EXHIBIT 10.1

 

AMENDMENT TO PLEDGE AGREEMENT AND UNDERWRITING, CONTINUING INDEMNITY AND
SECURITY AGREEMENT

 

THIS AMENDMENT TO PLEDGE AGREEMENT AND UNDERWRITING, CONTINUING INDEMNITY AND
SECURITY AGREEMENT ("this Amendment") made as of the 17th day of January, 2006,
by and between INTEGRATED ELECTRICAL SERVICES, INC., a Delaware corporation, and
certain of its Affiliates and Subsidiaries identified on Exhibit A, in their
capacity as named Principal under any Bond (individually and collectively
"Principal"); and INTEGRATED ELECTRICAL SERVICES, INC., a Delaware corporation,
and certain of its Affiliates and Subsidiaries identified on Exhibit B (along
with Principal, individually and collectively "Indemnitors") in favor of FEDERAL
INSURANCE COMPANY, an Indiana corporation, its Affiliates and Subsidiaries and
their respective co-sureties and reinsurers, and their respective successors and
permitted assigns (individually and collectively "Surety").

 

W I T N E S S E T H:

 

WHEREAS, Surety, Principal and Indemnitors entered into that certain Interim
Pledge Agreement dated September 9, 2004, as modified by First Amendment to
Interim Pledge Agreement dated October 6, 2004, as further amended by Second
Amendment to Interim Pledge Agreement dated October 12, 2004, as further amended
by Third Amendment to Interim Pledge Agreement dated November 3, 2004, and as
restated by that certain Restated Pledge Agreement dated January 14, 2005 (the
“Pledge Agreement”);

 

WHEREAS, Surety, Principal, and Indemnitors entered into that certain
Underwriting, Continuing Indemnity, and Security Agreement dated January 14,
2005 ("the Indemnity Agreement"), the terms of which are incorporated herein by
this reference;

 

WHEREAS, pursuant to the foregoing agreements Principal has previously delivered
to Surety as collateral for all of Principal’s obligations thereunder: (i) the
Existing Pledged Collateral in the original aggregate principal amount of
Seventeen Million Five Hundred Thousand Dollars ($17,500,000) (and all interest,
proceeds, and substitutions therefor); (ii) that certain Irrevocable Letter of
Credit No. ASL-3014854-140INE issued by Bank of America, N.A. on August 17,
2005, in the face amount of Six Million Three Hundred Ninety Eight Thousand
Seven Hundred Forty Eight Dollars ($6,398,748); and (iii) that certain
Irrevocable Letter of Credit No. ASL-3014832-140INE issued by Bank of America,
N.A. on August 8, 2005, in the face amount of Five Million Dollars ($5,000,000).

 

WHEREAS, Principal has stated publicly that it is considering whether to file a
Petition for Voluntary Relief under Chapter 11 of the United States Bankruptcy
Code in order to facilitate a broad restructuring of its affairs;

 

WHEREAS, on January 5, 2006, Principal renewed an existing request for the
issuance of a bond to the Board of Trustees of The Community College of
Baltimore County, as obligee, for the account of PrimeNet, Inc., an affiliate of
Primo Electric Company, in the penal sum of

 

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One Million Forty Four Thousand Nine Hundred Sixty-Three and 11/100ths
($1,044,963.11) Dollars;

 

WHEREAS, on January 6, 2006, Surety received from Principal a wire transfer in
the amount of Six Hundred Thirteen Thousand Seventy-Eight and 50/100ths
($613,078.50) Dollars to be held as collateral under the Pledge Agreement and
Indemnity Agreement and as consideration for the issuance of the requested bond;

 

WHEREAS, Principal requires continuing access to Surety Credit while it
considers its options; and

 

WHEREAS, all of the parties desire to amend and modify the Pledge Agreement and
the Indemnity Agreement as follows in order to provide for continuing Surety
Credit support.

 

NOW, THEREFORE, in consideration of the foregoing premises, and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

 

1.         Availability of Surety Credit. From that date hereof Surety agrees to
consider applications for the issuance of surety bonds on a case-by-case basis.
The issuance of any bond pursuant to such application will be in the sole and
absolute discretion of Surety and subject to such conditions as Surety may elect
to impose in its sole and absolute discretion. No surety bond will be issued
except upon delivery to Surety of collateral in the form of cash or letter(s) of
credit in an amount not less that fifty (50%) percent of the penal sum of the
bond to be issued. Surety will not consider issuing “low penalty” or
“miscellaneous” bonds except upon delivery of collateral in the amount of one
hundred (100%) percent of the penal sum thereof. Any letter(s) of credit offered
to Surety as collateral for the issuance of any bond shall be drawn on an
institution and in form and substance acceptable to Surety in its sole and
absolute discretion. Notwithstanding the fact that collateral may be required by
Surety hereunder in connection with the issuance of any specific bond, all
collateral held by Surety will support any and all of the indemnity and other
obligations of Principal and Indemnitors to Surety. Acceptance by Surety of
collateral in excess of fifty (50%) percent of the penal sum of any requested
bond shall not obligate surety to issue any other bond or to maintain any
specific ratio between collateral held and the aggregate penal sums of bonds
outstanding. In no event will Surety consider issuing bonds aggregating more
than Twenty Million ($20,000,000) Dollars in penal sum(s) after the date hereof
and prior to the filing of a Bankruptcy Petition.

 

2.         Amendment of Restated Pledge Agreement. To the extent that Principal
elects to offer cash as collateral, the parties hereto agree that the Restated
Pledge Agreement is hereby amended and modified to allow up to Ten Million
($10,000,000) Dollars to be added to the amount of Existing Pledged Collateral
now held by Surety. As set forth above in the premises, Surety acknowledges
receipt of cash in the amount of Six Hundred Thirteen Thousand Seventy-Eight and
50/100ths ($613,078.50) Dollars to be added to and held upon the same terms as
the Existing Pledged Collateral under the Restated Pledge Agreement as herein
amended.

 

 

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3.         Reservation of Rights as to Certain Subsidiaries and Affiliates.
Surety has identified certain Principals as being of particular concern with
regard to their respective ability to prosecute bonded projects successfully to
conclusion, including, but not limited to:

 

Bryant Electrical Company, Inc.

 

Pan American Electric, Inc.

 

Davis Electrical Constructors, Inc.

 

Mark Henderson, Incorporated

 

Primo Electric Company

 

Thomas Popp & Company

 

Valentine Electrical, Inc.

 

Daniel Electrical Contractors, Inc.

 

J. W. Gray Electrical Contractors, L.P.

 

Without limiting the breadth of the discretion reserved to Surety in deciding
whether to issue particular bonds, Surety specifically reserves the right to
decline to issue or renew bonds for these and any other entities subsequently
identified as being of similar concern. Further, should Surety elect to issue
any bond for entities so identified, Surety reserves the right to impose
additional collateral and other conditions in its sole and absolute discretion.
Under no circumstances will Surety be required to issue bonds for any entity
which has been or is to be sold or otherwise divested in the continuing course
of Principal’s financial restructuring.

 

4.         Exhibit. Exhibit D to the Agreement is hereby deleted in its entirety
and replaced with Exhibit D to this Amendment.

 

5.         Continuing Effect. Except as specifically set forth in this
Amendment, the Pledge Agreement and the Indemnity Agreement remain in full force
and effect as originally written.

 

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

 

IN WITNESS WHEREOF, each of the parties has caused this Amendment to be executed
by its duly authorized officer on the day and year first above written.

 

 

[BALANCE OF PAGE IS INTENTIONALLY BLANK]

 

[SIGNATURE PAGES FOLLOW]

 

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SURETY:

 

FEDERAL INSURANCE COMPANY

 

 

By:            /s/ Edward J. Reilly 

Its:            Assistant Secretary 

 

 

Integrated Electrical Services, Inc.

 

 

By:

/s/ David A. Miller

 

 

Aladdin Ward Electric & Air, Inc.

 

Amber Electric, Inc.

 

ARC Electric, Incorporated

 

Bachofner Electric, Inc.

 

Bryant Electric Company, Inc.

 

Commercial Electrical Contractors, Inc.

Cross State Electric, Inc.

 

Daniel Electrical Contractors, Inc.

 

Davis Electrical Constructors, Inc.

 

Electro-Tech, Inc.

 

Federal Communications Group, Inc.

 

Hatfield Reynolds Electric Company

 

Kayton Electric, Inc.

 

Mark Henderson, Incorporated

 

Menninga Electric, Inc.

 

Mid-States Electric Company, Inc.

 

Mitchell Electric Company, Inc.

 

Murray Electrical Contractors, Inc.

 

Newcomb Electric Company, Inc.

 

New Technology Electrical Contractors, Inc.

Pan American Electric, Inc.

 

Paulin Electric Company, Inc.

 

PrimeNet, Inc.

 

Primo Electric Company

 

Rodgers Electric Company, Inc.

Ron's Electric, Inc.

 

Thomas Popp & Company

 

 

- and -

 

 

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Valentine Electrical, Inc.

 

 

By:            /s/ David A. Miller 

 

 

BEXAR ELECTRIC COMPANY, LTD.

By:

BW/BEC Inc., its general partner

 

 

 

By:            /s/ David A. Miller 

 

 

HAYMAKER ELECTRIC, LTD.

 

By:

General Partner, Inc., its general partner

 

 

By:            /s/ David A. Miller 

 

 

HOUSTON-STAFFORD ELECTRICAL

 

 

CONTRACTORS LP

 

By:

Houston-Stafford Management LLC, its

 

general partner

 

 

 

By:            /s/ David A. Miller 

 

 

J.W. GRAY ELECTRICAL CONTRACTORS LP

By:

J.W. Gray Management LLC, its general

 

 

partner

 

 

By:            /s/ David A. Miller 

 

MILLS ELECTRIC LP (d/b/a Mills Electrical Contractors)

By:

Mills Management LLC

 

 

 

By:            /s/ David A. Miller 

 

 

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NEAL ELECTRIC LP

 

By:

BW/BEC Inc., its general partner

 

 

By:            /s/ David A. Miller 

 

 

POLLOCK SUMMIT ELECTRIC LP

 

By:

Pollock Electric, Inc. and Summit Electric of Texas,

 

Inc., its general partners

 

 

 

By:            /s/ David A. Miller 

 

 

RAINES ELECTRIC LP

 

By:

Raines Management LLC, its general partner

 

 

By:            /s/ David A. Miller 

 

 

RIVIERA ELECTRIC, LLC

 

 

By:            /s/ David A. Miller 

 

 

TESLA POWER AND AUTOMATION, L.P.

 

By:

Tesla Power GP, Inc., its general partner

 

By:            /s/ David A. Miller 

 

 

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DEBT INSTRUMENTS

 

1.          Indenture dated as of January 28, 1999, among the Company, certain
of its Subsidiaries and U.S. Bank Corporate Trust, successor in interest to
State Street Bank and Trust Company, as trustee.

 

2.          Indenture dated as of May 29, 2001, among the Company, certain of
its Subsidiaries and U.S. Bank Corporate Trust, successor in interest to State
Street Bank and Trust Company, as trustee.

 

3.          Credit Agreement dated February 27, 2004, among the Company as
Borrower, the financial institutions named therein as Banks and JPMorgan Chase
Bank, N.A. (successor by merger to Bank One, NA) as Administrative Agent for the
Banks, as same has been amended from time to time prior to the date hereof.

 

4.          Indenture dated as of November 24, 2004, among the Company, certain
of its Subsidiaries and Bank of New York, as trustee.

 

5.          Loan and Security Agreement dated August 1, 2005, by and between
Indemnitors as Borrower and Bank of America, N.A. as Lender and as Lender Agent.

 

 

 

EXHIBIT D