ARUBA) LTD.
                              RAYTHEON ENGINEERS & CONSTRUCTORS (RUSSIA) LTD.
                              RAYTHEON ENGINEERS & CONSTRUCTORS MIDWEST, INC.
                              RAYTHEON ENGINEERS & CONSTRUCTORS MIDWEST LLC
                              RAYTHEON INFRASTRUCTURE INC.
                              RAYTHEON NUCLEAR INC.
                              WASHINGTON QUALITY INSPECTION COMPANY (FORMERLY
                                 RAYTHEON QUALITY INSPECTION COMPANY)
                              SPECIALTY TECHNICAL SERVICES INC.
                              STEARNS CATALYTIC CORPORATION
                              UNITED ENGINEERS FAR EAST, LTD.
                              UNITED ENGINEERS INTERNATIONAL, INC.
                              UNITED MID-EAST, INC.
                              WASHINGTON ARCHITECTS, LLC  (FORMERLY RAYTHEON
                                 ARCHITECTS LLC)
                              WASHINGTON-CATALYTIC, INC. (FORMERLY
                                 RAYTHEON-CATALYTIC INC.)
                              WASHINGTON CONSTRUCTION CORPORATION (FORMERLY
                                 MORRISON KNUDSEN CORP - MONTANA)
                              POMEROY CORPORATION
                              MORRISON KNUDSEN LEASING CORPORATION
                              WASHINGTON DEMILITARIZATION COMPANY
                                 (FORMERLY RAYTHEON DEMILITARIZATION COMPANY)
                              WASHINGTON ELECTRICAL, INC. (FORMERLY BROADWAY
                                 CONSTRUCTION, INC.)
                              WASHINGTON INFRASTRUCTURE SERVICES, INC.
                                   (FORMERLY CENTENNIAL ENGINEERING, INC.)
                              WASHINGTON INTERNATIONAL, INC. (FORMERLY
                                  MORRISON KNUDSEN INTERNATIONAL, INC.)
                              WASHINGTON OHIO SERVICES LLC (FORMERLY
                                  MORRISON KNUDSEN LLC AND OHIO SERVICES
                                   LLC)
                              WASHINGTON QUALITY PROGRAMS COMPANY
                                    (FORMERLY RAYTHEON QUALITY PROGRAMS

                                       43

<Page>

                                 COMPANY)
                              YAMPA MINING CO.
                              RUST CONSTRUCTORS INC.
                              RUST CONSTRUCTORS PUERTO RICO, INC.
                              WASHINGTON CONTRACTORS GROUP, INC.
                              WCG HOLDINGS, INC.
                              WGI PANAMA LTD.
                              WGI TRINIDAD & TOBAGO LTD.
                              WCG LEASING, INC.
                              INDUSTRIAL CONSTRUCTORS CORP.
                              MK CONSTRUCTION, INC.
                              NATIONAL PROJECTS, INC.
                              NATIONAL PROJECTS SOUTHWEST, INC.

                              By:    /s/ Terry K. Eller
                                     ---------------------------------

                              Their: Authorized Officer
                                     ---------------------------------

                                       44

<Page>

List of Exhibits

Exhibit A   Subsidiaries and Affiliates of Indemnitor/Principal
Exhibit B   Existing Pledged Collateral - May 24, 2001, Pledge Agreement
Exhibit C   Litigation
Exhibit D   Regulatory and Environmental Disclosure
Exhibit E   Specially Treated Indemnitors

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