AMEND.NO.2 TO NOTE PURCHASE AGREEMENT

EXHIBIT 10.40

AMENDMENT NO. 2
TO
NOTE PURCHASE AGREEMENT

This AMENDMENT NO. 2 TO NOTE PURCHASE AGREEMENT (this "Amendment"),
dated as of December 20, 2002, is made by and among each of QUANTA SERVICES,
INC., a Delaware corporation (the "Company") and each of the institutions listed
on Annex 1 hereto (such institutions being collectively referred to as the
"Noteholders").

BACKGROUND

1. The Company and certain of the Noteholders are parties to that
certain Note Purchase Agreement (the "Original Note Purchase Agreement"), dated
as of March 1, 2000, that provides, among other things, for the sale by the
Company and the purchase by certain of the Noteholders of up to (a)
Seventy-Three Million Dollars ($73,000,000) in aggregate principal amount of the
Company's 8.46% Series 2000-A Senior Secured Notes, Tranche 1, due March 1, 2005
(the "Series A-1 Notes"), (b) Forty-One Million Five Hundred Thousand Dollars
($41,500,000) in aggregate principal amount of the Company's 8.55% Series 2000-A
Senior Secured Notes, Tranche 2, due March 1, 2007 (the "Series A-2 Notes") and
(c) Thirty-Five Million Five Hundred Thousand Dollars ($35,500,000) in aggregate
principal amount of the Company's 8.61% Series 2000-A Senior Secured Notes,
Tranche 3, due March 1, 2010 (the "Series A-3 Notes" and, collectively with the
Series A-1 Notes and the Series A-2 Notes, the "Series A Notes"). All of the
Series A Notes are currently outstanding.

2. The Original Note Purchase Agreement has been supplemented in
certain respects pursuant to a First Supplement to Note Purchase Agreement (the
"First Supplement" and, together with the Original Note Purchase Agreement, the
"Supplemented Note Purchase Agreement"), dated as of September 1, 2000, by and
among the Company and certain of the Noteholders, that provides, among other
things, for the sale by the Company and the purchase by certain of the
Noteholders of up to (a) Thirty Million Dollars ($30,000,000) in aggregate
principal amount of the Company's 8.01% Series 2000-B Senior Secured Notes,
Tranche 1, due September 1, 2005 (the "Series B-1 Notes"), (b) Five Million
Dollars ($5,000,000) in aggregate principal amount of the Company's 8.06% Series
2000-B Senior Secured Notes, Tranche 2, due September 1, 2006 (the "Series B-2
Notes") and (c) Twenty-Five Million Dollars ($25,000,000) in aggregate principal
amount of the Company's 8.29% Series 2000-B Senior Secured Notes, Tranche 3, due
September 1, 2010 (the "Series B-3 Notes" and, collectively with the Series B-1
Notes and the Series B-2 Notes, the "Series B Notes" and the Series B Notes,
together with the Series A Notes, the "Notes"). All of the Series B Notes are
currently outstanding.

3. The Supplemented Note Purchase Agreement and the Notes were
amended in certain respects pursuant to that Amendment No. 1 to Note Purchase
Agreement, dated as of August 12, 2002 among the Company and the Noteholders
("Amendment No. 1" and the Supplemented Note Purchase Agreement as amended by
Amendment No. 1, the "Existing Note Purchase Agreement").

4. The Company and the Noteholders wish to amend the Existing
Note Purchase Agreement.

QUANTA SERVICES, INC. AMENDMENT NO. 2 TO NOTE PURCHASE AGREEMENT

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NOW, THEREFORE, in order to induce the Noteholders to amend the
Existing Note Purchase Agreement and for other good and valuable consideration
(the receipt and sufficiency of which are hereby acknowledged), the Company
agrees with the Noteholders as follows:

SECTION 1. DEFINED TERMS.

All capitalized terms used, but not specifically defined, in this
Amendment have the respective meanings assigned to them in the Existing Note
Purchase Agreement.

SECTION 2. WARRANTIES AND REPRESENTATIONS.

The Company warrants and represents to each Noteholder that as of the
date of this Amendment and as of the Second Amendment Effective Date (as defined
in Section 3):

2.1 CORPORATE ORGANIZATION AND AUTHORITY. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, and is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which such
qualification is required by law, other than those jurisdictions as to which the
failure to be so qualified or in good standing could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect. The Company
has the corporate power and authority to transact the business it transacts and
proposes to transact, to execute and deliver this Amendment and to perform the
provisions hereof.

2.2 NO MATERIAL ADVERSE CHANGE. Since December 31, 2001, except as
disclosed in writing to the Noteholders, there has been no change in the
business, operations, affairs, financial condition, assets or properties of the
Company except for

(a) changes in general, economic, market and industry
conditions that are generally applicable to the Company and all other
Persons that are in the same or similar businesses as the Company and
are similarly situated, and

(b) changes in the ordinary course of business,

that in the aggregate for all such changes, could not reasonably be expected to
have a Material Adverse Effect.

2.3 FULL DISCLOSURE. Each written statement and all written
materials furnished by, or on behalf of, the Company to the Noteholders pursuant
to Sections 7.1 and 7.2 of the Existing Note Purchase Agreement, taken as a
whole, and each written statement and all written materials furnished by, or on
behalf of, the Company to the Noteholders in connection with this Amendment,
taken as a whole, do not contain any untrue statement of a material fact or omit
a material fact necessary to make the statements contained therein not
misleading in light of the circumstances made. There is no fact known to the
Company which the Company has not disclosed to the Noteholders in writing which
could reasonably be expected to have a Material Adverse Effect.

2.4 TRANSACTION IS LEGAL AND AUTHORIZED. The execution and
delivery of this Amendment by the Company, the consummation of each of the
transactions contemplated by this Amendment and the compliance by the Company
with all the provisions of this Amendment:

QUANTA SERVICES, INC. AMENDMENT NO. 2 TO NOTE PURCHASE AGREEMENT

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(a) are within the corporate powers of the Company;

(b) are in compliance with applicable law;

(c) do not conflict with, result in any breach in any of
the provisions of, constitute a default under, or result in the
creation of any Lien upon any property of the Company under the
provisions of, any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Company; and

(d) do not conflict with, result in any material breach
of any of the provisions of, constitute a material default under, or
result in the creation of any Lien not permitted by Section 10.5 of the
Existing Note Purchase Agreement upon any property of the Company under
the provisions of, any agreement, indenture, charter instrument, bylaw
or other constitutive document or instrument to which it is a party or
by which it or any of its property is bound.

2.5 AMENDMENT IS ENFORCEABLE. This Amendment is a legal, valid and
binding and enforceable obligation of the Company, enforceable against the
Company in accordance with its terms, except as the enforceability hereof may be
limited by applicable bankruptcy, reorganization, arrangement, insolvency,
moratorium or other similar laws affecting the enforceability of creditors'
rights generally and the application of general equitable principles.

2.6 NO DEFAULTS. The Company is not in violation in any respect of
any term in any agreement or other instrument to which it is a party or by which
it or any of its property may be bound, except for such violations that, in the
aggregate for all such violations, could not reasonably be expected to have a
Material Adverse Effect.

2.7 PENDING LITIGATION.

(a) There are no proceedings, actions or investigations
pending, or to the knowledge of the Company, threatened against or
affecting the Company in any court or before any Governmental Authority
or arbitration board or tribunal that, in the aggregate for all such
proceedings, actions and investigations, could reasonably be expected
to have a Material Adverse Effect.

(b) The Company is not in default with respect to any
judgment, order, writ, injunction or decree of any court, Governmental
Authority, arbitration board or tribunal that, in the aggregate for all
such defaults, could reasonably be expected to have a Material Adverse
Effect.

2.8 COMPLIANCE WITH LAW. The Company is not in violation of any
law, ordinance, governmental rule or regulation to which it is subject, except
for such violations that, in the aggregate for all such violations, could not
reasonably be expected to have a Material Adverse Effect.

2.9 NO DEFAULTS. After giving effect to this Amendment, no Default
or Event of Default will exist.

SECTION 3. CONDITIONS PRECEDENT.

QUANTA SERVICES, INC. AMENDMENT NO. 2 TO NOTE PURCHASE AGREEMENT

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This Amendment shall have no effect until all of the following
conditions precedent shall have been fulfilled (such time of effectiveness being
herein referred to as the "Second Amendment Effective Date"):

(a) WARRANTIES AND REPRESENTATIONS TRUE. After giving
effect to this Amendment, the warranties and representations set forth
in the Existing Note Purchase Agreement and in Section 2 to this
Amendment shall be true in all material respects (unless specifically
limited to an earlier date, in which case, such representations and
warranties were true as of such date).

(b) NO PROHIBITED ACTION. No Default or Event of Default
shall exist after giving effect to, the consummation of the
transactions contemplated by this Amendment.

(c) CONSENT OF NOTEHOLDERS. The Company and each of the
Noteholders shall have executed this Amendment.

(d) PAYMENT OF NOTEHOLDER FEES AND EXPENSES. The Company
shall have paid all fees and expenses of the Noteholders incurred in
connection with Amendment No. 1 and this Amendment for which invoices
have been delivered, including the fees and expenses of Bingham
McCutchen.

(e) OFFICERS' CERTIFICATE. Each Noteholder shall have
received a written certificate signed by an officer of the Company
acceptable to the Required Holders as to (i) the absence of any action,
suit, investigation or proceeding pending or, to the knowledge of the
Company, threatened in any court or before any arbitrator or
governmental authority that could reasonably be expected to materially
and adversely affect (A) the financial condition of the Company and its
Subsidiaries, taken as a whole, or (B) the ability of the Company and
its Subsidiaries to perform their respective obligations under the
Existing Note Purchase Agreement, the Notes or the Security Documents,
as amended by this Amendment, (ii) the absence of a material breach of
any representation or warranty of the Company set out in the Existing
Note Purchase Agreement, the Notes or the Security Documents, and (iii)
the existence of no Default or Event of Default, after giving effect to
this Amendment.

(f) FIRST RESERVE FUNDING. The First Reserve Fund IX,
L.P. shall have purchased capital stock of the Company for an aggregate
purchase price of approximately $72,900,000, and such purchase price
shall be contemporaneously paid.

(g) AMENDMENT OF BANK CREDIT AGREEMENT. A Ninth Amendment
to the Third Amended and Restated Secured Credit Agreement among the
Company, as Borrower, the Financial Institutions party thereto, as
Lenders, Bank of America, N.A., as Administrative Agent, and the other
agents named therein (as amended, the "Bank Credit Agreement") shall
have been entered into by the Company and the Majority Lenders (as such
term is defined in the Bank Credit Agreement), shall contain terms
satisfactory to the Noteholders, and shall be in full force and effect,
subject only to the effectiveness of this Amendment.

(h) GUARANTORS' CONSENT. The Guarantors shall have
executed and delivered the Consent attached hereto as Attachment A.

QUANTA SERVICES, INC. AMENDMENT NO. 2 TO NOTE PURCHASE AGREEMENT

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(i) AMENDMENT FEE. The Company shall have paid to each
Noteholder an amendment fee equal to .375% of the aggregate principal
amount of such Noteholder's currently outstanding Notes.

(j) PROCEEDINGS SATISFACTORY. All proceedings taken in
connection with the execution and delivery of this Amendment and the
transactions contemplated hereby shall be satisfactory to the
Noteholders and their special counsel.

SECTION 4. AMENDMENTS TO AMENDMENT NO. 1.

Sections 4.3 and 4.4 of Amendment No. 1 are deleted in their entirety.

SECTION 5. AMENDMENTS TO EXISTING NOTE PURCHASE AGREEMENT.

5.1 Section 7.1(h) of the Existing Note Purchase Agreement is
hereby amended by deleting the phrase "so long as any Event of Default shall
exist under the Bank Credit Agreement," appearing in lines 1 and 2 thereof.

5.2 Article 7 of the Existing Note Purchase Agreement is hereby
amended by adding the following new Section 7.4:

"Section 7.4 Notice of Interest Rate Changes. Within sixty
(60) days after the end of each of the first three quarterly
fiscal periods in each fiscal year and ninety (90) days after
the end of the fourth quarterly fiscal period in each fiscal
year, the Company shall provide each Noteholder with a
calculation of the Applicable Margin for such quarterly fiscal
period, which, in the case of the first three fiscal quarters
of each fiscal year, may be included in the compliance
certificate required by Section 7.2(a) of the Existing Note
Purchase Agreement."

5.3 The definition of "Remaining Scheduled Payments" contained in
Section 8.6 of the Existing Note Purchase Agreement and Section 5(b) of the
First Supplement is hereby amended by adding the following sentence to the end
thereof:

"For the purposes of calculating all Make-Whole Amounts due
under this Agreement, interest shall be deemed to (i) accrue
at all times at the Base Rate applicable to such Note, and
(ii) be payable semiannually on the first day of January and
July of each year."

5.4 Article 8 of the Existing Note Purchase Agreement is hereby
amended by adding the following new Section 8.8:

"Section 8.8 Special Prepayment of Principal. The Company
shall apply at the times required by the Bank Credit
Agreement:

(a) one hundred percent (100%) of the net cash proceeds
from collections of that portion of any accounts receivable
owed by account debtors previously specified in writing to the
Noteholders that have been written off as uncollectable and
which are included in the definition of "Permitted Charges",

QUANTA SERVICES, INC. AMENDMENT NO. 2 TO NOTE PURCHASE AGREEMENT

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(b) one hundred percent (100%) of the net cash proceeds
of asset sales made pursuant to Section 10.7(d),

(c) one hundred percent (100%) of the net cash proceeds
of asset sales in excess of $5,000,000 during each fiscal year
made pursuant to Section 10.7(e),

(d) one hundred percent (100%) of the net cash proceeds
of any sale or issuance of common or preferred stock or other
equity interests of the Company (other than the First Reserve
Funding), and

(e) one hundred percent (100%) of the net cash proceeds
of Funded Debt (as such term is defined in the Bank Credit
Agreement as in effect on the Second Amendment Effective Date)
in excess of $15,000,000 referred to in Section 2.10(c)(i) of
such Bank Credit Agreement.

in each case, to prepayment of the principal amount of the
Notes and the Debt under the Bank Credit Agreement, pro-rata,
based upon the Bank Lenders' (as such term is defined in the
Bank Credit Agreement) Commitment Amount at such time and the
aggregate outstanding principal amount of the Notes at such
time. Make-Whole Amounts shall be due and payable, from such
proceeds, with respect to any such prepayment of Notes under
this Section 8.8. Amounts paid to the Noteholders pursuant to
this Section 8.8 shall be applied first to the applicable
Make-Whole Amount and the remainder to the principal amount of
the Notes. For purposes of this Section 8.8, "net cash
proceeds" shall mean all cash proceeds of such sale, other
disposition or issuance net of usual and customary transaction
costs and expenses actually incurred in connection with such
sale, disposition or issuance.

5.5 Section 10.1 of the Existing Note Purchase Agreement is hereby
amended and restated in its entirety to read as follows:

"Section 10.1 Minimum Consolidated Net Worth. Prior to June
30, 2004, the Company will maintain a minimum Consolidated Net Worth of
not less than an amount equal to the sum of (a) 90% of Consolidated Net
Worth as of June 30, 2002 (determined without giving effect to any
adjustments made in accordance with FAS 142 and FAS 144), plus (b) for
each fiscal quarter ended after June 30, 2002, commencing with the
fiscal quarter ended September 30, 2002, the sum of (i) an amount equal
to 75% of Consolidated Net Income for such fiscal quarter, if positive,
plus (ii) an amount equal to 100% of the amount of any equity issuance
by the Company, including equity issued in a secondary offering or
equity issued to acquire another entity in an Acquisition, minus (iii)
any distributions to shareholders of any Subchapter S corporation
acquired in an Acquisition as a result of operations of such
corporation prior to the closing of the Acquisition, minus (iv)
Permitted Charges referenced in clauses (a) and (b) of such definition
which are applicable to such period, minus (v) charges taken in
accordance with FAS 142 and FAS 144 in conformity with GAAP at any time
during the period from June 30, 2002 to and including June 30, 2004,
which do not exceed $850,000,000 in the aggregate, and minus (vi) the
non-cash charges related to the Company's Stock Option Program or Stock
Compensation Plan required to be taken pursuant to GAAP. Increases in
Consolidated Net Worth required after June 30, 2002 shall be
appropriately adjusted to eliminate any adverse effects on the
Consolidated Net

QUANTA SERVICES, INC. AMENDMENT NO. 2 TO NOTE PURCHASE AGREEMENT

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Worth of the Company occasioned by the expensing of Make-Whole Amounts
paid pursuant to Section 8.8. Subsequent to June 30, 2004, the
foregoing provisions of this Section 10.1 shall continue to be
applicable in all respects except that the percentage of Consolidated
Net Income required to be added each quarter shall be reduced from 75%
to 50%."

5.6 Section 10.2 of the Existing Note Purchase Agreement is hereby
amended and restated in its entirety to read as follows:

"Section 10.2. Limitation on Consolidated Debt. The Company
will not, as of the final day of any period of four consecutive fiscal
quarters of the Company ending at any time during any period specified
below, permit the ratio of Funded Debt at such time to EBITDA for the
trailing four quarter period (in each case for the Company and its
Subsidiaries on a consolidated basis) to be greater than the ratio set
forth below opposite such period: