QUANTA SERVICES INC, S-1/A, 1998-01-26

QUANTA SERVICES INC
S-1/A, 1998-01-26
ELECTRICAL WORK

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<PAGE>

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 26, 1998

REGISTRATION NO. 333-42957
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- -------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

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

AMENDMENT NO. 1
TO
FORM S-1

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

QUANTA SERVICES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

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DELAWARE 1731 74-2851603
(STATE OR OTHER (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
JURISDICTION OF CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
INCORPORATION OR
ORGANIZATION)
JOHN R. COLSON
CHIEF EXECUTIVE OFFICER
3555 TIMMONS LANE
SUITE 610
HOUSTON, TEXAS 77027
(713) 629-7600
(NAME AND ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA
CODE, OF REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES AND AGENT FOR SERVICE)

---------------
COPIES TO:
JAMES S. RYAN, III STEPHEN A. RIDDICK
BRAD L. WHITLOCK PIPER & MARBURY L.L.P.
JACKSON WALKER L.L.P. CHARLES CENTER SOUTH
901 MAIN STREET 36 SOUTH CHARLES STREET
SUITE 6000 BALTIMORE, MARYLAND 21201
DALLAS, TEXAS 75287 (410) 539-2530
(214) 953-6000

---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.

If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [_]

If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]

If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]

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

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(A) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID
SECTION 8(A), MAY DETERMINE.

- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>

++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A +
+REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY +
+OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT +
+BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR +
+THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE +
+SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE +
+UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF +
+ANY SUCH STATE. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION

DATED JANUARY 26, 1998
5,000,000 Shares
[LOGO FOR QUANTA SERVICES, INC. APPEARS HERE]

Common Stock

--------

All of the 5,000,000 shares of Common Stock, $0.00001 par value (the "Common
Stock"), offered hereby are being offered by Quanta Services, Inc. (the
"Company"). The Company was founded in August 1997 to acquire four companies
engaged in specialty electric and telecommunications infrastructure contracting
services (the "Founding Companies") and has conducted no operations to date.
Prior to this offering, there has been no public market for the Common Stock.
It is currently estimated that the initial public offering price will be
between $8.00 and $10.00 per share. See "Underwriting" for a discussion of the
factors to be considered in determining the initial public offering price. The
Common Stock has been approved for listing, subject to notice of issuance, on
The New York Stock Exchange (the "NYSE") under the symbol "PWR". Of the net
proceeds to the Company from the sale of the Common Stock offered hereby, $21.0
million will be paid to the stockholders of the Founding Companies in
connection with the acquisition of the Founding Companies. See "Use of
Proceeds."

--------

THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 9.

--------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

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<TABLE>
<CAPTION>
PRICE UNDERWRITING PROCEEDS
TO DISCOUNTS AND TO
PUBLIC COMMISSIONS COMPANY(1)
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Per Share................. $ $ $
- -------------------------------------------------------------------------------
Total(2).................. $ $ $
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</TABLE>
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(1) Before deducting expenses of the offering payable by the Company estimated
at $2,900,000.
(2) The Company has granted the Underwriters a 30-day option to purchase up to
an additional 750,000 shares of Common Stock solely to cover over-
allotments, if any. To the extent the option is exercised, the Underwriters
will offer the additional shares at the Price to Public shown above. If the
option is exercised in full, the total Price to Public, Underwriting
Discounts and Commissions and Proceeds to Company will be $ ,
$ and $ , respectively. See "Underwriting."

--------

The shares of Common Stock are offered by the several Underwriters, as stated
herein, subject to prior sale when, as and if delivered to and accepted by them
and subject to their right to reject any order in whole or in part. It is
expected that delivery of such shares will be made through the offices of BT
Alex. Brown Incorporated, Baltimore, Maryland, on or about ,
1998.

BT ALEX. BROWN
BANCAMERICA ROBERTSON STEPHENS
SANDERS MORRIS MUNDY

The date of this Prospectus is , 1998.
<PAGE>

[map of company headquarters and areas of business appears here]

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CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK.
SPECIFICALLY, THE UNDERWRITERS MAY OVER-ALLOT IN CONNECTION WITH THIS OFFERING
AND MAY BID FOR AND PURCHASE SHARES OF THE COMMON STOCK IN THE OPEN MARKET. FOR
A DESCRIPTION OF THESE ACTIVITIES, SEE "UNDERWRITING."

2
<PAGE>

<S> <C>

Photo of Fiber Optic Cable Photo of Stadium Lighting

Photo of Rebuild of Energized Distribution Photo of Damaged
Lines Utilizing Specialized Robotic Arm Transmission Tower

</TABLE>

<PAGE>

<S> <C>

Photo of Erection of 500,000 Volt Tower Photo of Installation of Tramsmission Lines

Photo of Installation of Undeground
Distribution System

</TABLE>

<PAGE>

PROSPECTUS SUMMARY

Concurrently with the closing of the offering made hereby (the "Offering"),
Quanta Services, Inc. plans to acquire, in separate transactions (collectively,
the "Acquisitions"), in exchange for consideration including shares of its
Common Stock, four businesses: PAR Electrical Contractors, Inc. ("PAR"), Union
Power Construction Company ("Union Power"), TRANS TECH Electric, Inc. ("TRANS
TECH") and Potelco, Inc. ("Potelco" and, together with PAR, Union Power and
TRANS TECH, the "Founding Companies"). Unless otherwise indicated, references
herein to "Quanta" mean Quanta Services, Inc. and references to the "Company"
mean Quanta and the Founding Companies collectively.

The following summary is qualified in its entirety by the detailed
information and financial statements, including the notes thereto, appearing
elsewhere in this Prospectus. Unless otherwise indicated, the information and
share and per share data in this Prospectus (i) give effect to the
Acquisitions, (ii) assume the Underwriters' over-allotment option is not
exercised and (iii) give effect to a 1,613.6016-for-1 stock split of the Common
Stock effected in December 1997.

THE COMPANY

Quanta was founded in August 1997 to create a leading provider of specialty
electrical contracting and maintenance services primarily related to electric
and telecommunications infrastructure in North America. In addition, the
Company provides electrical contracting services to the commercial and
industrial markets and installs transportation control and lighting systems.
The Company's services include the installation, repair and maintenance of
electric power transmission and distribution lines and telecommunication and
cable television lines, the construction of electric substations, the erection
of cellular telephone, PCS(R) and microwave towers, the installation of highway
lighting and traffic control systems, design and engineering services and the
provision of specialty contracting services for electric, video, security,
fire, voice and data systems. The Company's customers include electric
utilities, telecommunication and cable television system operators,
governmental entities, general contractors and builders, owners and managers of
commercial and industrial properties.

Concurrently with the closing of the Offering, Quanta will acquire the four
Founding Companies, making it one of the largest providers of specialty
electric and telecommunications infrastructure contracting services in its
markets. The Company has a total of 13 offices in eight states and performed
work in 18 states during 1996, principally in the midwest and western U.S. The
Company believes that its size, geographical diversity, industry relationships,
expertise in specialty services, design and engineering capability and number
of skilled personnel provide the Company with significant competitive
advantages. During 1996, the Company generated pro forma combined revenues,
operating income and net income of $108.1 million, $6.5 million and $3.1
million, respectively. During the first nine months of 1997, the Company
generated pro forma combined revenues, operating income and net income of
$108.7 million, $13.0 million and $7.4 million, respectively.

The Company estimates that the electrical and telecommunications contracting
industry generates annual revenues in excess of $40 billion. The Company
believes that it will be well-positioned to capitalize on significant trends
currently affecting its industry. The Company expects that these trends, which
include the continuing deregulation of utilities, the upgrading and expansion
of existing infrastructure and the increased outsourcing of services to
providers such as the Company, will provide significant opportunities for
growth.

3
<PAGE>

the fragmented nature of the industry presents substantial consolidation and
growth opportunities for companies with a disciplined acquisition program, a
decentralized operating strategy and access to financial resources required to
complete acquisitions and to capitalize on industry growth opportunities.

GROWTH STRATEGY

The Company plans to achieve its goal of becoming a leading provider of
specialty electric and telecommunications infrastructure contracting services
in North America by (i) implementing its operating strategy, which focuses on
managing on a decentralized basis and achieving operating efficiencies, (ii)
emphasizing continued internal growth and (iii) expanding through acquisitions.
The key elements of the Company's strategy are:

Operating Strategy. The Company intends to manage its operations on a
decentralized basis while maintaining operating and financial controls. Local
management will retain responsibility for the operations, profitability and
growth of its business. Certain administrative functions will be centralized
following the Offering. While local management will retain control of the
operations of its business, the Company's executive management will have
responsibility for corporate strategy and acquisitions, financing, insurance,
investor relations and employee benefit plans. In addition, by combining
overlapping operations of certain of the Founding Companies, the Company
expects to achieve more efficient asset utilization and realize savings in
overhead and other expenses. The Company believes that its operating
efficiency, financial strength, technical expertise, presence in key geographic
areas and reputation for quality and reliability provide competitive advantages
in bidding for, winning and executing new contracts for infrastructure
projects.

Internal Growth. The Founding Companies experienced internal revenue growth
at a compound annual rate of 19.0% between 1994 and 1996. The Company is
focused on continuing its strong internal growth by (i) increasing the volume
of services provided to existing customers, including additional volumes
resulting from increased outsourcing by its customers, (ii) expanding the range
of services provided to existing customers to include additional specialties,
(iii) broadening its customer base to include additional businesses not
presently served by the Company and (iv) geographically expanding its service
area.

Acquisitions. The Company believes that the increasing trend toward the
outsourcing of services to the electric and telecommunications infrastructure
contracting industry will result in a competitive disadvantage for small and
mid-sized companies that do not have access to capital for growth and cannot
provide a broad range of specialty contracting services on a regional or
national basis. In addition, the Company expects that there will continue to be
a large number of attractive acquisition candidates due to the highly
fragmented nature of the industry, the inability of many companies to expand
and modernize due to capital constraints and the desire of owners for
liquidity. The Company intends to actively pursue acquisitions of well-
established companies to enter new geographic markets and expand the range of
services and leverage existing operations within existing markets.

Quanta believes that the prominence and operating strength of the Company and
the experience of its executive management will provide the Company with
significant competitive advantages as it pursues its growth strategy.

4
<PAGE>

THE OFFERING

<TABLE>
<S> <C>
Common Stock offered hereby...... 5,000,000 shares
Common Stock to be outstanding
after the Offering.............. 15,872,333 shares(1)
Use of Proceeds.................. To pay the cash portion of the purchase price
of the Founding Companies, to repay all or a
portion of debt of the Founding Companies, to
repay expenses incurred in connection with
the organization of Quanta and the Offering
and for general corporate purposes, including
future acquisitions.
Proposed NYSE symbol............. PWR
</TABLE>
- --------
(1) Includes (i) 7,527,000 shares to be issued to the owners of the Founding
Companies, (ii) 5,000,000 shares to be sold in the Offering and (iii)
3,345,333 shares of a special class of Common Stock ("Limited Vote Common
Stock") issued to the initial stockholders and certain management personnel
of the Company. Excludes options to purchase 1,500,000 shares of Common
Stock that are expected to be granted upon consummation of the Offering at
an exercise price equal to or greater than the initial public offering
price. See "Management--1997 Stock Option Plan," "Certain Transactions--
Organization of the Company" and "Description of Capital Stock--Common
Stock and Limited Vote Common Stock."

ACQUISITION CONSIDERATION

The aggregate consideration to be paid by Quanta in the Acquisitions consists
of approximately $21.0 million in cash (approximately % of the net proceeds
of the Offering) and 7,527,000 shares of Common Stock (collectively, the
"Acquisition Consideration"). The Acquisition Consideration was determined by
arms-length negotiations between Quanta and representatives of each Founding
Company and was based primarily on the pro forma adjusted net income of each
Founding Company. The cash portion of the Acquisition Consideration is subject
to adjustment, based upon the initial public offering price. For a more
detailed description of these transactions, see "Certain Transactions--
Organization of the Company."

5
<PAGE>

SUMMARY PRO FORMA COMBINED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

Quanta will acquire the Founding Companies simultaneously with and as a
condition to the consummation of the Offering. For financial statement
presentation purposes, PAR has been identified as the "accounting acquiror," as
its stockholders will represent the largest voting interest within the Company.
The following summary unaudited pro forma combined financial data present
certain data for the Company, as adjusted for (i) the effects of the
Acquisitions, (ii) the effects of certain other pro forma adjustments to the
historical financial statements and (iii) the consummation of the Offering and
the application of the net proceeds therefrom. The unaudited pro forma combined
income statement data assume that the Acquisitions, the Offering and related
transactions were closed on January l, 1996 and are not necessarily indicative
of the results that the Company would have obtained had these events actually
occurred then or of the Company's future results. During the periods presented
below, the Founding Companies were not under common control or management and,
therefore, the data presented may not be comparable to or indicative of
postcombination results to be achieved by the Company. The unaudited pro forma
combined financial statements should be read in conjunction with the other
financial information included elsewhere in this Prospectus. See "Selected
Financial Data," the Unaudited Pro Forma Combined Financial Statements and
notes thereto and the historical financial statements of the Founding Companies
and the notes thereto, all included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
PRO FORMA COMBINED
------------------------------------
YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, 1996 SEPTEMBER 30, 1997
----------------- ------------------
<S> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues................................ $108,143 $108,666
Cost of services (including
depreciation).......................... 91,769 87,296
-------- --------
Gross profit............................ 16,374 21,370
Selling, general and administrative
expenses(1)............................ 8,394 7,293
Goodwill amortization(2)................ 1,498 1,123
-------- --------
Income from operations.................. 6,482 12,954
Other income (expense), net(3).......... (400) (178)
-------- --------
Income before income tax expense........ 6,082 12,776
Provision for income taxes(4)........... 2,994 5,424
-------- --------
Net income.............................. $ 3,088 $ 7,352
======== ========
Net income per share.................... $ 0.20 $ 0.46
======== ========
Shares used in computing pro forma
income per share(5).................... 15,835 15,835
<CAPTION>
PRO FORMA
------------------------------------
SEPTEMBER 30, 1997
------------------------------------
COMBINED(6) AS ADJUSTED(7)
----------------- ------------------
<S> <C> <C>
BALANCE SHEET DATA:(8)
Working capital (deficit)............... $(19,473)(9) $ 13,986
Total assets............................ 125,842 126,126
Long-term debt, net of current
maturities............................. 5,421 --
Total stockholders' equity.............. 56,257 95,137
</TABLE>

(Footnotes on following page)

6
<PAGE>

- --------

(1) The unaudited pro forma combined statement of operations data reflect an
aggregate of approximately $0.9 million and $1.8 million for the year ended
December 31, 1996 and the nine months ended September 30, 1997,
respectively, in pro forma reductions in salary, bonus and benefits of the
owners of the Founding Companies to which they have agreed prospectively.
Additionally, excludes the $11.5 million non-recurring non-cash charge
recognized by Quanta related to the issuance of stock to an initial
stockholder and management, as a result of the issuance of such shares for
nominal consideration. See Note 2 of Notes to Financial Statements of
Quanta.

(2) Reflects amortization of the goodwill to be recorded as a result of the
Acquisitions over a 40-year period and computed on the basis described in
the notes to the Unaudited Pro Forma Combined Financial Statements.

(3) Reflects the reduction for interest expense of $1.4 million and $1.0
million for the year ended December 31, 1996 and the nine months ended
September 30, 1997, respectively, attributable to the repayment of $17.6
million of historical debt of the Founding Companies with proceeds from the
Offering, net of additional interest expense discussed in Note 8 below.
Additionally, reflects reductions in expenses associated with certain non-
operating assets that will be transferred to the Founding Companies prior
to the Acquisitions.

(4) Assumes all pretax income before non-deductible goodwill and other
permanent items is subject to an estimated 39.0% combined tax rate.

(5) Includes (i) 7,527,000 shares of Common Stock to be issued to the owners of
the Founding Companies, (ii) 3,345,333 shares of Limited Vote Common Stock
issued to the initial stockholders and certain management personnel of the
Company and (iii) 4,962,259 shares of the 5,000,000 shares of Common Stock
to be sold in the Offering to pay the cash portion of the Acquisition
Consideration, to repay expenses incurred in connection with the
organization of Quanta and the Offering and to retire debt.

(6) Reflects the Acquisitions and related transactions as if they had occurred
on September 30, 1997 as described in the notes to the Unaudited Pro Forma
Combined Financial Statements. The unaudited pro forma combined balance
sheet data should be read in conjunction with the other financial
information and historical financial statements and notes thereto included
elsewhere in this Prospectus.

(7) Reflects the closing of the Offering and the Company's application of the
net proceeds therefrom to fund the cash portion of the Acquisition
Consideration and to repay certain indebtedness of the Founding Companies.
See "Use of Proceeds" and "Certain Transactions."

(8) Two of the Founding Companies have historically elected S corporation
status for tax purposes. Prior to the Acquisitions, these Founding
Companies will make distributions to their stockholders totaling
approximately $7.8 million (the "S Corporation Distributions"). In order to
fund the S Corporation Distributions, the Company will borrow approximately
$7.8 million. Accordingly, pro forma interest expense has been increased by
$0.7 million for the year ended December 31, 1996 and $0.5 million for the
nine months ended September 30, 1997 and pro forma stockholders' equity has
been reduced by approximately $7.8 million.

(9) Includes the estimated $21.0 million payable to owners of the Founding
Companies, representing the actual cash portion of the Acquisition
Consideration to be paid from a portion of the net proceeds of the
Offering. The cash portion of the Acquisition Consideration will be
determined based on the initial public offering price of the Common Stock
offered hereby.

7
<PAGE>

SUMMARY INDIVIDUAL FOUNDING COMPANY FINANCIAL DATA
(IN THOUSANDS)

The following table presents certain summary historical income statement data
of the Founding Companies for each of their three most recent fiscal years and
their nine month calendar year-to-date results for 1996 and 1997. The
historical income statement data presented below have not been adjusted for the
pro forma adjustments reflected in the Unaudited Pro Forma Combined Financial
Statements, included elsewhere in this Prospectus. The income statement data
presented below have been audited for certain of the Founding Companies and
certain of the periods as reflected in the historical financial statements of
such Founding Companies, included elsewhere in this Prospectus. Also, see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations--Introduction."

<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER
FISCAL YEARS ENDED(1) 30,
------------------------ ---------------
1994 1995 1996 1996 1997
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
PAR:
Revenues............................. $43,909 $38,915 $42,684 $29,806 $36,439
Income from operations............... 2,548 1,380 1,883 663 3,482
UNION POWER:
Revenues............................. 12,614 25,636 42,792 22,147 37,202
Income from operations............... 478 1,754 3,060 752 3,538
TRANS TECH:
Revenues............................. 18,807 21,397 24,414 16,575 24,278
Income from operations............... 224 824 2,140 1,592 3,229
POTELCO:
Revenues............................. 9,463 17,147 14,549 10,173 13,248
Income (loss) from operations........ (310) 200 632 139 2,055
</TABLE>
- --------
(1) The fiscal years presented above are the years ended December 31, 1994,
1995 and 1996, except with respect to Union Power for which the fiscal
years presented are the years ended August 31, 1995, 1996 and 1997.

8
<PAGE>

RISK FACTORS

In addition to the other information in this Prospectus, the following
factors should be considered carefully in evaluating the Company and its
business before purchasing shares of Common Stock offered hereby. This
Prospectus contains, in addition to historical information, forward-looking
statements that involve risks and uncertainties. The Company's actual results
could differ materially from those discussed herein. Factors that could cause
or contribute to such differences include, but are not limited to, those
discussed in the following risk factors, "Management's Discussion and Analysis
of Financial Condition and Results of Operations," "Business" and elsewhere in
this Prospectus.

Absence of Combined Operating History. Quanta was founded in August 1997 but
has conducted no operations and generated no revenues to date. Quanta has
entered into agreements to acquire the Founding Companies simultaneously with,
and as a condition to, the closing of the Offering. The Founding Companies
have been operating and will continue to operate as separate independent
entities, and there can be no assurance that the Company will be able to
integrate the operations of these businesses successfully or to institute the
necessary systems and procedures, including accounting and financial reporting
systems, to manage the combined enterprise on a profitable basis. In addition,
there can be no assurance that the recently assembled management group will be
able to successfully manage the combined entity and effectively implement the
Company's operating or growth strategies. The pro forma combined financial
results of the Founding Companies cover periods during which the Founding
Companies and Quanta were not under common control or management and,
therefore, may not be indicative of the Company's future financial or
operating results. The success of the Company will depend on management's
ability to integrate the Founding Companies and other companies acquired in
the future into one organization in a profitable manner. The inability of the
Company to successfully integrate the Founding Companies and to coordinate and
integrate certain operational, administrative, banking, insurance and
accounting functions and computer systems would have a material adverse effect
on the Company's financial condition and results of operations and would make
it unlikely that the Company's acquisition program will be successful. See
"Business--Strategy" and "Management."

Risks Related to Acquisition Strategy. One of the Company's principal growth
strategies is to increase its revenues and the markets it serves through the
acquisition of additional electric and telecommunications infrastructure
contracting companies. The Company expects to face competition for acquisition
candidates, which may limit the number of acquisition opportunities and may
lead to higher acquisition prices. There can be no assurance that the Company
will be able to identify, acquire or profitably manage additional businesses
or to integrate successfully any acquired businesses into the Company without
substantial costs, delays or other operational or financial problems. Further,
acquisitions involve a number of special risks, including failure of the
acquired business to achieve expected results, diversion of management's
attention, failure to retain key personnel of the acquired business and risks
associated with unanticipated events or liabilities, some or all of which
could have a material adverse effect on the Company's business, financial
condition and results of operations. Customer dissatisfaction or performance
problems at a single acquired company could have an adverse effect on the
reputation of the Company generally. In addition, there can be no assurance
that the Founding Companies or other businesses acquired in the future will
achieve anticipated revenues and earnings. See "Business--Strategy."

Risks Related to Acquisition Financing. The timing, size and success of the
Company's acquisition efforts and the associated capital commitments cannot be
readily predicted. The Company intends to use its Common Stock for all or a
portion of the consideration for future acquisitions. If the Common Stock does
not maintain a sufficient market value or potential acquisition candidates are
unwilling to accept Common Stock as part of the consideration for the sale of
their businesses, the Company may be required to utilize more of its cash
resources, if available, in order to pursue its acquisition program. If the
Company does not have sufficient cash resources, its growth could be limited
unless it is able to obtain additional

9
<PAGE>

capital through future debt or equity financings. Using cash to complete
acquisitions and finance internal growth could substantially limit the
Company's financial flexibility, using debt could result in financial
covenants that limit the Company's operations and financial flexibility, and
using equity may result in dilution of the ownership interests of the then-
existing stockholders of the Company. The Company has recently initiated
negotiations with a group of commercial banks to provide the Company with a
credit facility to be used for acquisitions, working capital and other general
corporate purposes and may result in financial covenants that limit the
Company's operations and financial flexibility. There can be no assurance that
the Company will be able to obtain financing if and when it is needed or that,
if available, it will be available on terms the Company deems acceptable. As a
result, the Company may be unable to pursue its acquisition strategy
successfully. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations--Combined Liquidity and Capital Resources" and
"Business--Strategy."

Risks Related to Operating and Internal Growth Strategies. A key element of
the Company's strategy is to increase the profitability and revenues of the
Founding Companies and any subsequently acquired businesses. Although the
Company intends to implement this strategy by various means, there can be no
assurance that the Company will be able to do so successfully. A key component
of the Company's strategy is to operate the Founding Companies and
subsequently acquired businesses on a decentralized basis, with local
management retaining responsibility for day-to-day operations, profitability
and the internal growth of the business. If proper overall business controls
are not implemented, this decentralized operating strategy could result in
inconsistent operating and financial practices at the Founding Companies and
subsequently acquired businesses, and the Company's overall profitability
could be adversely affected. The Company's ability to generate internal
earnings growth will be affected by, among other factors, its ability to
expand the range of services offered to customers, attract new customers,
increase the number of projects performed for existing customers, hire and
retain employees, open additional facilities and reduce operating and overhead
expenses. Many of these factors are beyond the control of the Company, and
there can be no assurance that the Company's strategies will be successful or
that it will be able to generate cash flow sufficient to fund its operations
and to support internal growth. The Company's inability to achieve internal
earnings growth could have a material adverse effect on the Company's
business, financial condition and results of operations. See "Business--
Strategy."

Management of Growth. The Company expects to grow both internally and
through acquisitions. Management expects to expend significant time and effort
in evaluating, completing and integrating acquisitions and opening new
facilities. There can be no assurance that the Company's systems, procedures
and controls will be adequate to support the Company's operations as they
expand. Any future growth also will impose significant additional
responsibilities on members of senior management, including the need to
identify, recruit and integrate new senior level managers and executives.
There can be no assurance that such additional management will be identified
and retained by the Company. To the extent that the Company is unable to
manage its growth efficiently and effectively, or is unable to attract and
retain additional qualified management, the Company's financial condition and
results of operations could be materially adversely affected. See "Business--
Strategy."

Availability of Qualified Employees. The Company's ability to provide high-
quality services on a timely basis requires an adequate supply of skilled
electricians, journeymen linemen and project managers. Accordingly, the
Company's ability to increase its productivity and profitability will be
limited by its ability to employ, train and retain skilled personnel necessary
to meet the Company's requirements. Many companies in the Company's industry
are currently experiencing shortages of qualified personnel, and there can be
no assurance that the Company will be able to maintain an adequate skilled
labor force necessary to operate efficiently, that the Company's labor
expenses will not increase as a result of a shortage in the supply of skilled
personnel or that the Company will not have to curtail its planned internal
growth as a result of labor shortages. See "Business--Employees" and "--
Training, Quality Assurance and Safety."

10
<PAGE>

Unionized Workforce. Approximately 90% of the Company's employees are
covered by collective bargaining agreements. Although the majority of these
agreements prohibit strikes and work stoppages, there can be no assurance that
strikes or work stoppages will not occur in the future. Strikes or work
stoppages and the resultant adverse impact on the Company's relationship with
its customers could have a material adverse effect on the Company's business,
financial condition and results of operations. In addition, the Company's
acquisition strategy could be adversely affected because of its union status
for a variety of reasons, including without limitation, incompatibility with a
target's existing unions and reluctance of non-union targets to become
affiliated with a union based company. See "Business--Employees."

Competition. The electric and telecommunications infrastructure contracting
industry is highly competitive and is served by numerous small, owner-operated
private companies, public companies and several large regional companies. In
addition, there are relatively few, if any, barriers to entry into the market
in which the Company operates and, as a result, any organization that has
adequate financial resources and access to technical expertise may become a
competitor to the Company, including public utilities. Competition in the
industry depends on a number of factors, including price. Certain of the
Company's competitors may have lower overhead cost structures and may,
therefore, be able to provide their services at lower rates than the Company.
In addition, some of the Company's competitors are larger and have greater
resources than the Company. There can be no assurance that the Company's
competitors will not develop the expertise, experience and resources to
provide services that are equal or superior in both price and quality to the
Company's services, or that the Company will be able to maintain or enhance
its competitive position. The Company may also face competition from the in-
house service organizations of its existing or prospective customers,
including electric utility and telecommunications services providers, which
employ personnel who perform some of the same types of services as those
provided by the Company. There can be no assurance that existing or
prospective customers of the Company will continue to outsource services in
the future. See "Business--Competition."

Contract Bidding Risks. A significant portion of the Company's revenues are,
and will continue to be, generated under fixed price contracts. The Company
must estimate the costs of completing a particular project, and the cost of
labor and materials may vary from the costs originally estimated by the
Company. These variations and other risks inherent in performing fixed price
contracts may result in revenue and gross profits different from those
originally estimated, which could result in reduced profitability or losses on
projects. Depending upon the size of a particular project, variations from
estimated contract costs can have a significant impact on the Company's
operating results for any fiscal quarter or year. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations--Introduction."

Certain of the Company's contracts are master service agreements pursuant to
which work is assigned on a project by project basis. There is generally no
obligation on the part of the Company's customers to assign work to the
Company under these agreements and there can be no assurance that customers
will continue to assign work to the Company. A significant decline in work
assigned pursuant to these contracts could have a material adverse effect on
the results of operations of the Company.

Seasonality; Fluctuations of Quarterly Results. The electric and
telecommunications infrastructure contracting business can be subject to
seasonal variations. Generally, during the winter months, demand for new
projects and maintenance services may be lower due to reduced construction
activity during inclement weather, while demand for electrical service and
repairs may be higher due to damage caused by such weather. Additionally, the
industry can be highly cyclical. As a result, the Company's volume of business
may be adversely affected by declines in new projects in various geographic
regions of the U.S. Quarterly results may also be materially affected by the
timing of acquisitions, variations in the margins of projects performed during
any particular quarter, the timing and magnitude of acquisition assimilation
costs and regional economic conditions. Accordingly, the Company's operating
results in any particular quarter may not be indicative of the results that
can be expected for any other quarter or for

11
<PAGE>

the entire year. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations--Seasonality; Fluctuations of Quarterly
Results."

Potential Exposure to Environmental Liabilities. The Company's operations
are subject to various environmental laws and regulations, including those
dealing with handling and disposal of waste products, polychlorinated
biphenyls, fuel storage and air quality. As a result of past and future
operations at its facilities, the Company may be required to incur remediation
costs and other expenses related thereto. In addition, although the Company
intends to conduct appropriate due diligence with respect to environmental
matters in connection with future acquisitions, there can be no assurance that
the Company will be able to identify or be indemnified for all potential
environmental liabilities relating to any acquired business.

Control by Existing Management and Stockholders. Following consummation of
the Acquisitions and the Offering, the Company's executive officers and
directors, former stockholders of the Founding Companies and entities
affiliated with them will beneficially own approximately 9.1 million shares of
Common Stock and Limited Vote Common Stock, representing approximately 57.3%
of the aggregate outstanding shares of Common Stock and Limited Vote Common
Stock (55.0% if the Underwriters' over-allotment option is exercised in full).
The initial stockholders of the Company, certain members of management and
others own 3,345,333 shares of Limited Vote Common Stock. Shares of Limited
Vote Common Stock are entitled to elect one member of the Company's Board of
Directors and are entitled to 0.10 of one vote for each share held on all
other matters on which holders of Common Stock are entitled to vote. Holders
of Limited Vote Common Stock are not entitled to vote on the election of any
other directors. The Company's executive officers and directors and former
stockholders of the Founding Companies will control in the aggregate
approximately 60.0% of all shares of Common Stock (which percentage excludes
shares of Limited Vote Common Stock) and, if acting in concert, will be able
to control the Company's affairs, elect all except one of the members of the
Board of Directors and control the outcome of any matter submitted to a vote
of stockholders. See "Principal Stockholders."

Dependence on Key Personnel. The Company's operations are dependent on the
continued efforts of its executive officers and on senior management of the
Founding Companies. Furthermore, the Company will likely be dependent on the
senior management of companies that it may acquire in the future. Although the
Company will enter into an employment agreement with each of the Company's
executive officers and other key employees, there can be no assurance that any
individual will continue in such capacity for any particular period of time.
The loss of key personnel, or the inability to hire and retain qualified
employees could have an adverse effect on the Company's business, financial
condition and results of operations. The Company does not intend to carry key-
person life insurance on any of its employees. See "Management."

Proceeds of Offering Payable to Affiliates. A portion of the net proceeds of
this Offering will be used to pay the cash portion of the Acquisition
Consideration to the owners of the Founding Companies (many of whom will
become officers, directors or key employees of the Company). A portion of the
remaining net proceeds will be used to repay all or some of the indebtedness
of the Founding Companies, although the exact amount that will be repaid has
not yet been determined. Approximately $7.8 million of such indebtedness was
incurred to make the S Corporation Distributions. Additionally, Main Street
Merchant Partners II, L.P. ("Main Street") has agreed to advance to Quanta
until consummation of the Acquisitions and the Offering, such funds as are
necessary to effect the Acquisitions and the Offering and will be reimbursed
from the proceeds of the Offering for these advances. See "Use of Proceeds"
and "Certain Transactions." Additionally, the Company has entered into leases
of real property and equipment with owners of certain of the Founding
Companies, who will become directors of the Company following the Offering, or
their respective affiliates. Because of these relationships between the
parties, these leases have not been negotiated at arm's length. See "Certain
Transactions."

Shares Eligible for Future Sale. Simultaneously with the closing of the
Offering, the stockholders of the Founding Companies will receive, in the
aggregate, 7,527,000 shares of Common Stock as a portion

12
<PAGE>

of the Acquisition Consideration for their businesses. Additionally, the
initial stockholders of the Company, certain members of management and others
own 3,345,333 shares of Limited Vote Common Stock. None of these shares was or
will be issued in a transaction registered under the Securities Act of 1933,
as amended (the "Securities Act"), and, accordingly, such shares may not be
sold except in transactions registered under the Securities Act or pursuant to
an exemption from registration, including the exemption contained in Rule 144
under the Securities Act. When these shares become eligible for sale, the
market price of the Common Stock could be adversely affected by the sale of
substantial amounts of the shares in the public market. The stockholders of
the Founding Companies have certain registration rights with respect to their
shares to be received that may be exercised after the expiration of the two-
year lock-up period described below. If such stockholders, by exercising such
registration rights, cause a large number of shares to be registered and sold
in the public market, such sales may have an adverse effect on the market
price of the Common Stock. See "Shares Eligible for Future Sale."

Upon the closing of this Offering, the Company also expects to have
outstanding options to purchase up to a total of 1,500,000 shares of Common
Stock issued pursuant to the Company's 1997 Stock Option Plan (the "1997 Stock
Option Plan"). The number of shares issuable pursuant to such plan is the
greater of 2,380,850 shares or 15% of the outstanding Common Stock. The
Company intends to register all the shares subject to these options under the
Securities Act for public resale. See "Management--1997 Stock Option Plan."

The Company has agreed that it will not offer, sell or issue any shares of
Common Stock or options, rights or warrants to acquire any Common Stock for a
period of 180 days after the date of this Prospectus without the prior written
consent of BT Alex. Brown Incorporated, except for the grant of employee stock
options and for shares issued (i) in connection with acquisitions and (ii)
pursuant to the exercise of options granted under the 1997 Stock Option Plan.
Further, the Company's directors, executive officers and certain stockholders
who beneficially own 10,872,333 shares of Common Stock and Limited Vote Common
Stock in the aggregate have agreed not to directly or indirectly offer for
sale, sell or otherwise dispose of any Common Stock or Limited Vote Common
Stock for a period of two years after the date of this Prospectus without the
prior written consent of BT Alex. Brown Incorporated.

The Company currently intends to file a Registration Statement on Form S-1
covering up to an additional 5,000,000 shares of Common Stock under the
Securities Act for its use in connection with future acquisitions. These
shares generally will be freely tradeable after their issuance by persons not
affiliated with the Company unless the Company contractually restricts their
resale.

The effect, if any, of the availability for sale, or sale, of the shares of
Common Stock eligible for future sale on the market price of the Common Stock
prevailing from time to time is unpredictable, and no assurance can be given
that the effect will not be adverse.

No Prior Market; Possible Volatility of Stock Price. Prior to the Offering,
there has been no public market for the Common Stock. The initial public
offering price of the Common Stock will be determined through negotiations
between the Company and the representatives of the Underwriters and may not be
indicative of the price at which the Common Stock will trade after the
Offering. See "Underwriting" for a description of the factors to be considered
in determining the initial public offering price. The securities markets have,
from time to time, experienced significant price and volume fluctuations that
may be unrelated to the operating performance of particular companies. These
fluctuations often substantially affect the market price of a company's stock.
The Common Stock has been approved for listing, subject to notice of issuance,
on the NYSE, although no assurance can be given that an active trading market
for the Common Stock will develop or, if developed, will continue after the
Offering. The market price of the Common Stock could be subject to significant
fluctuations in response to numerous factors, including the timing of
acquisitions by the Company, variations in financial results or announcements
of material events by the Company or its competitors. Regulatory changes,
developments in the Company's industry or changes in general conditions in the
economy or the financial markets could also adversely affect the market price
of the Common Stock.

13
<PAGE>

Certain Anti-Takeover Provisions. Certain provisions of the Company's
Amended and Restated Certificate of Incorporation and Bylaws and Delaware law
could, together or separately, discourage potential acquisition proposals,
delay or prevent a change in control of the Company or limit the price that
certain investors may be willing to pay in the future for shares of the Common
Stock. The Amended and Restated Certificate of Incorporation permits the Board
of Directors to determine the rights, preferences and restrictions of unissued
series of the Company's authorized Preferred Stock and to fix the number and
the designation of shares thereunder and to adopt amendments to the Bylaws.
The Bylaws contain restrictions regarding the right of stockholders to
nominate directors and to submit proposals to be considered at stockholder
meetings. Also, the Amended and Restated Certificate of Incorporation and
Bylaws restrict the right of stockholders to call a special meeting of
stockholders and to act by written consent. The Company also is subject to
Section 203 of the Delaware General Corporation Law (the "DGCL"), which,
subject to certain exceptions, prohibits a Delaware corporation from engaging
in any of a broad range of business transactions with an "interested
stockholder" for a period of three years following the date such stockholder
became an interested stockholder. See "Description of Capital Stock."

Immediate and Substantial Dilution. Purchasers of shares of the Common Stock
offered hereby will experience immediate and substantial dilution in the net
tangible book value of their shares in the amount of $6.78 per share from the
initial public offering price. See "Dilution." In the event the Company issues
additional Common Stock in the future, including shares that may be issued in
connection with future acquisitions or other public or private financings,
purchasers of Common Stock in the Offering may experience further dilution in
the net tangible book value per share of the Common Stock.

Absence of Dividends. The Company has never paid any cash dividends and does
not anticipate paying cash dividends on its Common Stock in the immediate
future. See "Dividend Policy."

Forward-Looking Statements. There are a number of statements in this
Prospectus that address activities, events or developments which the Company
expects or anticipates will or may occur in the future, including such matters
as the Company's strategy for internal growth and improved profitability,
additional capital expenditures (including the amount and nature thereof),
acquisitions of assets and businesses, industry trends and other such matters.
These statements are based on certain assumptions and analyses made by the
Company in light of its perception of historical trends, current business and
economic conditions and expected future developments as well as other factors
it believes are reasonable or appropriate. However, whether actual results and
developments will conform with the Company's expectations and predictions is
subject to a number of risks and uncertainties, including the risk factors
discussed in this Prospectus; general economic, market or business conditions;
the business opportunities (or lack thereof) that may be presented to and
pursued by the Company; changes in laws or regulations and other factors, most
of which are beyond the control of the Company. Consequently, there can be no
assurance that the actual results or developments anticipated by the Company
will be realized or, even if substantially realized, that they will have the
expected consequences to or effects on the Company or its business or
operations.

14
<PAGE>

THE COMPANY

Quanta was founded in August 1997 to create a leading provider of specialty
electric and telecommunications infrastructure contracting services.
Concurrently with and as a condition to the closing of the Offering, Quanta
will acquire the four Founding Companies. For the year ended December 31,
1996, the Founding Companies, which have been in business an average of 36
years, had pro forma combined annual revenues of approximately $108.1 million.
A brief description of each of the Founding Companies is set forth below.

PAR. PAR was founded in 1954 and is headquartered in North Kansas City,
Missouri. PAR maintains additional offices in Topeka, Kansas; Coal, Missouri;
Des Moines, Iowa; Aurora, Colorado and El Cajon, California and in 1996
provided services to customers in Missouri, Iowa, Colorado, Kansas, Nebraska,
California, Montana, Illinois, Hawaii, Utah and Wyoming. PAR had revenues of
approximately $42.7 million for the year ended December 31, 1996 and currently
has approximately 450 employees. PAR provides full electric infrastructure
contracting services, including installation of electrical transmission lines,
both underground and above ground, and distribution lines and construction of
electric substations. In addition, PAR provides emergency electrical
restoration services and other routine electrical system maintenance services.
John R. Colson, former President of PAR and the Chief Executive Officer of the
Company, will become a director of the Company following consummation of the
Offering. John R. Wilson, who is President of PAR, will become a director of
the Company following consummation of the Offering. Both of those individuals
will enter into three-year employment agreements with the Company.

UNION POWER. Union Power was founded in 1946 and is headquartered in
Englewood, Colorado. Union Power maintains additional offices in Las Vegas and
Reno, Nevada and Vacaville, California and in 1996 provided services to
customers in Colorado, Nevada, California, Oregon, Washington and Utah. Union
Power had revenues of approximately $42.8 million for the year ended August
31, 1997 and currently has approximately 300 employees. Union Power provides
electric infrastructure contracting services, including installation of
electrical transmission lines, both underground and above ground, and
distribution lines and construction of electric substations. In addition,
Union Power provides electrical repair and maintenance services. Timothy A.
Soule and Ronald W. Soule, who are officers of Union Power, will enter into
three-year employment agreements with the Company, and Mr. Timothy Soule will
become a director of the Company following consummation of the Offering.

TRANS TECH. TRANS TECH was founded in 1983, is headquartered in South Bend,
Indiana and in 1996 provided services to customers in Indiana, Kentucky and
Michigan. TRANS TECH had revenues of approximately $24.4 million for the year
ended December 31, 1996 and currently has approximately 205 employees. TRANS
TECH installs, maintains and repairs traffic signals, signage, highway control
systems components, highway and airport lighting and fiber optics for states
and other governmental entities. The company also performs traditional
electrical contracting services for private and public entities in the
commercial and industrial markets. Robert J. Urbanski and John A. Martell, who
are officers and founders of TRANS TECH, will enter into three-year employment
agreements with the Company, and Mr. Martell will become a director of the
Company following consummation of the Offering.

POTELCO. Potelco was founded in 1965 and is headquartered near Seattle,
Washington. Potelco maintains an additional office in Spokane, Washington and
in 1996 provided services to customers in Washington, Oregon and Idaho.
Potelco had revenues of approximately $14.5 million for the year ended
December 31, 1996 and currently has approximately 145 employees. Potelco
provides electric and telecommunication infrastructure contracting services,
including installation of overhead and underground lines and facilities for
the power, telecommunications and cable television industries. In addition,
Potelco provides electrical and telecommunication installation, maintenance
and repair services to the commercial and industrial markets. Gary A. Tucci,
President of Potelco, will enter into a three-year employment agreement with
the Company and will become a director of the Company following consummation
of the Offering.

Quanta was incorporated in Delaware in August 1997 under the name Fabal
Construction, Inc. and changed its name to Quanta Services, Inc. in November
1997. See "Certain Transactions--Organization of the Company." Its executive
offices are located at 3555 Timmons Lane, Suite 610, Houston, Texas 77027, and
its telephone number at that address is (713) 629-7600.

15
<PAGE>

USE OF PROCEEDS

The net proceeds to the Company from the sale of the shares of Common Stock
offered hereby (after deducting underwriting discounts and commissions and
estimated Offering and Acquisitions expenses) are estimated to be $38.9
million ($45.2 million if the Underwriters' over-allotment option is exercised
in full), assuming an initial public offering price of $9.00 per share. Since
November 1997, Main Street Merchant Partners II, L.P. ("Main Street") has
advanced funds to the Company to enable the Company to pay various expenses
incurred in connection with its efforts to complete the Acquisitions and
consummate the Offering. Main Street's advances, which totaled approximately
$1.0 million as of January 22, 1998, and are estimated to total approximately
$2.9 million in the aggregate, will be repaid from the net proceeds of the
Offering.

Of the net proceeds, the Company estimates that approximately $21.0 million
will be used to pay the cash portion of the Acquisition Consideration, all of
which will be paid to former stockholders of the Founding Companies and some
of which will be paid to persons who will become directors of the Company upon
consummation of the Offering. In addition, the Company may use up to $17.6
million to repay outstanding indebtedness of the Founding Companies, although
the exact amount and specific debt to be repaid has not been determined at
this time. The remaining net proceeds will be used for working capital and for
general corporate purposes, which are expected to include future acquisitions.
Pending such uses, the Company intends to invest the remaining net proceeds in
short-term, investment grade, interest bearing securities. While the Company
is continuously considering possible acquisition prospects as part of its
growth strategy, the Company presently has no binding agreements to effect any
mergers or acquisitions other than the Acquisitions.

DIVIDEND POLICY

The Company currently intends to retain its future earnings, if any, to
finance the growth, development and expansion of its business and,
accordingly, does not currently intend to declare or pay any cash dividends on
the Common Stock in the immediate future. The declaration, payment and amount
of future cash dividends, if any, will be at the discretion of the Company's
Board of Directors after taking into account various factors, including, among
others, the Company's financial condition, results of operations, cash flows
from operations, current and anticipated capital requirements and expansion
plans, the income tax laws then in effect and the requirements of Delaware
law. In addition, the Company expects that the terms of any credit facility
that it may obtain in the future will include restrictions on payment of cash
dividends by the Company without the consent of the lender.

Prior to the Acquisitions, certain of the Founding Companies will make the S
Corporation Distributions to their stockholders in the amount of approximately
$7.8 million.

16
<PAGE>

CAPITALIZATION

The following table sets forth the current maturities of long-term
obligations and the capitalization as of September 30, 1997 of the Company (i)
on a pro forma basis after giving effect to the Acquisitions and related
transactions and (ii) on a pro forma combined basis, as adjusted to give
effect to both the Acquisitions and related transactions and the Offering and
the application of estimated net proceeds therefrom. See "Use of Proceeds."
This table should be read in conjunction with "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and the Unaudited
Pro Forma Combined Financial Statements of the Company and the related notes
thereto included elsewhere in this Prospectus.

<TABLE>
<CAPTION>
PRO FORMA
---------------------------
SEPTEMBER 30, 1997
---------------------------
COMBINED(1) AS ADJUSTED(4)
----------- --------------
(IN THOUSANDS)
<S> <C> <C>
Current maturities of long-term obligations(3)..... $41,016(2) $ 7,841
======= =======
Long-term debt, less current maturities............ $ 5,421 $ --
------- -------
Stockholders' equity:
Preferred Stock: $0.00001 par value, 10,000,000
shares authorized; none issued or outstanding... -- --
Common Stock: $0.00001 par value, 40,000,000
shares authorized; 7,527,000 issued and
outstanding, pro forma combined; and 12,527,000
shares issued and outstanding, pro forma as
adjusted(4)..................................... -- --
Limited Vote Common Stock; $0.00001 par value,
3,345,333 shares authorized, issued and
outstanding(5).................................. -- --
Additional paid-in capital....................... 45,400 84,280
Unrealized loss on securities.................... (56) (56)
Retained earnings................................ 10,913 10,913
------- -------
Total stockholders' equity..................... 56,257 95,137
------- -------
Total capitalization......................... $61,678 $95,137
======= =======
</TABLE>
- --------
(1) Combines the respective accounts of Quanta and the Founding Companies as
reflected in the Unaudited Pro Forma Combined Balance Sheet as of
September 30, 1997 prior to the Offering.

(2) Includes $21.0 million payable to the owners of the Founding Companies,
which represents the cash portion of the Acquisition Consideration to be
paid from a portion of the net proceeds of the Offering. The cash portion
of the Acquisition Consideration will be adjusted based on the initial
public offering price of the Common Stock offered hereby.

(3) Includes $7.8 million borrowed to fund the S Corporation Distributions.

(4) Adjusted to reflect the sale of 5,000,000 shares of Common Stock offered
hereby and the application of the estimated net proceeds therefrom. See
"Use of Proceeds." Excludes options to purchase 1,500,000 shares of Common
Stock that are expected to be granted upon consummation of the Offering.
See "Management--1997 Stock Option Plan."

(5) All of such shares of Limited Vote Common Stock have been issued to the
initial stockholders and certain management of the Company. See "Certain
Transactions" and "Description of Capital Stock."

17
<PAGE>

DILUTION

The deficit in pro forma combined net tangible book value of the Company at
September 30, 1997 was approximately $(3.7) million, or $(0.34) per share of
Common Stock. The deficit in pro forma combined net tangible book value per
share is determined by dividing the pro forma net tangible book value of the
Company (pro forma combined net tangible assets less pro forma combined total
liabilities) by the number of shares of Common Stock to be outstanding after
giving effect to the Acquisitions. The number of shares includes the
10,872,333 shares outstanding after the Acquisitions but prior to the
Offering. After giving effect to the sale by the Company of 5,000,000 shares
of Common Stock in the Offering and assuming an initial public offering price
of $9.00 per share, after deduction of the underwriting discounts and
commissions and estimated Offering and Acquisitions expenses, the pro forma
combined net tangible book value of the Company at September 30, 1997 would
have been $35.2 million or $2.22 per share. This represents an immediate
increase in pro forma net tangible book value of $2.56 per share to existing
stockholders and an immediate dilution to new investors purchasing Common
Stock in the Offering of $6.78 per share. The following table illustrates the
per share dilution to new investors purchasing Common Stock in the Offering:

<TABLE>
<S> <C> <C>
Assumed initial public offering price per share.................. $9.00
Pro forma combined deficit in net tangible book value per share
prior to the Offering......................................... $(0.34)
Increase in pro forma net tangible book value per share
attributable to new investors................................. 2.56
------
Pro forma net tangible book value per share after the Offering. 2.22
-----
Dilution in net tangible book value per share to new investors... $6.78
=====
</TABLE>

The following table sets forth, on a pro forma combined basis to give effect
to the Acquisitions at September 30, 1997, the number of shares of Common
Stock purchased from the Company, the total consideration paid and the average
price per share paid by (i) existing stockholders, (ii) stockholders of the
Founding Companies and (iii) the new investors purchasing shares from the
Company in the Offering (before deducting underwriting discounts and
commissions and estimated Offering and Acquisition expenses):

<TABLE>
<CAPTION>
SHARES PURCHASED AVERAGE
------------------ TOTAL PRICE
NUMBER PERCENT CONSIDERATION(2) PER SHARE
---------- ------- --------------- ---------
<S> <C> <C> <C> <C>
Existing stockholders and
stockholders of Founding
Companies(1).................... 10,872,333 68.5% $(3,658,000) $(0.34)
New investors.................... 5,000,000 31.5 45,000,000 9.00
---------- ----- -----------
Total.......................... 15,872,333 100.0% $41,342,000
========== ===== ===========
</TABLE>
- --------

(1) See "Certain Transactions" for a discussion of the issuance of Common
Stock to the initial stockholders and certain management of Quanta.

(2) Total consideration paid by Founding Company stockholders represents the
combined stockholders' equity of the Founding Companies before the
Offering, adjusted to reflect: (i) the payment of the estimated $21.0
million in cash to the stockholders of the Founding Companies as part of
the Acquisition Consideration and (ii) the S Corporation Distributions.

18
<PAGE>

SELECTED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE DATA)

Quanta will acquire the Founding Companies simultaneously with and as a
condition to the consummation of the Offering. For financial statement
presentation purposes, however, PAR has been identified as the "accounting
acquiror," as its stockholders will represent the largest voting interest
within the Company. The following selected historical financial data for PAR
as of December 31, 1996 and September 30, 1997 and for each of the three years
in the period ended December 31, 1996, and the nine months ended September 30,
1997, have been derived from the audited financial statements of PAR included
elsewhere in this Prospectus. The following selected historical financial data
for PAR as of December 31, 1992, 1993, 1994, and 1995 and for each of the two
years in the period ended December 31, 1993 and as of and for the nine months
ended September 30, 1996 have been derived from the unaudited financial
statements of PAR, which have been prepared on the same basis as the audited
financial statements and, in the opinion of PAR's management, reflect all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair presentation of such data. The results of operations for the nine months
ended September 30, 1997 should not be regarded as indicative of the results
that may be expected for the full year.

The selected unaudited pro forma combined financial data below present
certain data for the Company, adjusted for (i) the Acquisitions, (ii) the
effects of certain other pro forma adjustments to the historical financial
statements and (iii) the consummation of the Offering and the application of
the net proceeds therefrom. The unaudited pro forma combined income statement
data assume that the Acquisitions, the Offering and related transactions were
closed on January 1, 1996, and are not necessarily indicative of the results
the Company would have obtained had these events actually then occurred or of
the Company's future results. During the periods presented below, the Founding
Companies were not under common control or management and, therefore, the data
presented may not be comparable to or indicative of post-combination results
to be achieved by the Company. The unaudited pro forma combined income
statement data should be read in conjunction with the other financial
information included elsewhere in this Prospectus. See Unaudited Pro Forma
Combined Financial Statements and the notes thereto included elsewhere in this
Prospectus.

<TABLE>
<CAPTION>
NINE MONTHS
ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------------- ----------------
1992 1993 1994 1995 1996 1996 1997
------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
HISTORICAL STATEMENT OF
OPERATIONS DATA:
PAR
Revenues.............. $23,803 $26,553 $43,909 $38,915 $42,684 $29,806 $36,439
Cost of services
(including
depreciation)........ 19,571 22,834 36,525 33,193 35,789 25,583 27,944
------- ------- ------- ------- ------- ------- -------
Gross profit.......... 4,232 3,719 7,384 5,722 6,895 4,223 8,495
Selling, general and
administrative ex-
penses............... 3,325 2,895 4,836 4,342 5,012 3,560 5,013
------- ------- ------- ------- ------- ------- -------
Income from
operations........... 907 824 2,548 1,380 1,883 663 3,482
Other income
(expense), net....... (216) (251) (412) (512) (646) (458) (567)
------- ------- ------- ------- ------- ------- -------
Income before
provision for income
taxes................ 691 573 2,136 868 1,237 205 2,915
Provision for income
taxes................ 181 152 867 353 487 82 1,172
------- ------- ------- ------- ------- ------- -------
Net income............ $ 510 $ 421 $ 1,269 $ 515 $ 750 $ 123 $ 1,743
======= ======= ======= ======= ======= ======= =======
</TABLE>

19
<PAGE>

<TABLE>
<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
1996 1997
------------ -------------
<S> <C> <C>
PRO FORMA COMBINED:
Revenues.......................................... $108,143 $108,666
Cost of services (including depreciation)......... 91,769 87,296
-------- --------
Gross profit...................................... 16,374 21,370
Selling, general and administrative expenses(1)... 8,394 7,293
Goodwill amortization(2).......................... 1,498 1,123
-------- --------
Income from operations............................ 6,482 12,954
Other income (expense), net(3).................... (400) (178)
-------- --------
Income before income tax expense.................. 6,082 12,776
Provision for income taxes(4)..................... 2,994 5,424
-------- --------
Net income........................................ $ 3,088 $ 7,352
======== ========
Net income per share.............................. $ 0.20 $ 0.46
======== ========
Shares used in computing pro forma income per
share(5)......................................... 15,835 15,835
</TABLE>

<TABLE>
<CAPTION>
HISTORICAL PRO FORMA
----------------------------------------------------- --------------------------
DECEMBER 31, SEPTEMBER 30, 1997
--------------------------------------- --------------------------
SEPTEMBER 30, AS
1992 1993 1994 1995 1996 1997 COMBINED(6) ADJUSTED(7)
------- ------- ------- ------- ------- ------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:(8)
Working capital
(deficit)............ $ 1,157 $ 1,162 $ 1,959 $ 1,344 $ 653 $ (549) $(19,473)(9) $13,986
Total assets.......... 11,610 11,786 18,365 18,595 20,699 27,438 125,842 126,126
Long-term debt, net of
current maturities... 2,194 1,225 3,532 2,932 2,000 1,867 5,421 --
Total stockholders'
equity............... 4,753 5,174 6,443 6,958 7,708 9,451 56,257 95,137
</TABLE>
- --------

(1) The unaudited pro forma combined statement of operations data reflect an
aggregate of approximately $0.9 million and $1.8 million for the year
ended December 31, 1996 and the nine months ended September 30, 1997,
respectively, in pro forma reductions in salary, bonus and benefits of the
owners of the Founding Companies to which they have agreed prospectively.
Additionally, excludes the $11.5 million non-recurring, non-cash charge
recognized by Quanta related to the issuance of stock to an initial
stockholder and management, as a result of the issuance of such shares for
nominal consideration. See Note 2 of Notes to Financial Statements of
Quanta.

(3) Reflects the reduction for interest expense of $1.4 million and $1.0
million for the year ended December 31, 1996 and the nine months ended
September 30, 1997, respectively, attributable to the repayment of $17.6
million of historical debt of the Founding Companies with proceeds from
the Offering, net of additional interest expense discussed in Note 8
below. Additionally, reflects reductions in expenses associated with
certain non-operating assets that will be transferred to the Founding
Companies prior to the Acquisitions.

(4) Assumes all pretax income before non-deductible goodwill and other
permanent items is subject to an estimated 39.0% combined tax rate.

20
<PAGE>

(5) Includes (i) 7,527,000 shares of Common Stock to be issued to the owners
of the Founding Companies, (ii) 3,345,333 shares of Limited Vote Common
Stock issued to the initial stockholders and certain management personnel
of the Company and (iii) 4,962,259 shares of the 5,000,000 shares of
Common Stock to be sold in the Offering to pay the cash portion of the
Acquisition Consideration, to repay expenses incurred in connection with
the organization of Quanta and the Offering and to retire debt.

(8) Two of the Founding Companies have historically elected S corporation
status for tax purposes. Prior to the Acquisitions, these Founding
Companies will make the S Corporation Distributions to their stockholders
totaling approximately $7.8 million. In order to fund the S Corporation
Distributions, the Company will borrow approximately $7.8 million.
Accordingly, pro forma interest expense has been increased by $0.7 million
for the year ended December 31, 1996 and $0.5 million for the nine months
ended September 30, 1997 and pro forma stockholders' equity has been
reduced by approximately $7.8 million.

21
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis contains certain statements of a
forward-looking nature relating to future events or the future financial
performance of the Company. Such statements are only predictions and the
actual events or results may differ materially from the results discussed in
the forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed in "Risk
Factors," as well as those discussed elsewhere in this Prospectus. The
historical results set forth in this discussion and analysis are not
indicative of trends with respect to any actual or projected future financial
performance of the Company. This discussion and analysis should be read in
conjunction with the Unaudited Pro Forma Combined Financial Statements, the
Founding Companies' Financial Statements and the related Notes thereto
included elsewhere in this Prospectus.

INTRODUCTION

The Company's revenues are derived from providing specialty electrical
contracting and maintenance services related to electric and
telecommunications infrastructure, providing electrical contracting services
to the commercial and industrial markets and installing transportation control
and lighting systems. The Company's services include the installation, repair
and maintenance of electric power transmission and distribution lines and
telecommunication and cable television lines, the construction of electric
substations, the erection of cellular telephone, PCS(R) and microwave towers,
the installation of highway lighting and traffic control systems, design and
engineering services, as well as the provision of specialty contracting
services for electric, video, security, fire, voice and data systems. The
Company's customers include electric utilities, telecommunication and cable
television system operators, governmental entities, general contractors and
owners and managers of commercial and industrial properties. The Company had
pro forma combined revenues for the nine months ended September 30, 1997 of
$108.7 million, of which 71% was attributable to electric utility
infrastructure services, 7% was attributable to telecommunications
infrastructure services, 11% was attributable to commercial and industrial
services and 11% was attributable to transportation control and lighting
systems services.

The Company enters into contracts principally on the basis of competitive
bids, the final terms and prices of which are frequently negotiated with the
customer. Although the terms of the contracts undertaken by the Company vary
considerably, the contracts are usually on either a lump sum or unit price
basis in which the Company agrees to do the work for a fixed amount for the
entire project (lump sum) or for units of work performed (unit price). Most
installation projects are completed within one year, while maintenance and
repair work is frequently provided under open-ended, unit price master service
agreements which are renewable annually. Revenues from lump sum contracts are
generally recorded on a percentage-of-completion basis, using the cost-to-cost
method based on the percentage of total costs incurred to date in proportion
to total estimated costs to complete the contract. The Company recognizes
revenue when services are performed except when work is being performed under
a fixed price or cost-plus-fee contract. Such contracts generally provide that
the customer accept completion of progress to date and compensate the Company
for services which have been rendered, measured typically in terms of units
installed, hours expended or some other measure of progress. Certain of the
Company's customers require the Company to post performance and payment bonds
upon execution of the contract, depending upon the nature of the work to be
performed. The Company's fixed price contracts often include payment
provisions pursuant to which the customer withholds a 5% to 10% retainage from
each progress payment and forwards the retainage to the Company upon
completion and approval of the work.

Costs of services consist primarily of salaries and benefits to employees,
depreciation, fuel and other vehicle expenses, equipment rentals,
subcontracted services, materials, parts and supplies. The Company's gross
margin, which is gross profit expressed as a percentage of revenues, is
typically higher on projects where labor, rather than materials, constitutes a
greater portion of the cost of services. Labor costs can be

22
<PAGE>

calculated with relatively less accuracy than materials costs. Therefore, to
compensate for the potential variability of labor costs, the Company seeks to
maintain higher margins on its labor-intensive projects. Selling, general and
administrative expenses consist primarily of compensation and related benefits
to owners, administrative salaries and benefits, marketing, office rent and
utilities, communications and professional fees.

The Founding Companies have operated throughout the periods presented as
independent, privately-owned entities, and their results of operations reflect
varying tax structures (S corporations or C corporations) which have
influenced the historical level of owners' compensation. Gross profits and
selling, general and administrative expenses as a percentage of revenues may
not be comparable among the individual Founding Companies. In connection with
the Acquisitions, certain owners of the Founding Companies have agreed to
reductions in their compensation and related benefits totaling $0.9 million
versus 1996 levels. Such reductions have been reflected as a pro forma
adjustment in the Unaudited Pro Forma Combined Statement of Operations and in
the terms of the employment agreements to be entered into between these
persons and the Company.

The Company believes that it will realize savings from (i) consolidation of
insurance and bonding programs, (ii) reduction in other general and
administrative expenses such as training, marketing, communications and
professional fees, (iii) the Company's ability to borrow at lower interest
rates than most, if not all, of the Founding Companies, (iv) consolidation of
operations in certain locations and (v) greater volume discounts from
suppliers of materials, parts and supplies. It is anticipated that costs
related to the Company's new corporate management, being a public company and
integrating the Acquisitions will offset these savings. The Company believes
that neither these savings nor the costs associated therewith can be
quantified because the Acquisitions have not yet occurred, and there have been
no combined operating results upon which to base any assumptions. As a result,
these savings and associated costs have not been included in the pro forma
financial information included herein.

In November 1997, the Company sold 1.7 million shares of Limited Vote Common
Stock to management and an initial stockholder. As a result, the Company will
record a non-recurring, non-cash compensation charge of $11.5 million,
representing the difference between the amount paid for the shares and the
estimated fair value of the shares on the date of sale (the "Compensation
Charge"). The Compensation Charge has been estimated based on a fair value
that is discounted from the estimated initial public offering price. This non-
recurring Compensation Charge is not included in the Unaudited Pro Forma
Combined Financial Statements.

The Acquisitions will be accounted for using the purchase method of
accounting. PAR has been designated as the "accounting acquiror" in the
Acquisitions. Accordingly, the excess of the fair value of the consideration
paid for the Acquisitions of $37.3 million over the fair value of the net
assets acquired by PAR from the other Founding Companies will be recorded as
"goodwill." In addition, goodwill of $22.6 million will be recorded
attributable to the 3,345,333 shares of Limited Vote Common Stock issued to
initial stockholders and management. Together, this goodwill, totaling $59.9
million, will be amortized over its estimated useful life of 40 years as a
non-cash charge to operating income. The pro forma effect of this amortization
expense, which is not deductible for tax purposes, is expected to be
approximately $1.5 million per year. The amount of goodwill to be recorded and
the related amortization expense will depend in part on the actual Offering
price. See "Certain Transactions--Organization of the Company."

REGULATORY MATTERS

The Company's operations are subject to the authority of various state and
municipal regulatory bodies concerned with the licensing of contractors. The
Company has experienced no material difficulty in complying with the
requirements imposed on it by such regulatory bodies. See "Business--
Regulation."

23
<PAGE>

SEASONALITY; FLUCTUATIONS OF QUARTERLY RESULTS

The Company's results of operations can be subject to seasonal variations.
Generally, during the winter months, demand for new projects and maintenance
services may be lower due to reduced construction activity during such
weather, while demand for electrical service and repairs may be higher due to
damage caused by inclement weather. Additionally, the industry can be highly
cyclical. As a result, the Company's volume of business may be adversely
affected by declines in new projects in various geographic regions in the U.S.
Quarterly results may also be materially affected by the timing of
acquisitions, variations in the margins of projects performed during any
particular quarter, the timing and magnitude of acquisition assimilation costs
and regional economic conditions. Accordingly, the Company's operating results
in any particular quarter may not be indicative of the results that can be
expected for any other quarter or for the entire year.

COMBINED LIQUIDITY AND CAPITAL RESOURCES

Upon consummation of the Acquisitions and after applying the estimated net
proceeds of the Offering as discussed under "Use of Proceeds," the Company
will have $2.5 million of pro forma cash and cash equivalents, $14.0 million
of pro forma working capital and no outstanding indebtedness other than debt
relating to the S Corporation Distributions. It is anticipated that the
Founding Companies' historical indebtedness of $17.6 million will be repaid
from the proceeds of the Offering. See discussion of individual Founding
Companies' liquidity and capital resources included elsewhere herein.

In connection with and prior to the Acquisitions, certain Founding Companies
will make the S Corporation Distributions to their owners of substantially all
of their previously-taxed undistributed earnings. The pro forma combined
financial statements as of September 30, 1997 included elsewhere in this
Prospectus reflect pro forma adjustments for the estimated amount of these S
Corporation Distributions had they occurred in their entirety as of September
30, 1997. These pro forma adjustments reflect $7.8 million of S Corporation
Distributions.

The Company has entered into a preliminary agreement with a commercial bank
under which it expects to enter into a credit facility effective concurrent
with the closing of the Offering. The terms and conditions of the agreement
provide for an unsecured five year $50,000,000 revolving credit facility to
provide funds to be used for working capital, to finance acquisitions and for
other general corporate purposes. Amounts borrowed under the proposed credit
facility will bear interest at a rate equal to either (a) the London Interbank
Offered Rate ("LIBOR") plus 0.75% to 1.75%, as determined by the ratio of the
Company's total funded debt to EBITDA (as defined in the credit facility) or
(b) the bank's prime rate plus up to 0.25%, as determined by the ratio of the
Company's total funded debt to EBITDA. Commitment fees of 0.175% to 0.30%
(based on certain financial ratios) are due on any unused borrowing capacity
under the credit facility. The Company's existing and future subsidiaries will
guarantee the repayment of all amounts due under the facility and the facility
restricts pledges on all material assets. The Company expects that the credit
facility will require usual and customary covenants for a credit facility of
this nature including the consent of the lenders for acquisitions exceeding a
certain level of cash consideration.

As part of its growth strategy, the Company intends to pursue an acquisition
program. The timing, size or success of any acquisition effort and the
associated potential capital commitments cannot be predicted. The Company
expects to fund future acquisitions primarily with a portion of the net
proceeds of the Offering, working capital, issuances of additional equity,
borrowings, including any unborrowed portion of the proposed credit facility,
as well as cash flow from operations. The Company anticipates that its cash
flow from operations and proceeds from the Offering will provide sufficient
cash to enable the Company to meet its working capital needs, debt service
requirements and planned capital expenditures for property and equipment
through 1998. On a combined basis, the Founding Companies made capital
expenditures of $5.5 million in fiscal 1996.

24
<PAGE>

Due to relatively low levels of inflation experienced during the years ended
December 31, 1995 and 1996 and the first nine months of 1997, inflation did
not have a significant effect on the results of the combined Founding
Companies in those periods.

INDIVIDUAL FOUNDING COMPANIES

The selected historical financial information presented in the tables below
is derived from the respective audited financial statements of the Founding
Companies included elsewhere herein. The following discussion should be read
in conjunction with the Financial Statements of the Founding Companies and the
notes thereto appearing elsewhere in this Prospectus.

For financial statement presentation purposes, as required by the rules and
regulations of the Securities Act, PAR has been identified as the accounting
acquiror, as its shareholders will represent the largest shareholding interest
in Quanta.

PAR RESULTS OF OPERATIONS

PAR was founded in 1954 and is headquartered in North Kansas City, Missouri.
It operates primarily throughout the Midwestern and Western U.S. and maintains
divisional offices in Topeka, Kansas; Coal, Missouri; Des Moines, Iowa;
Aurora, Colorado and El Cajon, California. PAR focuses on providing full
electric infrastructure contracting services, including installation of
electric transmission lines, both underground and above ground, and
distribution lines and construction of electric substations. In 1996, PAR
provided services in Missouri, Iowa, Colorado, Kansas, Nebraska, California,
Montana, Illinois, Hawaii, Utah and Wyoming.

The following table sets forth selected statement of operations data and
such data as a percentage of revenues for the periods indicated:

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31 SEPTEMBER 30,
------------------------------------------- ----------------------------
1994 1995 1996 1996 1997
------------- ------------- ------------- ------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues................ $43,909 100.0% $38,915 100.0% $42,684 100.0% $29,806 100.0% $36,439 100.0%
Cost of services........ 36,525 83.2 33,193 85.3 35,789 83.8 25,583 85.8 27,944 76.7
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Gross profit.......... 7,384 16.8 5,722 14.7 6,895 16.2 4,223 14.2 8,495 23.3
Selling, general and
administrative
expenses............... 4,836 11.0 4,342 11.2 5,012 11.7 3,560 11.9 5,013 13.8
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Income from operations.. $ 2,548 5.8% $ 1,380 3.5% $ 1,883 4.5% $ 663 2.3% $ 3,482 9.5%
======= ===== ======= ===== ======= ===== ======= ===== ======= =====
</TABLE>

PAR results for the nine months ended September 30, 1997 compared to the nine
months ended September 30, 1996

Revenues. Revenues increased $6.6 million, or 22.1%, from $29.8 million for
the nine months ended September 30, 1996 to $36.4 million for the nine months
ended September 30, 1997, primarily as a result of an increased demand for the
Company's services in Missouri and California.

Gross profit. Gross profit increased $4.3 million, or 102.4%, from $4.2
million for the nine months ended September 30, 1996 to $8.5 million for the
nine months ended September 30, 1997. As a percentage of revenues, gross
profit increased from 14.2% to 23.3%. The increase in gross profit and gross

25
<PAGE>

margin is primarily due to increased labor productivity, renegotiated unit
pricing on certain long-term contracts, lower insurance expense and lower
equipment rental expense as PAR replaced rental equipment on certain projects
with company-owned equipment.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $1.4 million, or 38.9%, from $3.6 million
for the nine months ended September 30, 1996 to $5.0 million for the nine
months ended September 30, 1997, primarily due to increased administrative
support required by the higher level of revenues and increases in owner
compensation. As a percentage of revenues, selling, general and administrative
expenses remained relatively constant.

PAR results for the year ended December 31, 1996 compared to the year ended
December 31, 1995

Revenues. Revenues increased $3.8 million, or 9.8%, from $38.9 million for
the year ended December 31, 1995 to $42.7 million for the year ended December
31, 1996, primarily as a result of increased demand for the company's services
in Colorado and, to a lesser extent, in California, but were partially offset
by decreased activity in Missouri.

Gross profit. Gross profit increased $1.2 million, or 21.1%, from $5.7
million for the year ended December 31, 1995 to $6.9 million for the year
ended December 31, 1996. As a percentage of revenues, gross profit increased
from 14.7% to 16.2%. This increase in gross profit was a result of improved
labor productivity and asset utilization but was partially offset by increases
in insurance costs and higher costs than anticipated on certain contracts.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $0.7 million, or 16.3%, from $4.3 million
for the year ended December 31, 1995 to $5.0 million for the year ended
December 31, 1996, primarily due to increases in administrative salaries
required to support the higher level of revenues generated from an increased
volume of projects and increases in owner compensation. As a percentage of
revenues, selling, general, and administrative expenses increased from 11.2%
to 11.7%.

PAR results for the year ended December 31, 1995 compared to the year ended
December 31, 1994

Revenues. Revenues decreased $5.0 million, or 11.4%, from $43.9 million for
the year ended December 31, 1994 to $38.9 million for the year ended December
31, 1995, primarily due to severe winter weather in the Midwest during 1994,
which caused extraordinary damage to power transmission and distribution
lines, creating the need for increased repair work in 1994 when compared to
1995. Also, merger activity between utilities in Iowa in 1995 resulted in a
lower volume of activity by certain customers. The declines were partially
offset by increased demand for services in Missouri, Kansas and Colorado.

Gross profit. Gross profit decreased $1.7 million, or 23.0%, from $7.4
million for the year ended December 31, 1994 to $5.7 million for the year
ended December 31, 1995. As a percentage of revenues, gross profit decreased
to 14.7% from 16.8%. This decrease in gross profit margin was primarily due to
the decreased level of revenues.

Selling, general and administrative expenses. Selling, general and
administrative expenses decreased $0.5 million, or 10.4%, from $4.8 million
for the year ended December 31, 1994 to $4.3 million for the year ended
December 31, 1995, primarily due to a decrease in owner compensation. As a
percentage of revenues, selling, general and administrative expenses remained
relatively constant.

26
<PAGE>

PAR liquidity and capital resources

PAR generated $3.0 million of net cash from operating activities for the
nine months ended September 30, 1997. Net cash used in investing activities
was approximately $4.6 million, primarily for the purchase of operating
equipment and vehicles. Net cash provided by financing activities of $1.1
million resulted from net borrowings of long-term debt and borrowings under
PAR's line of credit for purchases of operating equipment and vehicles.

At September 30, 1997, PAR had a working capital deficit of $0.5 million and
total long-term debt of $1.9 million outstanding. PAR generated $2.7 million
in net cash from operating activities for the twelve months ended December 31,
1996. Net cash used in investing activities was approximately $2.6 million,
principally for the purchase of operating equipment. Net cash used in
financing activities of $0.4 million resulted from repayments of long-term
debt.

At December 31, 1996, PAR had working capital of $0.7 million and $2.0
million of total long-term debt outstanding.

UNION POWER RESULTS OF OPERATIONS

Union Power was founded in 1946, and is headquartered in Englewood,
Colorado. It operates primarily west of the Mississippi River and in 1996
provided services to customers in California, Colorado, Nevada, Oregon, Utah
and Washington. Union Power is primarily involved in providing electric
infrastructure contracting services, including installation of electrical
transmission lines, both underground and above ground, and distribution lines
and construction of electric substations. In addition, Union Power provides
electrical repair and maintenance services.

The following table sets forth selected statement of operations data and
such data as a percentage of revenues for the periods indicated:

<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED AUGUST 31, NOVEMBER 30,
------------------------------------------- ---------------------------
1995 1996 1997 1996 1997
------------- ------------- ------------- ------------ -------------
(DOLLARS IN THOUSANDS) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues................ $12,614 100.0% $25,636 100.0% $42,792 100.0% $7,211 100.0% $15,357 100.0%
Cost of services........ 10,240 81.2 22,319 87.1 37,766 88.3 6,037 83.7 13,474 87.7
------- ----- ------- ----- ------- ----- ------ ----- ------- -----
Gross profit.......... 2,374 18.8 3,317 12.9 5,026 11.7 1,174 16.3 1,883 12.3
Selling, general and
administrative
expenses............... 1,896 15.0 1,563 6.1 1,966 4.6 491 6.8 677 4.4
------- ----- ------- ----- ------- ----- ------ ----- ------- -----
Income from operations.. $ 478 3.8% $ 1,754 6.8% $ 3,060 7.1% $ 683 9.5% $ 1,206 7.9%
======= ===== ======= ===== ======= ===== ====== ===== ======= =====
</TABLE>

Union Power results for the three months ended November 30, 1997 compared to
the three months ended November 30, 1996

Revenues. Revenues increased $8.2 million, or 113.0%, from $7.2 million for
the three months ended November 30, 1996 to $15.4 million for the three months
ended November 30, 1997, primarily due to increased demand for Union Power's
services in Nevada, a higher volume of work in California and increased
outsourcing of required services by utility customers, which resulted in a
higher component of subcontracted work.

Gross profit. Gross profit increased $0.7 million, or 60.4%, from $1.2
million for the three months ended November 30, 1996 to $1.9 million for the
three months ended November 30, 1997, primarily as a result of the increase in
sales. As a percentage of revenues, gross profit decreased to 12.3% from 16.3%
primarily as a result of a higher proportion of subcontract work and low
margin material costs.

27
<PAGE>

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $0.2 million, or 37.9%, from $0.5 million
for the three months ended November 30, 1996 to $0.7 million for the three
months ended November 30, 1997, due primarily to growth in the Company's
office staff needed to support the increased sales. As a percentage of
revenues, selling, general and administrative expenses decreased from 6.8% to
4.4% primarily due to economies of scale.

Union Power results for the year ended August 31, 1997 compared to the year
ended August 31, 1996

Revenues. Revenues increased $17.2 million, or 67.2%, from $25.6 million for
the year ended August 31, 1996 to $42.8 million for the year ended August 31,
1997, primarily due to increased demand for the Company's services in Nevada,
a higher volume of work in California and increased outsourcing of required
services by utility customers, which resulted in a higher component of
subcontracted work.

Gross profit. Gross profit increased $1.7 million, or 51.5%, from $3.3
million for the year ended August 31, 1996 to $5.0 million for the year ended
August 31, 1997. As a percentage of revenues, gross profit decreased to 11.7%
from 12.9% primarily as a result of a higher percentage of work being
subcontracted at lower margins and higher costs than anticipated on certain
projects.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $0.4 million, or 25.0%, from $1.6 million
for the year ended August 31, 1996 to $2.0 million for the year ended August
31, 1997 due to the continued expansion into the California and Nevada
markets. As a percentage of revenues, selling, general and administrative
expenses decreased from 6.1% to 4.6% primarily due to economies of scale.

Union Power results for the year ended August 31, 1996 compared to the year
ended August 31, 1995

Revenues. Revenues increased $13.0 million, or 103.2%, from $12.6 million
for the year ended August 31, 1995 to $25.6 million for the year ended August
31, 1996, primarily as a result of an increase in the overall demand for the
company's services in Nevada and California.

Gross profit. Gross profit increased $0.9 million, or 37.5%, from $2.4
million for the year ended August 31, 1995 to $3.3 million for the year ended
August 31, 1996. As a percentage of revenues, gross profit decreased to 12.9%
from 18.8% primarily as a result of higher costs than anticipated on a
specific contract in 1996.

Selling, general and administrative expenses. Selling, general and
administrative expenses decreased $0.3 million, or 15.8%, from $1.9 million
for the year ended August 31, 1995 to $1.6 million for the year ended December
31, 1996 due to lower owner compensation and employee bonuses in 1996. As a
percentage of revenues, selling, general and administrative expenses decreased
from 15.0% to 6.1%.

Union Power liquidity and capital resources

Union Power generated $157,000 of net cash from operating activities for the
three months ended November 30, 1997. Net cash used in investing activities
was approximately $1.3 million, primarily for the purchase of operating
equipment. Net cash provided by financing activities of $1.7 million resulted
from advances under the Company's line of credit and additional borrowings.

At November 30, 1997, Union Power had $2.9 million of working capital and
$1.5 million of total long-term debt outstanding.

Union Power generated $1.0 million of net cash from operating activities for
the year ended August 31, 1997. Net cash used in investing activities was
approximately $1.5 million, primarily for the purchase of operating equipment.
Net cash provided by financing activities of $0.2 million resulted from
advances on the company's line of credit.

28
<PAGE>

At August 31, 1997, Union Power had working capital of $2.8 million and $1.0
million of total long-term debt outstanding.

TRANS TECH RESULTS OF OPERATIONS

TRANS TECH was founded in 1983, is headquartered in South Bend, Indiana and
in 1996 provided services to customers in Indiana, Kentucky and Michigan.
TRANS TECH installs, maintains and repairs traffic signals, signage, highway
control systems components, highway and airport lighting and fiber optics for
states and other governmental entities, and also performs traditional
electrical contracting services for private and public entities in the
commercial and industrial markets.

The following table sets forth selected statements of operations data and
such data as a percentage of revenues for the periods indicated:

<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER
YEARS ENDED DECEMBER 31, 30,
---------------------------- ----------------------------
1995 1996 1996 1997
------------- ------------- ------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues................ $21,397 100.0% $24,414 100.0% $16,575 100.0% $24,278 100.0%
Cost of services........ 18,934 88.5 20,426 83.7 13,683 82.6 19,687 81.1
------- ----- ------- ----- ------- ----- ------- -----
Gross profit.......... 2.463 11.5 3,988 16.3 2,892 17.4 4,591 18.9
Selling, general and
administrative
expenses............... 1,639 7.7 1,848 7.6 1,300 7.8 1,362 5.6
------- ----- ------- ----- ------- ----- ------- -----
Income from operations.. $ 824 3.8% $ 2,140 8.7% $ 1,592 9.6% $ 3,229 13.3%
======= ===== ======= ===== ======= ===== ======= =====
</TABLE>

TRANS TECH results for the nine months ended September 30, 1997 compared to
the nine months ended September 30, 1996.

Revenues. Revenues increased $7.7 million, or 46.4%, from $16.6 million for
the nine months ended September 30, 1996 to $24.3 million for the nine months
ended September 30, 1997, primarily as a result of an increase in demand for
services provided by commercial and industrial customers and, to a lesser
extent, by transportation control and lighting systems customers.

Gross profit. Gross profit increased $1.7 million, or 58.6%, from $2.9
million for the nine months ended September 30, 1996 to $4.6 million for the
nine months ended September 30, 1997. As a percentage of total revenue, gross
margin increased from 17.4% for the nine months ended September 30, 1996 to
18.9% for the nine months ended September 30, 1997 primarily as a result of
improved labor productivity and asset utilization.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $0.1 million, or 7.7%, from $1.3 million for
the nine months ended September 30, 1996 to $1.4 million for the nine months
ended September 30, 1997, primarily due to increased administrative salaries
required by the higher level of revenues and increases in owner compensation.
As a percentage of revenues, selling, general and administrative expenses
decreased from 7.8% to 5.6% due to economies of scale.

TRANS TECH results for the year ended December 31, 1996 compared to the year
ended December 31, 1995

Revenues. Revenues increased $3.0 million, or 14.0%, from $21.4 million for
the year ended December 31, 1995 to $24.4 million for the year ended December
31, 1996, primarily as a result of increased volume of work for commercial and
industrial customers offset partially by a decrease in activity in the
transportation control and lighting systems market.

29
<PAGE>

Gross profit. Gross profit increased $1.5 million, or 61.9%, for the year
ended December 31, 1995 to $4.0 million for the year ended December 31, 1996.
As a percentage of total revenue, gross margin increased from 11.5% for the
year ended December 31, 1995 to 16.3% for the year ended December 31, 1996 as
a result of increased labor productivity and a decrease in materials cost as a
percentage of revenues.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $0.2 million, or 12.5%, from $1.6 million
for the year ended December 31, 1995 to $1.8 million for the year ended
December 31, 1996, primarily due to the addition of administrative positions
and increased marketing expenses. As a percentage of revenues, selling,
general and administrative expenses remained relatively constant.

TRANS TECH liquidity and capital resources

TRANS TECH generated $1.3 million of net cash from operating activities for
the nine months ended September 30, 1997. Net cash used in investing
activities was approximately $0.8 million, primarily for the purchase of
operating equipment. Net cash used in financing activities of $28,000 resulted
primarily from distributions to shareholders of $1.5 million, net of
borrowings on the line of credit of $1.4 million.

At September 30, 1997, TRANS TECH had working capital of $4.0 million and
$0.5 million of total long-term debt outstanding.

TRANS TECH generated $2.9 million in net cash from operating activities for
the year ended December 31, 1996. Net cash used in investing activities was
approximately $0.9 million, principally for purchases of operating equipment.
Net cash used in financing activities of $2.1 million resulted from repayments
of debt and distributions to shareholders.

At December 31, 1996, TRANS TECH had working capital of $2.8 million and
$0.6 million of total long-term debt outstanding.

POTELCO RESULTS OF OPERATIONS

Potelco was founded in 1965, is headquartered near Seattle, Washington and
operates primarily in Washington, Oregon and Idaho. Potelco provides electric
and telecommunications infrastructure contracting services, including
installation of overhead and underground lines and facilities for the power,
telecommunications and cable television industries. In addition, Potelco
provides electrical and telecommunications installation, maintenance and
repair services to the commercial and industrial markets.

The following table sets forth selected statement of operations data and
such data as a percentage of revenues for the periods indicated:

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED SEPTEMBER 30
DECEMBER 31, ----------------------------
1996 1996 1997
------------- ------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Revenues.......................... $14,549 100.0% $10,173 100.0% $13,248 100.0%
Cost of services.................. 12,946 89.0 9,343 91.8 10,416 78.6
------- ----- ------- ----- ------- -----
Gross profit.................... 1,603 11.0 830 8.2 2,832 21.4
Selling, general and
administrative expenses.......... 971 6.7 691 6.8 777 5.9
------- ----- ------- ----- ------- -----
Income from operations............ $ 632 4.3% $ 139 1.4% $ 2,055 15.5%
======= ===== ======= ===== ======= =====
</TABLE>

30
<PAGE>

Potelco results for the nine months ended September 30, 1997 compared to the
nine months ended September 30, 1996

Revenues. Revenues increased $3.0 million, or 29.4%, from $10.2 million for
the nine months ended September 30, 1996 to $13.2 million for the nine months
ended September 30, 1997, primarily as a result of an increase in the demand
for services by telecommunications infrastructure and commerical and
industrial customers to either upgrade their telecommunication systems from
cable to fiber optic or to install new systems.

Gross profit. Gross profit increased $2.0 million, or 250.0%, from $0.8
million for the nine months ended September 30, 1996 to $2.8 million for the
nine months ended September 30, 1997. As a percentage of revenues, Potelco's
gross margins improved from 8.2% to 21.4% due to the projects performed during
1997 having a relatively higher labor component and therefore resulting in
higher gross margins, as compared to the projects performed during 1996 which
had a relatively higher proportion of low margin materials costs.

Selling, general and administrative expenses. Selling, general and
administrative expenses increased $0.1 million, or 14.3%, from $0.7 million
for the nine months ended September 30, 1996 to $0.8 million for the nine
months ended September 30, 1997, primarily due to increases in office salaries
and profit sharing contributions. As a percentage of revenues, these selling,
general and administrative expenses decreased from 6.8% to 5.9% due to
economies of scale.

Potelco liquidity and capital resources

Potelco generated $0.6 million of net cash from operating activities for the
nine months ended September 30, 1997. Net cash used in investing activities
was approximately $0.6 million, primarily for the purchase of property and
equipment. Net cash provided by financing activities of $0.2 million resulted
primarily from additional proceeds received from a note payable to a bank.

At September 30, 1997, Potelco had working capital of $2.1 million and $1.4
million of total long-term debt outstanding.

31
<PAGE>

BUSINESS

GENERAL

Quanta was founded in August 1997 to create a leading provider of specialty
electrical contracting and maintenance services primarily related to electric
and telecommunications infrastructure in North America. In addition, the
Company provides electrical contracting services to the commercial and
industrial markets and installs transportation control and lighting systems.
The Company's services include the installation, repair and maintenance of
electric power transmission and distribution lines and telecommunication and
cable television lines, the construction of electric substations, the erection
of cellular telephone, PCS(R) and microwave towers, the installation of
highway lighting and traffic control systems, design and engineering services
and the provision of specialty contracting services for electric, video,
security, fire, voice and data systems. The Company's customers include
electric utilities, telecommunication and cable television system operators,
governmental entities, general contractors and owners and managers of
commercial and industrial properties.

Concurrently with the closing of the Offering, Quanta will acquire the four
Founding Companies, making it one of the largest providers of electric and
telecommunications infrastructure contracting services in its markets. The
Company maintains a total of 13 offices in eight states and performed work in
18 states during 1996. The Company believes that its size, geographical
diversity of operations, industry relationships, design and engineering
capability, expertise in specialty services and number of skilled personnel
provide the Company significant competitive advantages. During 1996, the
Company generated pro forma combined revenues, operating income and net income
of $108.1 million, $6.5 million and $3.1 million, respectively. During the
first nine months of 1997, the Company generated pro forma combined revenues,
operating income and net income of $108.7 million, $13.0 million and $7.4
million, respectively.

INDUSTRY OVERVIEW

The Company estimates that the electrical and telecommunications contracting
industry generates annual revenues in excess of $40 billion. The Company
believes that growth in this industry is being positively affected by the
following trends:

Deregulation. The wholesale electricity market, including sales of
electricity between utilities and other generators, is regulated by the
Federal Energy Regulatory Commission ("FERC"). In 1996, FERC accelerated the
deregulation of the electric power industry by issuing Order nos. 888 and 889,
which require shareholder-owned utilities (of which there were approximately
223 in 1997) to provide non-utility electricity suppliers with access to
transmission services. Management expects the deregulation of the electric
power industry to increase competition among suppliers of electricity, which
will lead utilities to lower their costs by outsourcing non-core functions
such as the installation, construction, maintenance and repair of electric
transmission and distribution systems and electric substations, services that
have traditionally been performed by the utilities themselves.

The Telecommunications Act of 1996 preempted state and local government
control over access to the telecommunications market, eliminating barriers to
entry and opening the markets to new entrants. Management expects the
elimination of such barriers to lead to increased construction of competing
telecommunications networks as competitive telecommunications providers,
existing as well as new, expand into new markets and offer services that once
were reserved for incumbents.

Upgrading and Expanding Existing Infrastructure. As access to electric
transmission services increases, the Company believes that financial penalties
will be imposed upon electric utilities in the event of transmission and
distribution system downtime attributable to the utilities. As a result, the
Company

32
<PAGE>

expects that utilities will modernize existing transmission systems, which
will increase the amount of upgrading and repair work available to outside
contractors. The Company also expects commercial and industrial companies to
continue to upgrade and expand their existing electrical infrastructure as a
result of (i) increasing levels of modernization activity, (ii) the effects of
more stringent electric codes, which establish minimum power and safety
requirements, (iii) revised national energy standards, (iv) increases in use
of electric power and (v) increased installation of electrical capacity in
excess of minimum code requirements in order to facilitate marketing of
properties.

The amount of traditional voice and data traffic has increased steadily, and
growth in the use of personal computers and modems has created significant
data traffic from a wide variety of sources. Because of the physical
limitations of the existing communications network facilities, the Company
believes there is an immediate need to upgrade and expand facilities with new
and innovative technology, expanding, and in many cases, replacing existing
telecommunications and cable television infrastructure to allow for increases
in the volume of traffic. The need to upgrade and expand telecommunications
infrastructure as a result of deregulation and the growth in consumer demand
for enhanced telecommunications services is expected to continue to prompt
telecommunications providers to increase the current level of outsourcing to
independent contractors who serve the industry.

Increased Outsourcing. The outsourcing trend has largely been driven by the
efforts of electric utilities and telecommunications providers to reduce costs
and focus on their core competencies. The Company believes that electric
utilities and telecommunications providers will increasingly seek
comprehensive solutions to their infrastructure needs by utilizing fewer
qualified contractors that can provide the full range of new construction,
installation, repair, maintenance and emergency services.

The Company believes that its industry is highly fragmented. According to
the U.S. Census Bureau, there are more than 50,000 electrical and
telecommunications contracting businesses, consisting of a small number of
regional or national providers and a large number of relatively small, owner-
operated businesses that have limited access to capital and that offer a
limited range of services. The Company believes that the fragmented nature of
the industry presents substantial consolidation and growth opportunities for
companies with a disciplined acquisition program, a decentralized operating
strategy and access to financial resources. The Company also believes that the
prominence and operating strength of the Founding Companies and the experience
of its executive management will provide the Company with significant
competitive advantages to capitalize on these opportunities.

STRATEGY

The Company plans to achieve its goal of becoming a leading provider of
electric and telecommunications infrastructure contracting services by
implementing its operating strategy, emphasizing continued internal growth and
expanding through acquisitions.

OPERATING STRATEGY. The key elements of the Company's operating strategy
are:

Operate on a Decentralized Basis. The Company intends to manage its
operations on a decentralized basis while maintaining operating and
financial controls. Local management will retain responsibility for the
operations, profitability and growth of its business. The Company believes
that, while maintaining operating and financial controls, a decentralized
operating structure will retain the entrepreneurial spirit of each of the
Founding Companies and will permit the Company to capitalize on the
Founding Companies' local and regional market knowledge, specialized skills
and customer relationships. In addition, the Company believes that its
operating efficiency, financial strength, technical expertise, presence in
key geographic areas and reputation for quality and reliability provide
competitive advantages in bidding for, winning and executing new contracts
for infrastructure projects. While local management will retain control of
the operations of its business, the Company's

33
<PAGE>

executive management will have responsibility for corporate strategy and
acquisitions, financing, insurance, investor relations and employee benefit
plans.

Achieve Operating Efficiencies. Certain administrative functions will be
centralized following the Offering. In addition, by combining overlapping
operations of certain of the Founding Companies, the Company expects to
achieve more efficient asset utilization and realize savings in overhead
and other expenses. The Company intends to use its increased purchasing
power to gain volume discounts in areas such as vehicles and equipment,
electrical materials, marketing, bonding, employee benefits and insurance.
The Company will seek to realize cost savings and other benefits by the
sharing of purchasing, pricing, bidding and other business practices and
the sharing of licenses. The Company intends to further develop and expand
the use of management information systems to facilitate financial control,
project costing and asset utilization. At some locations, the larger
combined workforce will provide additional staffing flexibility.

INTERNAL GROWTH. The Company is focused on continuing its strong internal
growth by (i) increasing the volume of services provided to existing
customers, (ii) expanding the scope of services provided to existing
customers, (iii) broadening its customer base and (iv) geographically
expanding its service area. The Company believes it will be able to expand the
services it offers in its markets by leveraging the specialized strengths of
individual Founding Companies. Such services include design and engineering,
where the contractor applies in-house engineering expertise to design the most
cost-effective system, and the application of new technologies, such as a
robotic arm that can be used to facilitate the repair of high voltage power
transmission lines without taking them out of service.

ACQUISITIONS. The Company believes that the increasing trend toward the
outsourcing of services to the electric and telecommunications infrastructure
contracting industry will result in a competitive disadvantage for small and
mid-sized companies that do not have access to capital and cannot provide a
broad range of speciality contracting services on a national basis. In
addition, the Company expects that there will continue to be a large number of
attractive acquisition candidates due to the highly fragmented nature of the
industry, the inability of many companies to expand and modernize due to
capital constraints and the desire of owners for liquidity. The Company
believes that its financial strength and experienced management will be
attractive to acquisition candidates. The key elements of the Company's
acquisition strategy are:

Enter New Geographic Markets. The Company intends to expand into
geographic markets not currently served by the Founding Companies by
selectively acquiring well-established specialty electrical and
telecommunications contractors that, like the Founding Companies, are
leaders in their regional markets, are financially stable, have a strong
customer base, have senior management committed to participating in the
future growth of the Company and can serve as "platforms" for the future
growth of the Company.

Expand Within Existing Markets. The Company intends to explore
acquisition opportunities in the geographic markets it already serves as
well as geographic markets served by businesses the Company acquires in the
future. Once the Company has entered a specific geographic market, it will
seek to acquire other well-established companies in that particular market
to deepen its market penetration and expand the range of services offered
to its customers. The Company will also pursue "tuck-in" acquisitions of
smaller companies whose operations can be integrated into and leveraged
with an existing operation.

ACQUISITION PROGRAM

The Company believes it will be regarded by acquisition candidates as an
attractive acquiror because of (i) the Company's strategy for creating a
national, comprehensive and professionally managed specialty electric and
telecommunications infrastructure contracting business, (ii) the Company's
decentralized

34
<PAGE>

operating strategy and opportunities to participate in a larger organization,
(iii) the Company's access to financial resources as a public company, (iv)
the potential for increased profitability due to centralizing certain
administrative functions, enhanced systems capabilities and economies of scale
and (v) the potential for owners of the businesses being acquired to
participate in the Company's planned growth while realizing liquidity. The
Company believes that the management of the Founding Companies will be
instrumental in identifying and assisting in the completion of future
acquisitions.

The Company has developed a set of financial, geographic and management
criteria designed to assist management in the evaluation of acquisition
candidates. These criteria evaluate a variety of factors, including, but not
limited to (i) historical and projected financial performance, (ii) internal
rate of return, return on assets and return on revenue, (iii) experience and
reputation of the candidate's management and operations, (iv) composition and
size of the candidate's customer base, (v) whether the geographic location of
the candidate will enhance or expand the Company's market area or ability to
attract other acquisition candidates, (vi) whether the acquisition will
augment or increase the Company's market share or services offered or help
protect the Company's existing customer base, (vii) potential synergies gained
by combining the acquisition candidate with the Company's existing operations
and (viii) liabilities, contingent or otherwise, of the candidate. The Company
anticipates that acquisition candidates in the target markets and industries
will have annual revenues ranging from $10 million to $100 million. At the
present time, the Company has no binding agreements to effect any mergers or
acquisitions other than the Acquisitions.

As consideration for future acquisitions, the Company expects to utilize a
combination of cash, Common Stock and debt. The purchase price for each future
acquisition will vary. The major factors in establishing the purchase price
will be historical earnings, strength of management, future prospects of the
acquiree and the ability of the acquiree to complement or leverage the
services already offered by the Company. Following the Offering, the Company
intends to register 5,000,000 additional shares of Common Stock under the
Securities Act, which shares will be offered in connection with future
acquisitions.

SERVICES

The Company provides a broad range of services, including the installation,
repair and maintenance of electric power transmission and distribution lines
and telecommunications and cable television lines, the construction of
electric substations, the erection of cellular telephone, PCS(R) and microwave
towers, the installation of highway lighting and traffic control systems,
design and engineering services and the provision of specialty contracting
services for electric, video, security, fire, voice and data systems. The
Company currently provides four broad business services: electric utility
infrastructure services; telecommunications infrastructure services;
commercial and industrial services; and transportation control and lighting
systems services. The Company had pro forma combined revenues for the nine
months ended September 30, 1997 of $108.7 million, of which 71% was
attributable to electric utility infrastructure services, 7% was attributable
to telecommunications infrastructure services, 11% was attributable to
commercial and industrial services and 11% was attributable to transportation
control and lighting systems services.

ELECTRIC UTILITY INFRASTRUCTURE SERVICES. The Company performs specialty
electrical contracting services for electric utilities. These services include
installing, repairing and maintaining electric transmission and distribution
lines, principally above ground, maintaining street lights and other system
components, constructing electric substations and erecting transmission
towers. The work performed often involves the splicing of high voltage lines
and, on occasion, the installation of underground high voltage distribution
systems. The Company also repairs and replaces lines which have been damaged
or destroyed as a result of adverse weather conditions.

35
<PAGE>

TELECOMMUNICATIONS INFRASTRUCTURE SERVICES. The Company provides a variety
of services in connection with telecommunications, cable television and other
data transmission. The Company installs fiber optic, coaxial and copper cable
both above and below ground on behalf of telecommunications and cable service
providers. The services provided by the Company include the placing and
splicing of cable, excavation of trenches in which to place the cable,
placement of related structures such as poles, anchors, conduits, manholes,
cabinets and closures, placement of drop lines from the main distribution
lines to an individual residence or business and maintenance and removal of
these fiber optic, coaxial and copper lines and related structures. The
Company has the ability to directionally bore and place cables, a highly
specialized method of positioning buried cable which is often required in
congested urban and suburban markets where trenching may be impractical. In
addition, the Company is involved in the engineering, design and erection of
communications towers, including cellular telephone, PCS(R) and microwave
towers.

COMMERCIAL AND INDUSTRIAL SERVICES. The Company designs, installs, maintains
and repairs electrical wiring, telephone and data copper wiring, fiber optic
cabling and building control and automation systems for commercial and
industrial customers.

TRANSPORTATION CONTROL AND LIGHTING SYSTEMS SERVICES. The Company installs,
maintains and repairs traffic and highway control systems, such as signals,
signage, lighting and freeway management systems components. In addition, the
Company installs overhead cable and control systems for light rail lines,
"smart" highway control systems and airport lighting.

CUSTOMERS

The Company's customers include electric utilities, telecommunications and
cable television system operators, governmental entities, general contractors
and builders, owners and managers of commercial and industrial properties. The
Company's customer base is highly concentrated. For the year ended December
31, 1996, approximately 21% of the Company's total revenues were derived from
Public Service Company of Colorado, 6% from Nevada Power Company and 5% from
Pacific Telecom, Inc. For the nine months ended September 30, 1997,
approximately 14% of the Company's total revenues were derived from Public
Service Company of Colorado, 11% from Nevada Power Company and 7% from Pacific
Gas & Electric Company. Electric utilities, in the aggregate, represent the
largest customer base of the Company. General contractors, as a group, account
for a significant portion of customers for the Company's commercial and
industrial work. The Company believes that a substantial portion of its total
revenues and operating income will continue to be derived from a concentrated
group of customers. The loss of any of these customers could have a material
adverse effect on the Company's business, financial condition and results of
operations.

Management at each of the Founding Companies has been responsible for
developing and maintaining successful long-term relationships with key
customers. The Company relies heavily on repeat customers and uses both the
written and verbal referrals of its satisfied customers to help generate new
business. Many of the Company's customers or prospective customers have a
qualification procedure for becoming an approved bidder or vendor based upon
the satisfaction of particular performance and safety standards set by the
customer. Such customers often maintain a list of vendors meeting such
standards and award contracts for individual jobs only to such vendors. The
Company strives to maintain its status as a preferred or qualified vendor to
such customers.

EMPLOYEES

As of November 30, 1997, the Company had approximately 95 salaried
employees, including executive officers, project managers or engineers, job
superintendents, staff and clerical personnel and approximately 1,000 hourly
rated employees, the number of which fluctuates depending upon the number and
size of the projects undertaken by the Company at any particular time. The
Company does not anticipate any overall reductions in staff as a result of the
consolidation of the Founding Companies,

36
<PAGE>

although there may be some job realignments and new assignments in an effort
to eliminate overlapping and redundant positions.

Three of the Founding Companies are signatories to master collective
bargaining agreements with the International Brotherhood of Electrical Workers
(the "IBEW"). The other Founding Company is a signatory to various local IBEW
agreements as well as local agreements with the Laborers International Union
and the Operating Engineers Union. Under these agreements, the Founding
Companies agree to pay specified wages to its union employees, observe certain
workplace rules and make employee benefit payments to multi-employer pension
plans and employee benefit trusts rather than administering the funds on
behalf of their employees. IBEW covered employees are represented by numerous
local unions under various agreements with varying terms and expiration dates.
Such local agreements are entered into by and between the IBEW local and the
National Electrical Contractors Association ("NECA"), of which the Company is
a member. The majority of the collective bargaining agreements contain
provisions that prohibit work stoppages or strikes, even during specified
negotiation periods relating to agreement renewal, and provide for binding
arbitration dispute resolution in the event of prolonged disagreement;
however, there can be no assurance that work stoppages or strikes will not
occur at any given time.

Each of the Founding Companies provides a variety of health, welfare and
benefit plans for their employees who are not covered by collective bargaining
agreements. Following consummation of the Acquisitions, these various employee
benefit plans will be replaced by a single plan covering all of the Company's
non-bargaining employees.

The electric and telecommunications infrastructure contracting industry is
experiencing a shortage of skilled craftsmen. In response to the shortage, the
Company seeks to take advantage of various IBEW and NECA referral programs and
hire graduates of the joint IBEW/NECA apprenticeship program for training
qualified electricians. As a union employer, the Company believes that its
access to qualified personnel through these and other union sources will
afford it a distinct advantage over non-union employers in attracting much
needed skilled craftsmen in an ever-tightening labor market. None of the
Founding Companies has experienced any strikes or work stoppages in the past
20 years. The Company believes its relationships with its employees and union
representatives is satisfactory.

TRAINING, QUALITY ASSURANCE AND SAFETY

Performance of the Company's services requires the use of equipment and
exposure to conditions that can be dangerous. Although the Company is
committed to a policy of operating safely and prudently, the Company has been
and is subject to claims by employees, customers and third parties for
property damage and personal injuries resulting from performance of the
Company's services. The Company performs on-site services using employees who
have completed applicable Company safety and training programs. The Company's
policies require that employees complete a prescribed training and service
program with the Company in addition to those required by NECA and the IBEW
prior to performing more sophisticated and technical jobs. For example, all
journeymen linemen are required by the IBEW and NECA to complete a minimum of
8,000 hours of on-the-job training, approximately 200 hours of classroom
education and extensive testing and certification. The Company requires
additional training, depending upon the sophistication and technical
requirements of each particular job. Following completion of the Offering,
management intends to establish Company-wide training and educational
programs, as well as comprehensive safety policies and regulations, by sharing
"best practices" throughout its operations.

EQUIPMENT AND FACILITIES

The Company operates a fleet of owned and leased trucks and trailers,
support vehicles and specialty construction equipment, such as backhoes,
excavators, trenchers, generators, boring machines, cranes and wire pullers
and tensioners. The total size of the rolling-stock fleet approximates 2,600
units. Most of

37
<PAGE>

this fleet is serviced by the Company's own mechanics who work at various
maintenance sites and facilities. The Company believes that these vehicles
generally are well-maintained and adequate for its present operations.
Management believes that in the future it will be able to lease or purchase
this equipment at lower prices due to its larger size and the volume of its
leasing and purchasing activity.

After the consummation of the Offering, the Company expects to lease its
corporate headquarters in Houston, Texas. The Company operates 13 sites in
North Kansas City and Clinton, Missouri; South Bend, Indiana; Las Vegas and
Reno, Nevada; Topeka, Kansas; Des Moines, Iowa; Aurora and Englewood,
Colorado; El Cajon and Vacaville, California; and Sumner and Spokane,
Washington. This space is used for offices, warehousing, storage and vehicle
shops. The Company owns some of the facilities it occupies and leases others.
The Company believes that its facilities are sufficient for its current needs.
See "Certain Transactions."

REGULATION

The Company's operations are subject to various federal, state and local
laws and regulations including (i) licensing requirements applicable to
electricians and engineers, (ii) building and electrical codes, (iii)
permitting and inspection requirements applicable to construction projects,
(iv) regulations relating to worker safety and environmental protection and
(v) special bidding and procurement requirements on government projects.

The Company believes that it has all the required licenses to conduct its
operations and is in substantial compliance with applicable regulatory
requirements. Failure of the Company to comply with applicable regulations
could result in substantial fines and/or revocation of the Company's operating
licenses. Many state and local regulations governing electrical construction
require permits and licenses to be held by individuals who typically have
passed an examination or met other requirements. The Company intends to
implement a policy to ensure that, where possible, any such permits or
licenses that may be material to the Company's operations are held by at least
two Company employees.

COMPETITION

The markets in which the Company operates are highly competitive, requiring
substantial resources and skilled and experienced personnel. The Company
competes with other independent contractors in most of the markets in which it
operates, several of which are large domestic companies that have greater
financial, technical and marketing resources than the Company. In addition,
there are relatively few, if any, barriers to entry into the markets in which
the Company operates and, as a result, any organization that has adequate
financial resources and access to technical expertise may become a competitor
to the Company. A significant portion of the Company's revenues are currently
derived from master service agreements and price is often an important factor
in the award of such agreements. Accordingly, the Company could be outbid by
its competitors in an effort to procure such business. There can be no
assurance that the Company's competitors will not develop the expertise,
experience and resources to provide services that are equal or superior in
both price and quality to the Company's services, or that the Company will be
able to maintain or enhance its competitive position. The Company may also
face competition from the in-house service organizations of its existing or
prospective customers, including electric utility and telecommunications
providers, which employ personnel who perform some of the same types of
services as those provided by the Company. Although a significant portion of
these services is currently outsourced, there can be no assurance that
existing or prospective customers of the Company will continue to outsource
services in the future.

RISK MANAGEMENT, INSURANCE AND PERFORMANCE BONDS

The primary risks in the Company's operations are bodily injury, property
damage and injured workers' compensation. The Company maintains automobile and
general liability insurance for third party

38
<PAGE>

bodily injury and property damage and workers' compensation coverage which it
considers sufficient to insure against these risks, subject to self-insured
amounts. After the consummation of the Offering, the Company intends to
consolidate the purchase of insurance, which management believes will result
in savings from the amounts paid by the Founding Companies prior to the
Acquisitions.

Contracts in the electrical contracting industry may require performance
bonds or other means of financial assurance to secure contractual performance.
If the Company were unable to obtain surety bonds or letters of credit in
sufficient amounts or at acceptable rates, it may be precluded from entering
into additional contracts with certain of its customers.

LEGAL PROCEEDINGS

The Company is, from to time, a party to litigation or administrative
proceedings that arise in the normal course of its business. The Company does
not have pending any litigation that, separately or in the aggregate, if
adversely determined, would have a material adverse effect on the Company's
results of operations or financial condition.

39
<PAGE>

MANAGEMENT

DIRECTORS, EXECUTIVE OFFICERS AND KEY EMPLOYEES

The following table sets forth certain information concerning the Company's
directors and executive officers and those persons who will become directors,
executive officers and certain key employees following the consummation of the
Offering:

<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<C> <C> <S>
John R. Colson*....................... 50 Chief Executive Officer, Director
James H. Haddox....................... 49 Chief Financial Officer
Derrick A. Jensen..................... 27 Vice President and Controller
John R. Wilson*....................... 47 President of PAR, Director
Vice President of Union Power,
Timothy A. Soule*..................... 50 Director
Vice President of TRANS TECH,
John A. Martell*...................... 42 Director
Gary A. Tucci*........................ 41 President of Potelco, Director
James R. Ball*........................ 54 Director
Vincent D. Foster..................... 41 Chairman of the Board of Directors
Rodney R. Proto*...................... 48 Director
Michael T. Willis*.................... 52 Director
Ronald W. Soule....................... 53 President of Union Power
Robert J. Urbanski.................... 46 President of TRANS TECH
</TABLE>
- --------
* Election as a director of the Company effective upon the consummation of the
Offering.

John R. Colson was elected Chief Executive Officer of the Company in
December 1997 and will become a director of the Company effective upon the
consummation of the Offering. He joined PAR in 1971 and became President in
1991. He is currently a member of the Council of Industrial Relations,
governor of the Missouri Valley chapter of NECA and a director of the Missouri
Valley Line Apprenticeship Program.

James H. Haddox has been Chief Financial Officer of the Company since
November 1997. From March 1996 until joining the Company, Mr. Haddox was
Senior Vice President--Finance of Corporate Express Delivery Systems, Inc., a
national provider of same day delivery services. From January 1994 to March
1996, Mr. Haddox held various positions, including Chief Accounting Officer
and Vice President--Finance, with U.S. Delivery Systems, Inc., a NYSE listed
company which was the largest provider of same day delivery services in the
U.S. prior to its merger with Corporate Express, Inc. in March 1996. From 1991
to 1994 Mr. Haddox was an independent business consultant providing management
services. From 1987 to 1991, Mr. Haddox held various financial positions,
including Chief Financial Officer and Chief Accounting Officer, at Allwaste,
Inc., a NYSE listed national environmental services company. Mr. Haddox is a
Certified Public Accountant.

Derrick A. Jensen has been Vice President and Controller of the Company
since December 1997. Prior to joining the Company, he was employed by Arthur
Andersen LLP ("Arthur Andersen"), serving most recently as audit manager
focusing on clients in consolidating industries.

John R. Wilson was elected President of PAR in 1997. He joined PAR in 1977
and became an Executive Vice President in 1991. Mr. Wilson will become a
director of the Company effective upon the consummation of the Offering.

Timothy A. Soule joined Union Power in 1972 and became Vice President in
1975. He is also a member of the Board of Trustees for the joint NECA/IBEW
Line Construction Benefit Fund, Union Power's representative to the Rocky
Mountain Electrical League and a member of the Board of Directors of Power

40
<PAGE>

and Communication Contractors Association. Mr. Soule will become a director of
the Company effective upon the consummation of the Offering.

John A. Martell founded TRANS TECH in 1983 and serves as Vice President. He
is currently a member of the National Fire Protection Association and the
Illuminating Engineering Society. Mr. Martell is a Registered Professional
Engineer. Mr. Martell will become a director of the Company effective upon the
consummation of the Offering.

Gary A. Tucci joined Potelco in 1975 and became President in 1988. He is a
member of the Joint IBEW/NECA Apprenticeship and Training Committee as well as
the labor relations board. Mr. Tucci will become a director of the Company
effective upon the consummation of the Offering.

James R. Ball is a private investor, a consultant to Koch Industries, Inc.
and a member of the board of directors of Carbide/Graphite Group, Inc., a
producer of graphite electrodes specialties products. From 1969 to 1994, he
held several positions with Vista Chemical Company ("Vista") and its
predecessor, Conoco, Inc. Vista was sold in 1991 to RWE-DEA, a unit of RWE AG,
a German energy and chemicals concern, and Mr. Ball served on the board of
directors of RWE-DWA and was its President and Chief Executive Officer from
1992 through 1994. Mr. Ball will become a director of the Company effective
upon the consummation of the Offering.

Vincent D. Foster has been a director of the Company since November 1997 and
will become non-executive Chairman of the Board upon consummation of the
Offering. Mr. Foster is a Managing Director of Main Street Merchant Partners
II, L.P., a merchant banking firm which is a principal stockholder of the
Company. From September 1988 through October 1997, Mr. Foster was a partner of
Andersen Worldwide and Arthur Andersen. Mr. Foster was the Director of the
Corporate Finance and Mergers and Acquisitions practices of Arthur Andersen
for the southwestern U.S., specializing in structuring and executing "roll-up"
transactions and in providing merger and acquisition and corporate finance
advisory services to clients in consolidating industries. Mr. Foster holds a
J.D. degree and is a Certified Public Accountant.

Rodney R. Proto has been President, Chief Operating Officer and a director
of USA Waste Services, Inc. ("USA Waste"), the third largest solid waste
services company in North America, since August 1996. Prior thereto, he was
President, Chief Operating Officer and a director of Sanifill, Inc.
("Sanifill"), a solid waste management company acquired by USA Waste in August
1996. Mr. Proto joined Sanifill in February 1992. Before joining Sanifill, he
was employed by Browning-Ferris Industries, Inc. for 12 years where he served,
among other positions, as Chairman of BFI Overseas from 1985 to 1987 and
President of Browning-Ferris Industries Europe, Inc. from 1987 through 1991.
Mr. Proto will become a director of the Company effective upon the
consummation of the Offering.

Michael T. Willis is Chairman of the Board, Chief Executive Officer and
President of CoreStaff, Inc. ("CoreStaff"), one of the largest information
technology and staffing companies in the U.S. Prior to founding CoreStaff in
1993, Mr. Willis served as Chief Executive Officer and President of The Talent
Tree Corporation ("Talent Tree"), which he founded in 1976 and built into one
of the largest temporary services companies in the U.S. Mr. Willis sold Talent
Tree to Hestair plc in 1987 and then continued as President and Chief
Executive Officer until April 1993. Mr. Willis is also a director of the
Southwest Bank of Texas, a publicly-traded financial institution. Mr. Willis
will become a director of the Company effective upon the consummation of the
Offering.

Ronald W. Soule joined Union Power in 1963 and became President in 1987. He
is a member of the Board of Directors of the Colorado NECA/IBEW Negotiation
Committee, the Western Line Constructors Chapter of NECA and the Mountain
States Joint Apprenticeship and Training Committee. He is also Union Power's
representative to NECA and the past President of Western Line Constructors
Chapter of NECA.

Robert J. Urbanski founded TRANS TECH in 1983 and serves as President. He is
a member of the Institute of Transportation Engineers and the International
Municipal Sign Association.

41
<PAGE>

Upon consummation of the Offering, the Board of Directors of the Company
shall consist of nine members. The Bylaws of the Company permit the Board of
Directors to increase the size of the Board. Each director will serve a one-
year term. At each annual meeting of stockholders, all except one of the
directors will be elected by the holders of the Common Stock and one director
will be elected by the holders of the Limited Vote Common Stock.

The Board of Directors has established an Audit Committee and a Compensation
Committee. The members of these committees will be determined following
consummation of the Offering.

DIRECTORS' COMPENSATION

Directors who also are employees of the Company or any of its subsidiaries
will not receive additional compensation for serving as directors. Each
director who is not an employee of the Company or any of its subsidiaries will
receive a fee of $1,000 for attendance at each meeting of the Board of
Directors or any committee thereof (unless held on the same day as a Board of
Directors meeting). Directors of the Company will be reimbursed for reasonable
out-of-pocket expenses incurred in attending meetings of the Board of
Directors or the committees thereof, and for other expenses reasonably
incurred in their capacity as directors of the Company. Each non-employee
director will receive an option to purchase 10,000 shares of Common Stock upon
such person's initial election to the Board of Directors and an annual grant
of an option to purchase 5,000 shares of Common Stock at each annual meeting
of the Company's stockholders thereafter at which such director is re-elected
or remains a director. See "--1997 Stock Option Plan." In addition, each of
Messrs. Ball, Proto and Willis purchased 20,000 shares of Limited Vote Common
Stock from the Company for nominal consideration.

EXECUTIVE COMPENSATION

The Company was incorporated in August 1997 and has not conducted any
operations other than those activities related to the Acquisitions and the
Offering. The Company anticipates that during 1998 the annualized base
salaries of its most highly compensated executive officers will be $150,000
for each executive officer. As part of Mr. Haddox's employment arrangement
with the Company, he purchased 100,000 shares of Limited Vote Common Stock for
nominal consideration and will receive an option under the 1997 Stock Option
Plan to purchase 125,000 shares of Common Stock at the initial public offering
price. As part of Mr. Jensen's employment arrangement with the Company, he
purchased 37,500 shares of Limited Vote Common Stock for nominal consideration
and will receive an option under the 1997 Stock Option Plan to purchase 62,500
shares of Common Stock at the initial public offering price.

EMPLOYMENT AGREEMENTS

Upon consummation of the Offering, the Company will enter into an employment
agreement with each executive officer and certain key employees of the Company
that prohibits such individual from disclosing the Company's confidential
information and trade secrets and generally restricts these individuals from
competing with the Company for a period of five years after the date of the
individual's employment agreement. Each of the agreements has an initial term
of three years, provides for an automatic annual extension at the end of its
initial term and is terminable by the Company for "good cause" upon ten days'
written notice and without "good cause" by either party upon thirty days'
written notice. All employment agreements provide that if the officer's
employment is terminated by the Company without "good cause," such officer
will be entitled to receive a lump-sum severance payment at the effective time
of termination equal to the officer's base salary at the rate then in effect
for the greater of (i) the time period remaining under the initial term of the
agreement or (ii) one year. In addition, all employment agreements provide
that in the event of termination without "good cause," the non-competition
provision will not apply for any time period in which the employee is not
receiving or has not received severance compensation.

42
<PAGE>

The employment agreements contain certain provisions concerning a change-in-
control of the Company, including the following: (i) in the event five days'
advance notice of the transaction giving rise to the change-in-control is not
received by the Company and such officer, the change-in-control will be deemed
a termination of the employment agreement by the Company without "good cause,"
and the provisions of the employment agreement governing the same will apply,
except that the severance amount otherwise payable (discussed in the preceding
paragraph) shall be tripled and the provisions which restrict competition with
the Company shall not apply and (ii) the officer must be given sufficient time
and opportunity to elect whether to exercise all or any of his or her options
to purchase Common Stock, including any options with accelerated vesting under
the provisions of the 1997 Stock Option Plan, such that the officer may
acquire the Common Stock at or prior to the closing of the transaction giving
rise to the change-in-control, if he or she so desires.

1997 STOCK OPTION PLAN

In December 1997, the Board of Directors adopted, and the stockholders of
the Company approved, the 1997 Stock Option Plan. The purpose of the 1997
Stock Option Plan is to provide directors, key employees, officers and certain
advisors with additional incentives by increasing their proprietary interest
in the Company. The aggregate amount of Common Stock of the Company with
respect to which options may be granted may not exceed the greater of
2,380,850 shares or 15% of the outstanding shares of Common Stock.

The 1997 Stock Option Plan provides for the grant of incentive stock options
("ISOs") as defined in Section 422 of the Internal Revenue Code of 1986, as
amended (the "Code") and nonqualified stock options (collectively, the
"Awards"). The amount of ISOs that may be granted under the 1997 Stock Option
Plan is limited to 2,380,850 shares. The 1997 Stock Option Plan is
administered by the Compensation Committee of the Board of Directors. The
Compensation Committee has, subject to the terms of the 1997 Stock Option
Plan, the sole authority to grant Awards under the 1997 Stock Option Plan, to
construe and interpret the 1997 Stock Option Plan and to make all other
determinations and take any and all actions necessary or advisable for the
administration of the 1997 Stock Option Plan.

All of the Company's employees, nonemployee directors, officers and advisors
are eligible to receive Awards under the 1997 Stock Option Plan, but only
employees of the Company are eligible to receive ISOs. Options will be
exercisable during the period specified in each option agreement and will
generally become exercisable in installments pursuant to a vesting schedule
designated by the Compensation Committee. In the discretion of the
Compensation Committee, option agreements may provide that options will become
immediately exercisable in the event of a "change in control" (as defined in
the 1997 Stock Option Plan) of the Company. No ISO will remain exercisable
later than ten years after the date of grant (or five years in the case of
ISOs granted to employees owning more than 10% of the voting capital stock).

The Company expects to have outstanding options to purchase up to a total of
1,500,000 shares of Common Stock issued pursuant to the 1997 Stock Option Plan
following the Offering at an exercise price equal to or greater than the
initial public offering price.

The 1997 Stock Option Plan also provides for automatic option grants to
directors who are not otherwise employed by the Company or its subsidiaries.
Upon commencement of service, a non-employee director will receive a non-
qualified option to purchase 10,000 shares of Common Stock, and each
continuing or re-elected non-employee director annually will receive an option
to purchase 5,000 shares of Common Stock. Options granted to non-employee
directors are fully exercisable following the expiration of six months from
the date of grant.

43
<PAGE>

The exercise price for ISOs granted under the 1997 Stock Option Plan may be
no less than the fair market value of a share of the Common Stock on the date
of grant (or 110% in the case of ISOs granted to employees owning more than
10% of the voting capital stock).

44
<PAGE>

CERTAIN TRANSACTIONS

ORGANIZATION OF THE COMPANY

Quanta was initially capitalized in August 1997 by a group of investors,
including Midwest Acquisition Support, LLC (an entity controlled by Bernard J.
Gram), Kevin D. Miller, Steven P. Colmar and William G. Parkhouse, an advisory
director of the Company, who collectively have acted as co-founders of Quanta
and paid nominal cash consideration for 1,693,779 shares of Limited Vote
Common Stock. In September 1997, a corporation affiliated with this group
agreed to advance up to $125,000 to the Company in consideration for
receiving, at the closing of the Offering, a number of shares of Limited Vote
Common Stock equal to $375,000 divided by the offering price per share of
Common Stock, which, at an assumed offering price of $9.00 per share, will
total 41,667 shares of Limited Vote Common Stock. In addition, in November
1997 Main Street purchased 1,484,542 shares of Limited Vote Common Stock for
nominal cash consideration (both Main Street and the group of investors
described above, the "Initial Stockholders"). Since November 1997, Main Street
has advanced funds to Quanta to enable Quanta to pay various expenses incurred
in connection with its efforts to complete the Acquisitions and consummate the
Offering. All of Main Street's advances will be repaid from the net proceeds
of the Offering.

Simultaneously with the closing of the Offering, Quanta will acquire all of
the issued and outstanding capital stock and other equity interests of the
Founding Companies, at which time each Founding Company will become a wholly
owned subsidiary of the Company. The Acquisition Consideration consists of (i)
an estimated $21.0 million in cash and (ii) 7,527,000 shares of Common Stock.

The following table sets forth for each Founding Company the approximate
consideration to be paid by Quanta to the stockholders of the Founding
Companies (i) in cash and (ii) in shares of Common Stock.

<TABLE>
<CAPTION>
SHARES OF
CASH COMMON STOCK
----------- ------------
<S> <C> <C>
PAR.................................................... $ 8,370,000 3,000,000
Union Power............................................ 5,348,430 1,917,000
TRANS TECH............................................. 4,362,862 1,563,750
Potelco................................................ 2,919,038 1,046,250
----------- ---------
Total................................................ $21,000,330 7,527,000
=========== =========
</TABLE>

The amount of cash to be paid as part of the Acquisition Consideration is
based upon an assumed offering price of $9.00 per share. The actual amount of
cash paid to the stockholders of the Founding Companies will be the greater of
a previously specified fixed purchase price or a previously specified number
multiplied by the per share net offering proceeds to be received by Quanta as
reflected on the first page of the Prospectus. For each of the Founding
Companies, the respective fixed cash portion of the purchase price and number
to be multiplied by the per share net offering proceeds to be received by
Quanta are as follows: PAR: $7,500,000 and 1,000,000; Union Power: $4,792,500
and 639,000; TRANS TECH: $3,909,375 and 521,250; and Potelco: $2,615,625 and
348,750. The number of shares of Common Stock to be paid to the Founding
Companies is not subject to adjustment.

In addition, immediately prior to consummation of the Acquisitions, the
Founding Companies will make the S Corporation Distributions of approximately
$7.8 million in the aggregate. Prior to consummation of the Acquisitions, the
Founding Companies will also transfer, for cash consideration in an amount
equal to their respective book values, certain non-operating assets with an
aggregate net book value of approximately $0.9 million.

The consummation of each Acquisition is subject to customary conditions.
These conditions include, among others, the accuracy on the closing date of
the Acquisitions of the representations and warranties

45
<PAGE>

of the Founding Companies, their stockholders and of the Company, the
performance by each of the parties of their respective covenants and the
absence of a material adverse change in the business, results of operations or
financial condition of any of the Founding Companies.

The agreements relating to the Acquisitions may be terminated under certain
circumstances prior to the consummation of the Offering. Specifically, the
agreements may be terminated (i) by the mutual consent of the Board of
Directors of the Company and each Founding Company, (ii) if the Offering and
the Acquisitions are not consummated by June 1, 1998 or (iii) if a material
breach or default under the agreements shall exist and is not cured or waived.
There can be no assurance that the conditions to the closing of the
Acquisitions will be satisfied or waived or that the agreements relating to
the Acquisitions will not be terminated prior to the closing. However, if the
Acquisitions are not completed, the Offering will not be completed.

Pursuant to the agreements relating to the Acquisitions, all stockholders of
each of the Founding Companies have agreed not to compete with the Company for
a period of five years commencing on the date of closing of the Acquisitions.

Individuals who are or will become executive officers or directors of the
Company will receive the following consideration in the Acquisitions for their
interests in the Founding Companies, subject to adjustments as described
above.

<TABLE>
<CAPTION>
SHARES OF
CASH(1) COMMON STOCK
---------- ------------
<S> <C> <C>
PAR
John R. Colson........................................ $5,859,000 2,100,000
John R. Wilson........................................ 2,511,000 900,000
Union Power
Timothy A. Soule...................................... 941,324 337,392
TRANS TECH
John A. Martell....................................... 2,181,430 781,875
Potelco
Gary A. Tucci......................................... 2,919,038 1,046,250
</TABLE>
- --------

(1) Excludes distributions representing previously taxed S corporation
earnings to be made to S corporation stockholders. The anticipated amount
of such distributions to the former owners of the Founding Companies
aggregates approximately $7.8 million.

TRANSACTIONS INVOLVING CERTAIN OFFICERS, DIRECTORS AND STOCKHOLDERS

Certain stockholders of certain of the Founding Companies who will become
directors, executive officers or key employees of the Company upon
consummation of the Offering have guaranteed indebtedness, performance bonds
and other obligations of each of their respective Founding Companies. These
guarantees are expected to be terminated within 90 days following the
completion of the Offering.

Prior to consummation of the Offering, the stockholders of Union Power will
purchase certain non-operating assets from that company at a price equal to
the book value of such assets, estimated to be $183,000 in the aggregate.

Prior to consummation of the Offering, the stockholders of PAR will purchase
certain non-operating assets from that company at a price equal to the book
value of such assets, estimated to be $742,000 in the aggregate.

Union Power leases its main office facilities located in Englewood, Colorado
from Soule Trusts Partnership, which is controlled by affiliates of Ronald W.
and Timothy A. Soule, and a branch facility

46
<PAGE>

located in North Las Vegas, Nevada from RTS Partnership, which is owned by
Ronald W. and Timothy A. Soule. Ronald W. and Timothy A. Soule are President
and Vice President of Union Power, respectively, and Timothy Soule will become
a director of the Company upon consummation of the Offering. The Englewood
office lease provides for a five-year term that will terminate in the year
2002 with an option to renew the lease for an additional five-year term, and
covers approximately 3,500 square feet of office space on 4.8 acres, at a
monthly rental rate of $3,500. The North Las Vegas office lease will terminate
on May 31, 2006 with provision for automatic one-year renewal periods. Such
lease covers 2.69 acres and the leasehold improvements located on such land
for a monthly rental rate of $4,700. In addition, Union Power will lease two
directional drilling rigs from Mountain Drilling Equipment Co., which is owned
by Ronald W. and Timothy A. Soule. The equipment lease with Mountain Drilling
Equipment Co. provides for a one-year term which will terminate on August 1,
1998, and a monthly rental rate of $8,000. The Company believes that the
economic terms of these leases do not exceed fair market value.

Following the Acquisitions, Potelco will enter into written leases for its
main office with the father of Gary A. Tucci and for another office in
Washington with Gary A. Tucci, who will remain as President of Potelco and
will become a director of the Company upon consummation of the Offering.
Currently, both leases are oral and on a month to month basis. The main office
lease is for a 15,000 square foot building on five acres, at a rent of $2,000
per month. The other lease is for a 2,200 square foot office with a 6,000
square foot maintenance facility on 1.5 acres, at a rent of $2,800 per month.
The Company believes that the economic terms of these leases do not exceed
fair market value.

Following the Acquisitions, TRANS TECH will lease its main office from TRANS
TECH Properties, which is partially owned by Robert J. Urbanski and John A.
Martell, who are President and Vice President of TRANS TECH, respectively.
Additionally, Mr. Martell will become a director of the Company upon
consummation of the Offering. The main office of TRANS TECH is located in
South Bend, Indiana, and the facilities consist of approximately 7.5 acres of
real property, a 4,350 square foot office attached to a 10,560 square foot
heated warehouse, a 3,480 square foot detached unheated warehouse and a 3,000
square foot detached vehicle maintenance facility. The initial lease term is
for five years at a rent of $5,900 per month, plus the payment of all taxes,
insurance and maintenance on the property. TRANS TECH has the option to renew
the lease for an additional five year term at a rental rate equal to the then
current market rate. The Company believes that the economic terms of this
lease do not exceed fair market value.

Union Power has notes outstanding to various affiliates in the aggregate
amount of approximately $460,000. The Company intends to use a portion of the
proceeds of the Offering to repay these notes.

Potelco owes approximately $1.1 million to its sole stockholder and his
father pursuant to a promissory note and other arrangements. The Company
intends to use a portion of the proceeds of the Offering to repay this
indebtedness.

Following completion of the Offering, the Company may repay up to $17.6
million of the Founding Companies' outstanding debt, although the exact amount
and specific debt to be repaid has not been determined at this time.

COMPANY POLICY

In the future, any transactions with directors, officers, employees or
affiliates of the Company are anticipated to be minimal and will, in any case,
be approved by a majority of the Board of Directors, including a majority of
disinterested members of the Board of Directors.

47
<PAGE>

PRINCIPAL STOCKHOLDERS

The following table sets forth certain information with respect to the
beneficial ownership of the Company's voting capital stock by (i) each person
known by the Company to be a beneficial owner of more than 5% of any class of
the Company's voting capital stock, (ii) each director, nominee for director,
person who has consented to be named as a director ("named directors") and
executive officer of the Company and (iii) all directors, director nominees
and executive officers of the Company as a group. Except as otherwise
indicated below, the persons named in the table have advised the Company that
they have sole voting and investment power with respect to the shares of
capital stock shown as beneficially owned by them. Unless otherwise indicated,
each person or group has sole voting and investment power with respect to all
such shares. Unless otherwise indicated, the number of shares and percentage
of ownership of Common Stock for each of the named stockholders, directors and
executive officers assumes that shares of Common Stock that the stockholders
directors and executive officers may acquire within 60 days are outstanding.

<TABLE>
<CAPTION>
PERCENTAGE OF
SHARES
BENEFICIALLY
OWNED
SHARES -----------------
BENEFICIALLY PRIOR TO AFTER
NAME OWNED OFFERING OFFERING
- ---- ------------ -------- --------
<S> <C> <C> <C>
John R. Colson(1).............................. 2,100,000 19.3% 13.2%
Main Street Merchant Partners II, L.P.......... 1,484,542(a) 13.7 9.4
Vincent D. Foster(2)........................... 1,484,542(a) 13.7 9.4
Gary A. Tucci(3)............................... 1,046,250 9.6 6.6
John R. Wilson(4).............................. 900,000 8.2 5.7
John A. Martell(5)............................. 781,795 7.2 4.9
Timothy A. Soule(6)............................ 337,392 3.1 2.1
James H. Haddox(1)............................. 100,000(a) * *
Derrick A. Jensen(1)........................... 37,500(a) * *
James R. Ball(1)(7)............................ 20,000(a) * *
Rodney R. Proto(1)(7).......................... 20,000(a) * *
Michael T. Willis(1)(7)........................ 20,000(a) * *
All directors, director nominees and executive
officers as a group
(9 persons)(8)................................ 6,847,479 63.0 43.1
</TABLE>
- --------
* Less than 1%.

(a) Consists entirely of Limited Vote Common Stock. See "Description of
Capital Stock" for a description of the Limited Vote Common Stock.

(1) The address for Messrs. Ball, Colson, Proto, Haddox, Jensen and Willis is
3555 Timmons Lane, Suite 610, Houston, Texas 77027.

(2) Includes 1,472,191 shares issued to Main Street. Mr. Foster is a Managing
Director of Main Street. The address for Main Street and Mr. Foster is
1360 Post Oak Blvd., Suite 800, Houston, Texas 77056.

(3) The address for Mr. Tucci is 14103 Eight Street East, Sumner, Washington
98390.

(4) The address for Mr. Wilson is 1440 Iron Street, P.O. Box 12520, North
Kansas City, Missouri 64116.

(5) The address for Mr. Martell is 4601 Cleveland Road, P.O. Box 3915, South
Bend, Indiana 46619. Includes 174,310 shares owned by trusts for the
benefit of minor children of Mr. Martell, of which he disclaims beneficial
ownership.

(6) The address for Mr. Soule is 2045 W. Union Avenue, Englewood, Colorado
80110.

(7) In addition, each of Messrs. Ball, Proto and Willis have committed to
purchase 15,000 shares of Common Stock in the Offering.

(8) Includes 1,682,042 shares of Limited Vote Common Stock.

48
<PAGE>

DESCRIPTION OF CAPITAL STOCK

Upon completion of the Offering, the authorized capital stock of the Company
will consist of 40,000,000 shares of Common Stock, par value $.00001 per
share, including 3,345,333 shares of Limited Vote Common Stock. The Company
has also authorized the issuance of 10,000,000 shares of Preferred Stock, par
value $.00001 per share ("Preferred Stock"). The following discussion is
qualified in its entirety by reference to the Amended and Restated Certificate
of Incorporation of the Company, which is included as an exhibit to the
Registration Statement of which this Prospectus is a part.

COMMON STOCK AND LIMITED VOTE COMMON STOCK

The holders of Common Stock are entitled to one vote for each share on all
matters voted upon by stockholders, including the election of directors. Such
holders are not entitled to vote cumulatively for the election of directors.
Holders of a majority of the shares of Common Stock entitled to vote in any
election of directors may elect all of the directors standing for election.

Holders of Limited Vote Common Stock, voting together as a single class, are
entitled to elect one director. Holders of Limited Vote Common Stock are not
entitled to vote on the election of any other directors. Only the holders of
the Limited Vote Common Stock may remove the director such holders are
entitled to elect. Holders of Limited Vote Common Stock are entitled to 0.10
of one vote for each share held on all other matters on which they are
entitled to vote.

Subject to the rights of any then outstanding shares of Preferred Stock,
holders of Common Stock and Limited Vote Common Stock are together entitled to
participate pro rata in such dividends as may be declared in the discretion of
the Board of Directors out of funds legally available therefor. Holders of
Common Stock and Limited Vote Common Stock together are entitled to share
ratably in the net assets of the Company upon liquidation after payment or
provision for all liabilities and any preferential liquidation rights of any
Preferred Stock then outstanding. Holders of Common Stock and holders of
Limited Vote Common Stock have no preemptive rights to purchase shares of
stock of the Company. Shares of Common Stock are not subject to any redemption
provisions and are not convertible into any other securities of the Company.
Shares of Limited Vote Common Stock are not subject to any redemption
provisions and are convertible into Common Stock as described below.

Each share of Limited Vote Common Stock will automatically convert to Common
Stock on a share-for-share basis in the event of a disposition of such share
of Limited Vote Common Stock by the holder thereof (other than a distribution
by a holder to its partners or beneficial owners or a transfer to a related
party of such holders (as defined in Sections 267, 707, 318 and/or 4946 of the
Code).

The Common Stock has been approved for listing, subject to notice of
issuance, on the NYSE.

PREFERRED STOCK

The Preferred Stock may be issued from time to time by the Board of
Directors in one or more series. Subject to the provisions of the Amended and
Restated Certificate of Incorporation and limitations prescribed by law, the
Board of Directors is expressly authorized to adopt resolutions to issue the
shares, to fix the number of shares and to change the number of shares
constituting any series and to provide for or change the voting powers,
designations, preferences and relative, participating, optional, exchange or
other special rights, qualifications, limitations or restrictions thereof,
including dividend rights (including whether dividends are cumulative),
dividend rates, terms of redemption (including sinking fund provisions),
redemption prices, conversion rights and liquidation preferences of the shares
constituting any class or series of the Preferred Stock, in each case without
any further action or vote by the holders of Common Stock.

49
<PAGE>

Although the Company has no present intention to issue shares of Preferred
Stock, the issuance of shares of Preferred Stock, or the issuance of rights to
purchase such shares, could be used to discourage an unsolicited acquisition
proposal. For example, the issuance of a series of Preferred Stock might
impede a business combination by including class voting rights that would
enable the holders to block such a transaction; or such issuance might
facilitate a business combination by including voting rights that would
provide a required percentage vote of the stockholders. In addition, under
certain circumstances, the issuance of Preferred Stock could adversely affect
the voting power of the holders of the Common Stock. Although the Board of
Directors is required to make any determination to issue such stock based on
its judgment as to the best interests of the stockholders of the Company, the
Board of Directors could act in a manner that would discourage an acquisition
attempt or other transaction that some or a majority of the stockholders might
believe to be in their best interests or in which stockholders might receive a
premium for their stock over the then-market price of such stock. The Board of
Directors does not at present intend to seek stockholder approval prior to any
issuance of currently authorized stock, unless otherwise required by law or
the rules of any market on which the Company's securities are traded.

STATUTORY BUSINESS COMBINATION PROVISION

The Company is a Delaware corporation and is subject to Section 203 of the
DGCL. In general, Section 203 prevents a Delaware corporation from engaging in
a "business combination" (as defined) with an "interested stockholder"
(defined generally as a person owning 15% or more of a corporation's
outstanding voting stock or affiliate or associate) for three years following
the time such stockholder became an interested stockholder unless (i) before
such person became an interested stockholder, the board of directors of the
corporation approved the business combination or the transaction in which the
interested stockholder became an interested stockholder, (ii) upon
consummation of the transaction which resulted in the interested stockholder's
becoming an interested stockholder, the interested stockholder owned at least
85% of the voting stock of the corporation outstanding at the time the
transaction commenced (excluding stock held by directors who are also officers
of the corporation and by employee stock plans that do not provide employees
with the rights to determine confidentially whether shares held subject to the
plan will be tendered in a tender or exchange offer) or (iii) at or subsequent
to the time such person became an interested stockholder, the business
combination was approved by the board of directors of the corporation and
authorized at a meeting of stockholders by the affirmative vote of the holders
of 66 2/3% of the outstanding voting stock of the corporation not owned by the
interested stockholder. Under Section 203, the restrictions described above
also do not apply to certain business combinations proposed by an interested
stockholder following the announcement or notification of one of certain
extraordinary transactions involving the corporation and a person who had not
been an interested stockholder during the previous three years or who became
an interested stockholder with the approval of a majority of the corporation's
directors, if such extraordinary transaction is approved or not opposed by a
majority of the directors who were directors prior to any person becoming an
interested stockholder during the previous three years or were recommended for
election or elected to succeed such directors by a majority of such directors.

LIMITATION ON DIRECTORS' LIABILITY

Delaware law authorizes corporations to limit or eliminate the personal
liability of directors to corporations and their stockholders for monetary
damages for breach of a director's fiduciary duty of care. The duty of care
requires that, when acting on behalf of the corporation, directors must
exercise an informed business judgment based on all material information
reasonably available to them. Absent the limitations authorized by Delaware
law, directors are accountable to corporations and their stockholders for
monetary damages for conduct constituting gross negligence in the exercise of
their duty of care. Delaware law enables corporations to limit available
relief to equitable remedies such as injunction or rescission. The Amended and
Restated Certificate of Incorporation limits the liability of directors of the
Company to the Company or its stockholders to the fullest extent permitted by
Delaware law. Specifically,

50
<PAGE>

directors of the Company will not be personally liable to the Company or its
stockholders for monetary damages for breach of a director's fiduciary duty as
a director, except for liability for breach of the duty of loyalty, for acts
or omissions not in good faith or that involve intentional misconduct or a
knowing violation of law, for unlawful payments of dividends or unlawful stock
repurchases or redemptions as provided in Section 174 of the DGCL or for any
transaction in which a director has derived an improper personal benefit.

The Amended and Restated Certificate of Incorporation provides that each
officer and director of the Company will be indemnified and held harmless, to
the fullest extent permitted by Delaware law (as amended from time to time),
against all expenses, liabilities and losses reasonably suffered in connection
with any action, suit or proceeding by reason of the fact that he or she is or
was a director or officer of the Company or, while being at the time a
director or officer of the Company, is or was serving at the request of the
Company as a director, trustee, officer, employee or agent of another entity.
The Company is not, however, permitted to indemnify any person in connection
with a proceeding initiated by that person unless such proceeding was
authorized by the Board of Directors. The Bylaws also provide for mandatory
advancement of expenses of officers and directors incurred in defending any
covered proceeding in advance of its final disposition. The Company also
intends to obtain directors' and officers' liability insurance.

The inclusion of these provisions in the Amended and Restated Certificate of
Incorporation may have the effect of reducing the likelihood of derivative
litigation against directors and may discourage or deter stockholders or
management from bringing a lawsuit against directors for breach of their duty
of care, even though such an action, if successful, might otherwise have
benefitted the Company and its stockholders. The Company's Bylaws provide
indemnification to the Company's officers and directors and certain other
persons with respect to certain matters.

OTHER MATTERS

The Amended and Restated Certificate of Incorporation provides that the
number of directors shall be as determined by the Board of Directors from time
to time, but shall be at least one and not more than nineteen. It also
provides that directors may be removed only for cause, and then only by the
affirmative vote of the holders of at least a majority of all outstanding
voting stock entitled to vote. This provision, in conjunction with the
provision of the Bylaws authorizing the Board of Directors to fill vacant
directorships, will prevent stockholders from removing incumbent directors
without cause and filling the resulting vacancies with their own nominees.

The Amended and Restated Certificate of Incorporation provides that upon
consummation of the Offering stockholders may act only at an annual or special
meeting of stockholders and may not act by written consent. The Amended and
Restated Certificate of Incorporation provides that special meetings of the
stockholders can be called only by the Chairman of the Board pursuant to a
resolution approved by a majority of the whole Board of Directors.

STOCKHOLDER PROPOSALS

The Company's Bylaws contain provisions (i) requiring that advance notice be
delivered to the Company of any business to be brought by a stockholder before
an annual meeting of stockholders and (ii) establishing certain procedures to
be followed by stockholders in nominating persons for election to the Board of
Directors. Generally, such advance notice provisions provide that written
notice must be given to the Secretary of the Company by a stockholder (a) in
the event of business to be brought by a stockholder before, (i) an annual
meeting, not less than 90 nor more than 180 days prior to the earlier of the
date of the meeting or the anniversary date of the immediately preceding
annual meeting of stockholders and (ii) a special meeting, not less than 40
nor more than 60 days prior to the date of such

51
<PAGE>

meeting of stockholders (with certain exceptions if less than 50 days notice
or prior public disclosure of the date of the special meeting is given to
stockholders) and (b) in the event of nominations of persons for election to
the Board of Directors by any stockholder, (i) with respect to an election to
be held at the annual meeting of stockholders, not less than 90 days prior to
the anniversary date of the immediately preceding annual meeting of
stockholders and (ii) with respect to an election to be held at a special
meeting of stockholders for the election of directors, not later than the
close of business on the 10th day following the day on which notice of the
date of the special meeting was mailed to stockholders or public disclosure of
the date of the special meeting was made, whichever first occurs. Such notice
must set forth specific information regarding such stockholder and such
business or director nominee, as described in the Company's Bylaws. The
foregoing summary is qualified in its entirety by reference to the Company's
Bylaws, which are included as an exhibit to the Registration Statement of
which this Prospectus is a part.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock is American Stock
Transfer and Trust Company.

52
<PAGE>

SHARES ELIGIBLE FOR FUTURE SALE

Upon consummation of the Acquisitions and completion of the Offering, the
Company will have outstanding 15,872,333 shares of Common Stock (16,622,333 if
the Underwriters' over-allotment option is exercised in full) of which the
5,000,000 shares sold in the Offering (5,750,000 if the Underwriters' over-
allotment option is exercised in full) will be freely tradable without
restriction or further registration under the Securities Act, except for those
held by "affiliates" (as defined in the Securities Act) of the Company, which
shares will be subject to the resale limitations of Rule 144 under the
Securities Act. The remaining 10,872,333 shares of Common Stock are deemed
"restricted securities" under Rule 144 in that they were originally issued and
sold by the Company in private transactions in reliance upon exemptions under
the Securities Act, and may be publicly sold only if registered under the
Securities Act or sold in accordance with an applicable exemption from
registration, such as those provided by Rule 144 promulgated under the
Securities Act as described below.

In general, under Rule 144 as currently in effect, if a minimum of one year
has elapsed since the later of the date of acquisition of restricted
securities from the issuer or from any affiliate of the issuer, the acquiror
or subsequent holder would be entitled to sell within any three-month period a
number of those shares that does not exceed the greater of one percent of the
number of shares of such class of stock then outstanding or the average weekly
trading volume of the shares of such class of stock during the four calendar
weeks preceding the filing of a Form 144 with respect to such sale. Sales
under Rule 144 are also subject to certain manner of sale provisions and
notice requirements and to the availability of current public information
about the issuer. In addition, if a period of at least two years has elapsed
since the later of the date of acquisition of restricted securities from the
issuer or from any affiliate of the issuer, and the acquiror or subsequent
holder thereof is deemed not to have been an affiliate of the issuer of such
restricted securities at any time during the 90 days preceding a sale, such
person would be entitled to sell such restricted securities under Rule 144(k)
without regard to the requirements described above. Rule 144 does not require
the same person to have held the securities for the applicable periods. The
foregoing summary of Rule 144 is not intended to be a complete description
thereof. The Securities and Exchange Commission (the "Commission") has
proposed certain amendments to Rule 144 that would, among other things,
eliminate the manner of sale requirements and revise the notice provisions of
that rule. The Commission has also solicited comments on other possible
changes to Rule 144, including possible revisions to the one- and two-year
holding periods and the volume limitations referred to above.

As of the closing of this Offering, options to purchase an aggregate of
1,500,000 shares of Common Stock are expected to be issued under the 1997
Stock Option Plan. In general, pursuant to Rule 701 under the Securities Act,
any employee, officer or director of, or consultant to, the Company who
purchased his or her shares pursuant to a written compensatory plan or
contract is entitled to rely on the resale provisions of Rule 701, which
permit non-affiliates to sell such shares without compliance with the public
information, holding period, volume limitation or notice provisions of Rule
144, and permit affiliates to sell such shares without compliance with the
holding period provisions of Rule 144, in each case commencing 90 days after
the date of this Prospectus. In addition, the Company intends to file a
Registration Statement on Form S-8 covering the shares issuable upon exercise
of stock options that may be granted in the future under the 1997 Stock Option
Plan, in which case such shares of Common Stock generally will be freely
tradable by non-affiliates in the public market without restriction under the
Securities Act.

The Company, its executive officers, directors, current stockholders and
persons acquiring shares of Common Stock in connection with the Acquisitions
have agreed not to offer, sell, contract to sell, grant any option or other
right for the sale of, or otherwise dispose of any shares of Common Stock or
any securities, indebtedness or other rights exercisable for or convertible or
exchangeable into Common Stock owned or acquired in the future in any manner
for a period of two years following the date of this Prospectus (the "Lockup
Period") without the prior written consent of BT Alex. Brown Incorporated,
except that the Company may, subject to certain conditions, issue Common Stock
in connection with

53
<PAGE>

acquisitions, upon conversion of Limited Vote Common Stock into Common Stock
and may grant Awards (or Common Stock upon exercise of Awards) under the 1997
Stock Option Plan. See "Underwriting." These restrictions will be applicable
to any shares acquired by any of those persons in the Offering or otherwise
during the Lockup Period. In connection with the Acquisitions, the Company has
granted registration rights to stockholders of the Founding Companies in
connection with registrations of sales of Common Stock by the Company
following the Lockup Period (other than registrations in connection with
acquisitions and pursuant to employee benefit plans).

Prior to the Offering, there has been no established public market for the
Common Stock. No prediction can be made of the effect, if any, that sales of
shares under Rule 144, or otherwise, or the availability of shares for sale
will have on the market price of the Common Stock prevailing from time to time
after the Offering. The Company is unable to estimate the number of shares
that may be sold in the public market under Rule 144, or otherwise, because
such amount will depend on the trading volume in, and market price for, the
Common Stock and other factors. Nevertheless, sales of substantial amounts of
the Common Stock in the public market, or the perception that such sales could
occur, could adversely affect the market price of the Common Stock of the
Company and the Company's future ability to raise equity capital and complete
any additional acquisitions for Common Stock. See "Underwriting."

54
<PAGE>

UNDERWRITING

Subject to the terms and conditions of the Underwriting Agreement, the
underwriters named below (the "Underwriters"), through their representatives,
BT Alex. Brown Incorporated, BancAmerica Robertson Stephens and Sanders Morris
Mundy Inc. (together, the "Representatives"), have severally agreed to
purchase from the Company the following respective number of shares of Common
Stock at the initial public offering price less the underwriting discounts and
commissions set forth on the cover page of this Prospectus:

<TABLE>
<CAPTION>
NUMBER OF
UNDERWRITERS SHARES
- ------------ ---------
<S> <C>
BT Alex. Brown Incorporated...........................................
BancAmerica Robertson Stephens........................................
Sanders Morris Mundy Inc..............................................
---------
Total............................................................... 5,000,000
=========
</TABLE>

The Underwriting Agreement provides that the obligations of the Underwriters
are subject to certain conditions precedent and that the Underwriters will
purchase all of the shares of Common Stock offered hereby if any of such
shares are purchased.

The Company has been advised by the Representatives that the Underwriters
propose to offer the shares of Common Stock to the public at the initial
public offering price set forth on the cover page of this Prospectus and to
certain dealers at such price less a concession not in excess of $ per
share. The Underwriters may allow, and such dealers may re-allow, a concession
not in excess of $ per share to certain other dealers. After commencement of
the initial public offering, the offering price and other selling terms may be
changed by the Representatives.

The Company has granted the Underwriters an option, exercisable not later
than 30 days after the date of this Prospectus, to purchase up to 750,000
additional shares of Common Stock at the initial public offering price less
the underwriting discounts and commissions set forth on the cover page of this
Prospectus. To the extent that the Underwriters exercise such option, each of
the Underwriters will have a firm commitment to purchase approximately the
same percentage thereof that the number of shares of Common Stock to be
purchased by it in the above table bears to 5,000,000, and the Company will be
obligated, pursuant to the option, to sell such shares to the Underwriters.
The Underwriters may exercise such option only to cover over-allotments made
in connection with the sale of the Common Stock offered

55
<PAGE>

hereby. If purchased, the Underwriters will offer such additional shares on
the same terms as those on which the 5,000,000 shares are being offered.

The Underwriting Agreement contains covenants of indemnity and contribution
between the Underwriters and the Company regarding certain liabilities,
including liabilities under the Securities Act.

To facilitate the Offering, the Underwriters may engage in transactions that
stabilize, maintain or otherwise affect the market price of the Common Stock.
Specifically, the Underwriters may over-allot shares of the Common Stock in
connection with the Offering, thereby creating a short position in the
Underwriters' syndicate account. Additionally, to cover such over-allotments
or to stabilize the market price of the Common Stock, the Underwriters may bid
for, and purchase, shares of the Common Stock in the open market. Any of these
activities may maintain the market price of the Common Stock at a level above
that which might otherwise prevail in the open market. The Underwriters are
not required to engage in these activities, and, if commenced, any such
activities may be discontinued at any time. The Representatives, on behalf of
the Underwriters, also may reclaim selling concessions allowed to an
Underwriter or dealer, if the syndicate repurchases shares distributed by that
Underwriter or dealer.

The Company has agreed that it will not sell or offer any shares of Common
Stock or options, rights or warrants to acquire any Common Stock for a period
of 180 days after the date of this Prospectus without the prior written
consent of BT Alex. Brown Incorporated, except for shares issued (i) in
connection with acquisitions, (ii) pursuant to the exercise of options granted
under the 1997 Stock Option Plan and (iii) upon conversion of shares of
Limited Vote Common Stock. Further, the Company's directors, officers and
certain stockholders who beneficially own 10,872,333 shares in the aggregate
have agreed not to directly or indirectly sell or offer for sale or otherwise
dispose of any Common Stock for a period of two years after the date of this
Prospectus without the prior written consent of BT Alex. Brown Incorporated.

The Representatives have advised the Company that the Underwriters do not
intend to confirm sales to any account over which they exercise discretionary
authority.

Two shareholders and directors of Sanders Morris Mundy Inc. are limited
partners in Main Street. The shares of Common Stock beneficially owned by
these two individuals represent less than 1% of the Common Stock to be
outstanding after the consummation of the Offering.

Prior to the Offering, there has been no public market for the Common Stock.
Consequently, the initial public offering price for the Common Stock has been
determined by negotiations between the Company and the Representatives. Among
the factors considered in such negotiations were prevailing market conditions,
the results of operations of the Founding Companies in recent periods, the
market capitalization and stages of development or other companies which the
Company and the Representatives believed to be comparable to the Company,
estimates of the business potential of the Company, the present state of the
Company's development and other factors deemed relevant by the Company and the
Representatives.

LEGAL MATTERS

The validity of the shares of Common Stock offered hereby will be passed
upon for the Company by Jackson Walker L.L.P., Dallas, Texas. Certain legal
matters in connection with the sale of the Common Stock offered hereby will be
passed upon for the Underwriters by Piper & Marbury L.L.P., Baltimore,
Maryland.

56
<PAGE>

EXPERTS

The financial statements of Quanta and the Founding Companies, included in
this Prospectus and elsewhere in this registration statement have been audited
by Arthur Andersen LLP, independent public accountants, as indicated in their
reports with respect thereto, and are included herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
reports.

The Common Stock issued in connection with the Acquisitions may not be sold
to the public and the holders of those shares are restricted from selling
those shares to the public for a period of at least two years after
consummation of the Acquisitions. An independent valuation study was rendered
to Quanta by Willamette Management Associates, Inc., independent appraisers,
to assist Quanta in determining the discount to be applied to the Common Stock
issued in connection with the Acquisitions and Limited Vote Common Stock in
reliance upon the authority of such firm as experts in rendering said
valuation study.

ADDITIONAL INFORMATION

The Company has filed with the Commission a Registration Statement on Form
S-1 (together with all exhibits, schedules and amendments relating thereto,
the "Registration Statement") under the Securities Act with respect to the
Common Stock offered hereby. This Prospectus, filed as part of the
Registration Statement, does not contain all the information contained in the
Registration Statement, certain portions of which have been omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to the Company and the Common Stock offered hereby,
reference is made to the Registration Statement. Statements contained in this
Prospectus as to the contents of any contract or other document filed as an
exhibit to the Registration Statement accurately describes the material
provisions of such document and are qualified in their entirety by reference
to such exhibits for complete statements of their provisions. All of these
documents may be inspected without charge at the Public Reference Section of
the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, and at the following regional offices of the
Commission: Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661; and 7 World Trade Center, 13th Floor, New York, New York
10048. Copies can also be obtained from the Public Reference Section of the
Commission at prescribed rates. The Commission maintains a Web site
(http://www.sec.gov) that contains reports, proxy and information statements
and other information regarding registrants that file electronically with the
Commission.

Prior to filing the Registration Statement of which this Prospectus is a
part, the Company was not subject to the reporting requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Upon effectiveness of the Registration Statement, the Company will
become subject to the informational and periodic reporting requirements of the
Exchange Act, and in accordance therewith, will file periodic reports, proxy
statements and other information with the Commission. Such periodic reports,
proxy statements and other information will be available for inspection and
copying at the public reference facilities and other regional offices referred
to above. The Company intends to register the securities offered by the
Registration Statement under the Exchange Act simultaneously with the
effectiveness of the Registration Statement and to furnish its stockholders
with annual reports containing audited financial statements and such other
reports as may be required from time to time by law or the NYSE.

57
<PAGE>

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
QUANTA SERVICES, INC. UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
Introduction to Unaudited Pro Forma Combined Financial Statements....... F-2
Unaudited Pro Forma Combined Balance Sheet.............................. F-3
Unaudited Pro Forma Combined Statements of Operations................... F-4
Notes to Unaudited Pro Forma Combined Financial Statements.............. F-6
PAR ELECTRICAL CONTRACTORS, INC.
Report of Independent Public Accountants................................ F-12
Balance Sheets.......................................................... F-13
Statements of Operations................................................ F-14
Statements of Cash Flows................................................ F-15
Statements of Shareholders' Equity...................................... F-16
Notes to Financial Statements........................................... F-17
QUANTA SERVICES, INC.
Report of Independent Public Accountants................................ F-26
Balance Sheet........................................................... F-27
Statement of Operations................................................. F-28
Statement of Stockholders' Equity....................................... F-29
Notes to Financial Statements........................................... F-30
FOUNDING COMPANIES
UNION POWER CONSTRUCTION COMPANY
Report of Independent Public Accountants................................ F-33
Balance Sheets.......................................................... F-34
Statements of Operations................................................ F-35
Statements of Cash Flows................................................ F-36
Statements of Stockholders' Equity...................................... F-37
Notes to Financial Statements........................................... F-38
TRANS TECH ELECTRIC, INC.
Report of Independent Public Accountants................................ F-46
Balance Sheets.......................................................... F-47
Statements of Operations................................................ F-48
Statements of Cash Flows................................................ F-49
Statements of Shareholders' Equity...................................... F-50
Notes to Financial Statements........................................... F-51
POTELCO, INC.
Report of Independent Public Accountants................................ F-58
Balance Sheets.......................................................... F-59
Statements of Operations................................................ F-60
Statements of Cash Flows................................................ F-61
Statements of Stockholder's Equity...................................... F-62
Notes to Financial Statements........................................... F-63
</TABLE>

F-1
<PAGE>

QUANTA SERVICES, INC. AND FOUNDING COMPANIES
UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS
BASIS OF PRESENTATION

The following unaudited pro forma combined financial statements give effect
to (i) the acquisitions by Quanta Services, Inc. (Quanta), of the outstanding
capital stock of PAR, TRANS TECH, Union Power and Potelco (together, the
Founding Companies), and related transactions and (ii) the Offering. The
acquisitions (the Acquisitions) will occur simultaneously with the closing of
Quanta's initial public offering (the Offering) and will be accounted for
using the purchase method of accounting. PAR has been identified as the
accounting acquiror for financial statement presentation purposes as its
stockholders will represent the largest voting interest within Quanta.

The unaudited pro forma combined balance sheet gives effect to the
Acquisitions and related transactions, and the Offering, as if they had
occurred on September 30, 1997. The unaudited pro forma combined statements of
operations give effect to these transactions as if they had occurred on
January 1, 1996.

Quanta has preliminarily analyzed the savings that is expects to be realized
from reductions in salaries, bonuses and certain benefits to the owners. To
the extent the owners of the Founding Companies have contractually agreed to
prospective reductions in salary, bonuses, benefits and lease payments, these
reductions have been reflected in the unaudited pro forma combined statements
of operations. With respect to other potential cost savings, Quanta has not
and cannot quantify these savings until completion of the Acquisitions. It is
anticipated that these savings will be offset by costs related to Quanta's new
corporate management and by the costs associated with being a public company.
However, because these costs cannot be accurately quantified at this time,
they have not been included in the pro forma financial information of Quanta.

The pro forma adjustments are based on preliminary estimates, available
information and certain assumptions that Company management deems appropriate
and may be revised as additional information becomes available. The pro forma
financial data do not purport to represent what Quanta's financial position or
results of operations would actually have been if such transactions in fact
had occurred on those dates and are not necessarily representative of Quanta's
financial position or results of operations for any future period. Since the
Founding Companies were not under common control or management, historical
combined results may not be comparable to, or indicative of, future
performance. The unaudited pro forma combined financial statements should be
read in conjunction with the other financial statements and notes thereto
included elsewhere in this Prospectus. See also "Risk Factors" included
elsewhere herein.

F-2
<PAGE>

QUANTA SERVICES, INC. AND FOUNDING COMPANIES
UNAUDITED PRO FORMA COMBINED BALANCE SHEET
SEPTEMBER 30, 1997
(IN THOUSANDS)

<TABLE>
<CAPTION>
PRO
TRANS UNION PRO FORMA FORMA POST MERGER AS
PAR POTELCO TECH POWER QUANTA ADJUSTMENTS COMBINED ADJUSTMENTS ADJUSTED
ASSETS ------- ------- ------- ------- ------ ----------- -------- ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CURRENT ASSETS:
Cash and cash
equivalents........... $ 34 $ 280 $ 865 $ 74 $ 8 $ 874 $ 2,135 $ 340 $ 2,475
Accounts receivable.... 10,776 5,016 6,297 7,947 -- (651) 29,385 -- 29,385
Less -- Allowance...... 100 47 158 84 -- -- 389 -- 389
------- ------ ------- ------- ---- ------- -------- -------- --------
Accounts receivable,
net.................. 10,676 4,969 6,139 7,863 -- (651) 28,996 -- 28,996
Costs and profits
recognized in excess
of billings........... 1,218 975 4,320 361 -- -- 6,874 -- 6,874
Other receivables...... 148 -- -- -- -- -- 148 -- 148
Inventories............ -- -- 684 -- -- -- 684 -- 684
Prepaid expenses and
other................. 1,130 34 86 279 56 -- 1,585 (56) 1,529
------- ------ ------- ------- ---- ------- -------- -------- --------
Total current assets. 13,206 6,258 12,094 8,577 64 223 40,422 284 40,706
------- ------ ------- ------- ---- ------- -------- -------- --------
PROPERTY AND EQUIPMENT,
NET.................... 13,992 3,206 2,924 6,065 -- (925) 25,262 -- 25,262
OTHER ASSETS............ 240 -- 3 -- -- -- 243 -- 243
GOODWILL................ -- -- -- -- -- 59,915 59,915 -- 59,915
------- ------ ------- ------- ---- ------- -------- -------- --------
Total assets......... $27,438 $9,464 $15,021 $14,642 $ 64 $59,213 $125,842 $ 284 $126,126
======= ====== ======= ======= ==== ======= ======== ======== ========
<CAPTION>
LIABILITIES AND
STOCKHOLDERS' EQUITY
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CURRENT LIABILITIES:
Current maturities of
long-term debt........ $ 6,294 $1,653 $ 2,797 $ 1,138 $-- $ 7,816 $ 19,698 $(11,857) $ 7,841
Accounts payable and
accrued expenses...... 7,376 2,163 5,166 4,330 -- (651) 18,384 18,384
Payables to Founding
Company stockholders.. -- 254 -- -- 64 21,000 21,318 (21,318) --
Billings in excess of
costs and profits
recognized............ 85 74 173 163 -- -- 495 -- 495
------- ------ ------- ------- ---- ------- -------- -------- --------
Total current
liabilities......... $13,755 $4,144 $ 8,136 $ 5,631 $ 64 $28,165 $ 59,895 $(33,175) $ 26,720
------- ------ ------- ------- ---- ------- -------- -------- --------
LONG-TERM LIABILITIES:
Long-term debt, net of
current maturities.... 2,008 1,382 981 1,076 -- (26) 5,421 (5,421) --
Deferred income taxes.. 2,224 -- -- 1,257 -- 788 4,269 -- 4,269
------- ------ ------- ------- ---- ------- -------- -------- --------
Total long-term
liabilities......... 4,232 1,382 981 2,333 -- 762 9,690 (5,421) 4,269
------- ------ ------- ------- ---- ------- -------- -------- --------
COMMITMENTS AND
CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common Stock........... 50 -- 125 25 -- (200) -- -- --
Limited Vote Common
Stock................. -- -- -- -- -- -- -- -- --
Addition paid-in
capital............... -- 160 -- -- -- 45,240 45,400 38,880 84,280
Unrealized loss on
securities............ -- -- -- (56) -- -- (56) -- (56)
Retained earnings...... 10,913 3,778 5,841 6,709 -- (16,328) 10,913 -- 10,913
Treasury stock......... (1,512) -- (62) -- -- 1,574 -- -- --
------- ------ ------- ------- ---- ------- -------- -------- --------
Total stockholders'
equity.............. 9,451 3,938 5,904 6,678 -- 30,286 56,257 $ 38,880 95,137
------- ------ ------- ------- ---- ------- -------- -------- --------
Total liabilities and
stockholders'
equity.............. $27,438 $9,464 $15,021 $14,642 $ 64 $59,213 $125,842 $ 284 $126,126
======= ====== ======= ======= ==== ======= ======== ======== ========
</TABLE>

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

F-3
<PAGE>

QUANTA SERVICES, INC. AND FOUNDING COMPANIES

UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
TRANS UNION PRO FORMA
PAR POTELCO TECH POWER QUANTA ADJUSTMENTS TOTAL
------- ------- ------- ------- ------ ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUES................ $42,684 $14,549 $24,414 $30,884 $ -- $(4,388) $108,143
COST OF SERVICES
(including
depreciation).......... 35,789 12,946 20,426 26,996 -- (4,388) 91,769
------- ------- ------- ------- ----- ------- --------
Gross profit.......... 6,895 1,603 3,988 3,888 -- -- 16,374
SELLING, GENERAL AND
ADMINISTRATIVE
EXPENSES............... 5,012 971 1,848 1,471 -- (908) 8,394
GOODWILL AMORTIZATION... -- -- -- -- -- 1,498 1,498
------- ------- ------- ------- ----- ------- --------
INCOME FROM OPERATIONS.. 1,883 632 2,140 2,417 -- (590) 6,482
OTHER INCOME (EXPENSE):
Interest expense...... (576) (321) (313) (33) -- 661 (582)
Other, net............ (70) (123) 45 166 -- 164 182
------- ------- ------- ------- ----- ------- --------
Other income
(expense), net....... (646) (444) (268) 133 -- 825 (400)
------- ------- ------- ------- ----- ------- --------
INCOME BEFORE INCOME TAX
EXPENSE................ 1,237 188 1,872 2,550 -- 235 6,082
PROVISION FOR INCOME
TAXES:................. 487 -- -- 451 -- 2,056 2,994
------- ------- ------- ------- ----- ------- --------
NET INCOME.............. $ 750 $ 188 $ 1,872 $ 2,099 $ -- $(1,821) $ 3,088
======= ======= ======= ======= ===== ======= ========
NET INCOME PER SHARE.... $ 0.20
========
SHARES USED IN COMPUTING
PRO FORMA INCOME PER
SHARE(1)............... 15,835
========
</TABLE>
- --------
(1) Includes (a) 3,345,333 shares issued to certain management personnel and
the initial stockholders of Quanta, (b) 7,527,000 shares issued to owners
of the Founding Companies and (c) 4,962,259 of the 5,000,000 shares sold
in the Offering to pay the cash portion of the Acquisition consideration,
expenses of the Offering and retirement of debt. The 37,741 shares
excluded reflect net cash to Quanta.

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

F-4
<PAGE>

QUANTA SERVICES, INC. AND FOUNDING COMPANIES

UNAUDITED PRO FORMA COMBINED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)

<TABLE>
<CAPTION>
TRANS UNION PRO FORM
PAR POTELCO TECH POWER QUANTA ADJUSTMENTS TOTAL
------- ------- ------- ------- ------ ----------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
REVENUES................ $36,439 $13,248 $24,278 $37,202 $-- $(2,501) $108,666
COST OF SERVICES
(including
depreciation).......... 27,944 10,416 19,687 31,750 -- (2,501) 87,296
------- ------- ------- ------- ---- ------- --------
Gross profit............ 8,495 2,832 4,591 5,452 -- -- 21,370
SELLING, GENERAL AND
ADMINITRATIVE EXPENSES. 5,013 777 1,362 1,914 -- (1,773) 7,293
GOODWILL AMORTIZATION... -- -- -- -- -- 1,123 1,123
------- ------- ------- ------- ---- ------- --------
INCOME FROM OPERATIONS.. 3,482 2,055 3,229 3,538 -- 650 12,954
OTHER INCOME (EXPENSE):
Interest expense...... (470) (185) (232) (115) -- 508 (494)
Other, net............ (97) 20 38 230 -- 125 316
------- ------- ------- ------- ---- ------- --------
Other income
(expense), net....... (567) (165) (194) 115 -- 633 (178)
------- ------- ------- ------- ---- ------- --------
INCOME BEFORE INCOME TAX
EXPENSE................ 2,915 1,890 3,035 3,653 -- 1,283 12,776
PROVISION FOR INCOME
TAXES.................. 1,172 -- -- 1,461 -- 2,791 5,424
------- ------- ------- ------- ---- ------- --------
NET INCOME.............. $ 1,743 $ 1,890 $ 3,035 $ 2,192 $-- $(1,508) $ 7,352
======= ======= ======= ======= ==== ======= ========
NET INCOME PER SHARE.... $ 0.46
========
SHARES USED IN COMPUTING
PRO FORMA INCOME PER
SHARE(1)............... 15,835
========
</TABLE>
- --------
(1) Includes (a) 3,345,333 shares issued to certain management personnel and
the initial stockholders of Quanta, (b) 7,527,000 shares issued to owners
of the Founding Companies and (c) 4,962,259 of the 5,000,000 shares sold
in the Offering to pay the cash portion of the Acquisition consideration,
expenses of the Offering and retirement of debt. The 37,741 shares
excluded reflect net cash to Quanta.

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

F-5
<PAGE>

QUANTA SERVICES, INC. AND FOUNDING COMPANIES
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

1. GENERAL:

Quanta Services, Inc. (Quanta), was founded to create a leading provider of
specialty electrical contracting and maintenance services primarily related to
electric and telecommunications infrastructure in North America. Quanta has
conducted no operations to date and will acquire the Founding Companies
concurrently with and as a condition of the closing of this Offering.

The historical financial statements reflect the financial position and
results of operations of the Founding Companies and were derived from the
respective Founding Companies' financial statements where indicated. The
periods included in these financial statements for the individual Founding
Companies are as of and for the nine months ended September 30, 1997, and for
the year ended December 31, 1996. The audited historical financial statements
included elsewhere herein have been included in accordance with Securities and
Exchange Commission (SEC) Staff Accounting Bulletin No. 80.

2. ACQUISITION OF FOUNDING COMPANIES:

Concurrently with and as a condition to the closing of this Offering, Quanta
will acquire all of the outstanding capital stock of the Founding Companies.
The acquisitions will be accounted for using the purchase method of accounting
with PAR being reflected as the accounting acquiror as its stockholders will
represent the largest voting interest within Quanta.

The following table sets forth the consideration to be paid (a) in cash and
(b) in shares of Common Stock to the common stockholders of each of the
Founding Companies, other than the accounting acquiror (PAR). For purposes of
computing the estimated purchase price for accounting purposes, the value of
the shares was determined using an estimated fair value of $7.20 per share (or
$32.6 million), which is less than the estimated initial public offering price
of $9.00 per share due primarily to restrictions on the sale and
transferability of the shares issued. The total estimated purchase price of
$45.2 million for the acquisition is based upon preliminary estimates and is
subject to certain purchase price adjustments at and following closing. The
table does not reflect distributions totaling $7.8 million consisting of
certain Founding Companies' undistributed earnings previously taxed to their
stockholders (S Corporation Distributions) prior to the Acquisitions.

<TABLE>
<CAPTION>
SHARES OF
CASH COMMON STOCK
------- ------------
(IN THOUSANDS)
<S> <C> <C>
Potelco.............................................. $ 2,919 1,046
TRANS TECH........................................... 4,363 1,564
Union Power.......................................... 5,348 1,917
------- -----
Total.............................................. $12,630 4,527
======= =====
</TABLE>

Additionally, the Limited Vote Common Stock issued to the initial
stockholders and management has been accounted for by the Company as a
purchase transaction. For purposes of estimating the purchase price for
accounting purposes, the value of the shares was determined using an estimated
fair value of $6.75 per share (or $22.6 million) which is less than the
estimated initial public offering price of $9.00 per share due to restrictions
on the sale and transferability of the shares issued, and the limited vote
provisions applicable to such shares.

F-6
<PAGE>

QUANTA SERVICES, INC. AND FOUNDING COMPANIES
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS--(CONTINUED)

3. UNAUDITED PRO FORMA COMBINED BALANCE SHEET ADJUSTMENTS:

(a) Records the S Corporation Distributions of $7.8 million, which is
expected to be distributed using new borrowings of $7.8 million.

(b) Records the liability for the cash portion of the consideration to be
paid to PAR, the accounting acquiror, and the merger of Quanta with
PAR.

(c) Records the transfer of certain net nonoperating assets to the Founding
Companies prior to the Acquisition at a price equal to the net book
value of such assets. Management believes that the historical carrying
value of such net non-operating assets approximate fair value.
Additionally, reflects the elimination of payables and receivables
between PAR and Union Power.

(d) Records the purchase of the Founding Companies by Quanta consisting of
payables to Founding Company stockholders of $12.6 million (to reflect
the cash consideration payable to the Founders excluding PAR) and 4.53
million shares of Common Stock valued at $7.20 per share (or $32.6
million) for a total estimated purchase price of $45.2 million
resulting in excess purchase price of $37.3 million over the net assets
acquired of $7.9 million (see Note 2). Additionally, records the 3.3
million shares of Limited Vote Common Stock, issued to the sponsors and
management valued at $6.75 per share (or $22.6 million) resulting in
excess purchase price of $22.6 million over the net assets acquired.
Based on its initial assessment, management believes that the
historical carrying value of the Founding Companies' assets and
liabilities will approximate fair value and that there are no other
identifiable intangible assets to which any material purchase price can
be allocated.

The following reconciles the historical net assets of the Founding
Companies to the net assets acquired (in thousands):

<TABLE>
<CAPTION>
ACQUIRED
TOTAL LESS-- FOUNDING
COMBINED PAR COMPANIES
-------- -------- ---------
<S> <C> <C> <C>
Historical net assets..................... $25,183 (9,451) $15,732
S Corporation Distributions (as discussed
elsewhere herein)........................ (7,841) -- (7,841)
------- -------- -------
Net assets after transfers................ $17,342 $ (9,451) $ 7,891
======= ======== =======
</TABLE>

(e) Records the cash proceeds of $38.9 million from the issuance of shares
of Quanta Common Stock (based on an initial public offering price of
$9.00 per share) net of estimated offering costs of $6.1 million.
Offering costs primarily consist of underwriting discounts and
commissions, accounting fees, legal fees and printing expenses.

(f) Records payment of the cash portion of the consideration to the
stockholders of the Founding Companies of $21.0 million in connection
with the Acquisitions and the expected repayment of outstanding short-
and long-term debt totaling $17.6 million.

F-7
<PAGE>

QUANTA SERVICES, INC. AND FOUNDING COMPANIES
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS--(CONTINUED)

The following table summarizes unaudited pro forma combined balance sheet
adjustments (in thousands):

<TABLE>
<CAPTION>
ADJUSTMENT
---------------------------------- PRO FORMA
(A) (B) (C) (D) ADJUSTMENTS
ASSETS ------- -------- ------ ------- -----------
<S> <C> <C> <C> <C> <C>
Current assets--
Cash and cash equivalents.... $ -- $ -- $ 874 $ -- $ 874
Accounts receivable.......... -- -- (651) -- (651)
Prepaid expenses and other... -- -- -- -- --
------- -------- ------ ------- --------
Total current assets....... -- -- 223 -- 223
Property and equipment, net.... -- -- (925) -- (925)
Goodwill....................... -- -- -- 59,915 59,915
------- -------- ------ ------- --------
Total assets............... $ -- $ -- $ (702) $59,915 $ 59,213
======= ======== ====== ======= ========
<CAPTION>
LIABILITIES AND STOCKHOLDERS'
EQUITY
<S> <C> <C> <C> <C> <C>
Current liabilities--
Current maturities of long-
term debt................... $ 7,841 $ -- $ (25) $ -- $ 7,816
Accounts payable and accrued
expenses.................... -- -- (651) -- (651)
Payables to Founding Company
stockholders................ -- 8,370 -- 12,630 21,000
------- -------- ------ ------- --------
Total current liabilities.. 7,841 8,370 (676) 12,630 28,165
Long-term debt, net of current
maturities.................... -- -- (26) -- (26)
Deferred income taxes.......... -- -- -- 788 788
------- -------- ------ ------- --------
Total liabilities.......... 7,841 8,370 (702) 13,418 28,927
Stockholders' equity--
Common Stock................. -- (20) -- (180) (200)
Limited Vote Common Stock.... -- -- -- -- --
Additional paid-in capital... -- (9,862) -- 55,102 45,240
Retained earnings............ (7,841) -- -- (8,487) (16,328)
Treasury stock............... -- 1,512 -- 62 1,574
------- -------- ------ ------- --------
Total stockholders' equity. (7,841) (8,370) -- 46,497 30,286
------- -------- ------ ------- --------
Total liabilities and
stockholders' equity...... $ -- $ -- $ (702) $59,915 $ 59,213
======= ======== ====== ======= ========
</TABLE>

F-8
<PAGE>

QUANTA SERVICES, INC. AND FOUNDING COMPANIES
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS--(CONTINUED)

<TABLE>
<CAPTION>
ADJUSTMENT
---------------- POST MERGER
(E) (F) ADJUSTMENTS
ASSETS --- -------- -----------
<S> <C> <C> <C>
Current assets--
Cash and cash equivalents....................... $38,936 $(38,596) $ 340
Prepaid expenses and other...................... -- (56) (56)
------- -------- --------
Total current assets.......................... 38,936 (38,652) 284
------- -------- --------
Total assets.................................. $38,936 $(38,652) $ 284
======= ======== ========
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C> <C>
Current liabilities--
Current maturities of long-term debt............ $ -- $(11,857) $(11,857)
Payable to Founding Company stockholders........ -- (21,318) (21,318)
------- -------- --------
Total current liabilities..................... -- (33,175) (33,175)
Long-term debt, net of current maturities......... -- (5,421) (5,421)
------- -------- --------
Total liabilities............................. -- (38,596) (38,596)
------- -------- --------
Stockholders' equity--
Common Stock.................................... -- -- --
Limited Vote Common Stock....................... -- -- --
Additional paid-in capital...................... 38,936 (56) 38,880
Retained earnings............................... -- -- --
Treasury stock.................................. -- -- --
------- -------- --------
Total stockholders' equity.................... 38,936 (56) 38,880
------- -------- --------
Total liabilities and stockholders' equity.... $38,936 $(38,652) $ 284
======= ======== ========
</TABLE>

4. UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS ADJUSTMENTS:

YEAR ENDED DECEMBER 31, 1996

(a) Reflects the $0.9 million reduction in salaries, bonuses and benefits
to the owners of the Founding Companies. These reductions in salaries,
bonuses and benefits have been agreed to prospectively in accordance
with the terms of employment agreements. Such employment agreements are
primarily for three years, contain restrictions related to competition
and provide severance for termination of employment in certain
circumstances. Additionally, reflects reductions in expenses associated
with certain non-operating assets that will be transferred to the
Founding Companies prior to the Acquisitions.

(b) Reflects the amortization of goodwill to be recorded as a result of
these Acquisitions over a 40-year estimated life.

(c) Reflects interest expense of $0.7 million on borrowings of $7.8 million
necessary to fund the S Corporation Distributions, net of interest
savings of $1.4 million on $17.6 million of debt to be repaid using
proceeds from the Offering or distributed prior to the Acquisitions.
The additional $0.7 million of interest expense was calculated
utilizing an annual effective interest rate of approximately 8.5%.

(d) Reflects the elimination of revenues between PAR and Union Power.

F-9
<PAGE>

QUANTA SERVICES, INC. AND FOUNDING COMPANIES
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS--(CONTINUED)

(e) Reflects the incremental provision for federal and state income taxes
at an approximate 39.0% overall tax rate before goodwill and other
permanent items, relating to the other statement of operations
adjustments and for income taxes on S corporation income not provided
for in the historical financial statements.

The following table summarizes unaudited pro forma combined statements of
operations adjustments (in thousands):

<TABLE>
<CAPTION>
ADJUSTMENT
-------------------------------------- PRO FORMA
(A) (B) (C) (D) (E) ADJUSTMENTS
------ ------- ---- ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C>
Revenues................... $ -- $ -- $-- $(4,388) $ -- $(4,388)
Cost of service............ -- -- -- (4,388) -- (4,388)
------ ------- ---- ------- ------- -------
Gross profit............. -- -- -- -- -- --
Selling, general and admin-
istrative expenses........ (908) -- -- -- -- (908)
Goodwill amortization...... -- 1,498 -- -- -- 1,498
------ ------- ---- ------- ------- -------
Income (loss) from
operations.............. 908 (1,498) -- -- -- (590)
Other income (expense)--
Interest expense......... -- -- 661 -- -- 661
Other, net............... 164 -- -- -- -- 164
------ ------- ---- ------- ------- -------
Income (loss) before
income taxes............ 1,072 (1,498) 661 -- -- 235
Provision for income taxes. -- -- -- -- 2,056 2,056
------ ------- ---- ------- ------- -------
Net income (loss).......... $1,072 $(1,498) $661 $ -- $(2,056) $(1,821)
====== ======= ==== ======= ======= =======
</TABLE>

NINE MONTHS ENDED SEPTEMBER 30, 1997

(a) Reflects the $1.8 million reduction in salaries, bonuses and benefits
to the owners of the Founding Companies. These reductions in salaries,
bonuses and benefits have been agreed to prospectively in accordance
with the terms of employment agreements. Such employment agreements are
primarily for three years, contain restrictions related to competition
and provide severance for termination of employment in certain
circumstances. Additionally, reflects reductions in expenses associated
with certain non-operating assets that will be transferred to the
Founding Companies prior to the Acquisitions.

(b) Reflects the amortization of goodwill to be recorded as a result of
these Acquisitions over a 40-year estimated life.

(c) Reflects interest expense of $0.5 million on borrowings of $7.8 million
necessary to fund the S Corporation Distributions, net of interest
savings of $1.0 million on $17.6 million of debt to be repaid using
proceeds from the Offering. The additional $0.5 million of interest
expense was calculated utilizing an annual effective interest rate of
approximately 8.5%.

(d) Reflects the elimination of revenues between PAR and Union Power.

(e) Reflects the incremental provision for federal and state income taxes
at an approximate 39.0% overall tax rate before goodwill and other
permanent items, relating to the other statements of operations
adjustments and for income taxes on S corporation income not provided
for in the historical financial statements.

F-10
<PAGE>

QUANTA SERVICES, INC. AND FOUNDING COMPANIES
NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS--(CONTINUED)

The following table summarizes unaudited pro forma combined statements of
operations adjustments (in thousands):

<TABLE>
<CAPTION>
ADJUSTMENT
-------------------------------------- PRO FORMA
(A) (B) (C) (D) (E) ADJUSTMENTS
------ ------- ---- ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C>
Revenues................... $ -- $ -- $-- $(2,501) $ -- $(2,501)
Cost of service............ -- -- -- (2,501) -- (2,501)
------ ------- ---- ------- ------- -------
Gross profit........... -- -- -- -- -- --
Selling, general and
administrative expenses... (1,773) -- -- -- -- (1,773)
Goodwill amortization...... -- 1,123 -- -- -- 1,123
------ ------- ---- ------- ------- -------
Income (loss) from
operations............ 1,773 (1,123) -- -- -- 650
Other income (expense)--
Interest expense......... -- -- 508 -- -- 508
Other, net............... 125 -- -- -- -- 125
------ ------- ---- ------- ------- -------
Income (loss) before
income taxes.......... 1,898 (1,123) 508 -- -- 1,283
Provision for income taxes. -- -- -- -- 2,791 2,791
------ ------- ---- ------- ------- -------
Net income (loss).......... $1,898 $(1,123) $508 $ -- $(2,791) $(1,508)
====== ======= ==== ======= ======= =======
</TABLE>

F-11
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To PAR Electrical Contractors, Inc.:

We have audited the accompanying balance sheets of PAR Electrical Contractors,
Inc., a Missouri corporation, as of December 31, 1996, and September 30, 1997,
and the related statements of operations, cash flows and shareholders' equity
for the three years ended December 31, 1996, and the nine months ended
September 30, 1997. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of PAR Electrical Contractors,
Inc., as of December 31, 1996, and September 30, 1997, and the results of its
operations and cash flows for the three years ended December 31, 1996, and the
nine months ended September 30, 1997, in conformity with generally accepted
accounting principles.

ARTHUR ANDERSEN LLP

Houston, Texas
December 5, 1997

F-12
<PAGE>

PAR ELECTRICAL CONTRACTORS, INC.
BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE INFORMATION)

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
ASSETS ------------ -------------
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents......................... $ 479 $ 34
Accounts receivable--
Trade, net of allowance of $100................. 7,390 10,439
Retainage....................................... 374 237
Other receivables............................... 78 148
Costs and estimated earnings in excess of billings
on uncompleted contracts......................... 663 1,218
Deferred income taxes............................. 160 972
Prepaid expenses and other current assets......... 360 158
------- -------
Total current assets............................ 9,504 13,206
PROPERTY AND EQUIPMENT, net......................... 10,977 13,992
OTHER ASSETS........................................ 218 240
------- -------
Total assets.................................... $20,699 $27,438
======= =======
<CAPTION>
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES:
Current maturities of long-term debt.............. $ 2,555 $ 1,964
Current portion of capital lease obligations...... 25 55
Bank line of credit............................... 2,378 4,275
Accounts payable and accrued expenses............. 2,725 7,376
Billings in excess of costs and estimated earnings
on uncompleted contracts......................... 1,168 85
------- -------
Total current liabilities....................... 8,851 13,755
LONG-TERM DEBT, net of current maturities........... 2,000 1,867
LONG-TERM CAPITAL LEASE OBLIGATIONS, net of current
maturities......................................... 74 141
DEFERRED INCOME TAXES............................... 2,066 2,224
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock, $100 par value, 500 shares
authorized, 200 shares issued and outstanding.... 50 50
Retained earnings................................. 9,170 10,913
Treasury stock, 300 shares, at cost............... (1,512) (1,512)
------- -------
Total shareholders' equity...................... 7,708 9,451
------- -------
Total liabilities and shareholders' equity...... $20,699 $27,438
======= =======
</TABLE>

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

F-13
<PAGE>

PAR ELECTRICAL CONTRACTORS, INC.
STATEMENTS OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED DECEMBER 31, SEPTEMBER 30,
------------------------- -------------------
1994 1995 1996 1996 1997
------- ------- ------- ----------- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
REVENUES....................... $43,909 $38,915 $42,684 $29,806 $36,439
COST OF SERVICES (including
depreciation)................. 36,525 33,193 35,789 25,583 27,944
------- ------- ------- ------- -------
Gross profit................. 7,384 5,722 6,895 4,223 8,495
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES....... 4,836 4,342 5,012 3,560 5,013
------- ------- ------- ------- -------
Income from operations....... 2,548 1,380 1,883 663 3,482
------- ------- ------- ------- -------
OTHER INCOME (EXPENSE):
Interest expense............. (375) (568) (576) (411) (470)
Other, net................... (37) 56 (70) (47) (97)
------- ------- ------- ------- -------
Other income (expense),
net....................... (412) (512) (646) (458) (567)
------- ------- ------- ------- -------
INCOME BEFORE PROVISION FOR
INCOME TAXES.................. 2,136 868 1,237 205 2,915
PROVISION FOR INCOME TAXES..... 867 353 487 82 1,172
------- ------- ------- ------- -------
NET INCOME..................... $ 1,269 $ 515 $ 750 $ 123 $ 1,743
======= ======= ======= ======= =======
</TABLE>

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

F-14
<PAGE>

PAR ELECTRICAL CONTRACTORS, INC.
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEARS ENDED NINE MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
---------------------- ------------------
1994 1995 1996 1996 1997
------ ------ ------ ----------- ------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVI-
TIES:
Net income........................ $1,269 $ 515 $ 750 $ 123 $1,743
Adjustments to reconcile net
income to net cash provided by
operating activities--
Depreciation and amortization.... 1,729 1,805 1,935 1,452 1,685
Loss (gain) on sale of property
and equipment................... -- 5 (57) (57) (16)
Deferred income taxes............ 203 166 204 187 (655)
Changes in operating assets and
liabilities--
(Increase) decrease in--
Accounts receivable............ (2,882) 64 (892) (579) (2,982)
Costs and estimated earnings in
excess of billings on
uncompleted contracts......... (115) 154 (531) 132 (555)
Prepaid expenses and other
current assets................ (195) 169 (54) (38) 202
Increase (decrease) in--
Accounts payable and accrued
expenses...................... 1,190 (308) 363 528 4,651
Billings in excess of costs and
estimated earnings on
uncompleted contracts......... 311 (362) 983 (185) (1,083)
Other, net..................... 3 (14) (10) (21) (21)
------ ------ ------ ------ ------
Net cash provided by operating
activities................... 1,513 2,194 2,691 1,542 2,969
------ ------ ------ ------ ------
CASH FLOWS FROM INVESTING ACTIVI-
TIES:
Proceeds from sale of property and
equipment........................ -- 100 57 57 116
Additions of property and
equipment........................ (4,796) (2,427) (2,663) (2,425) (4,671)
------ ------ ------ ------ ------
Net cash used in investing
activities................... (4,796) (2,327) (2,606) (2,368) (4,555)
------ ------ ------ ------ ------
CASH FLOWS FROM FINANCING ACTIVI-
TIES:
Proceeds from long-term debt...... 4,468 1,501 1,787 312 1,350
Payments of long-term debt........ (1,257) (1,935) (2,395) (800) (2,106)
Net borrowings under bank lines of
credit........................... 295 655 238 670 1,897
------ ------ ------ ------ ------
Net cash provided by (used in)
financing activities......... 3,506 221 (370) 182 1,141
------ ------ ------ ------ ------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS.................. 223 88 (285) (644) (445)
CASH AND CASH EQUIVALENTS,
beginning of period............... 453 676 764 764 479
------ ------ ------ ------ ------
CASH AND CASH EQUIVALENTS, end of
period............................ $ 676 $ 764 $ 479 $ 120 $ 34
====== ====== ====== ====== ======
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION:
Cash paid for--
Interest......................... $ 378 $ 575 $ 572 $ 429 $ 464
Income taxes, net of refunds..... 351 553 279 34 89
</TABLE>

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

F-15
<PAGE>

PAR ELECTRICAL CONTRACTORS, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE INFORMATION)

<TABLE>
<CAPTION>
COMMON STOCK TOTAL
------------- RETAINED TREASURY SHAREHOLDERS'
SHARES AMOUNT EARNINGS STOCK EQUITY
------ ------ -------- -------- -------------
<S> <C> <C> <C> <C> <C>
BALANCE, December 31, 1993........ 200 $50 $ 6,636 $1,512 $5,174
Net income...................... -- -- 1,269 -- 1,269
--- --- ------- ------ ------
BALANCE, December 31, 1994........ 200 50 7,905 1,512 6,443
Net income...................... -- -- 515 -- 515
--- --- ------- ------ ------
BALANCE, December 31, 1995........ 200 50 8,420 1,512 6,958
Net income...................... -- -- 750 -- 750
--- --- ------- ------ ------
BALANCE, December 31, 1996........ 200 50 9,170 1,512 7,708
Net income...................... -- -- 1,743 -- 1,743
--- --- ------- ------ ------
BALANCE, September 30, 1997....... 200 $50 $10,913 $1,512 $9,451
=== === ======= ====== ======
</TABLE>

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

F-16
<PAGE>

PAR ELECTRICAL CONTRACTORS, INC.
NOTES TO FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION:

PAR Electrical Contractors, Inc., a Missouri corporation (the Company),
focuses on providing electrical contractor services primarily for utility
companies, municipal and commercial companies. The Company performs the
majority of its contract work under cost-plus-fee and fixed price contracts
with contract terms generally ranging from four to 36 months. The Company
performs the majority of its work in the Midwest.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Interim Financial Information

The interim financial statements for the nine months ended September 30,
1996, are unaudited and have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission. Accordingly, they do
not include all of the information and footnote disclosures required by
generally accepted accounting principles for complete financial statements. In
the opinion of the Company's management, the unaudited interim financial
statements contain all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation. The results of
operations for the interim periods are not necessarily indicative of the
results for the entire fiscal year.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents.

Supplemental Cash Flow Information

The Company had noncash investing and financing activities related to
capital leases of approximately $111,000 and $129,000 during the year ended
December 31, 1996, and the nine months ended September 30, 1997. There were no
non-cash investing activities for the years ended December 31, 1994 and 1995.

Accounts Receivable and Provision for Doubtful Accounts

The Company provides an allowance for doubtful accounts when collection is
considered doubtful.

Property and Equipment

Property and equipment are stated at cost, and depreciation is computed
using the straight-line method over the estimated useful lives of the assets.
Leasehold improvements are capitalized and amortized over the lesser of the
life of the lease or the estimated useful life of the asset. Depreciation and
amortization expense was approximately $1,729,000, $1,805,000, $1,935,000 and
$1,685,000 for the years ended December 31, 1994, 1995 and 1996, and the nine
months ended September 30, 1997, respectively.

Expenditures for repairs and maintenance are charged to expense when
incurred. Expenditures for major renewals and betterments, which extend the
useful lives of existing equipment, are capitalized and depreciated. Upon
retirement or disposition of property and equipment, the cost and related
accumulated depreciation are removed from the accounts and any resulting gain
or loss is recognized in the statements of operations.

Revenue Recognition

F-17
<PAGE>

PAR ELECTRICAL CONTRACTORS, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

progress. Revenues from fixed price or cost-plus-fee contracts are recognized
on the percentage-of-completion method measured by the percentage of costs
incurred to date to total estimated costs for each contract. Contract costs
include all direct material, labor and subcontract costs and those indirect
costs related to contract performance, such as indirect labor, supplies,
tools, repairs and depreciation costs. Provisions for the total estimated
losses on uncompleted contracts are made in the period in which such losses
are determined. Changes in job performance, job conditions, estimated
profitability and final contract settlements may result in revisions to costs
and income and their effects are recognized in the period in which the
revisions are determined.

The balances billed but not paid by customers pursuant to retainage
provisions in fixed price or cost-plus-fee contracts will be due upon
completion of the contracts and acceptance by the customer. Based on the
Company's experience with similar contracts in recent years, the retention
balance at each balance sheet date will be collected within the subsequent
fiscal year.

The current asset "Costs and estimated earnings in excess of billings on
uncompleted contracts" represents revenues recognized in excess of amounts
billed. The current liability "Billings in excess of costs and estimated
earnings on uncompleted contracts" represents billings in excess of revenues
recognized.

Warranty Costs

For certain contracts, the Company generally warrants labor for the first
year after installation of new electrical systems. The Company generally
warrants labor for 30 days after servicing of existing electrical systems. An
accrual for warranty costs is recorded based upon the historical level of
warranty claims and management's estimate of future costs.

Income Taxes

The Company follows the liability method of accounting for income taxes in
accordance with Statement of Financial Accounting Standards (SFAS) No. 109,
"Accounting for Income Taxes." Under this method, deferred assets and
liabilities are recorded for future tax consequences of temporary differences
between the financial reporting and tax bases of assets and liabilities, and
are measured using the enacted tax rates and laws that will be in effect when
the underlying assets or liabilities are recovered or settled.

Collective Bargaining Agreements

The Company is a party to various collective bargaining agreements with
certain of its employees. The agreements require the Company to pay specified
wages and provide certain benefits to its union employees. These agreements
expire at various times through the year 2000.

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires the use of estimates and assumptions
by management in determining the reported amounts of assets and liabilities,
disclosures of contingent liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. Reference is made to the
"Revenue Recognition" section of this footnote and Note 11 for discussion of
certain estimates reflected in the Company's financial statements.

New Accounting Pronouncement

Effective January 1, 1996, the Company adopted SFAS No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of." Accordingly, in the event that facts and

F-18
<PAGE>

PAR ELECTRICAL CONTRACTORS, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
circumstances indicate that property and equipment or other assets may be
impaired, an evaluation of recoverability would be performed. If an evaluation
is required, the estimated future undiscounted cash flows associated with the
asset are compared to the asset's carrying amount to determine if an
impairment of such property is necessary. Adoption of this standard did not
have a material effect on the financial position or results of operations of
the Company.

3.PROPERTY AND EQUIPMENT:

Property and equipment consists of the following (in thousands):

<TABLE>
<CAPTION>
ESTIMATED
USEFUL LIVES DECEMBER 31, SEPTEMBER 30,
IN YEARS 1996 1997
------------ ------------ -------------
<S> <C> <C> <C>
Land................................. -- $ 1,105 $ 1,221
Buildings and leasehold improvements. 5-31 1,255 1,255
Operating equipment and vehicles..... 5-10 21,980 25,821
Office equipment, furniture and fix-
tures............................... 5 386 529
------- -------
24,726 28,826
Less--Accumulated depreciation and
amortization........................ (13,749) (14,834)
------- -------
Property and equipment, net........ $10,977 $13,992
======= =======
</TABLE>

4.DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS:

Accounts payable and accrued expenses consist of the following (in
thousands):

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
------------ -------------
<S> <C> <C>
Accounts payable, trade............................ $1,068 $1,572
Accrued compensation and other expenses............ 1,657 5,804
------ ------
$2,725 $7,376
====== ======
</TABLE>

Contracts in progress are as follows (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
------------ -------------
<S> <C> <C>
Costs incurred on contracts in progress........... $ 9,926 $ 16,439
Estimated earnings, net of losses................. 2,322 2,386
-------- --------
12,248 18,825
Less--Billings to date............................ (12,753) (17,692)
-------- --------
$ (505) $ 1,133
======== ========
Costs and estimated earnings in excess of billings
on uncompleted contracts......................... $ 663 $ 1,218
Less--Billings in excess of costs and estimated
earnings on uncompleted contracts................ (1,168) (85)
-------- --------
$ (505) $ 1,133
======== ========
</TABLE>

5.DEBT:

The Company has an $8,000,000 bank revolving line of credit bearing interest
at the bank's prime rate (8.5 percent at September 30, 1997), of which
$2,378,000 and $4,275,000 was outstanding as of

F-19
<PAGE>

PAR ELECTRICAL CONTRACTORS, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
December 31, 1996, and September 30, 1997, respectively. With regard to the
line of credit, the Company has outstanding a $1,000,000 letter of credit
outstanding related to its workman's compensation insurance program (see Note
11 for discussion related to the Company self-insuring for certain workers'
compensation insurance). The Company also has a $4,000,000 equipment fixed
line of credit bearing interest at the bank's prime rate (8.5 percent at
September 30, 1997). These lines of credit expire in May 1998.

The Company's long-term debt obligations consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
------------ -------------
(IN THOUSANDS)
<S> <C> <C>
Note payable to bank, prime plus 1%, interest rate,
due $79,359 monthly including interest with final
maturity October 1997............................. $ 797 $ 119
Note payable to bank, prime plus.75%, interest
rate, due $47,968 monthly including interest with
final maturity December 1997...................... 551 145
Note payable to bank, prime plus .50% interest
rate, due $47,795 monthly including interest with
final maturity December 1998...................... 1,042 671
Note payable to bank, prime plus .50% interest
rate, due $31,747 monthly including interest with
final maturity May 1999........................... 825 589
Note payable to bank, prime plus .50% interest
rate, due $25,391 monthly including interest with
final maturity December 1999...................... 800 620
Note payable to bank, prime interest rate, due
$42,695 monthly including interest with final
maturity April 2000............................... -- 1,183
Installment note payable to bank, fixed 9.75%
interest rate, due $3,631 monthly including
interest with balance due December 1999;
collateralized by real estate..................... 318 308
Installment note payable, fixed 9% interest rate,
due $100,000 in December 1997 and $45,000 in
December 1998; unsecured.......................... 145 145
Installment note payable, fixed 6.5% interest rate,
due $25,500 annually plus interest with final ma-
turity January 1999; collateralized by real es-
tate.............................................. 77 51
------ ------
4,555 3,831
Less--Current maturities........................... (2,555) (1,964)
------ ------
Total long-term debt........................... $2,000 $1,867
====== ======
</TABLE>

The loan agreement covering the notes payable to bank and the bank lines of
credit contains various covenants, including a minimum net worth requirement
and a compensating balance requirement.

The notes payable to bank and the bank lines of credit are collateralized by
all equipment, receivables and other assets. The Company's two shareholders
have pledged their stock as security to the bank on this indebtedness.

The maturities of long-term debt as of September 30, 1997, are as follows
(in thousands):

<TABLE>
<S> <C>
Year ending September 30--
1998........................................................... $1,964
1999........................................................... 1,219
2000........................................................... 648
------
$3,831
======
</TABLE>

F-20
<PAGE>

PAR ELECTRICAL CONTRACTORS, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
6. LEASES:

Obligations Under Capital Leases

The Company leases various equipment under noncancelable capital leases and
the leased assets are included as part of "Property and equipment." Details of
the capital leased assets are as follows (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
------------ -------------
<S> <C> <C>
Automobiles........................................ $ 44 $ 44
Operating equipment and vehicles................... 540 669
----- -----
584 713
Less--Accumulated depreciation..................... (479) (495)
----- -----
Net capitalized leased assets...................... $ 105 $ 218
===== =====
</TABLE>

The following is a schedule showing the future minimum lease payments under
capital leases by years and the present value of the minimum lease payments as
of September 30, 1997 (in thousands):

<TABLE>
<S> <C>
Year ending September 30--
1998.................................................................. $ 68
1999.................................................................. 68
2000.................................................................. 60
2001.................................................................. 20
----
Total minimum lease payments........................................ 216
Less--Amounts representing interest..................................... (20)
Present value of minimum lease payments............................. 196
Less--Current portion................................................... (55)
----
Long-term obligation................................................ $141
====
</TABLE>

Operating Leases

The Company rents certain office equipment and warehouse space under several
operating lease agreements which vary in length and terms. The rent paid under
these lease agreements was approximately $20,000, $21,000, $205,000 and
$453,000 for the years ended December 31, 1994, 1995 and 1996, and nine months
ended September 30, 1997, respectively.

Future minimum lease payments under these noncancelable operating leases are
as follows (in thousands):

<TABLE>
<S> <C>
Year ending September 30--
1998................................................................ $ 615
1999................................................................ 402
2000................................................................ 147
2001................................................................ 24
2002................................................................ 8
------
$1,196
======
</TABLE>

F-21
<PAGE>

PAR ELECTRICAL CONTRACTORS, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
7. INCOME TAXES:

Federal and state income taxes are as follows (in thousands):

<TABLE>
<CAPTION>
YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
-------------- -----------------
1994 1995 1996 1997
---- ---- ---- -------------
<S> <C> <C> <C> <C> <C> <C>
Federal--
Current.............................. $550 $154 $234 $1,513
Deferred............................. 168 138 169 (542)
State--
Current.............................. 114 33 49 314
Deferred............................. 35 28 35 (113)
---- ---- ---- ------
$867 $353 $487 $1,172
==== ==== ==== ======

Actual income tax expense differs from income tax expense computed by
applying the U.S. federal statutory corporate rate of 35 percent to income
(loss) before provision for income taxes as follows (in thousands):

<CAPTION>
NINE MONTHS
YEAR ENDED ENDED
DECEMBER 31, SEPTEMBER 30,
-------------- -------------
1994 1995 1996 1997
---- ---- ---- -------------
<S> <C> <C> <C> <C> <C> <C>
Provision at the statutory rate........ $748 $304 $433 $1,017
Increase resulting from--
State income tax, net of related tax
effect.............................. 96 40 54 130
Nondeductible expenses............... 23 9 -- 25
---- ---- ---- ------
$867 $353 $487 $1,172
==== ==== ==== ======
</TABLE>

Deferred income tax provisions result from temporary differences in the
recognition of income and expenses for financial reporting purposes and for
tax purposes. The tax effects of these temporary differences, representing
deferred tax assets and liabilities, result principally from the following (in
thousands):

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
------------ -------------
<S> <C> <C>
Deferred income tax liabilities--
Property and equipment............................. $ (2,066) $(2,224)
State taxes........................................ 9 9
Other.............................................. (156) (164)
-------- -------
Total deferred income tax liabilities............ (2,213) (2,379)
-------- -------
Deferred income tax assets--
Bad debt reserves.................................. 42 42
State taxes........................................ (18) (68)
Other accruals not currently deductible............ 283 1,153
-------- -------
Total deferred income tax assets................. 307 1,127
Valuation allowance................................ -- --
-------- -------
Total deferred income tax liabilities............ $ (1,906) $(1,252)
======== =======
</TABLE>

F-22
<PAGE>

PAR ELECTRICAL CONTRACTORS, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
The net deferred tax assets and liabilities are comprised of the following
(in thousands):

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
------------ -------------
<S> <C> <C>
Deferred tax assets--
Current............................................ $ 307 $ 1,127
Long-term.......................................... -- --
------- -------
Total............................................ 307 1,127
------- -------
Deferred tax liabilities--
Current............................................ (147) (155)
Long-term.......................................... (2,066) (2,224)
------- -------
Total............................................ (2,213) (2,379)
------- -------
Net deferred income tax liabilities.............. $(1,906) $(1,252)
======= =======
</TABLE>

8. RELATED-PARTY TRANSACTIONS:

As of December 31, 1996 and September 30, 1997, the Company had a $45,000
note receivable due from one of its shareholders. The note receivable included
in "Accounts receivable--other receivables" in the accompanying balance sheet
as of September 30, 1997, was paid in full by the shareholder in October 1997.

9. EMPLOYEE BENEFIT PLAN:

In connection with its collective bargaining agreements with various
electrical unions, the Company participates with other companies in the
unions' multi-employer pension plans. These plans cover all of the Company's
employees who are members of such unions. The Employee Retirement Income
Security Act of 1974, as amended by the Multi-Employer Pension Plan Amendments
Act of 1980, imposes certain liabilities upon employers who are contributors
to a multi-employer plan in the event of the employer's withdrawal from, or
upon termination of such plan. The Company has no plans to withdraw from these
plans. The plans do not maintain information on net assets and actuarial
present value of the accumulated share of the plans' unfunded vested benefits
allocable to the Company, and amounts, if any, for which the Company may be
contingently liable is not ascertainable at this time.

The Company has a 401(k) plan and profit sharing plan covering substantially
all nonbargaining employees. Participant contributions to be in the 401(k)
plan are limited to 6.6 percent of total compensation paid to participants
during the plan year. The Company may also make discretionary contributions.
Contributions to the plan were approximately $243,000, $230,000, $182,000 and
$125,000 for the years ended December 31, 1994, 1995, 1996 and the nine months
ended September 30, 1997, respectively, and had accrued approximately $182,000
and $125,000 at December 31, 1996 and September 30, 1997, respectively.

In addition to the 401(k) plan and profit sharing plan, the financial
statements include discretionary bonuses to employees of $1,035,000, $564,000,
$1,087,000 and $1,763,000 for the years ended December 31, 1994, 1995 and 1996
and for the nine months ended September 30, 1997, respectively.

F-23
<PAGE>

PAR ELECTRICAL CONTRACTORS, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

10. FINANCIAL INSTRUMENTS:

The Company's financial instruments consist of cash and cash equivalents,
accounts receivable, lines of credit, accounts payable, notes payable and
debt. The Company believes that the carrying value of these instruments on the
accompanying balance sheets approximates their fair value.

11. COMMITMENTS AND CONTINGENCIES:

Litigation

The Company is involved in disputes or legal actions arising in the ordinary
course of business. Management does not believe the outcome of such legal
actions will have a material adverse effect on the Company's financial
position or results of operations.

Insurance

The Company carries a broad range of insurance coverage, including business
auto liability, business property liability, workers' compensation, general
liability and an umbrella policy.

Effective January 1, 1996, the Company began self-insuring for certain
workers' compensation risks up to $1,000,000 per occurrence. In October 1997,
the Company reduced the deductible to $500,000 per occurrence. The Company has
accrued for the estimated probable claims costs in satisfying the deductible
provisions of the insurance policies for claims occurring through September
30, 1997. The accrual is based on known facts and historical trends, and
management believes such accrual to be adequate.

Product Rights

In May 1997, the Company entered into an agreement with a third party which
gives the Company exclusive rights for 30 months to the use of a patented
product used in the construction, maintenance, repair and improvement of
energized transmission and distribution lines in all states west of the
Mississippi River. The product is a telescoping robotic arm for temporarily
supporting energized power lines to enable repair or replacement of
transmission poles, cross-arms, insulators and the like while maintaining an
energized connection. In exchange for the exclusive rights, the Company agreed
to pay the third party a fixed fee and a percentage of gross profits generated
from the use of the product. As of September 30, 1997, the Company had made
payments totaling $150,000 related to fees for the use of such product.

Performance Bonds

In certain circumstances, the Company is required to provide performance
bonds in connection with its contract commitments which are personally
guaranteed by certain stockholders of the Company.

12. MAJOR CUSTOMERS AND RISK CONCENTRATION:

The Company had sales greater than 10 percent of total sales to two major
customers (comprising approximately 25 percent and 16 percent of total sales),
three major customers (comprising approximately 16 percent, 15 percent and 11
percent of total sales), three major customers (comprising approximately 23
percent, 12 percent and 10 percent of total sales) and three major customers
(comprising approximately 19 percent, 12 percent and 11 percent of total
sales) during the years ended December 1994, 1995 and 1996, and for the nine
months ended September 30, 1997, respectively.

The Company grants credit, generally without collateral, to its customers,
which include utility companies, municipalities and commercial companies
located primarily in the Midwestern region of the United States. Consequently,
the Company is subject to potential credit risk related to changes in business

F-24
<PAGE>

PAR ELECTRICAL CONTRACTORS, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
and economic factors within the Midwestern region of the United States.
However, management believes that its contract acceptance, billing and
collection policies are adequate to minimize the potential credit risk.

13. SUBSEQUENT EVENTS TO DATE OF AUDITORS' REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS (UNAUDITED):

In December 1997, the Company and its shareholders entered into a definitive
agreement with Quanta Services, Inc. (Quanta), subject to certain conditions,
pursuant to which all outstanding shares of the Company's common stock will be
exchanged for cash and shares of Quanta common stock, concurrent with the
consummation of an initial public offering (the Offering) of additional common
stock by Quanta. In addition, the two executives of the Company will enter
into employment agreements with the Company and Quanta which have an initial
term of three years and generally restrict the disclosure of confidential
information as well as restrict competition with the Company and Quanta for a
period of five years from the date of the employment agreement.

Upon signing the definitive agreement, the shareholders of the Company will
purchase a portion of land and equipment from the Company. The net book value
of the land and the equipment to be purchased is approximately $759,000 and
$742,000 at December 31, 1996, and September 30, 1997, respectively. Proceeds
received from the sale of the land and the equipment will be netted against
the installment note payable assumed related to the land. The installment note
payable was $77,000 and $51,000 at December 31, 1996, and September 30, 1997,
respectively.

F-25
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Quanta Services, Inc.:

We have audited the accompanying balance sheet of Quanta Services, Inc., a
Delaware corporation, as of September 30, 1997, and the related statement of
operations, and stockholders' equity for the period from inception (August 19,
1997) through September 30, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Quanta Services, Inc., as of
September 30, 1997, and the results of its operations for the period from
inception (August 19, 1997) through September 30, 1997, in conformity with
generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Houston, Texas
December 5, 1997

F-26
<PAGE>

QUANTA SERVICES, INC.
BALANCE SHEET--SEPTEMBER 30, 1997
(IN THOUSANDS, EXCEPT SHARE INFORMATION)

ASSETS

<TABLE>
<S> <C>
CASH AND CASH EQUIVALENTS................................................... $ 8
DEFERRED OFFERING COSTS..................................................... 56
---
Total assets............................................................ $64
===
</TABLE>

LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<S> <C>
ACCRUED LIABILITIES AND AMOUNTS DUE TO STOCKHOLDER......................... $64
STOCKHOLDERS' EQUITY:
Preferred stock, $.00001 par value, 10,000,000 authorized, none issued
and outstanding......................................................... --
Common stock, $.00001 par value, 40,000,000 shares authorized, 1,693,779
shares issued and outstanding........................................... --
Additional paid-in capital............................................... --
Retained deficit......................................................... --
---
Total stockholders' equity............................................. --
---
Total liabilities and stockholders' equity............................. $64
===
</TABLE>

Reflects a 1,613.6016 for-one stock split effected in December 1997.

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

F-27
<PAGE>

QUANTA SERVICES, INC.
STATEMENT OF OPERATIONS
FOR THE PERIOD FROM INCEPTION
(AUGUST 19, 1997) THROUGH SEPTEMBER 30, 1997
(IN THOUSANDS)

<TABLE>
<S> <C>
REVENUES.................................................................. $ --
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES.............................. --
----
LOSS BEFORE INCOME TAXES.................................................. --
PROVISION FOR INCOME TAXES................................................ --
----
NET LOSS.................................................................. $ --
====
</TABLE>

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

F-28
<PAGE>

QUANTA SERVICES, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM INCEPTION
(AUGUST 19, 1997) THROUGH SEPTEMBER 30, 1997
(IN THOUSANDS, EXCEPT SHARE INFORMATION)

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL TOTAL
---------------- PAID-IN RETAINED STOCKHOLDERS'
SHARES AMOUNT CAPITAL DEFICIT EQUITY
--------- ------ ---------- -------- -------------
<S> <C> <C> <C> <C> <C>
INITIAL CAPITALIZATION,
August 19, 1997............ 1,693,779 $-- $-- $-- $--
NET INCOME (LOSS)........... -- -- -- -- --
--------- --- ---- --- ----
BALANCE, September 30, 1997. 1,693,779 $-- $-- $-- $--
========= === ==== === ====
</TABLE>

Reflects a 1,613.6016 for-one stock split effected in December 1997.

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

F-29
<PAGE>

QUANTA SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS

1. BUSINESS AND ORGANIZATION:

Quanta Services, Inc., a Delaware corporation (Quanta or the Company), was
founded in August 1997 to create a leading provider of specialty electrical
contracting and maintenance services primarily related to electric and
telecommunications infrastructure in North America. Quanta intends to acquire
certain businesses (the Acquisitions), complete an initial public offering
(the Offering) of its common stock and, subsequent to the Offering, continue
to acquire through merger or purchase similar companies to expand its national
and regional operations.

Quanta has not conducted any operations, and all activities to date have
related to the Offering and the Acquisitions. All expenditures of the Company
to date have been funded by the primary stockholders, on behalf of the
Company. The primary stockholders have also committed to fund future
organization expenses and offering costs. As of November 30, 1997, costs of
approximately $1,227,000 have been incurred in connection with the Offering,
and such costs will be treated as a reduction of the proceeds from the
Offering. Quanta has treated costs incurred through September 30, 1997, as
deferred offering costs in the accompanying balance sheet. Quanta is dependent
upon the Offering to execute the pending Acquisitions and to repay its current
primary stockholder for funding deferred offering costs. There is no assurance
that the pending Acquisitions will be completed. The ability of Quanta to
generate future operating revenues is dependent upon the ability of the
Company to manage the effect on the combined companies of changes in demand
for infrastructure services, the effect of business growth, including the
availability of linemen and electricians, and the need for other key
personnel. These risk factors, among others, are discussed in more detail in
"Risk Factors."

2. STOCKHOLDERS' EQUITY:

Common Stock and Preferred Stock

In connection with the organization and initial capitalization of Quanta,
the Company issued 1,693,779 shares (as restated for the 1,613.6016 for-one
stock split discussed in Note 5) of common stock at $.00001 par value (Common
Stock) for $10.48. Subsequent to September 30, 1997, Quanta issued
approximately 1.5 million shares and 0.2 million shares, respectively (as
restated for the 1,613.6016 for-one stock split discussed in Note 5) of Common
Stock at $.00001 par value to an initial stockholder and management of Quanta.
As a result of the issuance of shares to an initial stockholder and management
for nominal consideration, the Company recorded in November 1997, for
financial statement presentation purposes, a nonrecurring, noncash charge of
$11.5 million, which has been estimated based on a fair value of such shares
which has been determined to be $6.75 per share (a discount of 25% from the
estimated initial public offering price). The fair value of such shares was
based on specific factors related to the Company and the transactions
including restrictions on transferability and sale of the shares issued and
the limited vote provisions of such shares.

Stock Plan

In December 1997, the Company's board of directors and stockholders approved
the Company's 1997 Stock Option Plan (the Plan), which provides for the
granting or awarding of incentive or nonqualified stock options to directors,
officers, key employees and consultants of the Company. The aggregate amount
of Common Stock of the Company with respect to which options may be granted
may not exceed the greater of 2.38 million shares or 15 percent of the
aggregate number of shares of Common Stock outstanding. The Plan will be
administered by the compensation committee (the Committee) of the Company's
board of directors. The Company intends to file a registration statement on
Form S-8 under the Securities Act of 1933 registering the issuance of shares
upon exercise of options granted under this

F-30
<PAGE>

QUANTA SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
Plan. Options will be exercisable during the period specified in each option
agreement and will generally become exercisable in installments pursuant to a
vesting schedule designated by the Committee. No options will remain
exercisable later than ten years after the date of grant. The exercise price
of options may be no less than the fair market value of the Common Stock on
the date of grant (or 110 percent in the case of options granted to employees
owning more than 10 percent of the voting capital stock).

The Plan also provides for automatic option grants to directors who are not
otherwise employed by the Company or its subsidiaries. Upon commencement of
service, a nonemployee director will receive a nonqualified option to purchase
10,000 shares of Common Stock and continuing or re-elected nonemployee
directors annually will receive options to purchase 5,000 shares of Common
Stock. Options granted to nonemployee directors are fully exercisable
following the expiration of six months from the date of grant.

3. STOCK-BASED COMPENSATION:

Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting for
Stock-Based Compensation," allows entities to choose between a new fair value
method of accounting for employee stock options or similar equity instruments
and the current method of accounting prescribed by Accounting Principles Board
(APB) Opinion No. 25, under which compensation expense is recorded to the
extent that the fair market value of the related stock is in excess of the
options' exercise price at date of grant. Entities electing to remain with the
accounting in APB Opinion No. 25 must make pro forma disclosures of net income
and earnings per share as if the fair value method of accounting prescribed in
SFAS No. 123 had been applied. The Company will measure compensation expense
attributable to stock options based on the method prescribed in APB Opinion
No. 25 and will provide the required pro forma disclosure of net income and
earnings per share, as applicable, in the notes to future consolidated annual
financial statements.

4. NEW ACCOUNTING PRONOUNCEMENTS:

SFAS No. 128 requires the presentation of basic earnings per share and
diluted earnings per share in financial statements of public enterprises
rather than primary and fully diluted earnings per share as previously
required. Under the provisions of this statement, basic earnings per share
will be computed based on weighted average shares outstanding and will exclude
dilutive securities such as options and warrants. Diluted earnings per share
will be computed including the impact of all potentially dilutive securities.
The Company will adopt this statement in December 1997, but does not
anticipate that the statement will have a material impact on earnings per
share.

SFAS No. 129 requires additional disclosure of information about an entity's
capital structure, including, but not limited to, information about dividend
and liquidation preferences, voting rights, contracts to issue additional
shares and conversion and exercise prices. The Company will adopt this
statement in December 1997.

SFAS No. 130 requires the presentation of comprehensive income in an
entity's financial statements. Comprehensive income represents all changes in
equity of an entity during the reporting period, including net income and
charges directly to equity which are excluded from net income. This statement
is not anticipated to have a material impact on the Company, or its financial
disclosures, as the Company currently does not plan to enter into any material
transactions which result in charges (or credits) directly to equity (such as
additional minimum pension liability changes, currency translation
adjustments, unrealized gains and losses on available-for-sale securities,
etc.).

F-31
<PAGE>

QUANTA SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

5. SUBSEQUENT EVENTS TO THE DATE OF AUDITORS' REPORT (UNAUDITED):

Quanta effected a 1,613.6016 for-one stock split in December 1997 for each
share of Common Stock of the Company then outstanding. In addition, the
Company increased the number of authorized shares of Common Stock to
40,000,000 and increased the number of authorized shares of $.00001 par value
preferred stock to 10,000,000. The effects of the Common Stock split and the
increase in the shares of authorized Common Stock have been retroactively
reflected on the balance sheet, statement of stockholders' equity and in the
accompanying notes.

In December 1997, the 3.3 million shares of Common Stock held by certain
primary stockholders of Quanta were converted into 3.3 million shares of
limited vote common stock. The shares of limited vote common stock have rights
similar to shares of Common Stock, except that such shares are entitled to
elect one member of the board of directors and are entitled to one-tenth of
one vote for each share held on all other matters. Each share of limited vote
common stock will convert into Common Stock upon disposition by the holder of
such shares in accordance with the transfer restrictions applicable to such
shares.

Quanta has signed definitive agreements to acquire the following entities
(the Founding Companies) to be effective concurrently with the Offering. The
entities to be acquired are:

PAR Electrical Contractors, Inc.
Potelco, Inc.
TRANS TECH Electric, Inc.
Union Power Construction Company

The aggregate consideration that will be paid by Quanta to acquire the
Founding Companies is approximately $21.0 million in cash and 7.5 million
shares of Common Stock. The cash portion of the Acquisition Consideration will
be adjusted based on the initial public offering price of Common Stock
offered.

In addition, the Company plans to enter into employment agreements with
certain key executives of the Founding Companies and the executive officers of
Quanta. These employment agreements generally prohibit such individuals from
disclosing confidential information and trade secrets, and restrict such
individuals from competing with the Company for a period of five years from
the date of the employment agreement. The initial term of these employment
agreements is three years with provisions for annual extensions at the end of
the initial term.

In December 1997, Quanta filed a registration statement on Form S-1 for the
sale of its Common Stock.

The Company expects to enter into a credit facility effective concurrent
with the closing of the Offering. A commercial bank has agreed to structure
the credit facility subject to the terms and conditions of a commitment
letter. The terms provide for an unsecured five year $50,000,000 revolving
credit facility to provide funds to be used for working capital, to finance
acquisitions and for other general corporate purposes. Amounts borrowed under
the proposed credit facility will bear interest at a rate equal to either (a)
the London Interbank Offered Rate ("LIBOR") plus 0.75% to 1.75%, as determined
by the ratio of the Company's total funded debt to EBITDA (as defined in the
credit facility) or (b) the bank's prime rate plus up to 0.25%, as determined
by the ratio of the Company's total funded debt to EBITDA. Commitment fees of
0.175% to 0.30% (based on certain financial ratios) are due on any unused
borrowing capacity under the credit facility. The Company's existing and
future subsidiaries will guarantee the repayment of all amounts due under the
facility and the facility restricts pledges on all material assets. The
Company expects that the credit facility will require usual and customary
covenants for a credit facility of this nature including the consent of the
lenders for acquisitions exceeding a certain level of cash consideration.

F-32
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Union Power Construction Company:

We have audited the accompanying balance sheets of Union Power Construction
Company, a Colorado corporation, as of August 31, 1996 and 1997, and the
related statements of operations, cash flows and stockholders' equity for the
three years ended August 31, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Union Power Construction
Company as of August 31, 1996 and 1997, and the results of its operations and
cash flows for the three years ended August 31, 1997, in conformity with
generally accepted accounting principles.

ARTHUR ANDERSEN LLP

Houston, Texas
December 5, 1997

F-33
<PAGE>

UNION POWER CONSTRUCTION COMPANY
BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE INFORMATION)

<TABLE>
<CAPTION>
AUGUST 31,
---------------
NOVEMBER 30,
1996 1997 1997
------ ------- ------------
(UNAUDITED)
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents...................... $ 612 $ 404 $ 951
Marketable securities.......................... 101 110 123
Accounts receivable--
Trade, net of allowance for doubtful accounts
of $84,000.................................. 3,902 8,822 12,259
Retainage.................................... 204 498 601
Related-party receivables...................... 65 32 --
Costs and estimated earnings in excess of
billings on uncompleted contracts............. -- 77 113
Deferred income taxes.......................... 30 115 --
Prepaid expenses and other current assets...... 44 95 46
------ ------- -------
Total current assets....................... 4,958 10,153 14,093
PROPERTY AND EQUIPMENT, net...................... 4,810 5,868 6,836
------ ------- -------
Total assets............................... $9,768 $16,021 $20,929
====== ======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt........... $ 249 $ 663 $ 1,916
Current maturities of related-party debt....... 238 128 200
Accounts payable and accrued expenses.......... 2,878 6,209 8,239
Related-party payable.......................... 22 -- --
Billings in excess of costs and estimated
earnings on uncompleted contracts............. -- 322 700
------ ------- -------
Total current liabilities.................. 3,387 7,322 11,055
LONG-TERM DEBT, net of current maturities........ 1,065 748 1,234
RELATED-PARTY DEBT, net of current maturities.... 38 328 237
DEFERRED INCOME TAXES............................ 843 1,257 1,311
OTHER LONG-TERM LIABILITIES...................... 20 22 --
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $1.00 par value, 25,000 shares
authorized, 25,000 shares issued and
outstanding................................... 25 25 25
Unrealized loss on securities.................. (62) (56) (44)
Retained earnings.............................. 4,452 6,375 7,111
------ ------- -------
Total stockholders' equity................. 4,415 6,344 7,092
------ ------- -------
Total liabilities and stockholders' equity. $9,768 $16,021 $20,929
====== ======= =======
</TABLE>

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

F-34
<PAGE>

UNION POWER CONSTRUCTION COMPANY
STATEMENTS OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE
MONTHS ENDED
YEAR ENDED AUGUST 31, NOVEMBER 30,
------------------------- ---------------
1995 1996 1997 1996 1997
------- ------- ------- ------ -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
REVENUES........................... $12,614 $25,636 $42,792 $7,211 $15,357
COST OF SERVICES (including
depreciation)..................... 10,240 22,319 37,766 6,037 13,474
------- ------- ------- ------ -------
Gross profit................... 2,374 3,317 5,026 1,174 1,883
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES.......................... 1,896 1,563 1,966 491 677
------- ------- ------- ------ -------
Income from operations......... 478 1,754 3,060 683 1,206
------- ------- ------- ------ -------
OTHER INCOME (EXPENSE):
Interest expense................. (7) (84) (110) (36) (39)
Related-party interest expense... (10) (6) (22) (2) (7)
Other, net....................... 142 166 229 7 45
------- ------- ------- ------ -------
Other income, net.............. 125 76 97 (31) (1)
------- ------- ------- ------ -------
INCOME BEFORE PROVISION FOR INCOME
TAXES............................. 603 1,830 3,157 652 1,205
PROVISION FOR INCOME TAXES......... 239 718 1,234 254 469
------- ------- ------- ------ -------
NET INCOME......................... $ 364 $ 1,112 $ 1,923 $ 398 $ 736
======= ======= ======= ====== =======
</TABLE>

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

F-35
<PAGE>

UNION POWER CONSTRUCTION COMPANY
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
THREE
MONTHS ENDED
YEAR ENDED AUGUST 31, NOVEMBER 30,
------------------------ --------------
1995 1996 1997 1996 1997
------ ------- ------- ----- -------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income.......................... $ 364 $ 1,112 $ 1,923 $ 398 $ 736
Adjustments to reconcile net income
to net cash provided by
operating activities--
Depreciation and amortization...... 217 486 577 156 362
Deferred taxes..................... 137 296 329 132 172
Changes in operating assets and
liabilities--
(Increase) decrease in--
Accounts receivable.............. 249 (2,523) (5,180) (381) (3,540)
Costs and estimated earnings in
excess of billings on
uncompleted contracts........... (226) 237 (77) -- (36)
Prepaid expenses and other
current assets.................. 12 15 (51) 22 47
Increase (decrease) in--
Accounts payable and accrued
expenses........................ 280 1,578 3,331 222 2,030
Billings in excess of costs and
estimated earnings on
uncompleted contracts........... (28) -- 322 65 378
Other, net........................ 80 84 (132) 7 8
------ ------- ------- ----- -------
Net cash provided by operating
activities...................... 1,085 1,285 1,042 621 157
------ ------- ------- ----- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and
equipment.......................... 41 27 105 -- --
Additions of property and equipment. (605) (2,771) (1,634) (283) (1,330)
------ ------- ------- ----- -------
Net cash used in investing
activities...................... (564) (2,744) (1,529) (283) (1,330)
------ ------- ------- ----- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt........ 300 1,432 786 -- 2,450
Payments of long-term debt.......... (272) (239) (507) (101) (730)
------ ------- ------- ----- -------
Net cash provided by financing
activities...................... 28 1,193 279 (101) 1,720
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS.................... 549 (266) (208) 237 547
CASH AND CASH EQUIVALENTS, beginning
of year............................. 329 878 612 612 404
------ ------- ------- ----- -------
CASH AND CASH EQUIVALENTS, end of
year................................ $ 878 $ 612 $ 404 $ 849 $ 951
====== ======= ======= ===== =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for--
Interest......................... $ 17 $ 90 $ 161 $ 27 $ 50
Income taxes..................... 55 340 831 290 532
</TABLE>

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

F-36
<PAGE>

UNION POWER CONSTRUCTION COMPANY
STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE INFORMATION)
<TABLE>
<CAPTION>
COMMON STOCK
-------------
UNREALIZED TOTAL
RETAINED HOLDING STOCKHOLDERS'
SHARES AMOUNT EARNINGS GAIN (LOSS) EQUITY
------ ------ -------- ----------- -------------
<S> <C> <C> <C> <C> <C>
BALANCE, August 31, 1994...... 25,000 $25 $2,976 $-- $3,001
Change in market value of
securities................. -- -- -- (70) (70)
Net income.................. -- -- 364 -- 364
------ --- ------ ---- ------
BALANCE, August 31, 1995...... 25,000 25 3,340 (70) 3,295
Change in market value of
securities................. -- -- -- 8 8
Net income.................. -- -- 1,112 -- 1,112
------ --- ------ ---- ------
BALANCE, August 31, 1996...... 25,000 25 4,452 (62) 4,415
Change in market value of
securities................. -- -- -- 6 6
Net income.................. -- -- 1,923 -- 1,923
------ --- ------ ---- ------
BALANCE, August 31, 1997...... 25,000 25 6,375 (56) 6,344
------ --- ------ ---- ------
Change in market value of
securities (unaudited)..... -- -- -- 12 12
Net income (unaudited)...... -- -- 736 -- 736
------ --- ------ ---- ------
BALANCE, November 30, 1997
(unaudited).................. 25,000 $25 $7,111 $(44) $7,092
====== === ====== ==== ======
</TABLE>

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

F-37
<PAGE>

UNION POWER CONSTRUCTION COMPANY
NOTES TO FINANCIAL STATEMENTS
1. BUSINESS AND ORGANIZATION:

Union Power Construction Company, a Colorado corporation (the Company or
Union), provides electrical power line installation, repair and maintenance
services for utilities throughout the western United States. The Company
performs the majority of its contract work under time and equipment contracts,
fixed price contracts and unit cost contracts with contract terms generally
ranging from one month to two years. The Company performs the majority of its
work in Colorado, Nevada and California.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Interim Financial Information

The interim financial statements for the three months ended November 30,
1996 and 1997 are unaudited and have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission. Accordingly, they do
not include all of the information and footnote disclosures required by
generally accepted accounting principles for complete financial statements. In
the opinion of the Company's management, the unaudited interim financial
statements contain all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation. The results of
operations for the interim periods are not necessarily indicative of the
results for the entire fiscal year.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents.

Property and Equipment

Property and equipment are stated at cost, and depreciation is computed
using the straight-line method over the estimated useful lives of the assets.
Leasehold improvements are capitalized and amortized over the lesser of the
life of the lease or the estimated useful life of the asset. Depreciation
expense was $217,000, $486,000 and $577,000 for the years ended August 31,
1995, 1996 and 1997, respectively.

Revenue Recognition

The Company recognizes revenue when services are performed except when work
is being performed under a fixed price or cost-plus-fee contract. Such
contracts generally provide that the customer accept completion of progress to
date and compensate the Company for services which have been rendered,
measured typically in terms of units installed, hours expended or some other
measure of progress. Revenues from fixed price or cost-plus-fee contracts are
recognized on the percentage-of-completion method measured by the percentage
of costs incurred to date to total estimated costs for each contract. Contract
costs include all direct material, subcontractor and labor costs and those
indirect costs related to contract performance, such as indirect labor,
supplies, tools, repairs and depreciation costs. Provisions for the total
estimated losses on uncompleted contracts are made in the period in which such
losses are determined. Changes in job performance, job conditions, estimated
profitability and final contract settlements may result in revisions to costs
and income, and their effects are recognized in the period in which the
revisions are determined.

F-38
<PAGE>

UNION POWER CONSTRUCTION COMPANY
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Warranty Costs

For certain contracts, the Company generally warrants labor for one to two
years after project completion. An accrual for warranty costs is recorded
based upon the historical level of warranty claims and management's estimate
of future costs.

Accounts Receivable and Provision for Doubtful Accounts

The Company provides an allowance for doubtful accounts based upon the
specific identification of accounts receivable where collection is deemed no
longer probable and an allowance based upon the level of accounts receivable
balances.

Income Taxes

The Company follows the liability method of accounting for income taxes in
accordance with Statement of Financial Accounting Standards (SFAS) No. 109
"Accounting for Income Taxes." Under this method, deferred assets and
liabilities are recorded for future tax consequences of temporary differences
between the financial reporting and tax bases of assets and liabilities and
are measured using the enacted tax rates and laws that will be in effect when
the underlying assets or liabilities are recovered or settled.

Collective Bargaining Agreement

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires the use of estimates and assumptions
by management in determining the reported amounts of assets and liabilities,
disclosures of contingent liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. Reference is made to the
"Revenue Recognition" section of this footnote for discussion of significant
estimates reflected in the Company's financial statements.

New Accounting Pronouncements

Effective January 1, 1996, the Company adopted SFAS No. 121, "Accounting for
the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of." Accordingly, in the event that facts and

F-39
<PAGE>

UNION POWER CONSTRUCTION COMPANY
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
circumstances indicate that property and equipment or other assets may be
impaired, an evaluation of recoverability would be performed. If an evaluation
is required, the estimated future undiscounted cash flows associated with the
asset are compared to the asset's carrying amount to determine if an
impairment of such property is necessary. Adoption of this standard did not
have a material effect on the financial position or results of operations of
the Company.

SFAS No. 130, "Reporting Comprehensive Income" requires the presentation of
comprehensive income in an entity's financial statements. Comprehensive income
represents all changes in equity of an entity during the reporting period,
including net income and charges directly to equity which are excluded from
net income. This statement will be adopted by the Company during fiscal year
1998.

3. PROPERTY AND EQUIPMENT:

Property and equipment consists of the following (in thousands):

<TABLE>
<CAPTION>
ESTIMATED AUGUST 31,
USEFUL LIVES ---------------
IN YEARS 1996 1997
------------ ------- -------
<S> <C> <C> <C>
Land.......................................... -- $ 126 $ 126
Operating equipment and vehicles.............. 5-10 9,440 10,497
Leasehold improvements........................ 10 88 113
Office furniture and equipment................ 5 110 145
------- -------
9,764 10,881
Less--Accumulated depreciation and
amortization................................. 4,954 5,013
------- -------
Property and equipment, net................ $4,810 $5,868
======= =======

4. DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS:

Accounts payable and accrued expenses consist of the following (in
thousands):

<CAPTION>
AUGUST 31,
---------------
1996 1997
------- -------
<S> <C> <C> <C>
Accounts payable, trade.................................... $1,750 $3,840
Accrued compensation and benefits.......................... 456 1,300
Other accrued expenses..................................... 672 1,069
------- -------
$2,878 $6,209
======= =======

Contracts in progress are as follows (in thousands):

<CAPTION>
AUGUST 31,
---------------
1996 1997
------- -------
<S> <C> <C> <C>
Costs incurred on contracts in progress.................... $15,529 $45,025
Estimated earnings, net of losses.......................... 603 4,183
------- -------
16,132 49,208
Less--Billings to date..................................... 16,132 49,453
------- -------
$ -- $ (245)
======= =======
Costs and estimated earnings in excess of billings on
uncompleted contracts..................................... $ -- $ 77
Less--Billings in excess of costs and estimated earnings on
uncompleted contracts..................................... -- (322)
------- -------
$ -- $ (245)
======= =======
</TABLE>

F-40
<PAGE>

UNION POWER CONSTRUCTION COMPANY
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

5. LONG-TERM DEBT:

In August 1995, the Company entered into a $300,000 secured installment loan
with a bank. The loan is due August 1999 and bears interest at 8.27 percent
with monthly payments of $7,400. Amounts outstanding under this loan were
$221,000 and $149,000 at August 31, 1996 and 1997, respectively. In November
1995, the Company entered into a $200,000 secured installment loan with a bank
for the purchase of construction equipment. This loan is due November 1999 and
bears interest at 8.22 percent with monthly payments of $5,000. At August 31,
1996 and 1997, $163,000 and $116,000, respectively, were outstanding under
this agreement.

The Company entered into a $1 million secured installment loan with a bank
in August 1996. The loan matures in April 2000 and bears interest at a rate of
8 percent with monthly payments due of $24,000. Amounts outstanding under this
agreement were $929,000 and $682,000 at August 31, 1996 and 1997,
respectively. In April 1997, the Company entered into a $360,000 installment
loan with a bank. This loan matures February 2001 with monthly payments of
$8,800 and an interest rate of 8.25 percent. There was $314,000 outstanding
under this arrangement at August 31, 1997.

The Company has established a $2 million secured revolving line of credit
with a bank effective August 1997. Borrowings under this facility bear
interest at a rate of prime, as defined, minus 1 percent for the first $1
million in borrowings and at prime for any balance over $1 million and are due
February 1998. Outstanding indebtedness under this facility was $150,000 and
$1,500,000 at August 31, 1997 and November 30, 1997, respectively.

The Company also has loans outstanding from certain stockholders or other
related parties totaling $277,000 and $456,000 at August 31, 1996 and 1997,
respectively. These loans bear interest at rates ranging from 7 percent to 9
percent and are due at various times from November 1997 to June 2001.

The loan agreement covering the bank line of credit contains various
covenants, including a minimum tangible net worth requirement, a minimum
working capital requirement and various financial ratios.

All of the Company's debt is secured by property and equipment. Two of the
Company's stockholders have personally guaranteed substantially all debt with
banks.

The maturities of long-term debt as of August 31, 1997, are as follows (in
thousands):

<TABLE>
<S> <C>
Year ending August 31 --
1998........................................................... $ 791
1999........................................................... 588
2000........................................................... 406
2001........................................................... 82
------
$1,867
======
</TABLE>

6. LEASES:

Union leases its Denver office and facility from a company which is owned by
the Company's stockholders. The lease is renewable on a monthly basis at
Union's election. Rent paid under this related-party lease was approximately
$42,000 for each of the years ended August 31, 1995, 1996 and 1997.

The Company also leases its Las Vegas, Nevada, office and yard from two of
the Company's stockholders. The lease terminates in June 2006 and rent paid
was $19,000 and $56,000 for each of the years ended August 31, 1996 and 1997,
respectively.

F-41
<PAGE>

UNION POWER CONSTRUCTION COMPANY
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

The Company also enters into various vehicle and construction equipment
operating leases. Vehicle lease terms are typically five years or less, and
construction equipment leases typically are short-term (one year or less).
Payments made for vehicle leases were $11,000, $19,000 and $149,000 for the
years ended August 31, 1995, 1996 and 1997, respectively.

Union rents various construction equipment under a one-year operating lease
from a company owned by two of Union's stockholders. Total related-party
equipment rental expense was $96,000 for the year ended August 31, 1997.

Future minimum lease payments under these noncancelable operating leases are
as follows (in thousands):

<TABLE>
<S> <C>
Year ending August 31 --
1998........................................................... $ 343
1999........................................................... 248
2000........................................................... 240
2001........................................................... 188
2002........................................................... 56
Thereafter..................................................... 215
------
$1,290
======
</TABLE>

7. INCOME TAXES:

Federal and state income taxes are as follows (in thousands):

<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
----------------------
1995 1996 1997
----------------------
<S> <C> <C> <C>
Federal--
Current............................................. $ 87 $358 $ 745
Deferred............................................ 116 251 303
State--
Current............................................. 15 64 160
Deferred............................................ 21 45 26
------ ------ --------
$239 $718 $1,234
====== ====== ========
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
----------------------
1995 1996 1997
----------------------
<S> <C> <C> <C>
Provision at the statutory rate...................... $211 $641 $1,106
Increase resulting from--
Permanent differences, mainly meals and
entertainment..................................... 5 7 7
State income tax, net of benefit for federal
deduction......................................... 23 70 121
------ ------ --------
$239 $718 $1,234
====== ====== ========
</TABLE>

F-42
<PAGE>

UNION POWER CONSTRUCTION COMPANY
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

<TABLE>
<CAPTION>
YEAR ENDED AUGUST 31,
----------------------
1996 1997
---------- ----------
<S> <C> <C>
Deferred income tax liabilities--
Property and equipment............................. $ (843) $(1,257)
Other.............................................. (347) (14)
---------- ----------
Total deferred income tax liabilities............ (1,190) (1,271)
Deferred income tax assets--
Property and equipment............................. 5 5
Other accruals not currently deductible............ 377 129
---------- ----------
Total deferred income tax assets................. 382 134
Valuation allowance.................................. (5) (5)
---------- ----------
Total deferred income tax liabilities............ $ (813) $(1,142)
========== ==========
The net deferred tax assets and liabilities are comprised of the following
(in thousands):
<CAPTION>
YEAR ENDED AUGUST 31,
----------------------
1996 1997
---------- ----------
<S> <C> <C>
Deferred tax assets--
Current............................................ $ 377 $ 129
Long-term.......................................... -- --
---------- ----------
Total............................................ 377 129
---------- ----------
Deferred tax liabilities--
Current............................................ (347) (14)
---------- ----------
Long-term.......................................... (843) (1,257)
---------- ----------
Total............................................ (1,190) (1,271)
---------- ----------
Net deferred income tax liabilities.............. $ (813) $(1,142)
========== ==========
</TABLE>

8. RELATED-PARTY TRANSACTIONS:

Note Receivable

The Company has loaned funds to various entities owned by the Company's
stockholders. Interest income under this arrangement was $15,000, $13,000 and
$3,000 for the years ended August 31, 1995, 1996 and 1997, respectively.

Rental Income

Union has from time to time leased or rented construction equipment on a
short-term basis to various related parties. Total rental revenue under these
arrangements was $4,000 for the year ended August 31, 1996.

Management Fee Income

The Company also receives management fee income from a related-party owned
by two of Union's stockholders for financial and management services rendered.
Total payments received were $7,000, $13,000 and $9,000 for the years ended
August 31, 1995, 1996 and 1997.

F-43
<PAGE>

UNION POWER CONSTRUCTION COMPANY
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

9. EMPLOYEE BENEFIT PLAN:

In connection with its collective bargaining agreements with various
electrical, labor and operating engineer unions, the Company participates with
other companies in the various multiemployer pension plans. These plans cover
all of the Company's employees who are members of such unions. The Employee
Retirement Income Security Act of 1974, as amended by the Multi-Employer
Pension Plan Amendments Act of 1980, imposes certain liabilities upon
employers who are contributors to a multiemployer plan in the event of the
employer's withdrawal from, or upon termination of, such plan. The Company has
no plan to withdraw from these plans. The plans do not maintain information on
net assets and actuarial present value of the accumulated share of the plans'
unfunded vested benefits allocable to the Company, and amounts, if any, for
which the Company may be contingently liable are not ascertainable at this
time. Total contributions to these plans were approximately $1.2 million, $2.3
million and $2.9 million at August 31, 1995, 1996 and 1997, respectively.

The Company has a defined contribution profit-sharing plan for employees not
covered by a union bargaining agreement. The plan provides for the Company to
make discretionary contributions of up to 15 percent of an employee's salary.
Total contributions by the Company under the plan were approximately $127,000,
$130,000 and $155,000 for the years ended August 31, 1995, 1996 and 1997,
respectively.

10. FINANCIAL INSTRUMENTS:

The Company's financial instruments consist of cash and cash equivalents,
accounts receivable, available for sale securities, a line of credit, accounts
payable, notes payable and debt. The Company believes that the carrying value
of these instruments on the accompanying balance sheets approximates their
fair value.

11. COMMITMENTS AND CONTINGENCIES:

Litigation

Performance Bonds

In certain circumstances, the Company is required to provide performance
bonds in connection with its contract commitments which are personally
guaranteed by certain stockholders of the Company.

12. MAJOR CUSTOMERS AND RISK CONCENTRATION:

The Company had sales greater than 10 percent of total sales to three major
customers (comprising approximately 27 percent, 17 percent and 16 percent of
total sales), three major customers (comprising approximately 39 percent, 27
percent and 11 percent of total sales) and two major customers (comprising
approximately 40 percent and 34 percent of total sales) during the years ended
August 31, 1995, 1996 and 1997, respectively.

The Company grants credit, generally without collateral, to its customers,
which are major public utilities, located primarily in the western United
States. Consequently, the Company is subject to potential credit risk related
to changes in business and economic factors within the region it operates.
However,

F-44
<PAGE>

UNION POWER CONSTRUCTION COMPANY
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
management believes that its contract acceptance, billing and collection
policies are adequate to minimize the potential credit risk.

13. CONTRACT CLAIM:

In 1995, the Company received a $970,000 settlement from the Western Area
Power Administrator (WAPA). During the course of the project, the job was shut
down by WAPA for a protracted length of time due to an accident by an
unrelated contractor working on the same project. As a result, the Company
incurred significant idle crew time. The Company presented WAPA with a claim
for costs incurred by the Company for WAPA's actions and received the
settlement, which is included in 1995 revenues.

14. SUBSEQUENT EVENTS:

Construction Contract

In October 1997, the Company was awarded a major contract for construction
of 164 miles of electrical transmission lines and two substation facilities.
The contract requires substantial completion by December 1, 1998, and carries
significant penalties for work not being completed by the substantial
completion date. Work began in December 1997.

Debt

In November 1997, the Company entered into a $500,000 term loan agreement
due November 2001 with a bank for the purchase of construction equipment. The
loan bears interest at a rate of 8.5 percent and monthly principal and
interest payments of $12,300. The loan is secured by the equipment purchased.

15. SUBSEQUENT EVENTS TO DATE OF AUDITORS' REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS (UNAUDITED):

In December 1997, the Company amended its $2 million secured revolving line
of credit to increase total available borrowings under the facility to $3
million. The terms of the facility, including interest and maturity date,
remain unchanged. See discussion of the facility in Note 5.

In December 1997, the Company and its stockholders entered into a definitive
agreement with Quanta Services, Inc. (Quanta), subject to certain conditions,
pursuant to which all outstanding shares of the Company's common stock will be
exchanged for cash and shares of Quanta common stock concurrent with the
consummation of an initial public offering (the Offering) of additional common
stock by Quanta. In addition, the key executives of the Company will enter
into employment agreements with the Company and Quanta which have an initial
term of three years and generally restricts the disclosure of confidential
information as well as competition with the Company and Quanta for a period of
five years following from the date of the employment agreement.

Prior to the consummation of the Offering, two of Company's stockholders
will purchase certain nonoperating assets not used in the business at a price
equal to the net book value of such assets (approximately $183,000 at August
31, 1997).

F-45
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To TRANS TECH Electric, Inc.:

We have audited the accompanying balance sheets of TRANS TECH Electric, Inc.,
an Indiana Subchapter S corporation, as of December 31, 1996, and September
30, 1997, and the related statements of operations, cash flows and
shareholders' equity for the years ended December 31, 1995 and 1996, and the
nine months ended September 30, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of TRANS TECH Electric, Inc., as
of December 31, 1996, and September 30, 1997, and the results of its
operations and cash flows for the years ended December 31, 1995 and 1996, and
the nine months ended September 30, 1997, in conformity with generally
accepted accounting principles.

ARTHUR ANDERSEN LLP

Houston, Texas December 5, 1997

F-46
<PAGE>

TRANS TECH ELECTRIC, INC.
BALANCE SHEETS

(IN THOUSANDS, EXCEPT SHARE INFORMATION)

<TABLE>
<CAPTION>
PRO FORMA
DECEMBER 31, SEPTEMBER 30, SEPTEMBER 30,
1996 1997 1997(1)
------------ ------------- -------------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents........... $ 389 $ 865 $ 865
Accounts receivable--
Trade, net of allowance of $130
and $158, respectively........... 4,484 4,301 4,301
Retainage......................... 1,822 1,838 1,838
Inventories......................... 610 684 684
Costs and estimated earnings in
excess of billings on uncompleted
contracts.......................... 1,853 4,320 4,320
Prepaid expenses and other current
assets............................. 66 86 86
------- ------- -------
Total current assets.............. 9,224 12,094 12,094
PROPERTY AND EQUIPMENT, net........... 2,642 2,924 2,924
OTHER ASSETS.......................... 3 3 3
------- ------- -------
Total assets...................... $11,869 $15,021 $15,021
======= ======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Note payable........................ $ 797 $ 2,294 $ 2,294
Current maturities of long-term
debt............................... 107 89 89
Current portion of capital lease
obligations........................ 285 414 414
Accounts payable and accrued
expenses........................... 4,465 5,166 5,166
Billings in excess of costs and
estimated earnings on uncompleted
contracts.......................... 728 173 173
------- ------- -------
Total current liabilities......... 6,382 8,136 8,136
LONG-TERM DEBT, net of current
maturities........................... 607 543 6,384
LONG-TERM CAPITAL LEASE OBLIGATIONS,
net of current obligations........... 467 438 438
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock, no par value, 1,000
shares authorized, 926 shares
issued and outstanding............. 125 125 125
Retained earnings................... 4,350 5,841 --
Treasury stock, 150 shares, at cost. (62) (62) (62)
------- ------- -------
Total shareholders' equity........ 4,413 5,904 63
------- ------- -------
Total liabilities and
shareholders' equity............. $11,869 $15,021 $15,021
======= ======= =======
</TABLE>
- --------

(1) The pro forma balance sheet column presented reflects the impact of Sub S
distributions. See Note 12 for further discussion.

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

F-47
<PAGE>

TRANS TECH ELECTRIC, INC.
STATEMENTS OF OPERATIONS

(IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
---------------- ------------------
1995 1996 1996 1997
------- ------- -------- --------
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
REVENUES............................. $21,397 $24,414 $16,575 $24,278
COST OF SERVICES (including
depreciation)....................... 18,934 20,426 13,683 19,687
------- ------- -------- --------
Gross profit..................... 2,463 3,988 2,892 4,591
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES............................ 1,639 1,848 1,300 1,362
------- ------- -------- --------
Income from operations........... 824 2,140 1,592 3,229
------- ------- -------- --------
OTHER INCOME (EXPENSE):
Interest expense................... (297) (313) (249) (232)
Other, net......................... 34 45 31 38
------- ------- -------- --------
Other income (expense), net...... (263) (268) (218) (194)
------- ------- -------- --------
NET INCOME........................... $ 561 $ 1,872 $ 1,374 $ 3,035
======= ======= ======== ========
</TABLE>

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

F-48
<PAGE>

TRANS TECH ELECTRIC, INC.
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
YEAR ENDED NINE MONTHS ENDED
DECEMBER 31, SEPTEMBER 30,
---------------- -------------------
1995 1996 1996 1997
------- ------- ----------- -------
(UNAUDITED)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income............................. $ 561 $ 1,872 $ 1,374 $ 3,035
Adjustments to reconcile net income to
net cash provided by operating
activities --
Depreciation and amortization......... 442 574 428 496
Gain on sale of property and
equipment............................ (19) (31) (21) (15)
Bad debt expense...................... 83 34 10 38
Changes in operating assets and
liabilities--
(Increase) decrease in --
Accounts receivable................. 827 (2,134) 225 129
Inventories......................... (254) 256 (223) (74)
Costs and estimated earnings in
excess of billings on uncompleted
contracts.......................... (241) 377 (601) (2,467)
Prepaid expenses and other current
assets............................. (33) (7) 1 (20)
Increase (decrease) in--
Accounts payable and accrued
expenses........................... (878) 1,359 219 701
Billings in excess of costs and
estimated earnings on uncompleted
contracts.......................... (141) 583 (145) (555)
------- ------- ------- -------
Net cash provided by operating
activities........................... 347 2,883 1,267 1,268
------- ------- ------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and
equipment............................. 46 69 59 92
Additions of property and equipment.... (1,180) (923) (803) (856)
------- ------- ------- -------
Net cash used in investing activities. (1,134) (854) (744) (764)
------- ------- ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings (repayments) on line of
credit................................ 1,139 (2,283) (1,115) 1,496
Proceeds from long-term debt........... 537 1,185 1,185 327
Payments of long-term debt............. (148) (477) (387) (307)
Distributions to shareholders.......... (457) (542) (522) (1,544)
------- ------- ------- -------
Net cash provided by (used in)
financing activities................. 1,071 (2,117) (839) (28)
------- ------- ------- -------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS............................ 284 (88) (316) 476
CASH AND CASH EQUIVALENTS, beginning of
period................................. 193 477 477 389
------- ------- ------- -------
CASH AND CASH EQUIVALENTS, end of
period................................. $ 477 $ 389 $ 161 $ 865
======= ======= ======= =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for interest................ $ 310 $ 297 $ 246 $ 233
</TABLE>

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

F-49
<PAGE>

TRANS TECH ELECTRIC, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE INFORMATION)

<TABLE>
<CAPTION>
COMMON STOCK TOTAL
------------- RETAINED TREASURY SHAREHOLDERS'
SHARES AMOUNT EARNINGS STOCK EQUITY
------ ------ -------- -------- -------------
<S> <C> <C> <C> <C> <C>
BALANCE, December 31, 1994........ 926 $125 $ 2,916 $(62) $ 2,979
Distributions to shareholders... -- -- (457) -- (457)
Net income...................... -- -- 561 -- 561
--- ---- ------- ---- -------
BALANCE, December 31, 1995........ 926 125 3,020 (62) 3,083
Distributions to shareholders... -- -- (542) -- (542)
Net income...................... -- -- 1,872 -- 1,872
--- ---- ------- ---- -------
BALANCE, December 31, 1996........ 926 125 4,350 (62) 4,413
Distributions to shareholders... -- -- (1,544) -- (1,544)
Net income...................... -- -- 3,035 -- 3,035
--- ---- ------- ---- -------
BALANCE, September 30, 1997....... 926 $125 $ 5,841 $(62) $ 5,904
=== ==== ======= ==== =======
</TABLE>

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

F-50
<PAGE>

TRANS TECH ELECTRIC, INC.
NOTES TO FINANCIAL STATEMENTS

1.BUSINESS AND ORGANIZATION:

TRANS TECH Electric, Inc., an Indiana Subchapter S corporation (the
Company), focuses on providing traffic signals, street and sign lighting
installation and general commercial and industrial electrical construction
primarily for commercial, state and regulatory entities. The Company performs
the majority of its contract work under fixed price contracts, unit-price and
fixed price contracts modified by penalty provisions, with contract terms
generally ranging from six to 18 months. The Company performs the majority of
its work in Indiana and Michigan.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Interim Financial Information

The interim financial statements for the nine months ended September 30, 1996,
are unaudited and have been prepared pursuant to the rules and regulations of
the Securities and Exchange Commission. Accordingly, they do not include all
of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of the Company's
management, the unaudited interim financial statements contain all adjustments
(consisting of normal recurring adjustments) considered necessary for a fair
presentation. The results of operations for the interim periods are not
necessarily indicative of the results for the entire fiscal year.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents.

Supplemental Cash Flow Information

The Company had the following noncash investing and financing activities
related to capital leases and equipment acquired by seller financing of
approximately $621,000, $485,000 and $327,000 for the years ended December 31,
1995 and 1996, and the nine months ended September 30, 1997.

Inventories

Inventories consist of parts and supplies held for use in the ordinary
course of business and are stated at the lower of cost or market using the
last-in, first-out (LIFO) method. The excess of current costs over the
carrying value of LIFO inventories was $105,000 and $126,000 at December 31,
1996, and September 30, 1997, respectively.

Accounts Receivable and Provision for Doubtful Accounts

The Company provides an allowance for doubtful accounts based upon the
specific identification of accounts receivable where collection is no longer
deemed probable and an allowance based upon the level of total accounts
receivable balances.

Property and Equipment

Property and equipment are stated at cost, and depreciation is computed
using the straight-line method over the estimated useful lives of the assets.
Leasehold improvements are capitalized and amortized over the lesser of the
life of the lease or the estimated useful life of the asset. Depreciation
expense was $442,000, $574,000 and $496,000 for the years ended December 31,
1995 and 1996, and the nine months ended September 30, 1997, respectively.

F-51
<PAGE>

TRANS TECH ELECTRIC, INC.,
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Revenue Recognition

The Company recognizes revenue when services are performed except when work
is being performed under a fixed price contract. Such contracts generally
provide that the customer accept completion of progress to date and compensate
the Company for services which have been rendered, measured typically in terms
of units installed, hours expended or some other measure of progress. Revenues
from fixed price contracts are recognized on the percentage-of-completion
method measured by the percentage of costs incurred to date to total estimated
costs for each contract. Contract costs include all direct material, labor and
subcontract costs and those indirect costs related to contract performance,
such as indirect labor, supplies, tools, repairs and depreciation costs.
Provisions for the total estimated losses on uncompleted contracts are made in
the period in which such losses are determined. Changes in job performance,
job conditions, estimated profitability and final contract settlements may
result in revisions to costs and income, and their effects are recognized in
the period in which the revisions are determined.

The balances billed but not paid by customers pursuant to retainage
provisions in fixed price contracts will be due upon completion of the
contracts and acceptance by the customer. Based on the Company's experience
with similar contracts in recent years, the retention balance at each balance
sheet date will be collected within the subsequent fiscal year.

Warranty Costs

For certain contracts, the Company warrants labor for the first year after
installation of new electrical systems. An accrual for warranty costs is
recorded based upon the historical level of warranty claims and management's
estimate of future costs.

Income Taxes

The Company has elected S corporation status as defined by the Internal
Revenue Code, whereby the Company is not subject to taxation for federal
purposes. Under S corporation status, the shareholders report their shares of
the Company's taxable earnings or losses in their personal tax returns. The
Company will terminate its S corporation status concurrently with the
effective date of the Offering (see Note 12).

Collective Bargaining Agreements

Use of Estimates

F-52
<PAGE>

TRANS TECH ELECTRIC, INC.,
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates. Reference is made to the "Revenue
Recognition" section of this footnote and Note 9 for discussion of certain
estimates reflected in the Company's financial statements.

New Accounting Pronouncement

Effective January 1, 1996, the Company adopted Statement of Financial
Accounting Standards (SFAS) No. 121, "Accounting for the Impairment of Long-
Lived Assets and for Long-Lived Assets to Be Disposed Of." Accordingly, in the
event that facts and circumstances indicate that property and equipment or
other assets may be impaired, an evaluation of recoverability would be
performed. If an evaluation is required, the estimated future undiscounted
cash flows associated with the asset are compared to the asset's carrying
amount to determine if an impairment of such property is necessary. Adoption
of this standard did not have a material effect on the financial position or
results of operations of the Company.

3.PROPERTY AND EQUIPMENT:

Property and equipment consists of the following (in thousands):

<TABLE>
<CAPTION>
ESTIMATED
USEFUL LIVES DECEMBER 31, SEPTEMBER 30,
IN YEARS 1996 1997
------------ ------------ -------------
<S> <C> <C> <C>
Operating equipment and vehicles.... 5-7 $3,957 $4,559
Leasehold improvements.............. 5-20 384 384
Office furniture and equipment...... 5 317 346
------ ------
4,658 5,289
Less--Accumulated depreciation and
amortization....................... (2,016) (2,365)
------ ------
Property and equipment, net...... $2,642 $2,924
====== ======
</TABLE>

4.DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS:

Accounts payable and accrued expenses consist of the following (in
thousands):

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
------------ -------------
<S> <C> <C>
Accounts payable, trade........................... $3,702 $4,242
Accrued compensation and benefits................. 340 453
Other accrued expenses............................ 423 471
------ ------
$4,465 $5,166
====== ======
</TABLE>

Contracts in progress are as follows (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
------------ -------------
<S> <C> <C>
Costs incurred on contracts in progress.......... $9,178 $11,236
Estimated earnings, net of losses................ 1,630 2,534
------ -------
10,808 13,770
Less--Billings to date........................... 9,683 9,623
------ -------
$1,125 $ 4,147
====== =======
Costs and estimated earnings in excess of bill-
ings on uncompleted contracts................... $1,853 $ 4,320
Less--Billings in excess of costs and
estimated earnings on uncompleted contracts.. 728 173
------ -------
$1,125 $ 4,147
====== =======
</TABLE>

F-53
<PAGE>

TRANS TECH ELECTRIC, INC.,
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

5.DEBT:

The Company has a $4 million line of credit agreement with a bank bearing
interest at the national prime rate. The line of credit is collateralized by
the Company's receivables, inventory, property and equipment. The Company's
weighted average interest rate for the facility was 8.4 percent and 8.5
percent as of December 31, 1996, and September 30, 1997, respectively. At
December 31, 1996, and September 30, 1997, the outstanding balance on this
facility was $797,000 and $2,294,000, respectively, and is payable upon
demand.

The Company's debt obligations consisted of the following:

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
------------ -------------
(IN THOUSANDS)
<S> <C> <C>
Note payable to bank, 8.2% and 8.6% weighted
average interest rate, respectively, due $10,000
monthly with final maturity on May 1, 2001...... $663 $614
Note payable to commercial finance company, 8.1%
interest rate, $3,871 due monthly with final
maturity on March 1, 1998....................... 51 18
---- ----
714 632
Less--Current maturities......................... 107 89
---- ----
Total long-term debt............................. $607 $543
==== ====
</TABLE>

The long-term debt is secured by the Company's receivables, inventory,
property and equipment and is guaranteed by the Company's principal
shareholders. The line of credit and note payable to the bank are subject to
certain financial reporting and financial ratio requirements. The Company was
in compliance with such covenants for all periods presented. In October 1997,
the Company violated its minimum debt to net worth ratio due to the
distribution of the Company's accumulated adjustment account (see Note 11).
The Company has received a waiver, effective through January 1, 1999, from the
bank for this violation.

The maturities of long-term debt as of September 30, 1997, are as follows (in
thousands):

<TABLE>
<S> <C>
Year ending September 30--
1998.............................................................. $89
1999.............................................................. 77
2000.............................................................. 83
2001.............................................................. 383
</TABLE>

6.LEASES:

The Company leases its office and warehouse space from an entity owned
principally by the Company's shareholders. The lease expires in June 2000 and
requires the Company to pay all taxes, insurance and maintenance on the
property. The rent paid on this related-party lease was approximately $49,000,
$59,000 and $44,000 for the years ended December 31, 1995 and 1996, and the
nine months ended September 30, 1997, respectively.

F-54
<PAGE>

TRANS TECH ELECTRIC, INC.,
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

The Company leases various equipment under noncancelable sale-leaseback
capital leases and the leased assets are included as part of "Property and
equipment." Details of the capital leased assets are as follows:

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
------------ -------------
(IN THOUSANDS)
<S> <C> <C>
Operating equipment and vehicles.................. $1,022 $1,312
Less--Accumulated depreciation.................... (194) (306)
------ ------
Net capitalized leased assets..................... $ 828 $1,006
====== ======
</TABLE>

At September 30, 1997, the future minimum lease payments under operating and
capital leases are as follows (in thousands):

<TABLE>
<CAPTION>
SEPTEMBER 30
-----------------
OPERATING CAPITAL
LEASES LEASES
--------- -------
<S> <C> <C>
1998....................................................... $ 59 $483
1999....................................................... 59 318
2000....................................................... 44 162
---- ----
Total................................................... $162 963
====
Less--Amount representing interest......................... (111)
----
Present value of minimum lease payments.................... 852
Less--Current maturities................................... (414)
----
Long-term obligations...................................... $438
====
</TABLE>

7.EMPLOYEE BENEFIT PLAN:

In connection with its collective bargaining agreements with various
electrical, labor and operating engineer unions, the Company participates with
other companies in the unions' multiemployer pension plans. These plans cover
all of the Company's employees who are members of such unions. The Employee
Retirement Income Security Act of 1974, as amended by the Multi-Employer
Pension Plan Amendments Act of 1980, imposes certain liabilities upon
employers who are contributors to a multiemployer plan in the event of the
employer's withdrawal from, or upon termination of, such plan. The Company has
no plan to withdraw from these plans. The plans do not maintain information on
net assets and actuarial present value of the accumulated share of the plan's
unfunded vested benefits allocable to the Company, and amounts, if any, for
which the Company may be contingently liable are not ascertainable at this
time. Total contributions to the plans were approximately $403,000, $474,000
and $435,000 for the years ended December 31, 1995 and 1996, and the nine
months ended September 30, 1997, respectively.

The Company has a defined contribution profit-sharing plan. The plan
provides for the Company to match one-half of employee contributions to the
plan up to a maximum of $3,500 per year per employee. Total contributions by
the Company under the plan were approximately $31,000, $30,000 and $16,000 for
the years ended December 31, 1995 and 1996, and the nine months ended
September 30, 1997, respectively. The Company may also make discretionary
contributions. The Company made discretionary contributions of $44,000,
$70,000 and $ -- for the years ended December 31, 1995 and 1996, and the nine
months ended September 30, 1997, respectively.

F-55
<PAGE>

TRANS TECH ELECTRIC, INC.,
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

8.FINANCIAL INSTRUMENTS:

The Company's financial instruments consist of cash and cash equivalents,
accounts receivable, a line of credit, accounts payable, notes payable and
debt. The Company believes that the carrying value of these instruments on the
accompanying balance sheets approximates their fair value.

9.COMMITMENTS AND CONTINGENCIES:

Litigation

Insurance

The Company carries a broad range of insurance coverage, including workers'
compensation, business auto liability, general liability and an umbrella
policy. The Company is self-insured for medical claims up to $5,000 per year
per covered individual. The Company has recorded accruals for its estimated
portion of self-insured claims based on estimated claims incurred through
December 31, 1995 and 1996, and September 30, 1997.

Performance Bonds

In certain circumstances, the Company is required to provide performance
bonds in connection with its contract commitments which are personally
guaranteed by certain shareholders of the Company.

10.MAJOR CUSTOMERS AND RISK CONCENTRATION:

During 1995 and 1996, one customer accounted for 17 percent and 21 percent
of the Company's revenue, respectively. During 1997, two customers accounted
for 19 percent and 14 percent of the Company's revenues, respectively.

The Company grants credit, generally without collateral, to its customers,
which include real estate operators, general contractors and state and
regulatory agencies, located primarily in Indiana and Michigan. Consequently,
the Company is subject to potential credit risk related to changes in business
and economic factors within Indiana and Michigan. However, management believes
that its contract acceptance, billing and collection policies are adequate to
minimize the potential credit risk.

11.SUBSEQUENT EVENTS:

In October 1997, the Company made cash distributions of approximately
$5,050,000. The Company entered into a $5,050,000 note payable to a bank
bearing an 8 percent interest rate to finance these cash distributions. The
Company must make monthly payments of interest with final maturity in November
2000. Had this transaction been recorded at September 30, 1997, the effect on
the accompanying balance sheet would be an increase in liabilities of
$5,050,000 and a decrease in shareholders' equity of $5,050,000.

F-56
<PAGE>

TRANS TECH ELECTRIC, INC.,
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

12. SUBSEQUENT EVENTS TO DATE OF AUDITORS' REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS (UNAUDITED):

In December 1997, the Company and its shareholders entered into a definitive
agreement with Quanta Services, Inc. (Quanta), subject to certain conditions
pursuant to which all outstanding shares of the Company's common stock will be
exchanged for cash and shares of Quanta common stock, concurrent with the
consummation of an initial public offering (the Offering) of additional common
stock by Quanta. In addition, two executives of the Company will enter into
employment agreements with the Company and Quanta which have an initial term
of three years and generally restricts the disclosure of confidential
information as well as restricts competition with the Company and Quanta for a
period of five years from the date of the employment agreement. In the event
that the proposed sale of the Company to Quanta Services, Inc. does not occur,
the shareholders intend, if necessary, to contribute amounts to provide for
additional liquidity to the Company.

Prior to the closing of the transaction discussed above, the Company plans
to make additional Sub S distributions of approximately $791,000 based on the
Company's retained earnings balance at September 30, 1997. The Company intends
to fund the distribution through bank borrowings. The Company will also make
Sub S distributions to its owners of substantially all of their previously-
taxed undistributed earnings through December 31, 1997.

F-57
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Potelco, Inc.:

We have audited the accompanying balance sheets of Potelco, Inc., a Washington
Subchapter S corporation, as of December 31, 1996, and September 30, 1997, and
the related statements of operations, cash flows and stockholder's equity for
the year ended December 31, 1996, and the nine months ended September 30,
1997. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Potelco, Inc., as of December
31, 1996, and September 30, 1997, and the results of its operations and cash
flows for the year ended December 31, 1996, and the nine months ended
September 30, 1997, in conformity with generally accepted accounting
principles.

ARTHUR ANDERSEN LLP

Houston, Texas
December 5, 1997

F-58
<PAGE>

POTELCO, INC.
BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE INFORMATION)

<TABLE>
<CAPTION>
PRO FORMA
DECEMBER 31, SEPTEMBER 30, SEPTEMBER 30,
1996 1997 1997(1)
------------ ------------- -------------
<S> <C> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 36 $ 280 $ 280
Accounts receivable --
Trade, net of allowance of $15 and
$47, respectively.................. 2,987 4,428 4,428
Retainage........................... 902 541 541
Costs and estimated earnings in ex-
cess of billings on uncompleted con-
tracts.............................. 117 975 975
Prepaid expenses and other current
assets.............................. 25 34 34
------ ------ ------
Total current assets................ 4,067 6,258 6,258
PROPERTY AND EQUIPMENT, net.......... 2,679 3,206 3,206
------ ------ ------
Total assets........................ $6,746 $9,464 $9,464
====== ====== ======
LIABILITIES AND STOCKHOLDER'S EQUITY
CURRENT LIABILITIES:
Notes payable to bank................ $ 550 $1,162 $3,162
Note payable to stockholder.......... 109 35 35
Current maturities of long-term debt. 445 491 491
Current portion of note payable to
related party....................... 216 219 219
Accounts payable and accrued ex-
penses.............................. 1,839 2,163 2,163
Billings in excess of costs and esti-
mated earnings on uncompleted con-
tracts.............................. 139 74 74
------ ------ ------
Total current liabilities........... 3,298 4,144 6,144
LONG-TERM DEBT, net of current maturi-
ties --
Note payable to related party........ 863 823 823
Other long-term debt................. 537 559 559
COMMITMENTS AND CONTINGENCIES
STOCKHOLDER'S EQUITY:
Common stock, $5 par value, 10,000
shares authorized, 22 shares issued
and 2 shares outstanding............ -- -- --
Additional paid-in capital........... 160 160 160
Retained earnings.................... 1,888 3,778 1,778
------ ------ ------
Total stockholder's equity.......... 2,048 3,938 1,938
------ ------ ------
Total liabilities and stockholder's
equity............................. $6,746 $9,464 $9,464
====== ====== ======
</TABLE>
- --------

(1) The pro forma balance sheet column presented reflects the impact of Sub S
distributions. See Note 13 for further discussion.

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

F-59
<PAGE>

POTELCO, INC.
STATEMENTS OF OPERATIONS
(IN THOUSANDS)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED SEPTEMBER 30,
DECEMBER 31, -------------------
1996 1996 1997
------------ ----------- -------
(UNAUDITED)
<S> <C> <C> <C>
REVENUES...................................... $14,549 $10,173 $13,248
COST OF SERVICES (including depreciation)..... 12,946 9,343 10,416
------- ------- -------
Gross profit................................. 1,603 830 2,832
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES...................................... 971 691 777
------- ------- -------
Income from operations....................... 632 139 2,055
------- ------- -------
OTHER INCOME (EXPENSE):
Interest expense............................. (321) (218) (185)
Other, net................................... (123) 30 20
------- ------- -------
Other income (expense), net................. (444) (188) (165)
------- ------- -------
NET INCOME (LOSS)............................. $ 188 $ (49) $ 1,890
======= ======= =======
</TABLE>

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

F-60
<PAGE>

POTELCO, INC.
STATEMENTS OF CASH FLOWS
(IN THOUSANDS)

<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEAR ENDED SEPTEMBER 30,
DECEMBER 31, ------------------
1996 1996 1997
------------ ----------- ------
(UNAUDITED)
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................... $188 $(49) $1,890
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities --
Depreciation................................ 473 354 380
Loss (gain) on sale of property and equip-
ment....................................... 129 30 (6)
Changes in operating assets and
liabilities --
(Increase) decrease in --
Accounts receivable....................... 208 193 (1,080)
Costs and estimated earnings in excess of
billings on uncompleted contracts........ 79 (375) (858)
Prepaid expenses and other current assets. (16) -- (9)
Increase (decrease) in --
Accounts payable and accrued expenses..... (611) (759) 324
Billings in excess of costs and estimated
earnings on uncompleted contracts........ (371) 316 (65)
---- ---- ------
Net cash provided by (used in) operating
activities................................ 79 (290) 576
---- ---- ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of property and equipment. 60 44 48
Additions to property and equipment.......... (322) (235) (621)
---- ---- ------
Net cash used in investing activities...... (262) (191) (573)
---- ---- ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net increase in notes payable to bank........ 250 500 612
Net decrease in note payable to stockholder.. (8) (4) (74)
Payments of note payable to related party.... (45) (33) (37)
Payments of other long-term debt............. (437) (413) (404)
Proceeds from other long-term debt........... 50 26 144
Distributions to stockholder................. (101) (101) --
---- ---- ------
Net cash provided by (used in) financing
activities................................ (291) (25) 241
---- ---- ------
NET INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS.................................. (474) (506) 244
CASH AND CASH EQUIVALENTS, beginning of peri-
od........................................... 510 510 36
---- ---- ------
CASH AND CASH EQUIVALENTS, end of period...... $ 36 $ 4 $ 280
==== ==== ======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMA-
TION:
Cash paid for interest...................... $328 $224 $ 200
</TABLE>

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

F-61
<PAGE>

POTELCO, INC.
STATEMENTS OF STOCKHOLDER'S EQUITY
(IN THOUSANDS, EXCEPT SHARE INFORMATION)

<TABLE>
<CAPTION>
COMMON STOCK ADDITIONAL TOTAL
------------- PAID-IN RETAINED STOCKHOLDER'S
SHARES AMOUNT CAPITAL EARNINGS EQUITY
------ ------ ---------- -------- -------------
<S> <C> <C> <C> <C> <C>
BALANCE, December 31, 1995...... 2 $-- $160 $1,801 $1,961
Distributions to stockholder... -- -- -- (101) (101)
Net income..................... -- -- -- 188 188
--- --- ---- ------ ------
BALANCE, December 31, 1996...... 2 -- 160 1,888 2,048
Net income..................... -- -- -- 1,890 1,890
--- --- ---- ------ ------
BALANCE, September 30, 1997..... 2 $-- $160 $3,778 $3,938
=== === ==== ====== ======
</TABLE>

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

F-62
<PAGE>

POTELCO, INC.
NOTES TO FINANCIAL STATEMENTS

1.BUSINESS AND ORGANIZATION:

Potelco, Inc., a Washington Subchapter S corporation (the Company), focuses
on providing underground and overhead power and telephone cable installation
primarily under commercial, industrial and governmental contracts. The Company
performs the majority of its contract work in Washington under lump-sum, cost-
plus and unit-priced contracts, with contract terms generally ranging from 30
days to 18 months.

2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Interim Financial Information

The interim statements of operations and cash flows for the nine months
ended September 30, 1996, are unaudited and have been prepared pursuant to the
rules and regulations of the Securities and Exchange Commission. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. In the
opinion of the Company's management, the unaudited interim financial
statements contain all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation. The results of
operations for the interim periods are not necessarily indicative of the
results for the entire fiscal year.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents.

Supplemental Cash Flow Information

The Company had noncash investing and financing activities related to
capital leases of approximately $374,000 and $328,000 during the year ended
December 31, 1996, and nine months ended September 30, 1997, respectively.

Accounts Receivable and Provision for Doubtful Accounts

Property and Equipment

Property and equipment are stated at cost, and depreciation is computed
using the straight-line method over the estimated useful lives of the assets.
Leasehold improvements are capitalized and amortized over the lesser of the
life of the lease or the estimated useful life of the asset. Depreciation
expense was approximately $473,000 and $380,000 for the year ended December
31, 1996, and the nine months ended September 30, 1997, respectively.

F-63
<PAGE>

POTELCO, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

Revenue Recognition

The Company recognizes revenue when services are performed except when work
is being performed under fixed price or cost-plus-fee contracts. Such
contracts generally provide that the customer accept completion of progress to
date and compensate the Company for services which have been rendered,
measured typically in terms of units installed, hours expended or some other
measure of progress. Revenues from fixed price contracts are recognized on the
percentage-of-completion method measured by the percentage of costs incurred
to date to total estimated costs for each contract. Revenues from cost-plus-
fee contracts are recognized on the basis of costs incurred during the year,
plus the fee earned, and are measured by the cost-to-cost method. Contract
costs include all direct material and labor costs and those indirect costs
related to contract performance, such as indirect labor, supplies, tools,
repairs and depreciation costs. Provisions for the total estimated losses on
uncompleted contracts are made in the period in which such losses are
determined. Changes in job performance, job conditions, estimated
profitability and final contract settlements may result in revisions to costs
and income, and their effects are recognized in the period in which the
revisions are determined.

The balances billed but not paid by customers pursuant to retainage
provisions in fixed price or cost plus fee contracts will be due upon
completion of the contracts and acceptance by the customer. Based on the
Company's experience with similar contracts in recent years, the retention
balance at each balance sheet date will be collected within the subsequent
fiscal year.

The current asset, "Costs and estimated earnings in excess of billings on
uncompleted contracts," represents revenues recognized in excess of amounts
billed. The current liability, "Billings in excess of costs and estimated
earnings on uncompleted contracts," represents billings in excess of revenues
recognized.

Warranty Costs

For certain contracts, the Company generally warrants labor for the first
year after completion of the installation. An accrual for warranty costs is
recorded based upon the historical level of warranty claims and management's
estimate of future costs.

Income Taxes

Collective Bargaining Agreements

Use of Estimates

The preparation of financial statements in conformity with generally
accepted accounting principles requires the use of estimates and assumptions
by management in determining the reported amounts of assets and liabilities,
disclosures of contingent liabilities at the date of the financial statements
and the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates. Reference is made to the
"Revenue Recognition" section of this footnote for discussion of significant
estimates reflected in the Company's financial statements.

F-64
<PAGE>

POTELCO, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

New Accounting Pronouncement

Effective January 1, 1996, the Company adopted Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to Be Disposed Of." Accordingly, in the event
that facts and circumstances indicate that property and equipment or other
assets may be impaired, an evaluation of recoverability would be performed. If
an evaluation is required, the estimated future undiscounted cash flows
associated with the asset are compared to the asset's carrying amount to
determine if an impairment of such property is necessary. Adoption of this
standard did not have a material effect on the financial position or results
of operations of the Company.

3. PROPERTY AND EQUIPMENT:

Property and equipment consists of the following (in thousands):

<TABLE>
<CAPTION>
ESTIMATED
USEFUL LIVES DECEMBER 31, SEPTEMBER 30,
IN YEARS 1996 1997
------------ ------------ -------------
<S> <C> <C> <C>
Operating equipment and vehicles.... 5-10 $ 5,279 $ 6,080
Office equipment, furniture and
fixtures........................... 5 99 111
Leasehold improvements.............. 5 184 210
------- -------
Total cost........................ 5,562 6,401
Less--Accumulated depreciation...... (2,883) (3,195)
------- -------
Property and equipment, net...... $ 2,679 $ 3,206
======= =======
</TABLE>

4. DETAIL OF CERTAIN BALANCE SHEET ACCOUNTS:

Accounts payable and accrued expenses consist of the following (in
thousands):

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
------------ -------------
<S> <C> <C>
Accounts payable, trade........................... $1,117 $1,132
Accrued compensation and benefits................. 149 258
Other accrued expenses............................ 573 773
------ ------
$1,839 $2,163
====== ======
</TABLE>

Contracts in progress are as follows (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
------------ -------------
<S> <C> <C>
Costs incurred on contracts in progress.......... $ 1,147 $ 1,958
Estimated earnings, net of losses................ 782 898
------- -------
1,929 2,856
Less--Billings to date........................... (1,951) (1,955)
------- -------
$ (22) $ 901
======= =======
Costs and estimated earnings in excess of
billings on uncompleted contracts............... $ 117 $ 975
Billings in excess of costs and estimated
earnings on uncompleted contracts............... (139) (74)
------- -------
$ (22) $ 901
======= =======
</TABLE>

F-65
<PAGE>

POTELCO, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

5. NOTES PAYABLE TO BANK:

The notes payable to bank as of December 31, 1996, represents borrowings
under a revolving credit agreement maturing April 30, 1997. Borrowings are
based on percentages of contract billings and are secured by substantially all
of the Company's assets. This agreement provides for a total credit limit of
$800,000, of which $550,000, had been drawn at December 31, 1996, and requires
monthly interest payments of prime plus .75 percent.

On May 2, 1997, the Company entered into revolving credit agreements with a
bank maturing May 1, 1998. The agreements provide for total credit limits of
$1,000,000 and $400,000, of which approximately $995,000 and $167,000,
respectively, had been drawn at September 30, 1997, and requires monthly
interest payments of prime (8.50 percent at September 30, 1997) plus .75
percent beginning June 1, 1997. On October 1, 1997, the $1,000,000 revolving
credit agreement was amended to increase the credit limit to $1,500,000.

The notes payable outstanding as of December 31, 1996, and September 30,
1997, related to the revolving credit agreements contain several ratio and
covenant requirements, including a minimum working capital ratio and a debt to
net worth restriction. Furthermore, these notes are guaranteed by the
stockholder. The Company was in compliance with these requirements for the
year ended December 31, 1996, and the nine months ended September 30, 1997.

6. LONG-TERM DEBT AND CAPITAL LEASES:

Long-term debt and capital leases consist of the following:

<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
------------ -------------
(IN THOUSANDS)
<S> <C> <C>
Notes payable to a third party due in monthly
installments aggregating approximately $10,000,
including interest ranging from 7.9% to 11%,
collateralized by equipment.................... $ 263 $ 183
Notes payable to a third party due in monthly
installments aggregating approximately $12,000
plus interest at 10%, collateralized by
equipment...................................... 128 159
Notes payable to a third party due in monthly
installments of approximately $800 plus
interest at 10.27%, collateralized by
equipment...................................... 21 16
Obligations under capital leases................ 570 692
----- ------
982 1,050
Less--Current maturities of long-term debt...... (445) (491)
----- ------
Other long-term debt............................ $ 537 $ 559
===== ======
</TABLE>

Future required principal payments on long-term debt (excluding capital
leases) as of September 30, 1997, are as follows (in thousands):

<TABLE>
<S> <C>
Twelve months ending September 30 --
1998........................................................ $227
1999.......................................................... 131
</TABLE>

F-66
<PAGE>

POTELCO, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)
The Company has entered into noncancellable lease agreements with third-
party leasing companies for the acquisition of trucks and equipment. The
leases require payments, including interest at varying rates implicit in the
leases, as of September 30, 1997, over the next five years and are as follows
(in thousands):

<TABLE>
<S> <C>
Twelve months ending September 30 --
1998............................................................ $ 309
1999............................................................ 293
2000............................................................ 251
2001............................................................ 94
-----
Net minimum lease payments...................................... 947
Less amount representing interest............................... (255)
-----
Present value of net minimum lease payments..................... $ 692
Less--Current maturities........................................ (264)
-----
Long-term obligations........................................... $ 428
=====
</TABLE>

7. RELATED-PARTY NOTES PAYABLE:

The Company entered into a debt agreement amended with the father of the
Company's sole stockholder for approximately $1,163,000. The agreement
stipulates that the note will accrue interest at 8 percent, with required
monthly payments including interest and principal of at least $10,000. The
note is scheduled to mature on December 1, 2014. The balance outstanding was
approximately $1,079,000 and $1,042,000 as of December 31, 1996, and September
30, 1997, respectively.

The Company's sole stockholder advanced funds to the Company totaling
$200,000 to provide short-term liquidity during 1994. The interest rate on the
advance is based on a blended annual rate, which is approximately 6.35 percent
as of December 31, 1996, and September 30, 1997, respectively. Amounts due
totaled approximately $109,000 and $35,000 as of December 31, 1996, and
September 30, 1997, respectively.

Principal payments on related-party debt as of September 30, 1997, over the
next five years are as follows (in thousands):

<TABLE>
<S> <C>
Twelve months ending September 30 --
1998................................................................. $254
1999................................................................. 56
2000................................................................. 61
2001................................................................. 66
2002 and thereafter.................................................. 640
</TABLE>

8. RELATED-PARTY LEASES:

The Company leases a facility from the father of the Company's sole
stockholder for a monthly rental of $2,000 plus annual property taxes. The
lease is month-to-month, with no termination date.

The Company also leases a facility from its sole stockholder at a monthly
rental of $2,800 plus annual property taxes. The lease is month-to-month, with
no termination date.

Lease payments on the above facilities aggregated approximately $58,000 and
$43,000 for the year ended December 31, 1996, and the nine months ended
September 30, 1997, respectively.

F-67
<PAGE>

POTELCO, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

9. EMPLOYEE BENEFIT PLANS:

In connection with its collective bargaining agreements with various
electrical, labor and operating engineer unions, the Company participates with
other companies in the unions' multiemployer pension plans. These plans cover
all of the Company's employees who are members of such unions. The Employee
Retirement Income Security Act of 1974, as amended by the Multi-Employer
Pension Plan Amendments Act of 1980, imposes certain liabilities upon
employers who are contributors to a multiemployer plan in the event of the
employer's withdrawal from, or upon termination of, such plan. The Company has
no plans to withdraw from these plans. The plans do not maintain information
on net assets and actuarial present value of the accumulated share of the
plan's unfunded vested benefits allocable to the Company, and amounts, if any,
for which the Company may be contingently liable are not ascertainable at this
time. Total contributions to the plans were approximately $246,000 and
$247,000 for the year ended December 31, 1996, and the nine months ended
September 30, 1997, respectively.

The Company has two retirement plans covering all employees not included in
a collective bargaining unit. These noncontributory plans consist of a money
purchase pension plan and a profit-sharing plan. The money purchase pension
plan requires Company contributions equal to 10 percent of the covered
salaries. Contributions to this plan totaled approximately $27,000 and $26,000
for the year ended December 31, 1996, and the nine months ended September 30,
1997, respectively. The Company made discretionary contributions to the
profit-sharing plan of approximately $14,000 and $36,000 for the year ended
December 31, 1996, and the nine months ended September 30, 1997, respectively.
In addition, during the nine months ended September 30, 1997, the Company
accrued $30,000 related to employee bonuses that are anticipated to the be
paid subsequent to September 30, 1997.

10. FINANCIAL INSTRUMENTS:

11. COMMITMENTS AND CONTINGENCIES:

Litigation

Insurance

The Company carries a broad range of insurance coverage, including business
auto liability, general liability, workers' compensation and an umbrella
policy.

Performance Bonds

In certain circumstances, the Company is required to provide performance
bonds in connection with its contract commitments which are personally
guaranteed by certain stockholders of the Company.

F-68
<PAGE>

POTELCO, INC.
NOTES TO FINANCIAL STATEMENTS--(CONTINUED)

12. MAJOR CUSTOMERS AND RISK CONCENTRATION:

During the year ended December 31, 1996, three customers accounted for 36%,
20% and 12% of the Company's revenues, respectively. During the nine months
ended September 30, 1997, three customers accounted for 37%, 18% and 10% of
the Company's revenues, respectively.

The Company grants credit, generally without collateral, to its customers,
which are located primarily in the northwestern United States. Consequently,
the Company is subject to potential credit risk related to changes in business
and economic factors within this region. However, management believes that its
contract acceptance, billing and collection policies are adequate to minimize
the potential credit risk.

13. SUBSEQUENT EVENTS TO DATE OF AUDITORS' REPORT OF INDEPENDENT PUBLIC
ACCOUNTANTS (UNAUDITED):

In December 1997, the Company and its stockholder entered into a definitive
agreement with Quanta Services, Inc. (Quanta), subject to certain conditions
pursuant to which all outstanding shares of the Company's common stock will be
exchanged for cash and shares of Quanta common stock, concurrent with the
consummation of an initial public offering (the Offering) of additional common
stock by Quanta. In addition, the key executives of the Company will enter
into employment agreements with the Company and Quanta which have an initial
term of three years, and generally restricts the disclosure of confidential
information as well as restricts competition with the Company and Quanta for a
period of five years following termination of employment.

Prior to the closing of the transaction noted above, the Company plans to
make a Sub S distribution of approximately $2.0 million estimated based on the
Company's retained earnings balance at September 30, 1997. The Company intends
to fund the distribution through bank borrowings. The Company will make the
Sub S distribution to its owner of substantially all of the previously-taxed
undistributed earnings through December 31, 1997.

F-69
<PAGE>

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

NO DEALER, SALES REPRESENTATIVE OR ANY OTHER PERSON HAS BEEN AUTHORIZED IN
CONNECTION WITH THE OFFERING MADE HEREBY TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION AND REPRESENTATION MUST NOT BE RELIED UPON AS HAVING
BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR SOLICITATION OF AN OFFER TO BUY, SECURITIES
OTHER THAN THE REGISTERED SECURITIES TO WHICH IT RELATES OR AN OFFER TO, OR SO-
LICITATION OF, ANY PERSON IN ANY JURISDICTION WHERE AN OFFER OR SOLICITATION
WOULD BE UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE
HEREOF.

------------
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary........................................................ 3
Risk Factors.............................................................. 9
The Company............................................................... 15
Use of Proceeds........................................................... 16
Dividend Policy........................................................... 16
Capitalization............................................................ 17
Dilution.................................................................. 18
Selected Financial Data................................................... 19
Management's Discussion and Analysis of Financial Condition and Results of
Operations............................................................... 22
Business.................................................................. 32
Management................................................................ 40
Certain Transactions...................................................... 45
Principal Stockholders.................................................... 48
Description of Capital Stock.............................................. 49
Shares Eligible for Future Sale........................................... 53
Underwriting.............................................................. 55
Legal Matters............................................................. 56
Experts................................................................... 57
Additional Information.................................................... 57
Index to Financial Statements............................................. F-1
</TABLE>

------------
UNTIL , 1998 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE COMMON STOCK OFFERED HEREBY, WHETHER OR
NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A
PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A
PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.

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

5,000,000 Shares

[LOGO FOR QUANTA SERVICES, INC. APPEARS HERE]

Common Stock

------------
PROSPECTUS
------------

BT ALEX. BROWN

BANCAMERICA ROBERTSON STEPHENS

SANDERS MORRIS MUNDY

, 1998

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

The following table sets forth the expenses to be paid by the Company (other
than underwriting compensation expected to be incurred) in connection with the
offering described in this Registration Statement. All amounts are estimates,
except the SEC Registration Fee, the NASD Filing Fee and the NYSE Listing Fee.

<TABLE>
<S> <C>
SEC Registration Fee....................................... $ 16,962.50
NASD Filing Fee............................................ 6,250.00
NYSE Listing Fee........................................... 130,986.00
Printing Costs............................................. 150,000.00
Legal Fees and Expenses.................................... 350,000.00
Accounting Fees and Expenses............................... 2,000,000.00
Transfer Agent and Registrar Fees and Expenses............. 7,500.00
D & O Insurance............................................ 85,000
Miscellaneous.............................................. 252,301.50
-------------
Total.................................................. $2,914,000.00
=============
</TABLE>

ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Delaware General Corporation Law

Section 145(a) of the General Corporation Law of the State of Delaware (the
"DGCL") provides that a corporation may indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the corporation)
by reason of the fact that he is or was a director, officer, employee or agent
of the corporation, or is or was serving at the request of the corporation as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding
if he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon a plea of nolo contendere or its
equivalent, shall not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had reasonable cause to believe that his
conduct was unlawful.

Section 145(b) of the DGCL states that a corporation may indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that he
is or was a director, officer, employee or agent of the corporation, or is or
was serving at the request or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the defense
or settlement of such action or suit if he acted in good faith and in a manner
he reasonably believed to be in or not opposed to the

II-1
<PAGE>

best interests of the corporation and except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall
have been adjudged to be liable to the corporation unless and only to the
extent that the Court of Chancery or the court in which such action or suit
was brought shall determine upon application that, despite the adjudication of
liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the Court
of Chancery or such other court shall deem proper.

Section 145(c) of the DGCL provides that to the extent that a director,
officer, employee or agent of a corporation has been successful on the merits
or otherwise in defense of any action, suit or proceeding referred to in
subsections (a) and (b) of Section 145, or in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith.

Section 145(d) of the DGCL states that any indemnification under subsections
(a) and (b) of Section 145 (unless ordered by a court) shall be made by the
corporation only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in the
circumstances because he has met the applicable standard of conduct set forth
in subsections (a) and (b). Such determination shall be made (1) by the board
of directors by a majority vote of a quorum consisting of directors who were
not parties to such action, suit or proceeding, or (2) if such a quorum is not
obtainable, or, even if obtainable, a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (3) by the
stockholders.

Section 145(e) of the DGCL provides that expenses (including attorneys'
fees) incurred by an officer or director in defending any civil, criminal,
administrative or investigative action, suit or proceeding may be paid by the
corporation in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be determined that he is
not entitled to be indemnified by the corporation as authorized in Section
145. Such expenses (including attorneys' fees) incurred by other employees and
agents may be so paid upon such terms and conditions, if any, as the board of
directors deems appropriate.

Section 145(f) of the DGCL states that the indemnification and advancement
of expenses provided by, or granted pursuant to, the other subsections of
Section 145 shall not be deemed exclusive of any other rights to which those
seeking indemnification or advancement of expenses may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors or
otherwise, both as to action in his official capacity and as to action in
another capacity while holding such office.

Section 145(g) of the DGCL provides that a corporation shall have the power
to purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the corporation
would have the power to indemnify him against such liability under the
provisions of Section 145.

Section 145(j) of the DGCL states that the indemnification and advancement
of expenses provided by, or granted pursuant to, Section 145 shall, unless
otherwise provided when authorized or ratified, continue as to a person who
has ceased to be a director, officer, employee or agent, and shall inure to
the benefit of the heirs, executors and administrators of such a person.

Amended and Restated Certificate of Incorporation

The Amended and Restated Certificate of Incorporation provides that a
director of the Company shall not be personally liable to the Company or its
stockholders for monetary damages for breach of fiduciary

II-2
<PAGE>

duty as a director, except for liability for unlawful payments of dividends or
unlawful stock repurchases or redemptions as provided for in Section 174 of
the DGCL. If the DGCL is amended to authorize the further elimination or
limitation of the liability of directors, then the liability of a director of
the Company, in addition to the limitation on personal liability described
above, shall be limited to the fullest extent permitted by the amended DGCL.
Further, any repeal or modification of such provision of the Amended and
Restated Certificate of Incorporation by the stockholders of the Company shall
be prospective only, and shall not adversely affect any limitation on the
personal liability of a director of the Company existing at the time of such
repeal or modification.

Bylaws

The Bylaws of the Company provide that the Company will indemnify and hold
harmless any director or officer of the Company to the fullest extent
permitted by applicable law, as in effect as of the date of the adoption of
the Bylaws or to such greater extent as applicable law may thereafter permit,
from and against all losses, liabilities, claims, damages, judgments,
penalties, fines, amounts paid in settlement and expenses (including
attorneys' fees) whatsoever arising out of any event or occurrence related to
the fact that such person is or was a director or officer of the Company and
further provide that the Company may, but is not required to, indemnify and
hold harmless any employee or agent of the Company or a director, officer,
employee or agent of any other corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise who is or was serving in such
capacity at the written request of the Company; provided, however, that the
Company is only required to indemnify persons serving as directors, officers,
employees or agents of the Company for the expenses incurred in a proceeding
if such person has met the standards of conduct that make it permissible under
the laws of the State of Delaware for the Company to indemnify the claimant
for the amount claimed, but the burden of proving such defense will be on the
Company. The Bylaws further provide that, in the event of any threatened, or
pending action, suit or proceeding in which any of the persons referred to
above is a party or is involved and that may give rise to a right of
indemnification under the Bylaws, following written request by such person,
the Company will promptly pay to such person amounts to cover expenses
reasonably incurred by such person in such proceeding in advance of its final
disposition upon the receipt by the Company of (i) a written undertaking
executed by or on behalf of such person providing that such person will repay
the advance if it is ultimately determined that such person is not entitled to
be indemnified by the Company as provided in the Bylaws and (ii) satisfactory
evidence as to the amount of such expenses.

Underwriting Agreement

The Underwriting Agreement provides for the indemnification of the directors
and officers of the Company in certain circumstances.

Insurance

The Company intends to maintain liability insurance for the benefit of its
directors and officers.

ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.

The following information relates to securities issued or sold by the
Company within the last three years:

(a) Quanta was initially capitalized in August 1997 by a group of
investors, including Midwest Acquisition Support, LLC (an entity controlled
by Bernard J. Gram), Kevin D. Miller, Steven P. Colmar and William G.
Parkhouse, an advisory director of the Company, and certain of their
affiliates, who paid aggregate cash consideration of $10.47 for 1,048
shares of pre-split common stock that were reclassified into 1,620,624
shares of Limited Vote Common Stock.

(b) In November 1997 Main Street paid cash consideration of $9.60 for 960
shares of pre-split common stock that were reclassified into 1,484,542
shares of Limited Vote Common Stock.

(c) In November 1997, James H. Haddox, Chief Financial Officer of the
Company, paid $.65 cash for shares of pre-split common stock that were
reclassified into 100,000 shares of Limited Vote Common Stock.

II-3
<PAGE>

(d) In December 1997, the Company issued 37,500 shares of Limited Vote
Common Stock to Derrick Jensen, Vice President and Controller of the
Company, for nominal consideration.

(e) In January 1998, the Company issued, for nominal consideration,
20,000 shares of Limited Vote Common Stock to each of Messrs. James R.
Ball, Rodney R. Proto and Michael T. Willis, who have all agreed to become
directors of the Company upon the consummation of the Offering.

(f) The Company has agreed to issue shares of Limited Vote Common Stock
in an amount equal to $375,000 divided by the initial Offering price to an
investor who agreed to advance the Company up to $125,000 prior to the
Offering in order to cover expenses. At an assumed offering price of $9.00
per share, this will result in 41,667 shares of Limited Vote Common Stock
being issued in connection with this transaction.

(g) Concurrent with the closing of the Offering, the Company will issue
500 shares of Limited Vote Common Stock to each of two consultants in
consideration for services rendered to the Company prior to the Offering.

(h) In connection with the Acquisition, the Company will acquire all of
the outstanding shares of equity stock of the Founding Companies in
exchange for an aggregate of 7,527,000 shares of Common Stock and $21.0
million in cash.

All of the transactions described above were exempt from the registration
requirements of the Securities Act pursuant to Section 4(2) thereunder. All of
such sales were conducted without any public solicitation and all of the
purchasers were provided with all material information that was available
regarding the Company. All of such purchasers were informed that the
transactions were being effected without registration under the Securities Act
and that the shares acquired by them could not be resold without registration
under the Securities Act unless the sale was effected pursuant to an exemption
from the registration requirements thereof. All of such purchasers also agreed
to contractual restrictions on the resale of the shares acquired by them.

ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.

(a) Exhibits.

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- ---------------------------------------------------------------------
<C> <S>
1.1 --Form of Underwriting Agreement
2.1 --Amended and Restated Agreement and Plan of Organization dated as of
December 11, 1997 by and among Quanta Services, Inc. and PAR
Electrical Contractors, Inc. and its stockholders**
2.2 --Amended and Restated Agreement and Plan of Organization dated as of
December 11, 1997 by and among Quanta Services, Inc. and Union Power
Construction Company and its stockholders**
2.3 --Amended and Restated Agreement and Plan of Organization dated as of
December 11, 1997 by and among Quanta Services, Inc. and TRANS TECH
Electric, Inc. and its stockholders**
2.4 --Amended and Restated Agreement and Plan of Organization dated as of
December 11, 1997 by and among Quanta Services, Inc. and Potelco,
Inc. and its stockholders**
3.1 --Amended and Restated Certificate of Incorporation
3.2 --Bylaws
4.1 --Form of Common Stock Certificate*
5.1 --Opinion of Jackson Walker L.L.P.*
10.1 --Form of Employment Agreement**
10.2 --1997 Stock Option Plan
21.1 --Subsidiaries*
23.1 --Consent of Arthur Andersen LLP
23.2 --Consent of Jackson Walker L.L.P. (contained in Exhibit 5)*
</TABLE>

II-4
<PAGE>

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- --------------------------------
<C> <S>
23.4 --Consent of John R. Wilson**
23.5 --Consent of Timothy A. Soule**
23.6 --Consent of John A. Martell**
23.7 --Consent of Gary A. Tucci**
23.8 --Consent of Michael T. Willis**
23.9 --Consent of Rodney R. Proto**
23.10 --Consent of James R. Ball
24.1 --Power of Attorney**
27 --Financial Data Schedule**
</TABLE>
- --------

*To be filed by amendment.

**Previously filed.

(b) Financial Statement Schedules.

All schedules are omitted because they are not applicable or because the
required information is contained in the Financial Statements or Notes
thereto.

ITEM 17. UNDERTAKINGS.

The undersigned registrant hereby undertakes as follows:

(1) To provide to the Underwriters at the closing specified in the
Underwriting Agreement certificates in such denominations and registered in
such names as required by the Underwriters to permit prompt delivery to
each purchaser.

(2) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described in Item 14,
or otherwise, the registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in
the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payments
by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.

(3) That, for the purposes of determining any liability under the
Securities Act, the information omitted from the form of prospectus filed
as part of this registration statement in reliance upon Rule 430A and
contained in a form of prospectus filed by the registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this registration statement as of the time it was declared
effective.

(4) That, for the purpose of determining any liability under the
Securities Act, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.

II-5
<PAGE>

SIGNATURES

Pursuant to the requirements of the Securities Act, Quanta Services, Inc.
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Houston, State of
Texas, on January 23, 1998.

Quanta Services, Inc.

/s/ John R. Colson
By: _________________________________
John R. Colson
Chief Executive Officer

Pursuant to the requirements of the Securities Act, as amended, this
Registration Statement has been signed by the following persons in the
capacities indicated and on January 23, 1998.

<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----

<S> <C>
/s/ John R. Colson Chief Executive Officer
___________________________________________ (Principal Executive Officer)
John R. Colson

/s/ James H. Haddox Chief Financial Officer
___________________________________________ (Principal Financial and
James H. Haddox Accounting Officer)

/s/ Vincent D. Foster Director
___________________________________________
Vincent D. Foster
</TABLE>

II-6
<PAGE>

EXHIBIT INDEX

**Previously filed.

<PAGE>

EXHIBIT 1.1

5,000,000 Shares

QUANTA SERVICES, INC.

Common Stock

UNDERWRITING AGREEMENT
----------------------

February __, 1998

BT Alex. Brown Incorporated
BancAmerica Robertson Stephens
Sanders Morris Mundy Inc.
As Representatives of the
Several Underwriters
c/o BT Alex. Brown Incorporated
One South Street
Baltimore, Maryland 21202

Ladies and Gentlemen:

Quanta Services, Inc., a Delaware corporation (the "Company"), proposes to
sell to the several underwriters (the "Underwriters") named in Schedule I hereto
for whom you are acting as representatives (the "Representatives") an aggregate
of 5,000,000 shares of the Company's Common Stock, par value $.00001 per share
(the "Firm Shares"). The respective amounts of the Firm Shares to be so
purchased by the several Underwriters are set forth opposite their names in
Schedule I hereto. The Company also proposes to sell at the Underwriters'
option an aggregate of up to 750,000 additional shares of the Company's Common
Stock (the "Option Shares") as set forth below.

As the Representatives, you have advised the Company that you are authorized
to enter into this Agreement on behalf of the several Underwriters, and that the
several Underwriters are willing, acting severally and not jointly, to purchase
the numbers of Firm Shares set forth opposite their respective names in Schedule
I, plus their pro rata portion of the Option Shares if you elect to exercise the
over-allotment option in whole or in part for the accounts of the several
Underwriters. The Firm Shares and the Option Shares (to the extent the
aforementioned option is exercised) are herein collectively called the "Shares."

1
<PAGE>

Simultaneously with the closing with respect to the purchase of the Firm
Shares by the Underwriters, the Company will acquire each of the Founding
Companies (as hereinafter defined) (collectively, the "Founding Company
Acquisitions"), the consideration for which will be a combination of cash and
shares of the Company's Common Stock as described in the Registration Statement
(as hereinafter defined).

In consideration of the mutual agreements contained herein and of the
interests of the parties in the transactions contemplated hereby, the parties
hereto agree as follows:

1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
----------------------------------------------

The Company represents and warrants to each of the Underwriters as follows:

(a) A registration statement on Form S-1 (Reg. No. 333-42957) with
respect to the Shares has been carefully prepared by the Company in conformity
with the requirements of the Securities Act of 1933, as amended (the "Act"), and
the Rules and Regulations (the "Rules and Regulations") of the Securities and
Exchange Commission (the "Commission") thereunder and has been filed with the
Commission. The Company has complied with the conditions for the use of
Form S-1. Copies of such registration statement, including any amendments
thereto, the preliminary prospectuses (meeting the requirements of the Rules and
Regulations) contained therein and the exhibits, financial statements and
schedules, as finally amended and revised, have heretofore been delivered by the
Company to you. Such registration statement, together with any registration
statement filed by the Company pursuant to Rule 462(b) of the Act, herein
referred to as the "Registration Statement," which shall be deemed to include
all information omitted therefrom in reliance upon Rule 430A and contained in
the Prospectus referred to below, has become effective under the Act and no
post-effective amendment to the Registration Statement has been filed as of the
date of this Agreement. "Prospectus" means (a) the form of prospectus first
filed with the Commission pursuant to Rule 424(b) or (b) the last preliminary
prospectus included in the Registration Statement filed prior to the time it
becomes effective or filed pursuant to Rule 424(a) under the Act that is
delivered by the Company to the Underwriters for delivery to purchasers of the
Shares, together with the term sheet or abbreviated term sheet filed with the
Commission pursuant to Rule 424(b)(7) under the Act. Each preliminary prospectus
included in the Registration Statement prior to the time it becomes effective is
herein referred to as a "Preliminary Prospectus."

(b) The Company has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own or lease its properties and conduct its
business as described in the Registration Statement. Each of PAR Electrical
Contractors, Inc., Union Power Construction Company, TRANS TECH Electric, Inc.,
and Potelco, Inc. (collectively the

2
<PAGE>

"Founding Companies") has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority to own or lease its properties
and conduct its business as described in the Registration Statement. As of the
date hereof, the Company has no subsidiaries except those listed as an Exhibit
to the Registration Statement. The Company and each of the Founding Companies
are duly qualified to transact business in all jurisdictions in which the
conduct of their respective businesses requires such qualification. The
outstanding shares of capital stock of each of the Founding Companies have been
duly authorized and validly issued, are fully paid and non-assessable. As of the
Closing Date (as hereinafter defined), after giving effect to the Founding
Company Acquisitions, all of the outstanding shares of capital stock of each of
the Founding Companies will be owned by the Company free and clear of all liens,
encumbrances and equities and claims; and no options, warrants or other rights
to purchase, agreements or other obligations to issue or other rights to convert
any obligations into shares of capital stock or ownership interests in any of
the Founding Companies will be outstanding.

(c) The outstanding shares of Common Stock of the Company have been duly
authorized and validly issued and are fully paid and non-assessable; the Shares
to be issued and sold by the Company pursuant to the terms of this Agreement
have been duly authorized and when issued and paid for as contemplated herein
will be validly issued, fully paid and non-assessable; and no preemptive rights
of stockholders exist with respect to any of the Shares or the issue and sale
thereof. Neither the filing of the Registration Statement nor the offering or
sale of the Shares as contemplated by this Agreement gives rise to any rights,
other than those which have been waived or satisfied, for or relating to the
registration of any shares of Common Stock. Upon completion of the Founding
Company Acquisitions in the manner described in the Registration Statement, the
shares of Common Stock of the Company to be issued in such acquisitions will be
duly authorized, validly issued and fully paid and non-assessable.

(d) The information set forth under the caption "Capitalization" in the
Prospectus is true and correct. All of the Shares conform to the description
thereof contained in the Registration Statement. The form of certificates for
the Shares conforms to the corporate law of the jurisdiction of the Company's
incorporation.

(e) The Commission has not issued an order preventing or suspending the
use of any Prospectus relating to the proposed offering of the Shares nor
instituted proceedings for that purpose. The Registration Statement contains,
and the Prospectus and any amendments or supplements thereto will contain, all
statements which are required to be stated therein by, and will conform to the
requirements of the Act and the Rules and Regulations. The Registration
Statement and any amendment thereto do not contain, and will not contain, any
untrue statement of a material fact and do not omit, and will not omit, to state
any material fact required to be stated therein or necessary to make

3
<PAGE>

the statements therein not misleading. The Prospectus and any amendments and
supplements thereto do not contain, and will not contain, any untrue statement
of a material fact; and do not omit, and will not omit, to state any material
fact required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representations or warranties as to
information contained in or omitted from the Registration Statement or the
Prospectus, or any such amendment or supplement, in reliance upon, and in
conformity with, written information furnished to the Company by or on behalf of
any Underwriter through the Representatives, specifically for use in the
preparation thereof.

(f) All of the financial statements of the Company and the separate
financial statements of the Founding Companies, in each case together with
related notes and schedules, as set forth in the Registration Statement, present
fairly in all material respects the financial position and the results of
operations and cash flows of the Company and of each of the Founding Companies,
respectively, at the indicated dates and for the indicated periods. Such
financial statements and related schedules have been prepared in accordance with
generally accepted principles of accounting, consistently applied throughout the
periods involved, except as disclosed therein, and all adjustments necessary for
a fair presentation of results for such periods have been made. The summary
historical and pro forma financial and statistical data included in the
Registration Statement present fairly the information shown therein and such
data have been compiled on a basis consistent with the financial statements
presented therein and the books and records of the Company and the Founding
Companies, as applicable. The pro forma combined financial statements of the
Company and the Founding Companies (including the supplemental pro forma
information shown therein), together with the related notes, as set forth in the
Registration Statement and the Prospectus, present fairly the information shown
therein, have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and have been properly
compiled on the pro forma bases described therein, and in the opinion of the
Company, the assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the transactions or
circumstances referred to therein.

(g) Arthur Andersen LLP, who have certified certain of the financial
statements filed with the Commission as part of the Registration Statement, are
independent public accountants as required by the Act and the Rules and
Regulations.

(h) There is no action, suit, claim or proceeding pending or, to the
knowledge of the Company, threatened against the Company or any of the Founding
Companies before any court or administrative agency or otherwise, which if
determined adversely to the Company or such Founding Company is reasonably
likely to result in any material

4
<PAGE>

adverse change in the earnings, business, management, properties, assets,
rights, operations, condition (financial or otherwise) or prospects of the
Company and the Founding Companies, taken as a whole, or to prevent the
consummation of the transactions contemplated hereby except as set forth in the
Registration Statement.

(i) Each of the Company and the Founding Companies has good and
marketable title to all of its properties and assets reflected in its financial
statements (or as described in the Registration Statement) hereinabove
described, subject to no lien, mortgage, pledge, charge or encumbrance of any
kind except those reflected in such financial statements (or as described in the
Registration Statement) or which are not material in amount. Each of the Company
and the Founding Companies occupies its leased properties under valid and
binding leases conforming in all material respects to the description thereof
set forth in the Registration Statement.

(j) Each of the Company and the Founding Companies has filed all
Federal, state, local and foreign income tax returns which have been required to
be filed and have paid all taxes indicated by said returns and all assessments
received by it or any of them to the extent that such taxes have become due and
are not being contested in good faith. All tax liabilities have been adequately
provided for in the financial statements of the Company and the Founding
Companies, as applicable.

(k) Since the respective dates as of which information is given in the
Registration Statement, as it may be amended or supplemented, there has not been
any material adverse change or any development involving a prospective material
adverse change in or affecting the earnings, business, management, properties,
assets, rights, operations, condition (financial or otherwise), or prospects of
the Company and the Founding Companies, taken as a whole, whether or not
occurring in the ordinary course of business, and there has not been any
material transaction entered into or any material transaction that is probable
of being entered into by the Company or the Founding Companies, other than
transactions in the ordinary course of business and changes and transactions
described in the Registration Statement, as it may be amended or supplemented.
Neither the Company nor any of the Founding Companies has any material
contingent obligations which are not disclosed in the Company's or such Founding
Company's financial statements, as applicable, included in the Registration
Statement.

(l) Neither the Company nor any of the Founding Companies is, or with
the giving of notice or lapse of time or both, will be, in violation of or in
default under its Charter or By-Laws or under any agreement, lease, contract,
indenture or other instrument or obligation to which it is a party or by which
it, or any of its properties, is bound and which default is of material
significance in respect of the condition (financial or otherwise) of the Company
and the Founding Companies, taken as a whole, or the

5
<PAGE>

business, management, properties, assets, rights, operations, condition
(financial or otherwise) or prospects of the Company and the Founding Companies,
taken as a whole. The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated and the fulfillment of the
terms hereof will not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, any indenture, mortgage, deed of
trust or other agreement or instrument to which the Company or any of the
Founding Companies is a party, or of the Charter or By-Laws of the Company or
any of the Founding Companies or any order, rule or regulation applicable to the
Company or any of the Founding Companies of any court or of any regulatory body
or administrative agency or other governmental body having jurisdiction. No
consent, approval, authorization or order of, or filing with, any court or
governmental agency or body is required for the consummation of the transactions
contemplated by this Agreement in connection with the issuance or sale of the
securities by the Company, except such as have been obtained under the Act and
such as may be required under the state securities laws in connection with the
purchase and distribution of the Shares by the Underwriters.

(m) Each approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or other
governmental body necessary in connection with the execution and delivery by the
Company of this Agreement and the consummation of the transactions herein
contemplated (except such additional steps as may be required by the Commission
or the National Association of Securities Dealers, Inc. (the "NASD")) has been
obtained or made and is in full force and effect.

(n) The Company and each of the Founding Companies hold all material
licenses, certificates and permits from governmental authorities which are
necessary to the conduct of their businesses; and neither the Company nor any of
the Founding Companies has infringed any patents, patent rights, trade names,
trademarks or copyrights, which infringement is material to the business of the
Company or such Founding Company. The Company knows of no material infringement
by others of patents, patent rights, trade names, trademarks or copyrights owned
by or licensed to the Company or any of the Founding Companies.

(o) Neither the Company, nor to the Company's best knowledge, any of its
affiliates or any of the Founding Companies or any of their affiliates, has
taken or may take, directly or indirectly, any action designed to cause or
result in, or which has constituted or which might reasonably be expected to
constitute, the stabilization or manipulation of the price of the shares of
Common Stock to facilitate the sale or resale of the Shares.

(p) Neither the Company nor any of the Founding Companies is an
"investment company" within the meaning of such term under the Investment
Company

6
<PAGE>

Act of 1940, as amended (the "1940 Act") and the rules and regulations of
the Commission thereunder.

(q) The Company and each of the Founding Companies maintain a system of
internal accounting controls sufficient to provide reasonable assurances that
(i) transactions are executed in accordance with management's general or
specific authorization; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain accountability for assets; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

(r) The Company and each of the Founding Companies carry, or are covered
by, insurance in such amounts and covering such risks as is adequate for the
conduct of their respective businesses and the value of their respective
properties and as is customary for companies engaged in similar industries.

(s) The Company and each of the Founding Companies are in compliance in
all material respects with all presently applicable provisions of the Employee
Retirement Income Security Act of 1974, as amended, including the regulations
and published interpretations thereunder ("ERISA"); no "reportable event" (as
defined in ERISA) has occurred with respect to any "pension plan" (as defined in
ERISA) for which the Company or any of the Founding Companies would have any
liability; neither the Company nor any of the Founding Companies has incurred
nor expects to incur liability under (i) Title IV of ERISA with respect to
termination of, or withdrawal from, any "pension plan," or (ii) Sections 412 or
4971 of the Internal Revenue Code of 1986, as amended, including the regulations
and published interpretations thereunder (the "Code"); and each "pension plan"
for which the Company or any of the Founding Companies would have any liability
that is intended to be qualified under Section 401(a) of the Code is so
qualified in all material respects and nothing has occurred, whether by action
or by failure to act, which would cause the loss of such qualification.

(t) No labor dispute with the employees of the Company or any of the
Founding Companies exists, or to the knowledge of the Company, is threatened
other than such disputes which would not individually or in the aggregate, have
a material adverse effect upon the condition (financial or otherwise) business,
management, properties, assets, rights, operations or prospects of the Company.

(u) There is (i) no significant unfair labor practice complaint pending
against the Company or any of the Founding Companies or, to the best knowledge
of the Company, threatened against any of them, before the National Labor
Relations Board or

7
<PAGE>

any state or local labor relations board, and no significant grievance or more
significant arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against any of the Founding Companies or, to
the best knowledge of the Company, threatened against any of them, and (ii) no
significant strike, labor dispute, slowdown or stoppage pending against any of
the Founding Companies or, to the best knowledge of the Company, threatened
against any of the Founding Companies except for such actions specified in
clause (i) or (ii) above, which, singly or in the aggregate could not reasonably
be expected to have a material adverse effect on the Founding Companies, taken
as a whole.

(v) (i) To the best of the Company's knowledge and belief, except as set
forth in each Amended and Restated Agreement and Plan of Organization or
otherwise disclosed in writing to the Underwriters, (A) each of the Founding
Companies has conducted its business in compliance with applicable Environmental
Laws, including without limitation, having all permits, licenses and other
approvals and authorizations necessary for the operation of their respective
businesses as presently conducted, (B) none of the properties owned by the
Founding Companies contain any Hazardous Substance as a result of any activity
of any of the Founding Companies in amounts exceeding the levels permitted by
applicable Environmental Laws, (C) none of the Founding Companies has received
any notices, demand letters or requests for information from any Federal, state,
local or foreign governmental entity or third party indicating that such
Founding Company may be in violation of, or liable under, any Environmental Law
in connection with the ownership or operation of its business, (D) there are no
civil, criminal or administrative actions, suits, demands, claims, hearings,
investigations or proceedings pending or threatened, against any of the Founding
Companies relating to any violation, or alleged violation, of any Environmental
Law, (E) no reports have been filed, or are required to be filed, by any of the
Founding Companies concerning the release of any Hazardous Substance or the
threatened or actual violation of any Environmental Law, (F) no Hazardous
Substance has been disposed of, released or transported in violation of any
applicable Environmental Law from any properties owned by any of the Founding
Companies as a result of any activity of any of the Founding Companies during
the time such properties were owned, leased, or operated by any of the Founding
Companies, (G) there have been no environmental investigations, studies, audits,
tests, reviews or other analysis regarding compliance or non-compliance with any
applicable Environmental Law conducted by or which are in the possession of any
of the Founding Companies relating to the activities of any of the Founding
Companies which are not described in the Amended and Restated Agreements and
Plans of Organization prior to the date hereof, (H) there are no underground
storage tanks on, in or under any properties owned by the Founding Companies and
no underground storage tanks have been closed or removed from any of such
properties during the time such properties were owned, leased or operated by any
of the Founding Companies, (I) there is no asbestos or asbestos containing
material present in any of the properties owned by any of the Founding

8
<PAGE>

Companies, and no asbestos has been removed from any of such properties during
the time such properties were owned, leased or operated by any of the Founding
Companies, and (J) neither the Company or any Founding Companies nor any of
their respective properties are subject to any material liabilities or
expenditures (fixed or contingent) relating to any suit, settlement, court
order, administrative order, regulatory requirement, judgment or claim asserted
or arising under any Environmental Law, except for violations of the foregoing
clauses (A) through (K) that, singly or in the aggregate, would not reasonably
be expected to have a material adverse effect on the condition or (financial or
otherwise) business, management, properties, assets, rights, operations or
prospects of the Company and the Founding Companies taken as a whole.

(ii) As used herein, "Environmental Law" means any Federal, State, local
or foreign law, statute, ordinance, rule, regulation, code, license, permit,
authorization, approval, consent, legal doctrine, order, judgment, decree,
injunction, requirement or agreement with any governmental entity relating to
(A) the protection, preservation or restoration of the environment (including,
without limitation, air, water vapor, surface water, groundwater, drinking water
supply, surface land, subsurface land, plant and animal life or any other nature
resource) or to human health or safety or (B) the exposure to, or the use,
storage, recycling, treatment, generation, transportation, processing, handling,
labeling, production, release or disposal of Hazardous Substances, in each case
as amended as in effect on the Closing Date. The term Environmental Law
includes, without limitation, (X) the Federal Comprehensive Environmental
Response Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act, the Federal Water Pollution Control Act, the Federal
Resource Conservation and Recovery Act of 1976 (including the Hazardous and
Solid Waste Amendments thereto), the Federal Solid Waste Disposal and the
Federal Toxic Substances Control Act, the Federal Insecticide, Fungicide and
Rodenticide Act, the Federal Occupational Safety and Health Act of 1970, each as
amended and as in effect on the Closing Date, and (Y) any common law or
equitable doctrine (including, without limitation, injunctive relief and tort
doctrines such as negligence, nuisance, trespass and strict liability) that may
impose liability or obligations for injuries or damages due to, or threatened as
a result of, the presence of, effects of or exposure to any Hazardous Substance.

(iii) As used herein, "Hazardous Substance" means any substance
presently or hereafter listed, defined, designated, or classified as hazardous,
toxic, radioactive, or dangerous, or otherwise regulated, under any
Environmental Law. Hazardous Substance includes any substance to which exposure
is regulated by any governmental authority or any Environmental Law including,
without limitation, any toxic waste, pollutant, contaminant, hazardous
substance, toxic substance, hazardous waste, special waste, industrial substance
or petroleum or any derivative or by-product

9
<PAGE>

thereof, radon, radioactive material, asbestos or asbestos containing material,
urea, formaldehyde, foam insulation, lead or polychlorinated biphenyls.

2. PURCHASE, SALE AND DELIVERY OF THE FIRM SHARES.
-----------------------------------------------

(a) On the basis of the representations, warranties and covenants herein
contained, and subject to the conditions herein set forth, the Company agrees to
sell to the Underwriters and each Underwriter agrees, severally and not jointly,
to purchase, at a price of $_____ per share, the number of Firm Shares set forth
opposite the name of each Underwriter in Schedule I hereof, subject to
adjustments in accordance with Section 9 hereof.

(b) Payment for the Firm Shares to be sold hereunder is to be made in
same day funds via wire transfer to the order of the Company against delivery of
certificates therefor to the Representatives for the several accounts of the
Underwriters. Such payment and delivery are to be made at the offices of BT
Alex. Brown Incorporated, One South Street, Baltimore, Maryland, at 10:00 a.m.,
Baltimore time, on the third business day after the date of this Agreement or at
such other time and date not later than three business days thereafter as you
and the Company shall agree upon, such time and date being herein referred to as
the "Closing Date." (As used herein, "business day" means a day on which the New
York Stock Exchange is open for trading and on which banks in New York are open
for business and are not permitted by law or executive order to be closed.) The
certificates for the Firm Shares will be delivered in such denominations and in
such registrations as the Representatives request in writing not later than the
third full business day prior to the Closing Date, and will be made available
for inspection by the Representatives at least one business day prior to the
Closing Date.

(c) In addition, on the basis of the representations and warranties
herein contained and subject to the terms and conditions herein set forth, the
Company hereby grants an option to the several Underwriters to purchase the
Option Shares at the price per share as set forth in paragraph (a) of this
Section 2. The option granted hereby may be exercised in whole or in part by
giving written notice (i) at any time before the Closing Date and (ii) only once
thereafter within 30 days after the date of this Agreement, by you, as
Representatives of the several Underwriters, to the Company setting forth the
number of Option Shares as to which the several Underwriters are exercising the
option, the names and denominations in which the Option Shares are to be
registered and the time and date at which such certificates are to be delivered.
The time and date at which certificates for Option Shares are to be delivered
shall be determined by the Representatives but shall not be earlier than three
nor later than 10 full business days after the exercise of such option, nor in
any event prior to the Closing Date (such time and date being herein referred to
as the "Option Closing Date"). If the date of exercise of the option is three or
more days before the Closing Date, the notice of exercise shall set the

10
<PAGE>

Closing Date as the Option Closing Date. The number of Option Shares to be
purchased by each Underwriter shall be in the same proportion to the total
number of Option Shares being purchased as the number of Firm Shares being
purchased by such Underwriter bears to 5,000,000, adjusted by you in such
manner as to avoid fractional shares. The option with respect to the Option
Shares granted hereunder may be exercised only to cover over-allotments in
the sale of the Firm Shares by the Underwriters. You, as Representatives of
the several Underwriters, may cancel such option at any time prior to its
expiration by giving written notice of such cancellation to the Company. To
the extent, if any, that the option is exercised, payment for the Option
Shares shall be made on the Option Closing Date in same day funds via wire
transfer to the order of the Company against delivery of certificates
therefor at the offices of BT Alex. Brown Incorporated, One South Street,
Baltimore, Maryland.

3. OFFERING BY THE UNDERWRITERS.
----------------------------

It is understood that the Underwriters are to make a public offering of the
Firm Shares as soon as the Representatives deem it advisable to do so. The Firm
Shares are to be initially offered to the public at the public offering price
set forth in the Prospectus. The Representatives may from time to time
thereafter change the public offering price and other selling terms. To the
extent, if at all, that any Option Shares are purchased pursuant to Section 2
hereof, the Underwriters will offer them to the public on the foregoing terms.
It is further understood that you will act as the Representatives for the
Underwriters in the offering and sale of the Shares in accordance with a Master
Agreement Among Underwriters entered into by you and the several other
Underwriters.

4. COVENANTS OF THE COMPANY.
------------------------

The Company covenants and agrees with the Underwriters that:

(a) The Company will (A) use its best efforts to cause the Registration
Statement to become effective or, if the procedure in Rule 430A of the Rules
and Regulations is followed, to prepare and timely file with the Commission
under Rule 424(b) of the Rules and Regulations a Prospectus in a form
approved by the Representatives containing information previously omitted at
the time of effectiveness of the Registration Statement in reliance on Rule
430A of the Rules and Regulations, and (B) not file any amendment to the
Registration Statement or supplement to the Prospectus of which the
Representatives shall not previously have been advised and furnished with a
copy or to which the Representatives shall have reasonably objected in
writing or which is not in compliance with the Rules and Regulations.

(b) The Company will advise the Representatives promptly (A) when the
Registration Statement or any post-effective amendment thereto shall have
become

11
<PAGE>

effective, (B) of receipt of any comments from the Commission, (C) of any
request of the Commission for amendment of the Registration Statement or
for supplement to the Prospectus or for any additional information and (D)
of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or the use of the Prospectus or
of the institution of any proceedings for that purpose. The Company will
use its best efforts to prevent the issuance of any such stop order
preventing or suspending the use of the Prospectus and to obtain as soon as
possible the lifting thereof, if issued.

(c) The Company will cooperate with the Representatives in endeavoring
to qualify the Shares for sale under the securities laws of such
jurisdictions as the Representatives may reasonably have designated in
writing and will make such applications, file such documents, and furnish
such information as may be reasonably required for that purpose, provided
the Company shall not be required to qualify as a foreign corporation or to
file a general consent to service of process in any jurisdiction where it
is not now so qualified or required to file such a consent. The Company
will, from time to time, prepare and file such statements, reports, and
other documents, as are or may be required to continue such qualifications
in effect for so long a period as the Representatives may reasonably
request for distribution of the Shares.

(d) The Company will deliver to, or upon the order of, the
Representatives, from time to time, as many copies of any Preliminary
Prospectus as the Representatives may reasonably request. The Company will
deliver to, or upon the order of, the Representatives during the period
when delivery of a Prospectus is required under the Act, as many copies of
the Prospectus in final form, or as thereafter amended or supplemented, as
the Representatives may reasonably request. The Company will deliver to the
Representatives at or before the Closing Date, three signed copies of the
Registration Statement and all amendments thereto including all exhibits
filed therewith, and will deliver to the Representatives such number of
copies of the Registration Statement (including such number of copies of
the exhibits filed therewith that may reasonably be requested), and of all
amendments thereto, as the Representatives may reasonably request.

(e) The Company will comply with the Act and the Rules and Regulations
and the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and the rules and regulations of the Commission thereunder, so as to permit
the completion of the distribution of the Shares as contemplated in this
Agreement and the Prospectus. If during the period in which a prospectus is
required by law to be delivered by an Underwriter or dealer, any event
shall occur as a result of which, in the judgment of the Company or in the
reasonable opinion of the Underwriters, it becomes necessary to amend or
supplement the Prospectus in order to make the statements therein, in the
light of the circumstances existing at the time the Prospectus is delivered
to a purchaser, not

12
<PAGE>

misleading, or, if it is necessary at any time to amend or supplement the
Prospectus to comply with any law, the Company promptly will prepare and
file with the Commission an appropriate amendment to the Registration
Statement or supplement to the Prospectus so that the Prospectus as so
amended or supplemented will not, in the light of the circumstances when it
is so delivered, be misleading, or so that the Prospectus will comply with
the law.

(f) The Company will make generally available to its security holders,
as soon as it is practicable to do so, but in any event not later than 15
months after the effective date of the Registration Statement, an earning
statement (which need not be audited) in reasonable detail, covering a
period of at least 12 consecutive months beginning after the effective date
of the Registration Statement, which earning statement shall satisfy the
requirements of Section 11(a) of the Act and Rule 158 of the Rules and
Regulations and will advise you in writing when such statement has been so
made available.

(g) The Company will, for a period of five (5) years from the Closing
Date, deliver to the Representatives copies of annual reports and copies of
all other documents, reports and information furnished by the Company to
its stockholders or filed with any securities exchange pursuant to the
requirements of such exchange or with the Commission pursuant to the Act or
the Exchange Act. The Company will deliver to the Representatives similar
reports with respect to significant subsidiaries, as that term is defined
in the Rules and Regulations, which are not consolidated in the Company's
financial statements.

(h) No offering, sale, short sale or other disposition of any shares of
Common Stock of the Company or other securities convertible into or
exchangeable or exercisable for shares of Common Stock or derivative of
Common Stock (or agreement for such) will be made for a period of 180 days
after the date of the Prospectus, directly or indirectly, by the Company
otherwise than hereunder or with the prior written consent of BT Alex.
Brown Incorporated, except that the Company may, without such consent,
issue shares (i) upon exercise of options granted under the 1997 Stock
Option Plan, (ii) in connection with acquisitions of businesses or (iii) in
connection with the conversion of shares of Limited Vote Common Stock to
Common Stock.

(i) The Company will use its best efforts to list, subject to notice of
issuance, the Shares on the New York Stock Exchange.

(j) The Company has caused each executive officer, director and current
stockholder of the Company and each person acquiring shares of the
Company's Common Stock in connection with the Founding Company Acquisitions
to furnish to you, on or prior to the date of this Agreement, a letter or
letters, in form and substance satisfactory to the Underwriters, pursuant
to which each such person has agreed not to offer, sell, sell

13
<PAGE>

short or otherwise dispose of any shares of Common Stock or Limited Vote
Common Stock of the Company, as the case may be, owned by such person (or
as to which such person has the right to direct the disposition of) or
request the registration for the offer or sale of any of the foregoing for
a period of two (2) years after the Closing Date, directly or indirectly,
except with the prior written consent of BT Alex. Brown Incorporated
("Lockup Agreements").

(k) The Company will (i) use its best efforts to satisfy all conditions
to the consummation of the Founding Company Acquisitions as set forth in
the agreements with respect thereto, (ii) use its best efforts to cause
each other party to such agreements to satisfy all conditions to the
consummation of the Founding Company Acquisitions, and (iii) promptly
notify the Underwriters of the occurrence of any event which may result in
the non-consummation of any of the Founding Company Acquisitions on the
Closing Date.

(l) The Company shall apply the net proceeds of its sale of the Shares
as set forth in the Prospectus and shall file such reports with the
Commission with respect to the sale of the Shares and the application of
the proceeds therefrom as may be required in accordance with Rule 463 under
the Act.

(m) The Company shall not invest, or otherwise use, the proceeds
received by the Company from its sale of the Shares in such a manner as
would require the Company or any of the Founding Companies to register as
an investment company under the 1940 Act.

(n) The Company will maintain a transfer agent and, if necessary under
the jurisdiction of incorporation of the Company, a registrar for the
Common Stock.

(o) The Company will not take, directly or indirectly, any action
designed to cause or result in, or that has constituted or might reasonably
be expected to constitute, the stabilization or manipulation of the price
of any securities of the Company.

5. COSTS AND EXPENSES.
------------------

The Company will pay all costs, expenses and fees incident to the performance
of the obligations of the Company under this Agreement and in connection with
the Founding Company Acquisitions, including, without limiting the generality of
the foregoing, the following: accounting fees of the Company; the fees and
disbursements of counsel for the Company; the cost of printing and delivering
to, or as requested by, the Underwriters copies of the Registration Statement,
Preliminary Prospectuses, the Prospectus, and this Agreement; the Underwriters'
Selling Memorandum and the Underwriters' Invitation Letter; the fees of the
Commission; the filing fee of the NASD; transfer agent and registrar fees and
expenses; and the Listing Fee of The

14
<PAGE>

New York Stock Exchange. The Company shall not, however, be required to pay for
any of the Underwriters' expenses (other than those related to qualification
under NASD regulations) except that, if this Agreement shall not be consummated
because the conditions in Section 6 hereof are not satisfied, or because this
Agreement is terminated by the Representatives pursuant to Section 11 hereof, or
by reason of any failure, refusal or inability on the part of the Company to
perform any undertaking or satisfy any condition of this Agreement or to comply
with any of the terms hereof on its part to be performed, unless such failure to
satisfy said condition or to comply with said terms be due to the default or
omission of any Underwriter, then the Company shall reimburse the several
Underwriters for reasonable out-of-pocket expenses, including fees and
disbursements of counsel, reasonably incurred in connection with investigating,
marketing and proposing to market the Shares or in contemplation of performing
their obligations hereunder; but the Company shall not in any event be liable to
any of the several Underwriters for damages on account of loss of anticipated
profits from the sale by them of the Shares.

6. CONDITIONS OF OBLIGATIONS OF THE UNDERWRITERS.
---------------------------------------------

The several obligations of the Underwriters to purchase the Firm Shares on
the Closing Date and the Option Shares, if any, on the Option Closing Date are
subject to the accuracy, as of the Closing Date or the Option Closing Date, as
the case may be, of the representations and warranties of the Company contained
herein, and to the performance by the Company of its covenants and obligations
hereunder and to the following additional conditions:

(a) The Registration Statement and all post-effective amendments
thereto shall have become effective and any and all filings required by Rule 424
and Rule 430A of the Rules and Regulations shall have been made, and any request
of the Commission for additional information (to be included in the Registration
Statement or otherwise) shall have been disclosed to the Representatives and
complied with to their reasonable satisfaction. No stop order suspending the
effectiveness of the Registration Statement, as amended from time to time, shall
have been issued and no proceedings for that purpose shall have been taken or,
to the knowledge of the Company, shall be contemplated by the Commission and no
injunction, restraining order, or order of any nature by a Federal or state
court of competent jurisdiction shall have been issued as of the Closing Date,
which would prevent the issuance of the Shares.

(b) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, the opinion of Jackson Walker L.L.P.,
counsel for the Company, dated the Closing Date or the Option Closing Date, as
the case may be, addressed to the Underwriters (and stating that it may be
relied upon by counsel to the Underwriters) to the effect that:

(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of
Delaware, with corporate power and authority to own or lease its
properties and conduct its

15
<PAGE>

business as described in the Registration Statement; each of the
Founding Companies has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the jurisdiction
of its incorporation, with corporate power and authority to own or
lease its properties and conduct its business; the Company and each of
the Founding Companies are duly qualified to transact business in all
jurisdictions in which the conduct of their business requires such
qualification, or in which the failure to qualify would have a
materially adverse effect upon the business of the Company and the
Founding Companies taken as a whole; and, upon consummation of the
Founding Company Acquisitions, the outstanding shares of capital stock
of each of the Founding Companies will have been duly authorized and
validly issued and will be fully paid and non-assessable and will be
owned by the Company; and, to the best of such counsel's knowledge,
the outstanding shares of capital stock of each of the Founding
Companies will be owned by the Company, free and clear of all liens,
encumbrances and equities and claims, and no options, warrants or
other rights to purchase, agreements or other obligations to issue or
other rights to convert any obligations into any shares of capital
stock of or other ownership interests in any of the Founding Companies
will be outstanding.

(ii) The Company has authorized and outstanding capital stock as
set forth under the caption "Capitalization" in the Prospectus; the
outstanding shares of the Company's Common Stock and the Company's
Limited Vote Common Stock have been duly authorized and validly issued
and are fully paid and non-assessable; all of the Shares conform to
the description thereof contained in the Prospectus; the certificates
for the Shares, assuming they are in the form filed with the
Commission, are in the form required by Delaware law; the shares of
Common Stock including the Firm Shares and Option Shares, if any, to
be sold by the Company pursuant to this Agreement and the shares of
Common Stock of the Company to be issued in connection with the
Founding Company Acquisitions have been duly authorized and will be
validly issued, fully paid and non-assessable when issued and paid for
as contemplated by this Agreement; and no statutory or, to the best of
such counsel's knowledge, contractual preemptive rights of
stockholders exist with respect to any of the Shares or the shares to
be issued in the Founding Company Acquisitions or the issue or sale
thereof.

(iii) Except as described in or contemplated by the Prospectus, to
the best knowledge of such counsel, there are no outstanding
securities of the Company convertible or exchangeable into or
evidencing the right to purchase or subscribe for any shares of
capital stock of the Company and there are no outstanding or
authorized options, warrants or rights of any character obligating the
Company to issue any shares of its capital stock or any securities
convertible or exchangeable into or evidencing the right to purchase
or subscribe for any

16
<PAGE>

shares of such stock; and except as described in the Prospectus, to
the best knowledge of such counsel, no holder of any securities of the
Company or any other person has the right, contractual or otherwise,
which has not been satisfied or effectively waived, to cause the
Company to sell or otherwise issue to them, or to permit them to
underwrite the sale of, any of the Shares or the right to have any
shares of Common Stock or other securities of the Company included in
the Registration Statement or the right, as a result of the filing of
the Registration Statement, to require registration under the Act of
any shares of Common Stock or other securities of the Company.

(iv) The Registration Statement has become effective under the Act
and, to the best of the knowledge of such counsel, no stop order
proceedings with respect thereto have been instituted or are pending
or threatened under the Act.

(v) The Registration Statement, the Prospectus and each amendment
or supplement thereto comply as to form in all material respects with
the requirements of the Act and the applicable rules and regulations
thereunder (except that such counsel need express no opinion as to the
financial statements, notes thereto and related schedules and other
financial and statistical information included therein or any
information furnished by the Underwriters for use therein).

(vi) The statements under the captions "Business--Employees,"
"Management--Executive Compensation," "--Employment Agreements,"
"--1997 Stock Option Plan," "Certain Transactions," "Description of
Capital Stock" and "Shares Eligible for Future Sale" in the
Prospectus, insofar as such statements constitute a summary of
documents referred to therein or matters of law, fairly summarize in
all material respects the information called for with respect to such
documents and matters.

(vii) Each Amended and Restated Agreement and Plan of Organization
with respect to the Founding Company Acquisitions (which have been
filed with the Commission as exhibits to the Registration Statement)
has been duly authorized, executed and delivered by the Company and
each of the Founding Companies and constitutes the valid binding
obligation of the Company and each of the Founding Companies.

(viii) Such counsel does not know of any contracts or documents
required to be filed as exhibits to the Registration Statement or
described in the Registration Statement or the Prospectus which are
not so filed or described as required, and such contracts and
documents as are summarized in the Registration Statement or the
Prospectus are fairly summarized in all material respects.

17
<PAGE>

(ix) Such counsel knows of no material legal or governmental
proceedings pending or threatened against the Company or any of the
Founding Companies except as set forth in the Prospectus.

(x) The execution and delivery of this Agreement and the
consummation of the transactions herein contemplated do not and will
not conflict with or result in a breach of any of the terms or
provisions of, or constitute a default under, the Certificate of
Incorporation, as amended or restated, or By-Laws of the Company, or,
any agreement or instrument known to such counsel to which the Company
or any of the Founding Companies is a party or by which the Company or
any of the Founding Companies may be bound.

(xi) This Agreement has been duly authorized, executed and
delivered by the Company.

(xii) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory, administrative or
other governmental body is necessary in connection with the execution
and delivery of this Agreement and the consummation of the
transactions herein contemplated (other than as may be required by the
NASD as to which such counsel need express no opinion), except such as
have been obtained or made or except as relate to state, county or
municipal engineering or related licenses or permits relating to the
business of the Company as conducted by the Founding Companies.

(xiii) The Company is not, and will not become, as a result of the
consummation of the transactions contemplated by this Agreement, and
application of the net proceeds therefrom as described in the
Prospectus, required to register as an investment company under the
1940 Act.

In rendering such opinion, Jackson Walker L.L.P. may provide that its
opinion is limited to matters governed by the laws of Texas and the General
Corporation law of the State of Delaware and the Federal securities laws of the
United States and may rely on counsel (such counsel having been deemed
acceptable by the Underwriters) to one or more of the Founding Companies with
respect to matters related to the Founding Companies, provided that, in lieu of
such reliance, Jackson Walker L.L.P. may provide separate opinions of such
counsel so long as such opinions are addressed to the Underwriters, and further
provided that, in each case, Jackson Walker L.L.P. shall state that they
believe that they and the Underwriters are justified in relying on such other
counsel. In addition to the matters set forth above, the opinion of Jackson
Walker L.L.P. shall also include a statement to the effect that nothing has
come to the attention of such counsel which leads them to believe that (i) the
Registration Statement, at the time it became effective under the Act (but
after giving effect to any modifications incorporated

18
<PAGE>

therein pursuant to Rule 430A under the Act) and as of the Closing Date or
the Option Closing Date, as the case may be, contained an untrue statement
of a material fact or omitted to state a material fact required to be
stated therein or necessary to make the statements therein not misleading,
and (ii) the Prospectus, or any supplement thereto, on the date it was
filed pursuant to the Rules and Regulations and as of the Closing Date or
the Option Closing Date, as the case may be, contained an untrue statement
of a material fact or omitted to state a material fact necessary in order
to make the statements, in the light of the circumstances under which they
are made, not misleading (except that such counsel need express no view as
to financial statements, schedules and statistical information therein).
With respect to such statement, Jackson Walker L.L.P. may state that their
belief is based upon the procedures set forth therein, but is without
independent check and verification.

(c) The Representatives shall have received from Piper & Marbury L.L.P.,
counsel for the Underwriters, an opinion dated the Closing Date or the
Option Closing Date, as the case may be, substantially to the effect
specified in subparagraphs (ii), (iii), (iv), and (xi) of Paragraph (b) of
this Section 6, and that the Company is a duly organized and validly
existing corporation under the laws of the State of Delaware. In rendering
such opinion, Piper & Marbury L.L.P. may rely as to the matters relating to
the laws of the States other than Maryland and Delaware or Federal laws on
the opinions of counsel referred to in Paragraph (b) of this Section 6. In
addition to the matters set forth above, such opinion shall also include a
statement to the effect that nothing has come to the attention of such
counsel which leads them to believe that (i) the Registration Statement, or
any amendment thereto, as of the time it became effective under the Act
(but after giving effect to any modifications incorporated therein pursuant
to Rule 430A under the Act) as of the Closing Date or the Option Closing
Date, as the case may be, contained an untrue statement of a material fact
or omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, and (ii) the
Prospectus, or any supplement thereto, on the date it was filed pursuant to
the Rules and Regulations and as of the Closing Date or the Option Closing
Date, as the case may be, contained an untrue statement of a material fact
or omitted to state a material fact, necessary in order to make the
statements, in the light of the circumstances under which they are made,
not misleading (except that such counsel need express no view as to
financial statements, schedules and statistical information therein). With
respect to such statement, Piper & Marbury L.L.P. may state that their
belief is based upon the procedures set forth therein, but is without
independent check and verification.

(d) You shall have received, on the date hereof, the Closing Date and
the Option Closing Date, as the case may be, a letter dated the date
hereof, the Closing Date or the Option Closing Date, as the case may be, in
form and substance satisfactory to you, of Arthur Andersen LLP confirming
that they are independent public accountants within the meaning of the Act
and the applicable published Rules and Regulations thereunder

19
<PAGE>

and stating that, in their opinion, the financial statements and schedules
of the Company and the Founding Companies examined by them and included in
the Registration Statement comply in form in all material respects with the
applicable accounting requirements of the Act and the related published
Rules and Regulations; and containing such other statements and information
as is ordinarily included in accountants' "comfort letters" to Underwriters
with respect to such financial statements and certain financial and
statistical information contained in the Registration Statement and
Prospectus.

(e) The Representatives shall have received on the Closing Date or the
Option Closing Date, as the case may be, a certificate or certificates of
the Company and signed by the Chief Executive Officer and the Chief
Financial Officer of the Company to the effect that, as of the Closing Date
or the Option Closing Date, as the case may be, each of them severally
represents as follows:

(i) The Registration Statement has become effective under the Act
and no stop order suspending the effectiveness of the Registration
Statement has been issued, and no proceedings for such purpose have
been taken or are, to his knowledge, contemplated by the Commission;

(ii) The representations and warranties of the Company contained in
Section 1 hereof are true and correct as of the Closing Date or the
Option Closing Date, as the case may be;

(iii) All filings required to have been made pursuant to Rules 424
or 430A under the Act have been made;

(iv) He or she has carefully examined the Registration Statement
and the Prospectus and, in his or her opinion, as of the effective
date of the Registration Statement, the statements contained in the
Registration Statement were true and correct and such Registration
Statement and Prospectus did not omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein not misleading, and since the effective date of the
Registration Statement, no event has occurred which should have been
set forth in a supplement to or an amendment of the Prospectus which
has not been so set forth in such supplement or amendment; and

20
<PAGE>

(v) Since the respective dates as of which information is given in
the Registration Statement and Prospectus, there has not been any
material adverse change or any development involving a prospective
material adverse change in or affecting the condition, financial or
otherwise, of the Company or any of the Founding Companies or the
earnings, business, management, properties, assets, rights,
operations, condition (financial or otherwise) or prospects of the
Company or any of the Founding Companies, whether or not arising in
the ordinary course of business.

(f) The Company shall have furnished to the Representatives such further
certificates and documents confirming the representations and warranties,
covenants and conditions contained herein and related matters as the
Representatives may reasonably have requested.

(g) The Firm Shares and Option Shares, if any, shall have been approved
for designation upon notice of issuance on the New York Stock Exchange.

(h) The Lockup Agreements described in Section 4(j) shall be in full
force and effect.

(i) Each of the Founding Company Acquisitions shall have been completed
upon the terms set forth in the Prospectus simultaneously with the closing
of the purchase of the Firm Shares by the Underwriters.

The opinions and certificates mentioned in this Agreement shall be deemed to
be in compliance with the provisions hereof only if they are in all material
respects satisfactory to the Representatives and to Piper & Marbury L.L.P.,
counsel for the Underwriters.

If any of the conditions hereinabove provided for in this Section 6 shall not
have been fulfilled when and as required by this Agreement to be fulfilled, the
obligations of the Underwriters hereunder may be terminated by the
Representatives by notifying the Company of such termination in writing or by
telegram at or prior to the Closing Date or the Option Closing Date, as the case
may be.

In such event, the Company and the Underwriters shall not be under any
obligation to each other (except to the extent provided in Sections 5 and 8
hereof).

21
<PAGE>

7. CONDITIONS OF THE OBLIGATIONS OF THE COMPANY.
--------------------------------------------

The obligations of the Company to sell and deliver the portion of the Shares
required to be delivered as and when specified in this Agreement are subject to
the conditions that: (a) at the Closing Date or the Option Closing Date, as the
case may be, no stop order suspending the effectiveness of the Registration
Statement shall have been issued and in effect or proceedings therefor initiated
or threatened, and (b) each of the Founding Company Acquisitions shall have been
completed upon the terms set forth in the Prospectus simultaneously with the
closing of the purchase of the Firm Shares by the Underwriters.

8. INDEMNIFICATION.
---------------

(a) The Company agrees to indemnify and hold harmless each Underwriter
and each person, if any, who controls any Underwriter within the meaning of
the Act, against any losses, claims, damages or liabilities to which such
Underwriter or any such controlling person may become subject under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) arise out of or are based upon
(i) any untrue statement or alleged untrue statement of any material fact
contained in the Registration Statement, any Preliminary Prospectus, the
Prospectus or any amendment or supplement thereto or (ii) the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading; and
will reimburse each Underwriter and each such controlling person upon
demand for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating or
defending any such loss, claim, damage or liability, action or proceeding
or in responding to a subpoena or governmental inquiry related to the
offering of the Shares, whether or not such Underwriter or controlling
person is a party to any action or proceeding; provided, however, that the
Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement, or omission or alleged omission made
in the Registration Statement, any Preliminary Prospectus, the Prospectus,
or such amendment or supplement, in reliance upon and in conformity with
written information furnished to the Company by or through the
Representatives specifically for use in the preparation thereof. This
indemnity agreement will be in addition to any liability which the Company
may otherwise have.

(b) Each Underwriter severally and not jointly will indemnify and hold
harmless the Company, each of its directors, each of its officers who has
signed the Registration Statement, and each person, if any, who controls
the Company within the meaning of the Act against any losses, claims,
damages or liabilities to which the Company or any such director, officer,
or controlling person may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions or

22
<PAGE>

proceedings in respect thereof) arise out of or are based upon (i) any
untrue statement or alleged untrue statement of any material fact contained
in the Registration Statement, any Preliminary Prospectus, the Prospectus
or any amendment or supplement thereto or (ii) the omission or the alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of the
circumstances under which they were made; and will reimburse any legal or
other expenses reasonably incurred by the Company or any such director,
officer, or controlling person in connection with investigating or
defending any such loss, claim, damage, liability, action or proceeding;
provided, however, that each Underwriter will be liable in each case to the
extent, but only to the extent, that such untrue statement or alleged
untrue statement or omission or alleged omission has been made in the
Registration Statement, any Preliminary Prospectus, the Prospectus or such
amendment or supplement, in reliance upon and in conformity with written
information furnished to the Company by or through the Representatives
specifically for use in the preparation thereof. This indemnity agreement
will be in addition to any liability which such Underwriter may otherwise
have.

(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may
be sought pursuant to this Section 8, such person (the "indemnified party")
shall promptly notify the person against whom such indemnity may be sought
(the "indemnifying party") in writing. No indemnification provided for in
Section 8(a) or (b) shall be available to any party who shall fail to give
notice as provided in this Section 8(c) if the party to whom notice was not
given was unaware of the proceeding to which such notice would have related
and was materially prejudiced by the failure to give such notice, but the
failure to give such notice shall not relieve the indemnifying party or
parties from any liability which it or they may have to the indemnified
party for contribution or otherwise than on account of the provisions of
Section 8(a) or (b). In case any such proceeding shall be brought against
any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it shall wish, jointly with any
other indemnifying party similarly notified, to assume the defense thereof,
with counsel satisfactory to such indemnified party and shall pay as
incurred the fees and disbursements of such counsel related to such
proceeding. In any such proceeding, any indemnified party shall have the
right to retain its own counsel at its own expense. Notwithstanding the
foregoing, the indemnifying party shall pay as incurred (or within 30 days
of presentation) the fees and expenses of the counsel retained by the
indemnified party in the event (i) the indemnifying party and the
indemnified party shall have mutually agreed to the retention of such
counsel, (ii) the named parties to any such proceeding (including any
impleaded parties) include both the indemnifying party and the indemnified
party and representation of both parties by the same counsel would be
inappropriate due to actual or potential differing interests between them
or (iii) the indemnifying party shall have failed to assume the defense and
employ counsel

23
<PAGE>

acceptable to the indemnified party within a reasonable period of time
after notice of commencement of the action. It is understood that the
indemnifying party shall not, in connection with any proceeding or related
proceedings in the same jurisdiction, be liable for the reasonable fees and
expenses of more than one separate firm for all such indemnified parties.
Such firm shall be designated in writing by you in the case of parties
indemnified pursuant to Section 8(a) and by the Company in the case of
parties indemnified pursuant to Section 8(b). The indemnifying party shall
not be liable for any settlement of any proceeding effected without its
written consent but if settled with such consent or if there be a final
judgment for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by reason of such
settlement or judgment. In addition, the indemnifying party will not,
without the prior written consent of the indemnified party, settle or
compromise or consent to the entry of any judgment in any pending or
threatened claim, action or proceeding of which indemnification may be
sought hereunder (whether or not any indemnified party is an actual or
potential party to such claim, action or proceeding) unless such
settlement, compromise or consent includes an unconditional release of each
indemnified party from all liability arising out of such claim, action or
proceeding.

(d) If the indemnification provided for in this Section 8 is unavailable
to or insufficient to hold harmless an indemnified party under Section 8(a)
or (b) above in respect of any losses, claims, damages or liabilities (or
actions or proceedings in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (or actions or proceedings in respect thereof) in such
proportion as is appropriate to reflect the relative benefits received by
the Company on the one hand and the Underwriters on the other from the
offering of the Shares. If, however, the allocation provided by the
immediately preceding sentence is not permitted by applicable law then each
indemnifying party shall contribute to such amount paid or payable by such
indemnified party in such proportion as is appropriate to reflect not only
such relative benefits but also the relative fault of the Company on the
one hand and the Underwriters on the other in connection with the
statements or omissions which resulted in such losses, claims, damages or
liabilities, (or actions or proceedings in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by
the Company on the one hand and the Underwriters on the other shall be
deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bears to the
total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover page of the Prospectus.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to
information supplied by the Company on the one hand or the Underwriters on
the other and the parties' relative intent,

24
<PAGE>

knowledge, access to information and opportunity to correct or prevent such
statement or omission.

The Company and the Underwriters agree that it would not be just and
equitable if contributions pursuant to this Section 8(d) were determined by
pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to above in this Section
8(d). The amount paid or payable by an indemnified party as a result of the
losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) referred to above in this Section 8(d) shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in connection with investigating or defending any such action or
claim. Notwithstanding the provisions of this subsection (d), (i) no
Underwriter shall be required to contribute any amount in excess of the
underwriting discounts and commissions applicable to the Shares purchased
by such Underwriter and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The Underwriters' obligations in this Section
8(d) to contribute are several in proportion to their respective
underwriting obligations and not joint.

(e) In any proceeding relating to the Registration Statement, any
Preliminary Prospectus, the Prospectus or any supplement or amendment
thereto, each party against whom contribution may be sought under this
Section 8 hereby consents to the jurisdiction of any court having
jurisdiction over any other contributing party, agrees that process issuing
from such court may be served upon him, her or it by any other contributing
party and consents to the service of such process and agrees that any other
contributing party may join him, her or it as an additional defendant in
any such proceeding in which such other contributing party is a party.

(f) Any losses, claims, damages, liabilities or expenses for which an
indemnified party is entitled to indemnification or contribution under this
Section 8 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 8 and the
representations and warranties of the Company set forth in this Agreement
shall remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person
controlling any Underwriter, the Company, its directors or officers or any
persons controlling the Company, (ii) acceptance of any Shares and payment
therefor hereunder, and (iii) any termination of this Agreement. A
successor to any Underwriter, or to the Company, its directors or officers,
or any person controlling the Company, shall be entitled to the benefits of
the indemnity, contribution and reimbursement agreements contained in this
Section 8.

25
<PAGE>

9. DEFAULT BY UNDERWRITERS.
-----------------------

If on the Closing Date or the Option Closing Date, as the case may be, any
Underwriter shall fail to purchase and pay for any portion of the Shares which
such Underwriter has agreed to purchase and pay for on such date (otherwise than
by reason of any default on the part of the Company), you, as Representatives of
the Underwriters, shall use your reasonable efforts to procure within 36 hours
thereafter one or more of the other Underwriters, or any others, to purchase
from the Company such amounts as may be agreed upon and upon the terms set forth
herein, the Firm Shares or Option Shares, as the case may be, which the
defaulting Underwriter failed to purchase. If during such 36 hours, you, as
such Representatives, shall not have procured such other Underwriters, or any
others, to purchase the Firm Shares or Option Shares, as the case may be, agreed
to be purchased by the defaulting Underwriter or Underwriters, then (a) if the
aggregate number of shares with respect to which such default shall occur does
not exceed 10% of the Firm Shares or Option Shares, as the case may be, covered
hereby, the other Underwriters shall be obligated, severally, in proportion to
the respective numbers of Firm Shares or Option Shares, as the case may be,
which they are obligated to purchase hereunder, to purchase the Firm Shares or
Option Shares, as the case may be, which such defaulting Underwriter or
Underwriters failed to purchase or (b) if the aggregate number of Firm Shares or
Option Shares, as the case may be, with respect to which such default shall
occur exceeds 10% of the Firm Shares or Option Shares, as the case may be,
covered hereby, the Company or you, as the Representatives of the Underwriters,
will have the right, by written notice given within the next 36-hour period to
the parties to this Agreement, to terminate this Agreement without liability on
the part of the non-defaulting Underwriters or of the Company except to the
extent provided in Section 8 hereof. In the event of a default by any
Underwriter or Underwriters, as set forth in this Section 9, the Closing Date or
Option Closing Date, as the case may be, may be postponed for such period, not
exceeding seven (7) days, you, as the Representatives of the Underwriters, may
determine in order that the required changes in the Registration Statement or in
the Prospectus or in any other documents or arrangements may be effected. The
term "Underwriter" includes any person substituted for a defaulting Underwriter.
Any action taken under this Section 9 shall not relieve any defaulting
Underwriter from liability in respect of any default of such Underwriter under
this Agreement.

10. NOTICES.
-------

All communications hereunder shall be in writing and, except as otherwise
provided herein, will be mailed, delivered, telecopied or telegraphed and
confirmed as follows: if to the Underwriters, to BT Alex. Brown Incorporated,
One South Street, Baltimore, Maryland 21202, Attention: David M. Gray, Managing
Director, with a copy to BT Alex. Brown Incorporated, One South Street,
Baltimore, Maryland 21202 Attention: General Counsel; and if to the Company; to
Quanta Services, Inc., 3555 Timmons Lane, Suite 610, Houston, Texas 77027,

26
<PAGE>

Attention: John R. Colson, Chief Executive Officer, with copies to Jackson
Walker L.L.P., 901 Main Street, Suite 6000, Dallas, Texas 75287, Attention:
Brad L. Whitlock, Esq.

11. TERMINATION.
-----------

This Agreement may be terminated by you by notice to the Company as follows:

(a) at any time prior to the earlier of (i) the time the Shares are
released by you for sale by notice to the Underwriters or (ii) 11:30 a.m.
on the first business day following the date of this Agreement;

(b) at any time prior to the Closing Date if any of the following has
occurred: (i) since the respective dates as of which information is given
in the Registration Statement and the Prospectus, any material adverse
change or any development involving a prospective material adverse change
in or affecting the condition, financial or otherwise, of the Company and
the Founding Companies taken as a whole or the earnings, business,
management, properties, assets, rights, operations, condition (financial or
otherwise) or prospects of the Company and the Founding Companies taken as
a whole, whether or not arising in the ordinary course of business; (ii)
any outbreak or escalation of hostilities or declaration of war or national
emergency or other national or international calamity or crisis or change
in economic or political conditions if the effect of such outbreak,
escalation, declaration, emergency, calamity, crisis or change on the
financial markets of the United States would, in your reasonable judgment,
make it impracticable to market the Shares or to enforce contracts for the
sale of the Shares; (iii) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange, American Stock Exchange or the Nasdaq Stock Market or limitation
on prices (other than limitations on hours or numbers of days of trading);
(iv) the enactment, publication, decree or other promulgation of any
statute, regulation, rule or order of any court or other governmental
authority which in your opinion materially and adversely affects or may
materially and adversely affect the business or operations of the Company;
(v) declaration of a banking moratorium by United States or New York State
authorities; (vi) the suspension of trading of the Company's Common Stock
by the Commission on the New York Stock Exchange; or (vii) the taking of
any action by any governmental body or agency in respect of its monetary or
fiscal affairs which in your reasonable opinion has a material adverse
effect on the securities markets in the United States; or

12. SUCCESSORS.
----------

27
<PAGE>

This Agreement has been and is made solely for the benefit of the Underwriters
and the Company and their respective successors, executors, administrators,
heirs and assigns, and the officers, directors and controlling persons referred
to herein, and no other person will have any right or obligation hereunder. No
purchaser of any of the Shares from any Underwriter shall be deemed a successor
or assign merely because of such purchase.

13. INFORMATION PROVIDED BY UNDERWRITERS.
------------------------------------

The Company and the Underwriters acknowledge and agree that the only
information furnished or to be furnished by any Underwriter to the Company for
inclusion in any Prospectus or the Registration Statement consists of the
information set forth in the last paragraph on the front cover page (insofar as
such information relates to the Underwriters), legends required by Item 502(d)
of Regulation S-K under the Act and the information under the caption
"Underwriting" in the Prospectus.

14. MISCELLANEOUS.
-------------

The reimbursement, indemnification and contribution agreements contained in
this Agreement and the representations and covenants in this Agreement shall
remain in full force and effect, regardless of (a) any termination of this
Agreement, (b) any investigation made by or on behalf of any Underwriter or
controlling person thereof, or by or on behalf of the Company or its directors
or officers and (c) delivery of and payment for the Shares under this Agreement.

This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.

This Agreement shall be governed by, and construed in accordance with, the
laws of the State of Delaware.

28
<PAGE>

If the foregoing letter is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicates hereof,
whereupon it will become a binding agreement among the Company and the
Underwriters in accordance with its terms.

Very truly yours,

QUANTA SERVICES, INC.

By: __________________________________
John R. Colson,
Chief Executive Officer

The foregoing Underwriting Agreement
is hereby confirmed and accepted as
of the date first above written.

BT Alex. Brown Incorporated
BancAmerica Robertson Stephens
Sanders Morris Mundy Inc.

By: BT Alex. Brown Incorporated

By _____________________________
Authorized Officer

29
<PAGE>

SCHEDULE I

Schedule of Underwriters

Number of Firm Shares
Underwriter to be Purchased
----------- ---------------

BT Alex. Brown Incorporated
BancAmerica Robertson Stephens
Sanders Morris Mundy Inc.

Total 5,000,000

<PAGE>

EXHIBIT 3.1

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
QUANTA SERVICES, INC.

Quanta Services, Inc. (the "Corporation"), a corporation organized and
existing under and by virtue of the General Corporation Law of the State of
Delaware (the "DGCL"), hereby adopts this Amended and Restated Certificate of
Incorporation, which accurately restates and integrates the provisions of the
existing Certificate of Incorporation of the Corporation and all amendments and
restatements thereto that are in effect on the date hereof (the "Certificate of
Incorporation") and further amends the provisions of the Certificate of
Incorporation as described below, and does hereby further certify that:

1. The name of the Corporation is Quanta Services, Inc. The original
certificate of incorporation of the Corporation was filed with the Secretary of
State of the State of Delaware on August 19, 1997, and the Corporation was
formerly known as Fabal Construction, Inc. The Certificate of Incorporation was
further amended and restated on December 22, 1997.

2. The Board of Directors of the Corporation duly adopted a resolution
proposing and declaring advisable the amendments to the Certificate of
Incorporation as described herein, and the holders of at least a majority of the
Corporation's outstanding capital stock have duly adopted such amendments, all
in accordance with the provisions of Sections 228, 242 and 245 of the DGCL.

3. This Amended and Restated Certificate of Incorporation is being filed
pursuant to Sections 242 and 245 of the Delaware General Corporation Law in
order to restate the Certificate of Incorporation of the Corporation as amended
to date, and also to amend further the Certificate of Incorporation to provide
that from and after such time that any class of the Corporation's equity
securities is traded on a national securities exchange, the stockholders of the
Corporation may take action only at an annual or special meeting of stockholders
of the Corporation and not via any consent in writing by such stockholders.

4. In the preceding Amended and Restated Certificate of Incorporation,
each outstanding share of then existing Common Stock, par value $0.01 per share,
was converted into and reclassified as 1,613.6016 shares of Limited Vote Common
Stock (as defined below), par value $0.00001 per share. Certificates
representing reclassified shares were canceled and upon presentation of the
canceled certificates to the Corporation, the holders thereof shall be entitled
to receive certificate(s) representing the new shares into which such canceled
shares have been converted.

5. The Certificate of Incorporation is hereby restated and further amended
to read in its entirety as follows:

AMENDED AND RESTATED CERTIFICATE OF INCORPORATION

FIRST. The name of the corporation is Quanta Services, Inc.
<PAGE>

SECOND. The Corporation's registered office in the State of Delaware is
1209 Orange Street, Corporation Trust Center, in the City of Wilmington, County
of New Castle. The name and address of its registered agent is The Corporation
Trust Company, 1209 Orange Street, Wilmington, Delaware.

THIRD. The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized under the General Corporation
Law of the State of Delaware.

FOURTH. The aggregate number of shares of capital stock that the
Corporation will have authority to issue is Fifty Million (50,000,000), Thirty
Six Million, Six Hundred Fifty Four Thousand, Six Hundred Sixty Seven
(36,654,667) of which will be shares of Common Stock, having a par value of
$0.00001 per share (hereinafter called "Common Stock"), Three Million, Three
Hundred Forty Five Thousand, Three Hundred Thirty Three (3,345,333) of which
will be shares of Limited Vote Common Stock, having a par value of $0.00001 per
share (hereinafter called "Limited Vote Common Stock") and Ten Million
(10,000,000) of which will be shares of preferred stock, having a par value of
$0.00001 per share (hereinafter called "Preferred Stock").

(a) Preferred Stock may be issued in one or more series as may be
determined from time to time by the Board of Directors. All shares of any one
series of Preferred Stock will be identical except as to the dates of issue and
the dates from which dividends on shares of the series issued on different dates
will cumulate, if cumulative. Authority is hereby expressly granted to the
Board of Directors to authorize the issuance of one or more series of Preferred
Stock, and to fix by resolution or resolutions providing for the issue of each
such series the voting powers, designations, preferences, and relative,
participating, optional, redemption, conversion, exchange or other special
rights, qualifications, limitations or restrictions of such series, and the
number of shares in each series, to the full extent now or hereafter permitted
by law.

(b) Subject to the preferred rights of the holders of shares of any class
or series of Preferred Stock, the holders of Common Stock shall be entitled to
receive out of the funds of the Corporation legally available therefor, such
dividends (payable in cash, stock or otherwise) as the Board of Directors may
from time to time determine, payable to stockholders of record on such dates,
not exceeding 60 days preceding the dividend payment dates, as shall be fixed
for such purpose by the Board of Directors in advance of payment of each
particular dividend. All dividends on Common Stock shall be paid pari passu
with dividends on Limited Vote Common Stock.

In the event of any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, after the distribution or payment
to the holders of shares of any class or series of Preferred Stock as provided
by the Board of Directors with respect to any such class or eries of Preferred
Stock, the remaining assets of the Corporation available for distribution to
stockholders shall be distributed among and paid to the holders of Common Stock
and Limited Vote Common Stock ratably in proportion to the number of shares of
Common Stock and Limited Vote Common Stock held by them respectively.

2
<PAGE>

Except as otherwise required by law, each holder of shares of Common Stock
shall be entitled to one vote for each share of Common Stock standing in such
holder's name of the books of the Corporation.

(c) Subject to the preferred rights of the holders of shares of any class
or series of Preferred Stock, the holders of the Limited Vote Common Stock shall
be entitled to receive, as and when declared by the Board of Directors, such
dividends (payable in cash, stock or otherwise) as the Board of Directors may
from time to time determine, payable to stockholders of record on such dates,
not exceeding 60 days preceding the dividend payment dates, as shall be fixed
for such purpose by the Board of Directors in advance of payment of each
particular dividend. All dividends on Limited Vote Common Stock shall be paid
pari passu with dividends on Common Stock.

Holders of Limited Vote Common Stock voting as a class shall be entitled to
elect one member of the Board of Directors, but shall not otherwise be entitled
to vote in the election of directors of the Corporation. Only holders of
Limited Vote Common Stock shall have the right to remove the member elected by
them from the Board of Directors. Subject to the foregoing, and except as
otherwise required by law, each holder of shares of Limited Vote Common Stock
shall be entitled to one-tenth of one vote for each share of Limited Vote Common
Stock standing in such holder's name of the books of the Corporation.

Each share of the Limited Vote Common Stock will automatically convert into
Common Stock on a share-for-share basis in the event of a disposition of
such share of Limited Vote Common Stock by the holder.

(d) The Corporation shall be entitled to treat the person in whose name any
share of its stock is registered as the owner thereof for all purposes and shall
not be bound to recognize any equitable or other claim to, or interest in, such
share on the part of any other person, whether or not the Corporation shall have
notice thereof, except as expressly provided by applicable laws.

FIFTH. The number of directors of the Corporation shall be as specified
in, or determined in the manner provided in, the Bylaws, but shall be at least
one and not more than nineteen. Election of directors need not be by written
ballot. A director of the Corporation may be removed only for cause and only
upon the affirmative vote of the holders of a majority of the outstanding
capital stock of the Corporation entitled to vote at an election of directors,
subject to further restrictions on removal, not inconsistent with this Section,
as may be contained in the bylaws.

Notwithstanding the foregoing, whenever the holders of any one or more
classes or series of Preferred Stock issued by the Corporation shall have the
right, voting separately by class or series, to elect directors at an annual or
special meeting of stockholders, the election, term of office, filling of
vacancies and other features of such directorships shall be governed by the
terms of the Directors' resolutions applicable thereto, and such directors so
elected shall not be subject to the provisions of this Section unless expressly
provided by such terms.

3
<PAGE>

SIXTH. No stockholder of the Corporation will, solely by reason of holding
shares of any class, have any preemptive or preferential right to purchase or
subscribe for any shares of the Corporation, now or hereafter to be authorized,
or any notes, debentures, bonds or other securities convertible into or carrying
warrants, rights or options to purchase shares of any class, now or hereafter to
be authorized, whether or not the issuance of any such shares or such notes,
debentures, bonds or other securities would adversely affect the dividend,
voting or any other rights of such stockholder. The Board of Directors may
authorize the issuance of, and the Corporation may issue, shares of any class of
the Corporation, or any notes, debentures, bonds or other securities convertible
into or carrying warrants, rights or options to purchase any such shares,
without offering any shares of any class to the existing holders of any class of
stock of the Corporation.

SEVENTH. At all meetings of stockholders, a quorum will be present if the
holders of a majority of the shares entitled to vote at the meeting are
represented at the meeting in person or by proxy. From and after the first date
as of which any class of the Corporation's equity securities is traded on a
national securities exchange, (i) any action required or permitted to be taken
by the stockholders of the Corporation must be effected at an annual or special
meeting of stockholders of the Corporation and may not be effected by any
consent in writing by such stockholders and (ii) special meetings of the
stockholders of the Corporation may be called only by the Chairman of the Board
of Directors and shall be called within ten (10) days after receipt of the
written request of the Board of Directors, pursuant to a resolution approved by
a majority of the whole Board of Directors.

EIGHTH. Stockholders of the Corporation will not have the right of
cumulative voting for the election of directors or for any other purpose.

NINTH. The Board of Directors is expressly authorized to alter, amend or
repeal the Bylaws of the Corporation or to adopt new Bylaws.

TENTH. (a) The Corporation will, to the fullest extent permitted by the
Delaware General Corporation Law, as the same exists or may hereafter be
amended, indemnify any and all persons it has power to indemnify under such law
from and against any and all of the expenses, liabilities or other matters
referred to in or covered by such law. Such indemnification may be provided
pursuant to any Bylaw, agreement, vote of stockholders or disinterested
directors or otherwise, both as to action in his director or officer capacity
and as to action in another capacity while holding such office, will continue as
to a person who has ceased to be a director, officer, employee or agent, and
will inure to the benefit of the heirs, executors and administrators of such a
person.

(b) If a claim under the preceding paragraph (a) is not paid in full by the
Corporation within 30 days after a written claim has been received by the
Corporation, the claimant may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim and, if successful in
whole or in part, the claimant will be entitled to be paid also the expense of
prosecuting such claim. It will be a defense to any such action (other than an
action brought to enforce a claim for expenses incurred in defending any
proceeding in advance of its final disposition where the required undertaking,
if any is required, has been tendered to the Corporation) that the claimant has
not met the standards of conduct that make it permissible under the laws of the
State of Delaware for the Corporation to indemnify the claimant for the amount
claimed, but the burden of proving

4
<PAGE>

such defense will be on the Corporation. Neither the failure of the Corporation
(including its Board of Directors, independent legal counsel, or its
stockholders) to have made a determination prior to the commencement of such
action that indemnification of the claimant is proper in the circumstances
because he has met the applicable standard of conduct set forth in the laws of
the State of Delaware nor an actual determination by the Corporation (including
its Board of Directors, independent legal counsel, or its stockholders) that the
claimant has not met such applicable standard of conduct, will be a defense to
the action or create a presumption that the claimant has not met the applicable
standard of conduct.

ELEVENTH. To the fullest extent permitted by the laws of the State of
Delaware as the same exist or may hereafter be amended, a director of the
Corporation will not be liable to the Corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director. Any repeal or
modification of this Article will not increase the personal liability of any
director of the Corporation for any act or occurrence taking place before such
repeal or modification, or adversely affect any right or protection of a
director of the Corporation existing at the time of such repeal or modification.
The provisions of this Article shall not be deemed to limit or preclude
indemnification of a director by the Corporation for any liability of a director
that has not been eliminated by the provisions of this Article.

IN WITNESS WHEREOF, the Corporation has caused this certificate to be
executed this 23rd day of January, 1998.

QUANTA SERVICES, INC.

By: /s/ John R. Colson
---------------------------
John R. Colson
Chief Executive Officer

<PAGE>

EXHIBIT 3.2

BYLAWS

QUANTA SERVICES, INC.
<PAGE>

TABLE OF CONTENTS

<TABLE>
<CAPTION>
ARTICLE I
<S> <C>
OFFICES
Section 1.1. Registered Office.......................... 1
Section 1.2. Other Offices.............................. 1

ARTICLE II

STOCKHOLDERS
Section 2.1. Place of Meetings.......................... 1
Section 2.2. Annual Meeting............................. 1
Section 2.3. List of Stockholders....................... 1
Section 2.4. Special Meetings........................... 2
Section 2.5. Notice..................................... 2
Section 2.6. Quorum..................................... 2
Section 2.7. Voting..................................... 2
Section 2.8. Method of Voting........................... 3
Section 2.9. Record Date................................ 3
Section 2.10. Action by Consent.......................... 3
Section 2.11. Stockholder Proposals...................... 3
Section 2.12. Nomination of Directors.................... 4
Section 2.13. Inspectors of Election..................... 5

ARTICLE III

BOARD OF DIRECTORS
Section 3.1. Management................................. 6
Section 3.2. Qualification; Election; Term.............. 6
Section 3.3. Number..................................... 6
Section 3.4. Removal.................................... 6
Section 3.5. Vacancies.................................. 6
Section 3.6. Place of Meetings.......................... 7
Section 3.7. Annual Meeting............................. 7
Section 3.8. Regular Meetings........................... 7
Section 3.9. Special Meetings........................... 7
Section 3.10. Quorum..................................... 7
Section 3.11. Interested Directors....................... 7
Section 3.12. Committees................................. 8
Section 3.13. Action by Consent.......................... 8
Section 3.14. Compensation of Directors.................. 8
</TABLE>
<PAGE>

<TABLE>
<CAPTION>
ARTICLE IV
<S> <C>
NOTICE
Section 4.1. Form of Notice............................. 8
Section 4.2. Waiver..................................... 8

ARTICLE V

OFFICERS AND AGENTS
Section 5.1. In General................................. 9
Section 5.2. Election................................... 9
Section 5.3. Other Officers and Agents.................. 9
Section 5.4. Compensation............................... 9
Section 5.5. Term of Office and Removal................. 9
Section 5.6. Employment and Other Contracts............. 9
Section 5.7. Chairman of the Board of Directors......... 9
Section 5.8. Chief Executive Officer.................... 10
Section 5.9. Chief Operating Officer.................... 10
Section 5.10. Chief Financial Officer.................... 10
Section 5.11. Secretary.................................. 10
Section 5.12. Bonding.................................... 10

ARTICLE VI

CERTIFICATES REPRESENTING SHARES
Section 6.1. Form of Certificates....................... 11
Section 6.2. Lost Certificates.......................... 11
Section 6.3. Transfer of Shares......................... 11
Section 6.4. Registered Stockholders.................... 12

ARTICLE VII

INDEMNIFICATION
Section 7.1. Indemnification of Directors and Officers.. 12

ARTICLE VIII

GENERAL PROVISIONS
Section 8.1. Dividends.................................. 14
Section 8.2. Reserves................................... 14
Section 8.3. Telephone and Similar Meetings............. 15
Section 8.4. Books and Records.......................... 15
Section 8.5. Fiscal Year................................ 15
Section 8.6. Seal....................................... 15
Section 8.7. Insurance.................................. 15
Section 8.8. Resignation................................ 15
Section 8.9. Amendment of Bylaws........................ 15
Section 8.10. Invalid Provisions......................... 15
Section 8.11. Relation to the Certificate of
Incorporation............................. 15
</TABLE>
<PAGE>

BYLAWS

QUANTA SERVICES, INC.

ARTICLE I

OFFICES
-------

Section 1.1. Registered Office. The registered office and registered
agent of Quanta Services, Inc. (the "Corporation") required to be maintained in
the State of Delaware by the General Corporation Law of the State of Delaware
(the "DGCL"), will be as from time to time set forth in the Corporation's
Certificate of Incorporation (as may be amended from time to time) or in any
certificate filed with the Secretary of State of the State of Delaware, and the
appropriate county Recorder or Recorders, as the case may be, to amend such
information.

Section 1.2. Other Offices. The Corporation may also have offices at
such other places both within and without the State of Delaware as the Board of
Directors may from time to time determine or the business of the Corporation may
require.

ARTICLE II

STOCKHOLDERS
------------

Section 2.1. Place of Meetings. All meetings of the stockholders for
the election of Directors will be held at such place, within or without the
State of Delaware, as may be fixed from time to time by the Board of Directors.
Meetings of stockholders for any other purpose may be held at such time and
place, within or without the State of Delaware, as may be stated in the notice
of the meeting or in a duly executed waiver of notice thereof.

Section 2.2. Annual Meeting. An annual meeting of the stockholders will
be held at such time as may be determined by the Board of Directors, at which
meeting the stockholders will elect a Board of Directors, and transact such
other business as may properly be brought before the meeting.

Section 2.3. List of Stockholders. At least ten days before each
meeting of stockholders, a complete list of the stockholders entitled to vote at
said meeting, arranged in alphabetical order, with the address of and the number
of voting shares registered in the name of each, will be prepared by the officer
or agent having charge of the stock transfer books. Such list will be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place will be specified in the notice of the meeting, or if not so
specified at the place where the meeting is to be held. Such list will be
produced and kept open at the time

1
<PAGE>

and place of the meeting during the whole time thereof, and will be subject to
the inspection of any stockholder who may be present.

Section 2.4. Special Meetings. Special meetings of the stockholders,
for any purpose or purposes, unless otherwise prescribed by law, the Certificate
of Incorporation or these Bylaws, may be called by the Chairman of the Board,
the Chief Executive Officer or the Board of Directors. Business transacted at
all special meetings will be confined to the purposes stated in the notice of
the meeting unless all stockholders entitled to vote are present and consent.
Except to the extent specified in the Certificate of Incorporation or the
resolutions of the Board of Directors creating any class or series of preferred
stock of the Corporation, stockholders of the Corporation may not call a special
meeting.

Section 2.5. Notice. Written or printed notice stating the place, day
and hour of any meeting of the stockholders and, in case of a special meeting,
the purpose or purposes for which the meeting is called, will be delivered not
less than ten nor more than sixty days before the date of the meeting, either
personally or by mail, by or at the direction of the Chairman of the Board, the
Chief Executive Officer, the Secretary, or the officer or person calling the
meeting, to each stockholder of record entitled to vote at the meeting. If
mailed, such notice will be deemed to be delivered when deposited in the United
States mail, addressed to the stockholder at his address as it appears on the
stock transfer books of the Corporation, with postage thereon prepaid.

Section 2.6. Quorum. At all meetings of the stockholders, the presence
in person or by proxy of the holders of a majority of the shares issued and
outstanding and entitled to vote will be necessary and sufficient to constitute
a quorum for the transaction of business except as otherwise provided by law,
the Certificate of Incorporation or these Bylaws. If, however, such quorum is
not present or represented at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or represented by proxy, will have
power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum is present or represented. If the
adjournment is for more than 30 days, or if after the adjournment a new record
date is fixed for the adjourned meeting, a notice of the adjourned meeting will
be given to each stockholder of record entitled to vote at the meeting. At such
adjourned meeting at which a quorum is present or represented, any business may
be transacted that might have been transacted at the meeting as originally
notified.

Section 2.7. Voting. When a quorum is present at any meeting of the
Corporation's stockholders, the vote of the holders of a majority of the shares
entitled to vote on, and voted for or against, any matter will decide any
questions brought before such meeting, unless the question is one upon which, by
express provision of law, the Certificate of Incorporation or these Bylaws, a
different vote is required, in which case such express provision will govern and
control the decision of such question. The stockholders present in person or by
proxy at a duly organized meeting may continue to transact business until
adjournment, notwithstanding the withdrawal of enough stockholders to leave less
than a quorum.

Section 2.8. Method of Voting. Each outstanding share of the
Corporation's capital stock, regardless of class, will be entitled to one vote
on each matter submitted to a vote at a meeting of

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stockholders, except to the extent that the voting rights of the shares of any
class or classes are limited or denied by the Certificate of Incorporation, as
amended from time to time. At any meeting of the stockholders, every stockholder
having the right to vote will be entitled to vote in person, or by proxy
appointed by an instrument in writing subscribed by such stockholder and bearing
a date not more than three years prior to such meeting, unless such instrument
provides for a longer period. Each proxy will be revocable unless expressly
provided therein to be irrevocable and if, and only as long as, it is coupled
with an interest sufficient in law to support an irrevocable power. A proxy may
be made irrevocable regardless of whether the interest with which it is coupled
is an interest in the stock itself or an interest in the Corporation generally.
Such proxy will be filed with the Secretary of the Corporation prior to or at
the time of the meeting. Voting on any question or in any election, other than
for directors, may be by voice vote or show of hands unless the presiding
officer orders, or any stockholder demands, that voting be by written ballot.

Section 2.9. Record Date. The Board of Directors may fix in advance a
record date for the purpose of determining stockholders entitled to notice of or
to vote at a meeting of stockholders, which record date will not precede the
date upon which the resolution fixing the record date is adopted by the Board of
Directors, and which record date will not be less than ten nor more than sixty
days prior to such meeting. In the absence of any action by the Board of
Directors, the close of business on the date next preceding the day on which the
notice is given will be the record date, or, if notice is waived, the close of
business on the day next preceding the day on which the meeting is held will be
the record date.

Section 2.10. Action by Consent. Except as set forth below, any action
required or permitted by law, the Certificate of Incorporation or these Bylaws
to be taken at a meeting of the stockholders of the Corporation may be taken
without a meeting if a consent or consents in writing, setting forth the action
so taken, is signed by the holders of outstanding stock having not less than the
minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all shares entitled to vote thereon were present and voted
and will be delivered to the Corporation by delivery to its registered office in
Delaware, its principal place of business or an officer or agent of the
Corporation having custody of the minute book. Notwithstanding the foregoing,
from and after the first date that the Corporation has received funding from the
sale of capital stock of the Corporation in an initial public offering any
action required or permitted to be taken by the stockholders of the Corporation
must be effected at an annual or special meeting of the stockholders of the
Corporation and may not be effected by any consent in writing by the
stockholders.

Section 2.11. Stockholder Proposals. No proposal by a stockholder made
pursuant to this Article II may be voted upon at a meeting of stockholders
unless such stockholder shall have delivered or mailed in a timely manner (as
set herein) and in writing to the Secretary of the Corporation (i) notice of
such proposal, (ii) the text of the proposed alteration, amendment or repeal, if
such proposal relates to a proposed change to the Corporation's Certificate of
Incorporation or Bylaws, or the text of such proposal for adoption and any
supporting statement (which shall not exceed 500 words in length), (iii)
evidence reasonably satisfactory to the Secretary of the Corporation of such
stockholder's status as such and of the number of shares of each class of
capital stock of the Corporation of which such stockholder is the beneficial
owner, (iv) a list of the names and addresses of other beneficial owners of
shares of the capital stock of the Corporation, if any, with

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<PAGE>

whom such stockholder is acting in concert, and the number of shares of each
class of capital stock of the Corporation beneficially owned by each such
beneficial owner and (v) an opinion of counsel, which counsel and the form and
substance of which opinion shall be reasonably satisfactory to the Board of
Directors of the Corporation, to the effect that the Certificate of
Incorporation or Bylaws resulting from the adoption of such proposal would not
be in conflict with the laws of the State of Delaware, if such proposal relates
to a proposed change to the Corporation's Certificate of Incorporation or
Bylaws. To be timely in connection with an annual meeting of stockholders, a
stockholder's notice and other aforesaid items shall be delivered to or mailed
and received at the principal executive offices of the Corporation not less than
ninety nor more than 180 days prior to the earlier of the date of the meeting or
the corresponding date on which the immediately preceding year's annual meeting
of stockholders was held (PROVIDED, HOWEVER, that if no annual meeting was held
in the previous year or the date of the annual meeting of stockholders has been
changed by more than 30 calendar days from the date contemplated at the time of
the previous year's proxy statement, the notice must be received by the
Corporation at least 45 days prior to the date the Corporation intends to
distribute its proxy statement with respect to such meeting). To be timely in
connection with the voting on any such proposal at a special meeting of the
stockholders, a stockholder's notice and other aforesaid items shall be
delivered to or mailed and received at the principal executive offices of the
Corporation not less than forty days nor more than sixty days prior to the date
of such meeting; provided, however, that in the event that less than fifty days'
notice or prior public disclosure of the date of the special meeting of the
stockholders is given or made to the stockholders, such stockholder's notice and
other aforesaid items to be timely must be so received not later than the close
of business on the seventh day following the day on which such notice of date of
the meeting was mailed or such public disclosure was made. Within thirty days
(or such shorter period that may exist prior to the date of the meeting) after
such stockholder shall have submitted the aforesaid items, the Secretary and the
Board of Directors of the Corporation shall respectively determine whether the
items to be ruled upon by them are reasonably satisfactory and shall notify such
stockholder in writing of their respective determinations. If such stockholder
fails to submit a required item in the form or within the time indicated, or if
the Secretary or the Board of Directors of the Corporation determines that the
items to be ruled upon by them are not reasonably satisfactory, then such
proposal by such stockholder may not be voted upon by the stockholders of the
Corporation at such meeting of stockholders. The presiding person at each
meeting of stockholders shall, if the facts warrant, determine and declare to
the meeting that a proposal was not made in accordance with the procedure
prescribed by these Bylaws, and if he should so determine, he shall so declare
to the meeting and the defective proposal shall be disregarded. The requirements
of this Section 2.11 shall be in addition to any other requirements imposed by
these Bylaws, by the Corporation's Certificate of Incorporation or the law.

Section 2.12. Nomination of Directors. Nominations for the election of
directors may be made by the Board of Directors or by any stockholder (a
"Nominator") entitled to vote in the election of directors. Such nominations,
other than those made by the Board of Directors, shall be made in writing
pursuant to timely notice delivered to or mailed and received by the Secretary
of the Corporation as set forth in this Section 2.12. To be timely in connection
with an annual meeting of stockholders, a Nominator's notice, setting forth the
name and address of the person to be nominated, shall be delivered to or mailed
and received at the principal executive offices of the Corporation not less than
ninety days nor more than 180 days prior to the earlier of the date of the
meeting or the

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<PAGE>

corresponding date on which the immediately preceding year's annual meeting of
stockholders was held. To be timely in connection with any election of a
director at a special meeting of the stockholders, a Nominator's notice, setting
forth the name and address of the person to be nominated, shall be delivered to
or mailed and received at the principal executive offices of the Corporation not
later than the close of business on the tenth day following the day on which
such notice of date of the meeting was mailed or such public disclosure was
made, whichever first occurs. At such time, the Nominator shall also submit
written evidence, reasonably satisfactory to the Secretary of the Corporation,
that the Nominator is a stockholder of the Corporation and shall identify in
writing (i) the name and address of the Nominator, (ii) the number of shares of
each class of capital stock of the Corporation of which the Nominator is the
beneficial owner, (iii) the name and address of each of the persons with whom
the Nominator is acting in concert and (iv) the number of shares of capital
stock of which each such person with whom the Nominator is acting in concert is
the beneficial owner pursuant to which the nomination or nominations are to be
made. At such time, the Nominator shall also submit in writing (i) the
information with respect to each such proposed nominee that would be required to
be provided in a proxy statement prepared in accordance with Regulation 14A
under the Securities Exchange Act of 1934, as amended, and (ii) a notarized
affidavit executed by each such proposed nominee to the effect that, if elected
as a member of the Board of Directors, he will serve and that he is eligible for
election as a member of the Board of Directors. Within thirty days (or such
shorter time period that may exist prior to the date of the meeting) after the
Nominator has submitted the aforesaid items to the Secretary of the Corporation,
the Secretary of the Corporation shall determine whether the evidence of the
Nominator's status as a stockholder submitted by the Nominator is reasonably
satisfactory and shall notify the Nominator in writing of his determination. If
the Secretary of the Corporation finds that such evidence is not reasonably
satisfactory, or if the Nominator fails to submit the requisite information in
the form or within the time indicated, such nomination shall be ineffective for
the election at the meeting at which such person is proposed to be nominated.
The presiding person at each meeting of stockholders shall, if the facts
warrant, determine and declare to the meeting that a nomination was not made in
accordance with the procedures prescribed by these bylaws, and if he should so
determine, he shall so declare to the meeting and the defective nomination shall
be disregarded. The requirements of this Section 2.12 shall be in addition to
any other requirements imposed by these bylaws, by the Certificate of
Incorporation or by law.

Section 2.13. Inspectors of Election. Before any meeting of
stockholders, the Board of Directors may, and if required by law shall, appoint
one or more persons to act as inspectors of election at such meeting or any
adjournment thereof. If any person appointed as inspector fails to appear or
fails or refuses to act, the chairman of the meeting may, and if required by law
or requested by any stockholder entitled to vote or his proxy shall, appoint a
substitute inspector. If no inspectors are appointed by the Board of Directors,
the chairman of the meeting may, and if required by law or requested by any
stockholder entitled to vote or his proxy shall, appoint one or more inspectors
at the meeting. Notwithstanding the foregoing, inspectors shall be appointed
consistent with Section 231 of the DGCL. Inspectors may include individuals who
serve the Corporation in other capacities (including as officers, employees,
agents or representatives); PROVIDED, HOWEVER, that no Director or candidate for
the office of Director shall act as an inspector. Inspectors need not be
stockholders. The inspectors shall (i) determine the number of shares of capital
stock of the Corporation outstanding and the voting power of each, the number of
shares represented at the

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meeting, the existence of a quorum and the validity and effect of proxies and
(ii) receive votes or ballots, hear and determine all challenges and questions
arising in connection with the right to vote, count and tabulate all votes and
ballots, determine the results and do such acts as are proper to conduct the
election or vote with fairness to all stockholders. On request of the chairman
of the meeting, the inspectors shall make a report in writing of any challenge,
request or matter determined by them and shall execute a certificate of any fact
found by them. The inspectors shall have such other duties as may be prescribed
by Section 231 of the DGCL.

ARTICLE III

BOARD OF DIRECTORS
------------------

Section 3.1. Management. The business and affairs of the Corporation
will be managed by or under the direction of its Board of Directors who may
exercise all such powers of the Corporation and do all such lawful acts and
things as are not by law, by the Certificate of Incorporation or by these Bylaws
directed or required to be exercised or done by the stockholders.

Section 3.2. Qualification; Election; Term. None of the Directors need
be a stockholder of the Corporation or a resident of the State of Delaware.
Directors shall be elected at the annual meeting of the stockholders and each
director shall be elected to serve until his successor shall be elected and
shall qualify. Directors shall be elected by a plurality of the votes of the
shares present in person or represented by proxy and entitled to vote on the
election of Directors at any annual or special meeting of stockholders. Such
election shall be by written ballot.

Section 3.3. Number. The number of Directors of the Corporation will be
at least one and not more than nineteen. The number of Directors authorized
will be fixed as the Board of Directors may from time to time designate, or if
no such designation has been made, the number of Directors will be the same as
the number of members of the initial Board of Directors as set forth in the
Certificate of Incorporation.

Section 3.4. Removal. Any Director may be removed, only for cause, at
any special meeting of stockholders by the affirmative vote of the holders of a
majority in number of all outstanding voting stock entitled to vote; provided
that notice of the intention to act upon such matter has been given in the
notice calling such meeting.

Section 3.5. Vacancies. Newly created directorships resulting from any
increase in the authorized number of Directors and any vacancies occurring in
the Board of Directors caused by death, resignation, retirement,
disqualification or removal from office of any Directors or otherwise, may be
filled by the vote of a majority of the Directors then in office, though less
than a quorum, or a successor or successors may be chosen at a special meeting
of the stockholders called for that purpose, and each successor Director so
chosen will hold office until whichever of the following occurs first: his
successor is elected and qualified, his resignation, his removal from office by
the stockholders or his death.

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Section 3.6. Place of Meetings. Meetings of the Board of Directors,
regular or special, may be held at such place within or without the State of
Delaware as may be fixed from time to time by the Board of Directors.

Section 3.7. Annual Meeting. The first meeting of each newly elected
Board of Directors will be held without further notice immediately following the
annual meeting of stockholders and at the same place, unless by unanimous
consent, the Directors then elected and serving change such time or place.

Section 3.8. Regular Meetings. Regular meetings of the Board of
Directors may be held without notice at such time and place as is from time to
time determined by resolution of the Board of Directors.

Section 3.9. Special Meetings. Special meetings of the Board of
Directors may be called by the Chairman of the Board or the Chief Executive
Officer on oral or written notice to each Director, given either personally, by
telephone, by telegram or by mail; special meetings will be called by the
Chairman of the Board, Chief Executive Officer, or Secretary in like manner and
on like notice on the written request of at least three Directors. The purpose
or purposes of any special meeting will be specified in the notice relating
thereto.

Section 3.10. Quorum. At all meetings of the Board of Directors the
presence of a majority of the number of Directors fixed by these Bylaws will be
necessary and sufficient to constitute a quorum for the transaction of business,
and the affirmative vote of at least a majority of the Directors present at any
meeting at which there is a quorum will be the act of the Board of Directors,
except as may be otherwise specifically provided by law, the Certificate of
Incorporation or these Bylaws. If a quorum is not present at any meeting of the
Board of Directors, the Directors present thereat may adjourn the meeting from
time to time without notice other than announcement at the meeting, until a
quorum is present.

Section 3.11. Interested Directors. No contract or transaction between
the Corporation and one or more of its Directors or officers, or between the
Corporation and any other corporation, partnership, association or other
organization in which one or more of the Corporation's Directors or officers are
directors or officers or have a financial interest, will be void or voidable
solely for this reason, solely because the Director or officer is present at or
participates in the meeting of the Board of Directors or committee thereof that
authorizes the contract or transaction, or solely because his or their votes are
counted for such purpose, if: (i) the material facts as to his relationship or
interest and as to the contract or transaction are disclosed or are known to the
Board of Directors or the committee, and the Board of Directors or committee in
good faith authorizes the contract or transaction by the affirmative vote of a
majority of the disinterested Directors, even though the disinterested Directors
be less than a quorum, (ii) the material facts as to his relationship or
interest and as to the contract or transaction are disclosed or are known to the
stockholders entitled to vote thereon, and the contract or transaction is
specifically approved in good faith by vote of the stockholders or (iii) the
contract or transaction is fair as to the Corporation as of the time it is
authorized, approved or ratified by the Board of Directors, a committee thereof
or the stockholders.

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<PAGE>

Common or interested directors may be counted in determining the presence of a
quorum at a meeting of the Board of Directors or of a committee that authorizes
the contract or transaction.

Section 3.12. Committees. The Board of Directors may, by resolution
passed by a majority of the entire Board, designate committees, each committee
to consist of two or more Directors of the Corporation, which committees will
have such power and authority and will perform such functions as may be provided
in such resolution. Such committee or committees will have such name or names
as may be designated by the Board and will keep regular minutes of their
proceedings and report the same to the Board of Directors when required.

Section 3.13. Action by Consent. Any action required or permitted to be
taken at any meeting of the Board of Directors or any committee of the Board of
Directors may be taken without such a meeting if a consent or consents in
writing, setting forth the action so taken, is signed by all the members of the
Board of Directors or such committee, as the case may be.

Section 3.14. Compensation of Directors. Directors will receive such
compensation for their services and reimbursement for their expenses as the
Board of Directors, by resolution, may establish; provided that nothing herein
contained will be construed to preclude any Director from serving the
Corporation in any other capacity and receiving compensation therefor.

ARTICLE IV

NOTICE
------

Section 4.1. Form of Notice. Whenever by law, the Certificate of
Incorporation or of these Bylaws, notice is to be given to any Director or
stockholder, and no provision is made as to how such notice will be given, such
notice may be given in writing, by mail, postage prepaid, addressed to such
Director or stockholder at such address as appears on the books of the
Corporation. Any notice required or permitted to be given by mail will be
deemed to be given at the time the same is deposited in the United States mails.

Section 4.2. Waiver. Whenever any notice is required to be given to any
stockholder or Director of the Corporation as required by law, the Certificate
of Incorporation or these Bylaws, a waiver thereof in writing signed by the
person or persons entitled to such notice, whether before or after the time
stated in such notice, will be equivalent to the giving of such notice.
Attendance of a stockholder or Director at a meeting will constitute a waiver of
notice of such meeting, except where such stockholder or Director attends for
the express purpose of objecting, at the beginning of the meeting, to the
transaction of any business on the ground that the meeting has not been lawfully
called or convened.

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ARTICLE V

OFFICERS AND AGENTS
-------------------

Section 5.1. In General. The officers of the Corporation will consist of
a Chief Executive Officer, Chief Financial Officer and Secretary and such other
officers as shall be elected by the Board of Directors or appointed by the Chief
Executive Officer (except the Board of Directors alone shall have authority to
elect a Chief Executive Officer). Any two or more offices may be held by the
same person.

Section 5.2. Election. The Board of Directors, at its first meeting
after each annual meeting of stockholders, will elect the officers, none of whom
need be a member of the Board of Directors.

Section 5.3. Other Officers and Agents. Except as set forth in Section
5.1 hereof, the Board of Directors and Chief Executive Officer may also elect
and appoint such other officers and agents as it or he deems necessary, who will
be elected and appointed for such terms and will exercise such powers and
perform such duties as may be determined from time to time by the Board or the
Chief Executive Officer.

Section 5.4. Compensation. The compensation of all officers and agents
of the Corporation will be fixed by the Board of Directors or any committee of
the Board, if so authorized by the Board.

Section 5.5. Term of Office and Removal. Each officer of the
Corporation will hold office until his death, his resignation or removal from
office, or the election and qualification of his successor, whichever occurs
first. Any officer or agent elected or appointed by the Board of Directors or
the Chief Executive Officer may be removed at any time, for or without cause, by
the affirmative vote of a majority of the entire Board of Directors or at the
discretion of the Chief Executive Officer (without regard to how the agent or
officer was elected), but such removal will not prejudice the contract rights,
if any, of the person so removed. If the office of any officer becomes vacant
for any reason, the vacancy may be filled by the Board of Directors or, in the
case of a vacancy in the office of officer other than Chief Executive Officer
and Chief Operating Officer, such vacancy may be filled by the Chief Executive
Officer.

Section 5.6. Employment and Other Contracts. The Board of Directors may
authorize any officer or officers or agent or agents to enter into any contract
or execute and deliver any instrument in the name or on behalf of the
Corporation, and such authority may be general or confined to specific
instances. The Board of Directors may, when it believes the interest of the
Corporation will best be served thereby, authorize executive employment
contracts that will have terms no longer than ten years and contain such other
terms and conditions as the Board of Directors deems appropriate. Nothing herein
will limit the authority of the Board of Directors to authorize employment
contracts for shorter terms.

Section 5.7. Chairman of the Board of Directors. If the Board of
Directors has elected a Chairman of the Board, he will preside at all meetings
of the stockholders and the Board of Directors. In addition, the Chairman of the
Board shall perform whatever duties and shall exercise all powers that are given
to him by the Board of Directors.

Section 5.8. Chief Executive Officer. The Chief Executive Officer will
be the chief executive officer of the Corporation and, subject to the control of
the Board of Directors, will

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<PAGE>

supervise and control all of the business and affairs of the Corporation. The
Chief Executive Officer shall have the authority to elect any officer of the
Corporation other than the Chief Executive Officer or President. He will, in the
absence of the Chairman of the Board, preside at all meetings of the
stockholders and the Board of Directors. The Chief Executive Officer will have
all powers and perform all duties incident to the office of Chief Executive
Officer and will have such other powers and perform such other duties as the
Board of Directors may from time to time prescribe. During the absence or
disability of the President, or if no President shall be elected, the Chief
Executive Officer will exercise the powers and perform the duties of President.

Section 5.9. Chief Operating Officer. The Chief Operating Officer, if
one shall be elected, will have responsibility for oversight of the
Corporation's operating and development activities. In the absence or
disability of the Chief Executive Officer and the Chairman of the Board, the
Chief Operating Officer will exercise the powers and perform the duties of the
Chief Executive Officer. The Chief Operating Officer will render to the
Directors whenever they may require it an account of the operating and
development activities of the Corporation and will have such other powers and
perform such other duties as the Board of Directors may from time to time
prescribe or as the Chief Executive Officer may from time to time delegate to
him.

Section 5.10. Chief Financial Officer. The Chief Financial Officer will
have principal responsibility for the financial operations of the Corporation.
The Chief Financial Officer will render to the Directors whenever they may
require it an account of the operating results and financial condition of the
Corporation and will have such other powers and perform such other duties as the
Board of Directors may from time to time prescribe or as the Chief Executive
Officer may from time to time delegate to him.

Section 5.11. Secretary. The Secretary will attend all meetings of the
stockholders and record all votes and the minutes of all proceedings in a book
to be kept for that purpose. The Secretary will perform like duties for the
Board of Directors and committees thereof when required. The Secretary will
give, or cause to be given, notice of all meetings of the stockholders and
special meetings of the Board of Directors. The Secretary will keep in safe
custody the seal of the Corporation. The Secretary will be under the
supervision of the Chief Executive Officer. The Secretary will have such other
powers and perform such other duties as the Board of Directors may from time to
time prescribe or as the Chief Executive Officer may from time to time delegate
to him.

Section 5.12. Bonding. The Corporation may secure a bond to protect the
Corporation from loss in the event of defalcation by any of the officers, which
bond may be in such form and amount and with such surety as the Board of
Directors may deem appropriate.

ARTICLE VI

CERTIFICATES REPRESENTING SHARES
--------------------------------

Section 6.1. Form of Certificates. Certificates, in such form as
may be determined by the Board of Directors, representing shares to which
stockholders are entitled will be delivered to each stockholder. Such
certificates will be consecutively numbered and will be entered in the stock
book

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<PAGE>

of the Corporation as they are issued. Each certificate will state on the
face thereof the holder's name, the number, class of shares, and the par value
of such shares or a statement that such shares are without par value. They will
be signed by the Chief Executive Officer or Chief Operating Officer and the
Secretary or an Assistant Secretary, and may be sealed with the seal of the
Corporation or a facsimile thereof. If any certificate is countersigned by a
transfer agent, or an assistant transfer agent or registered by a registrar,
either of which is other than the Corporation or an employee of the Corporation,
the signatures of the Corporation's officers may be facsimiles. In case any
officer or officers who have signed, or whose facsimile signature or signatures
have been used on such certificate or certificates, ceases to be such officer or
officers of the Corporation, whether because of death, resignation or otherwise,
before such certificate or certificates have been delivered by the Corporation
or its agents, such certificate or certificates may nevertheless be adopted by
the Corporation and be issued and delivered as though the person or persons who
signed such certificate or certificates or whose facsimile signature or
signatures have been used thereon had not ceased to be such officer or officers
of the Corporation.

Section 6.2. Lost Certificates. The Board of Directors may direct
that a new certificate be issued in place of any certificate theretofore issued
by the Corporation alleged to have been lost or destroyed, upon the making of an
affidavit of that fact by the person claiming the certificate to be lost or
destroyed. When authorizing such issue of a new certificate, the Board of
Directors, in its discretion and as a condition precedent to the issuance
thereof, may require the owner of such lost or destroyed certificate, or his
legal representative, to advertise the same in such manner as it may require
and/or to give the Corporation a bond, in such form, in such sum, and with such
surety or sureties as it may direct as indemnity against any claim that may be
made against the Corporation with respect to the certificate alleged to have
been lost or destroyed. When a certificate has been lost, apparently destroyed
or wrongfully taken, and the holder of record fails to notify the Corporation
within a reasonable time after such holder has notice of it, and the Corporation
registers a transfer of the shares represented by the certificate before
receiving such notification, the holder of record is precluded from making any
claim against the Corporation for the transfer of a new certificate.

Section 6.3. Transfer of Shares. Shares of stock will be
transferable only on the books of the Corporation by the holder thereof in
person or by such holder's duly authorized attorney. Upon surrender to the
Corporation or the transfer agent of the Corporation of a certificate
representing shares duly endorsed or accompanied by proper evidence of
succession, assignment or authority to transfer, it will be the duty of the
Corporation or the transfer agent of the Corporation to issue a new certificate
to the person entitled thereto, cancel the old certificate and record the
transaction upon its books.

Section 6.4. Registered Stockholders. The Corporation will be
entitled to treat the holder of record of any share or shares of stock as the
holder in fact thereof and, accordingly, will not be bound to recognize any
equitable or other claim to or interest in such share or shares on the part of
any other person, whether or not it has express or other notice thereof, except
as otherwise provided by law.

11
<PAGE>

ARTICLE VII

INDEMNIFICATION
---------------

Section 7.1. Indemnification of Directors and Officers. (a) The
Corporation (i) shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Corporation) by reason of the
fact that such person is or was, at any time prior to or during which this
Article VII is in effect, a director of officer of the Corporation, or is or
was, at any time prior to or during which this Article VII is in effect, serving
at the request of the Corporation as a director or officer of another
corporation partnership, joint venture, trust, other enterprises or employee
benefit plan and (ii) upon a determination by the Board of Directors that
indemnification is appropriate, the Corporation may indemnify any person who was
or is a party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceedings, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the Corporation) by
reason of the fact that such person is or was, at any time prior to or during
which this Article VII is in effect, an employee or agent of the Corporation or
at the request of the Corporation was serving as an employee or agent of any
other corporation, partnership, joint venture, trust, other enterprise or
employee benefit plan, in the case of (i) and (ii) against reasonable expenses
(including attorneys' fees), judgments, fines, penalties, amounts paid in
settlement and other liabilities actually and reasonably incurred by such person
in connection with such action, suit or proceeding if such person acted in good
faith and in a manner he reasonably believed to be in or not opposed to the best
interests of the Corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe that his conduct was unlawful.
The termination of any action, suit or proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that such person did not act in good
faith and in a manner which he reasonably believed to be in or not opposed to
the best interests of the Corporation, and, with respect to any criminal action
or proceeding, had reasonable cause to believe that his conduct was unlawful.

(b) The Corporation (i) shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that such person is or was, at any
time prior to or during which this Article VII is in effect, a director or
officer of the Corporation, or is or was, at any time prior to or during which
this Article VII is in effect, serving at the request of the Corporation as a
director or officer of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise and (ii) upon a determination by the
Board of Directors that indemnification is appropriate, the Corporation may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action or suit by or in the right of the
Corporation to procure a judgment in its favor by reason of the fact that such
person is or was, at any time prior to or during which this Article VII is in
effect, an employee or agent of the Corporation or at the request of the
Corporation was serving as an employee or agent of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise, in
the case of (i) and (ii) against expenses (including attorneys' fees), actually
and reasonably incurred by such person in connection with the defense or
settlement of such action or suit if such person acted in

12
<PAGE>

good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Corporation; provided, that no indemnification shall be
made under this subsection (b) in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation
unless and only to the extent that the Delaware Court of Chancery, or other
court of appropriate jurisdiction, shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances of
the case, such person is fairly and reasonably entitled to indemnity of such
expenses which the Delaware Court of Chancery, or other court of appropriate
jurisdiction, shall deem proper.

(c) Any indemnification under subsections (a) or (b) (unless ordered
by the Delaware Court of Chancery or other court of appropriate jurisdiction)
shall be made by the Corporation only as authorized in the specific case upon a
determination that indemnification of such person is proper in the circumstances
because he has met the applicable standard of conduct set forth in subsections
(a) and (b). Such determination shall be made (1) by the Board of Directors by
a majority vote of a quorum consisting of directors not parties to such action,
suit or proceeding; or (2) if such a quorum is not obtainable, or, even if
obtainable a quorum of disinterested directors so directs, by independent legal
counsel, in written opinion, selected by the Board of Directors; or (3) by the
Stockholders. In the event a determination is made under this subsection (c)
that the director, officer, employer or agent has met the applicable standard of
conduct as to some matters but not as to others, amounts to be indemnified may
be reasonably prorated.

(d) Expenses incurred by a person who is or was a director or officer
of the Corporation in appearing at, participating in or defending any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, shall be paid by the Corporation at
reasonable intervals in advance of the final disposition of such action, suit or
proceeding upon receipt of an undertaking by or on behalf of the director or
officer to repay such amount if it shall ultimately be determined that he is not
entitled to be indemnified by the Corporation as authorized by this Article VII.
In addition, the Corporation shall pay or reimburse expenses incurred by any
person who is or was a director or officer of the Corporation in connection with
such person's appearance as a witness or other participant in a proceeding in
which such person or the Corporation is not a named party to such proceeding,
provided that such appearance or participation is on behalf of the Corporation
or by reason of his capacity as a director or officer, or former director or
officer of the Corporation.

(e) If in a suit or proceeding for indemnification required under this
Article VII of a director or officer, or former director or officer, of the
Corporation of any of its affiliates, a court of competent jurisdiction
determines that such person is entitled to indemnification under this Article
VII, the court shall award, and the Corporation shall pay, to such person the
expenses incurred in securing such judicial determination.

(f) It is the intention of the Corporation to indemnify the persons
referred to in this Article VII to the fullest extent permitted by law and with
respect to any action, suit or proceeding arising from events which occur at any
time prior to or during which this Article VII is in effect. The
indemnification and advancement of expenses provided by this Article VII not be
deemed exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be or

13
<PAGE>

become entitled under any law, the Certificate of Incorporation, these Bylaws,
agreement, the vote of stockholders or disinterested directors or otherwise, or
under any policy or policies of insurance purchased and maintained by the
Corporation on behalf of any such person, both as to action in his official
capacity and as to action in another capacity while holding such office, and
shall continue as to a person who has ceased to be a director, officer, employee
or agent and shall inure to the benefit of the heirs, executors and
administrators of such person.

(g) The indemnification provided by this Article VII shall be subject
to all valid and applicable laws, and, in the event this Article VII or any
other provisions hereof or the indemnification contemplated hereby are found to
be inconsistent with or contrary to any such valid laws, the latter shall be
deemed to control and this Article VII shall be regarded as modified
accordingly, and, as so modified, to continue in full force and effect.

ARTICLE VIII

GENERAL PROVISIONS
------------------

Section 8.1. Dividends. Dividends upon the outstanding shares of
the Corporation, subject to the provisions of the Certificate of Incorporation,
if any, may be declared by the Board of Directors at any regular or special
meeting. Dividends may be declared and paid in cash, in property, or in shares
of the Corporation, subject to the provisions of the General Corporation Law of
the State of Delaware and the Certificate of Incorporation. The Board of
Directors may fix in advance a record date for the purpose of determining
stockholders entitled to receive payment of any dividend, such record date will
not precede the date upon which the resolution fixing the record date is
adopted, and such record date will not be more than sixty days prior to the
payment date of such dividend. In the absence of any action by the Board of
Directors, the close of business on the date upon which the Board of Directors
adopts the resolution declaring such dividend will be the record date.

Section 8.2. Reserves. There may be created by resolution of the
Board of Directors out of the surplus of the Corporation such reserve or
reserves as the Directors from time to time, in their discretion, deem proper to
provide for contingencies, or to equalize dividends, or to repair or maintain
any property of the Corporation, or for such other purpose as the Directors may
deem beneficial to the Corporation, and the Directors may modify or abolish any
such reserve in the manner in which it was created. Surplus of the Corporation
to the extent so reserved will not be available for the payment of dividends or
other distributions by the Corporation.

Section 8.3. Telephone and Similar Meetings. Stockholders,
directors and committee members may participate in and hold meetings by means of
conference telephone or similar communications equipment by which all persons
participating in the meeting can hear each other. Participation in such a
meeting will constitute presence in person at the meeting, except where a person
participates in the meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business on the ground that
the meeting has not been lawfully called or convened.

14
<PAGE>

Section 8.4. Books and Records. The Corporation will keep correct
and complete books and records of account and minutes of the proceedings of its
stockholders and Board of Directors, and will keep at its registered office or
principal place of business, or at the office of its transfer agent or
registrar, a record of its stockholders, giving the names and addresses of all
stockholders and the number and class of the shares held by each.

Section 8.5. Fiscal Year. The fiscal year of the Corporation will be
fixed by resolution of the Board of Directors.

Section 8.6. Seal. The Corporation may have a seal, and the seal
may be used by causing it or a facsimile thereof to be impressed or affixed or
reproduced or otherwise. Any officer of the Corporation will have authority to
affix the seal to any document requiring it.

Section 8.7. Insurance. The Corporation may at the discretion of
the Board of Directors purchase and maintain insurance on behalf of the
Corporation and any person whom it has the power to indemnify pursuant to law,
the Certificate of Incorporation, these Bylaws or otherwise.

Section 8.8. Resignation. Any director, officer or agent may resign
by giving written notice to the President or the Secretary. Such resignation
will take effect at the time specified therein or immediately if no time is
specified therein. Unless otherwise specified therein, the acceptance of such
resignation will not be necessary to make it effective.

Section 8.9. Amendment of Bylaws. Other than as set forth herein,
these Bylaws may be altered, amended, or repealed at any meeting of the Board of
Directors at which a quorum is present, by the affirmative vote of a majority of
the Directors present at such meeting.

Section 8.10. Invalid Provisions. If any part of these Bylaws is
held invalid or inoperative for any reason, the remaining parts, so far as
possible and reasonable, will be valid and operative.

Section 8.11. Relation to the Certificate of Incorporation. These
Bylaws are subject to, and governed by, the Certificate of Incorporation of the
Corporation as amended from time to time.

<PAGE>

EXHIBIT 10.2

QUANTA SERVICES, INC.
1997 STOCK OPTION PLAN
----------------------

SECTION 1. PURPOSE OF PLAN. The purpose of the Quanta Services, Inc. 1997
Stock Option Plan (the "Plan") shall be to provide for the grant to employees,
officers, directors, and consultants of the Company options to acquire Stock of
the Company.

SECTION 2. DEFINITIONS. Unless the context clearly indicates otherwise,
the following terms, when used in the Plan, shall have the meanings set forth in
this section.

a. "Board" shall mean the Board of Directors of the Company.

b. "Cause" shall mean (i) Grantee's willful, material and irreparable
breach of any agreement that governs the terms and conditions of his or her
employment; (ii) Grantee's gross negligence or gross incompetence in the
performance or intentional nonperformance (continuing for ten days after
receipt of written notice of such negligence) of any of Grantee's material
duties and responsibilities; (iii) Grantee's dishonesty, fraud or misconduct
with respect to the business or affairs of the Company or any Subsidiary; (iv)
Grantee's conviction of a felony crime; or (v) chronic alcohol abuse or illegal
drug abuse by Grantee.

c. A "Change in Control" of the Company shall occur when: (i) any "person"
(as such term is used in Sections 13(d) and 14(d) of the Exchange Act) is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing 30
percent or more of the combined voting power of the Company's then outstanding
securities; (ii) as a result of, or in connection with, any tender offer or
exchange offer, merger, or other business combination (a "Transaction"), the
persons who were directors of the Company immediately before the Transaction
shall cease to constitute a majority of the Board of Directors of the Company or
any successor to the Company; (iii) the Company is merged or consolidated with
another corporation and as a result of the merger or consolidation less than 75
percent of the outstanding voting securities of the surviving or resulting
corporation shall then be owned in the aggregate by the former stockholders of
the Company; (iv) a tender offer or exchange offer is made and consummated for
the ownership of securities of the Company representing 50 percent or more of
the combined voting power of the Company's then outstanding voting securities;
or (v) the Company transfers substantially all of its assets to another
corporation which is not controlled by the Company.

d. "Code" shall mean the Internal Revenue Code of 1986 as it may be
amended from time to time.

e. "Committee" shall mean any Committee of two or more Directors that may
be designated by the Board to administer the Plan, all of which Committee's
members shall be Nonemployee Directors. Additionally, if any Options are
intended to qualify as performance-based compensation under Section 162(m)(4)(C)
of the Code, all members of the Committee granting such Options shall be
"outside directors" within the meaning of that Code section.

f. "Consultant" shall mean any person who is engaged to perform services
for the Company or its Subsidiaries, other than as an Employee or Director.

1997 STOCK OPTION PLAN -- Page 1
<PAGE>

g. "Control Person" shall mean any person who, as of the date of grant of
an Option, owns (within the meaning of Section 422(b)(6) of the Code) stock
possessing more than ten percent of the total combined voting power or value of
all classes of stock of the Company or of any parent or Subsidiary.

h. "Company" shall mean Quanta Services, Inc., a Delaware corporation.

i. "Director" shall mean any member of the Board.

j. "Employee" shall mean any full-time employee of the Company or any
Subsidiary (including Directors who are otherwise employed on a full-time basis
by the Company or any Subsidiary).

k. "Exchange Act" shall mean the Securities Exchange Act of 1934 as it may
be amended from time to time.

l. "Fair Market Value" of the Stock on a given date shall be based upon:
(i) if the Stock is listed on a national securities exchange or quoted in an
interdealer quotation system, the last sales price or, if such price is
unavailable, the average of the closing bid and asked prices per share of the
Stock on such date (or, if there was no trading or quotation in the Stock on
such date, on the next preceding date on which there was trading or quotation)
as provided by one of such organizations; or (ii) if the Stock is not listed on
a national securities exchange or quoted in an interdealer quotation system, the
value as determined by the Board in good faith in its sole discretion; provided,
however, that the "Fair Market Value" of Stock on the date on which shares of
Stock are first issued and sold pursuant to a registration statement filed with
and declared effective by the SEC (the "Registration Statement") shall be the
Initial Public Offering price of the shares so issued and sold, as set forth in
the first final prospectus used in such offering.

m. "Grantee" shall mean a person granted an Option under the Plan.

n. "Initial Public Offering" shall mean the initial public offering of
shares of Stock in a firm commitment underwriting registered with the SEC in
compliance with the provisions of the 1933 Act.

o. "ISO" shall mean an Option granted pursuant to the Plan to purchase
shares of the Stock and intended to qualify as an incentive stock option under
Section 422 of the Code, as now or hereafter constituted.

p. "1933 Act" shall mean the Securities Act of 1933, as it may be amended
from time to time.

q. "Nonemployee Director" shall mean a director who:

(i) Is not currently an officer (as defined in Rule 16a-1(f) under the
Exchange Act) of the Company or a Subsidiary, or otherwise currently
employed by the Company or a Subsidiary;

(ii) Does not receive compensation, either directly or indirectly,
from the Company or a Subsidiary, for services rendered as a consultant or
in any capacity other than as a director, except for an amount that does
not exceed the dollar amount for which disclosure would be required
pursuant to Item 404(a) of SEC Regulation S-K;

(iii) Does not possess an interest in any other transaction for which
disclosure by the Company would be required pursuant to Item 404(a) of SEC
Regulation S-K; and

1997 STOCK OPTION PLAN -- Page 2
<PAGE>

(iv) Is not engaged in a business relationship for which disclosure by
the Company would be required pursuant to Item 404(b) of SEC
Regulation S-K.

r. "NQSO" shall mean an Option granted pursuant to the Plan to purchase
shares of the Stock that is not an ISO.

s. "Option" or "Options" shall refer to one or more NQSOs and ISOs issued
under and subject to the Plan.

t. "Parent" shall mean any parent corporation as defined in Section 424 of
the Code.

u. "SEC" means the United States Securities and Exchange Commission.

v. "Plan" shall mean the Quanta Services, Inc. 1997 Stock Option Plan as
set forth herein and as amended from time to time.

w. "Stock" shall mean shares of the common stock, par value $.00001 per
share, of the Company.

x. "Subsidiary" shall mean any corporation with respect to which the
Company owns, directly or indirectly, 50 percent or more of the total combined
voting power of all classes of stock of such corporation.

SECTION 3. SHARES OF STOCK SUBJECT TO THE PLAN. Subject to the provisions
of Section 10 hereof, the total amount of Stock with respect to which Options
may be granted under the Plan shall not exceed the greater of (i) 2,380,850
shares (subject to adjustment pursuant to Section 10 hereof) and (ii)15 percent
of the total number of shares of Stock outstanding from time to time.
Notwithstanding the foregoing, the total amount of Stock with respect to which
ISOs may be granted under the Plan shall not exceed 2,380,850 shares. Moreover,
the total amount of Stock with respect to which Options may be granted under the
Plan to any Grantee during the term of the Plan shall not exceed 1,000,000
shares. Stock issuable under the Plan may be authorized but unissued shares or
reacquired shares of Stock. If, prior to exercise, any Options are forfeited,
lapse, or terminate for any reason, the Stock covered thereby shall again be
available for Option grants under the Plan.

SECTION 4. ADMINISTRATION OF THE PLAN. The Plan shall be administered by
the Committee. Subject to the express provisions of the Plan, the Committee
shall have the authority to interpret the Plan, to prescribe, amend, and rescind
rules and regulations relating to the Plan, to determine the terms and
provisions of stock option agreements thereunder, and to make all other
determinations necessary or advisable for the administration of the Plan. Any
controversy or claim arising out of or related to the Plan or the Options
granted thereunder shall be determined unilaterally by, and at the sole
discretion of, the Committee. To the extent necessary to comply with Rule 16b-3
under the Exchange Act, determinations concerning Options granted to any person
who is a Director or officer or otherwise subject to Section 16 of the Exchange
Act shall be made by the Committee.

SECTION 5. TYPES OF OPTIONS. Options granted under the Plan may be of two
types: ISOs or NQSOs. The Committee shall have the authority and discretion to
grant to an eligible Employee either ISOs, NQSOs, or both but shall clearly
designate the nature of each Option at the time of grant. Grantees who are not
Employees of the Company or a Subsidiary on the date an Option is granted shall
receive only NQSOs.

SECTION 6. GRANT OF OPTIONS TO EMPLOYEES AND CONSULTANTS.

1997 STOCK OPTION PLAN -- Page 3
<PAGE>

(a) Employees and Consultants of the Company and its Subsidiaries shall be
eligible to receive Options under the Plan.

(b) The exercise price per share of Stock subject to an Option granted to
an Employee or Consultant shall be determined by the Committee; provided,
however, that the exercise price of each share subject to an Option shall be not
less than 100 percent of the Fair Market Value of a share of the Stock on the
date such Option is granted, or, in the case of an ISO granted to a Control
Person, not less than 110 percent of such Fair Market Value.

(c) The term of each Option granted to an Employee or Consultant shall be
determined by the Committee, provided that no ISO shall be exercisable more than
ten years from the date of grant of the Option and further provided that no ISO
granted to a Control Person shall be exercisable more than five years from the
date of grant of the Option.

(d) The Committee shall determine and designate from time to time Employees
or Consultants who are to be granted Options, the nature of each Option granted
and the number of shares of Stock subject to each such Option.

(e) Notwithstanding any other provisions hereof, the aggregate Fair Market
Value (determined at the time the ISO is granted) of the Stock with respect to
which ISOs are exercisable for the first time by any Employee during any
calendar year under all plans of the Company and any Parent or Subsidiary
corporation shall not exceed $100,000. To the extent the limitation set forth in
the preceding sentence is exceeded, the Options with respect to such excess
shall be treated as NQSOs.

(f) The Committee, in its sole discretion, shall determine whether any
Option granted to an Employee or Consultant shall become exercisable in one or
more installments and shall specify the installment dates. The Committee may
also make such other provisions, not inconsistent with the terms of this Plan,
as it may deem desirable, including such provisions as it may deem necessary to
qualify any ISO under the provisions of Section 422 of the Code. Without
limitation of the foregoing, the Committee may, in its discretion, provide that
Options shall immediately become exercisable upon (i) the death of an Employee
or Consultant while in the employ of the Company or any Subsidiary or (ii) a
Change in Control.

(g) The Committee may, at any time, grant new or additional options to any
eligible Employee or Consultant who has previously received Options under the
Plan or options under other plans, whether such prior Options or other options
are still outstanding, have been exercised previously in whole or in part, or
have been canceled. The exercise price of such new or additional Options may be
established by the Committee, subject to Section 6(b) hereof, without regard to
such previously granted Options or other options.

SECTION 7. GRANTS OF OPTIONS TO NONEMPLOYEE DIRECTORS.

(a) Nonemployee Directors of the Company shall be eligible to receive
Options under the Plan only pursuant to the provisions of this Section 7. Each
individual who agrees to become a Nonemployee Director prior to the filing of
the Registration Statement covering the Initial Public Offering shall receive,
without the exercise of the discretion of any person, an NQSO under the Plan
relating to the purchase of 10,000 shares of Stock. Each individual who agrees
to become a Nonemployee Director between the filing and effective date of the
Registration Statement covering the Initial Public Offering shall receive,
without the exercise of the discretion of any person, an NQSO under the Plan
relating to the purchase of 10,000 shares of stock at

1997 STOCK OPTION PLAN -- Page 4
<PAGE>

an exercise price equal to the Initial Public Offering price per share.
Thereafter, each individual who agrees to become a Nonemployee Director within
six months following (i) the effective date of the Registration Statement
covering the Initial Public Offering or (ii) an annual meeting of the Company's
stockholders shall receive, without the exercise of the discretion of any
person, an NQSO under the Plan relating to the purchase of 10,000 shares of
Stock. In addition, on the day after the first annual meeting of stockholders
next following the date of the Initial Public Offering, and the date after each
subsequent annual meeting, each person who is a continuing Nonemployee Director
on any such date shall receive, without the exercise of the discretion of any
person, an NQSO under the Plan relating to the purchase of 5,000 shares of
Stock, and each person who is a new, first-time Nonemployee Director on any such
date and who became a Nonemployee Director more than six months following (i)
the effective date of the Registration Statement covering the Initial Public
Offering or (ii) the immediately preceding annual meeting of the Company's
stockholders shall receive, without the exercise of the discretion of any
person, an NQSO under the Plan relating to the purchase of 10,000 shares of
Stock. In the event that there are not sufficient shares available under the
Plan to allow for the grant to each Nonemployee Director of an NQSO for the
number of shares provided herein, each Nonemployee Director shall receive an
NQSO for his pro rata share of the total number of shares of Stock available
under the Plan.

(b) The exercise price of each share of Stock subject to an Option granted
to a Nonemployee Director shall equal the Fair Market Value of a share of Stock
on the date such Option is granted. Payment of the exercise price for the shares
being purchased shall be made in cash.

(c) Each Option granted to a Nonemployee Director shall become exercisable
six months from, and shall have a term of ten (10) years from, the date of
Option grant, or, if later, the date the Grantee becomes a Nonemployee Director.
Notwithstanding the exercise period of any Option granted to a Nonemployee
Director, all such Options shall immediately become exercisable upon (i) the
death of a Nonemployee Director while serving as such or (ii) a Change in
Control.

SECTION 8. EXERCISE OF OPTIONS.

(a) A Grantee shall exercise an Option by delivery of written notice to
the Company setting forth the number of shares with respect to which the Option
is to be exercised, together with cash, certified check, bank draft, or postal
or express money order payable to the order of the Company for an amount equal
to the Option price of such shares and any income tax required to be withheld.
The Committee may, in its sole discretion, permit a Grantee to pay all or a
portion of the exercise price by a simultaneous sale of the shares of Stock to
be issued pursuant to such exercise pursuant to a brokerage or similar
arrangement.

(b) Except as provided pursuant to Section 9(a) hereof, no Option granted
to an Employee or Consultant shall be exercised unless at the time of such
exercise the Grantee is then an Employee or Consultant of the Company or a
Subsidiary.

(c) Except as provided in Section 9(a) hereof, no Option granted to a
Nonemployee Director shall be exercised unless at the time of such exercise the
Grantee is then a Nonemployee Director.

(d) Before the Company issues Stock to a Grantee pursuant to the exercise
of an NQSO, the Company shall have the right to require that the Grantee make
such provision, or furnish the Company such authorization, necessary or
desirable so that the Company may satisfy its obligation under applicable income
tax laws to withhold income or other taxes due upon or incident to such
exercise.

1997 STOCK OPTION PLAN -- Page 5
<PAGE>

SECTION 9. EXERCISE OF OPTIONS UPON TERMINATION.

(a) Subject to Section 9 (c) hereof, upon the termination of a Grantee's
relationship with the Company and its Subsidiaries, the period during which such
Grantee may exercise any outstanding and then exercisable installments of his
Options shall not exceed (i) if such termination is due to death or permanent
and total disability (within the meaning of Section 22(e)(3) of the Code), one
year from the date of such termination, and (ii) in all other cases, three
months (six months for Nonemployee Directors) from the date of such termination,
provided, however, that in no event shall the period extend beyond the
expiration of the Option term. Notwithstanding the foregoing, all Options shall
immediately terminate upon a termination of a Grantee's employment if the
Committee determines, in its sole discretion, that such termination is for
Cause.

(b) In no event shall any Option be exercisable for more than the maximum
number of shares that the Grantee was entitled to purchase at the date of
termination of the relationship with the Company and its Subsidiaries; provided,
however, that in the case of Options granted prior to the Initial Public
Offering to a Grantee who at no time prior to the date of termination of his
relationship with the Company and its Subsidiaries was subject to the provisions
of Section 16(b) of the Exchange Act, any member of the Board who had been the
Grantee's immediate or ultimate supervisor prior to the Initial Public Offering
may, in the sole discretion of such Board member, accelerate the exercisability
of all or a portion of such Option which is not then otherwise exercisable if
(i) such Grantee is terminated by the Company or a Subsidiary without Cause or
(ii) the Subsidiary employing such Grantee is sold.

(c) The Committee may, in its discretion, extend the period of
exercisability set forth in clauses (i) and (ii) in paragraph (a) above;
provided, however, that such period may not be extended for Options granted to
Nonemployee Directors.

(d) Subject to Section 9(b) hereof, the sale of any Subsidiary shall be
treated as a termination of employment with respect to any Grantee employed by
such Subsidiary.

(e) Subject to the foregoing, in the event of a Grantee's death, Options
may be exercised by the Grantee's legal representative.

SECTION 10. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. If the Company
shall effect a subdivision or consolidation of shares or other increase or
reduction of shares of Stock outstanding without receiving compensation therefor
in money, services or property, or any other change in corporate capital
structure shall occur, then (a) the number of shares subject to outstanding
Options shall be proportionately adjusted (without a change in the total price
applicable to any such Option, but with a corresponding adjustment in the price
per share), and (b) the number of shares available for issuance under Sections 3
and 7(a) shall be proportionately adjusted.

SECTION 11. RESTRICTIONS ON ISSUING SHARES. No Stock shall be issued or
transferred under the Plan unless and until all applicable legal requirements
have been compiled with to the satisfaction of the Committee. The Committee
shall have the right to condition any Option on the Grantee's undertaking in
writing to comply with such restrictions on any subsequent disposition of the
shares of Stock issued or transferred thereunder as the Committee shall deem
necessary or advisable as a result of any applicable law, regulation, official
interpretation thereof, or underwriting agreement, and certificates representing
such shares may be legended to reflect any such restrictions.

1997 STOCK OPTION PLAN -- Page 6
<PAGE>

SECTION 12. OPTION AGREEMENTS; MISCELLANEOUS TERMS.

(a) Each Option shall be evidenced by a written agreement containing such
terms and conditions, not inconsistent with the Plan, as the Committee shall
approve. The terms and provisions of such agreements may vary among Grantees and
among different Options granted to the same Grantee.

(b) The grant of an Option in any year shall not give the Grantee any right
to similar grants in future years, any right to continue such Grantee's
employment relationship with the Company or its Subsidiaries, or, until such
Option is exercised and share certificates are issued, any rights as a
Stockholder of the Company. All Grantees shall remain subject to discharge to
the same extent as if the Plan were not in effect.

(c) No Grantee, and no beneficiary or other persons claiming under or
through the Grantee, shall have any right, title, or interest by reason of any
Option to any particular assets of the Company or its Subsidiaries or any shares
of Stock allocated or reserved for the purposes of the Plan or subject to any
Option except as set forth herein. The Company shall not be required to
establish any fund or make any other segregation of assets to assure the payment
of any Option.

(d) No Option shall be subject to anticipation, sale, assignment, pledge,
encumbrance, or charge except by will or the laws of descent and distribution,
and an Option shall be exercisable during the Grantee's lifetime only by the
Grantee.

(e) The issuance of shares of Stock to Grantees or to their legal
representatives shall be subject to any applicable taxes and other laws or
regulations of the United States or of any state having jurisdiction thereof.

SECTION 13. AMENDMENT AND TERMINATION. The Board may, at any time, alter,
amend, suspend, discontinue, or terminate the Plan; provided, however, that no
such action shall adversely affect the rights of Grantees to Options previously
granted hereunder and provided further that any stockholder approval necessary
or desirable in order to comply with Rule 16b-3 under the Exchange Act or with
Section 422 of the Code (or other applicable law or regulation) shall be
obtained in the manner required therein.

SECTION 14. EFFECTIVE DATE OF PLAN. The Plan shall be effective upon its
adoption by the Board and it approval by the Company's stockholders. No ISO may
be granted more than ten years after such effective date.

1997 STOCK OPTION PLAN -- Page 7

<PAGE>

EXHIBIT 23.1

CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS

As independent public accountants, we hereby consent to the use of our reports
dated December 5, 1997, on the financial statements of the following
businesses included in or made a part of this registration statement on Form
S-1: PAR Electrical Contractors, Inc.; Quanta Services, Inc.; Union Power
Construction Company; TRANS TECH Electric, Inc.; and Potelco, Inc.; and to all
references to our firm included in this registration statement.

ARTHUR ANDERSEN LLP

Houston, Texas

January 23, 1998

<PAGE>

EXHIBIT 23.10

CONSENT OF PROPOSED DIRECTOR

The undersigned hereby consents to being named as a proposed member of the
Board of Directors of Quanta Services, Inc. (the "Registrant") in the
Prospectus constituting a part of the Registration Statement on Form S-1 of
the Registrant filed under the Securities Act of 1933, as amended.

/s/ James R. Ball
_____________________________________

James R. Ball

January 21, 1998