exv10w4



 




Exhibit 10.4





RESTATED UNDERWRITING, CONTINUING INDEMNITY, AND SECURITY AGREEMENT




     THIS RESTATED UNDERWRITING, CONTINUING INDEMNITY, AND SECURITY AGREEMENT (“this Agreement”)
entered into as of the 12th day of May, 2006, 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”). All capitalized terms will have the
meaning set out in Section 1.



W I T N E S S E T H:




     WHEREAS, Principal, operating through certain of its Affiliates and Subsidiaries, is engaged
in the business, among other things, of providing electrical and communication services to the
commercial, industrial, and residential service markets and in connection with this business may
desire or be required from time to time to give certain bonds;



     WHEREAS, Integrated Electrical Services, Inc. and certain of its Affiliates and Subsidiaries
commenced the Bankruptcy Case on February 14, 2006, in the United States Bankruptcy Court, North
District of Texas, Dallas Division, styled, In Re: Integrated Electrical Services, Inc., Et Al.,
Jointly Administered Case Number 06-30602-BJH-11;



     WHEREAS, Principal has assumed all Existing Bonded Contracts pursuant to Section 365 of the
Bankruptcy Code, which assumption has been effected by the Interim Order and confirmed by the Final
Order;



     WHEREAS, a Plan of Reorganization was confirmed by an order of the Bankruptcy Court entered on
April 28, 2006, in the Bankruptcy Case which Plan contemplates Principal obtaining bonds in
connection with the performance of its business;



     WHEREAS, the parties hereto previously entered into that certain Underwriting, Continuing
Indemnity, and Security Agreement dated January 14, 2005, and that certain Amendment to Pledge
Agreement and Underwriting, Continuing Indemnity, and Security Agreement dated January 17, 2006,
and desire to restate said Agreement pursuant to terms and conditions of this Agreement;



     WHEREAS, Indemnitors recognize that bonds may be a necessary and desirable adjunct to the
business done and to be done by Principal that will directly benefit Indemnitors and desire to
accommodate the financial, security, indemnity, exoneration, and other requirements of Surety as an
inducement to Surety to become surety upon obligations of Principal, and have therefore



 









 







agreed to be bound by this Agreement and have agreed to exercise their best efforts to permit and
require any Indemnitor to honor and perform all of the applicable terms of this Agreement and the
other Surety Credit Documents;



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



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



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



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



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



     “Accounts” means and includes all of Indemnitors’ now owned or hereafter acquired accounts (as
defined in the UCC) and (whether included in such definition) accounts receivable; and proceeds,
including without limitation, all insurance proceeds, proceeds of any letter of credit on which any
Indemnitor is a beneficiary, in each case solely to the extent such accounts, accounts receivable,
and proceeds arise out of a Bonded Contract, including, but not limited to, Retainage, and all
forms of obligations whatsoever owing to any Indemnitor under instruments and documents of title
constituting the foregoing or proceeds thereof; and all rights, securities, and guarantees with
respect to each of the foregoing.



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



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



     “Bank
of America Credit Agreement” means that certain Loan and
Security Agreement dated May 12, 2006, among Integrated Electrical Services, Inc., certain of its subsidiaries, the lenders
named therein and Bank of America, N.A., as collateral and administrative agent, as it may be
amended, modified or supplemented from time to time.



     “Bankruptcy Case” means the bankruptcy cases commenced by Integrated Electrical Services,
Inc., and certain of its Affiliates on February 14, 2006, in the Bankruptcy Court pursuant to the
Bankruptcy Code.



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



     “Bankruptcy Court” means the United States District Court for the Northern District of Texas,
Dallas Division, having jurisdiction over the Bankruptcy Case of Indemnitors, or such other court
to which any such Bankruptcy Case may be transferred.



     “Bonded Backlog” means at any given time, the current estimated Cost to Complete all Bonded
Contracts (included, but not limited to, Bonded Contracts which any Indemnitor has sold or
transferred (directly or indirectly) and for which unaffiliated third parties may now be primarily
responsible). Surety will, in its sole and absolute discretion, determine the amount of Bonded
Backlog based on the work in process schedules to be provided by Indemnitors and information
developed independently by Surety.



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



     “Bonded Contract Balances” means all payments made, or to be made, to or on behalf of any
Principal pursuant to, arising out of, or relating to any Bonded Contract, including, without
limitation, whether earned and unpaid or to be earned, Retainage, increases in contract amounts and
payments made, or to be made, as a result of affirmative claims.



     “Bonded Job Site” means the site where a Principal is to perform the Work related to a Bonded
Contract.



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



     “Business Day” means any day excluding Saturday, Sunday, and any day which is a legal holiday
under the laws of the State of New York or is a day on which banking institutions located in such
state are authorized or required by law or other governmental action to close. Notwithstanding



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the foregoing, the reference to New York in this definition will be replaced with a reference to
Texas when determining the Effective Date.



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



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



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



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



     “Effective Date” means the Business Day on which all conditions to the consummation of the
Plan of Reorganization as set forth in Article 9.02 of the Plan of Reorganization have been
satisfied or waived.



     “Equipment” means all of Indemnitor’s now owned or hereafter acquired right, title, and
interest with respect to equipment (as defined in the UCC) and (whether or not included in such
definition) all other personal property in each case which is delivered to, prefabricated for, or
specifically ordered for a Bonded Job site, whether or not the same will be deemed to be affixed
to, arise out of, or relate to any real property, together with all accessions thereto.



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



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



     (b) any representation or warranty made or deemed made by any Indemnitor in this Agreement or
any other Surety Credit Document, or which is contained in any certificate, document, opinion, or
financial or other statement furnished under or in connection with any Surety Credit Document,
proves to have been incorrect in a material respect on or as of the date made or deemed made;
provided, however, Principal will have the right to cure an Event of Default under this item (b) by
delivering to Surety cash in an amount designated by Surety, in its



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sole and absolute discretion, within ten (10) days of written demand having been made by
Surety for such delivery. In the event that Surety determines it is obligated to discharge any
performance bond claim before making such demand (or the expiration of such ten (10) day period),
said action will not operate as a defense to Surety’s rights under this Agreement; provided,
however, that such action by Surety will not be an Event of Default under this Agreement if
Indemnitors fully indemnify Surety within ten (10) days of receipt of any demand by Surety for
indemnification; or



     (c) an Obligee under a Bonded Contract has declared any Principal to be in default under such
Bonded Contract and such Principal has failed to cure such default within any cure period provided
in such Bonded Contract and as a result of such default Obligee has made a claim under a Bond, or
any Principal has acknowledged its default under any Bonded Contract irrespective of whether such
Principal is actually in default of the Bonded Contract. It will be no defense to the enforcement
of this Agreement by Surety that any Principal asserts that it is not in default under the Bonded
Contract; or



     (d) Surety incurs any Surety Loss (excluding items payable pursuant to paragraph (b) of the
definition of Surety Loss and other attorneys fees and similar fees and professional fees incurred
in the ordinary course of business that are promptly reimbursed to Surety by Indemnitors);
provided, however, Principal will have the right to cure an Event of Default under this item (d) by
delivering to Surety cash in an amount designated by Surety, in its sole and absolute discretion,
within ten (10) days of written demand having been made by Surety for such delivery; or



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



     (f) any Principal has failed or refused to pay when due or is unable to pay when due claims,
bills, or other Debt incurred in, or in connection with, the performance of any Bonded Contract,
and Principal has failed to deliver to Surety an amount sufficient to discharge any claim or demand
made against Surety with respect to such Bond within ten (10) days of written demand having been
made on Indemnitors by Surety in respect of such claim or demand. In the event that Surety
determines it is obligated to discharge any Bond claim resulting from such failure or refusal to
pay prior to any cure by Principal or Indemnitor before the foregoing demand by Surety is made on
Indemnitors, said action will not operate as a defense against any of Surety’s rights under this
Agreement; provided, however, that such action by Surety will not result in an Event of Default
under this Agreement if Indemnitors fully indemnify Surety within ten (10) days of receipt of any
demand by Surety for indemnification in respect of all amounts incurred in respect of such action;
or



     (g) Principal defaults under any banking facility or other credit agreement to which Principal
is a party in respect of any Debt having an aggregate principal amount of more than Fifteen Million
Dollars ($15,000,000) which results in (i) acceleration of the Debt thereunder, or



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(ii) the foreclosure or notice of foreclosure by the lenders thereunder or applicable agent on
behalf of such lenders of the collateral that secures such Debt thereunder; or



     (h) Principal defaults under any banking facility or other credit agreement to which Principal
is a party in respect of any Debt having an aggregate principal amount of more than Fifteen Million
Dollars ($15,000,000) which results in such lenders materially limiting the availability of the
credit facility for the business operations of Principal; provided, however, the foregoing will not
be deemed an Event of Default hereunder if such event is cured within thirty (30) days of the
occurrence of said event; or



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



     (j) the appointment of a receiver or trustee for any Principal or Indemnitors after the
Effective Date, or for any substantial part of their assets, or the institution by a Person other
than any Principal or any Indemnitor or any Person acting on their behalf of any proceedings for
the dissolution or the full or partial liquidation of any Principal or Indemnitors after the
Effective Date and such proceedings are not dismissed, discharged, or stayed within sixty (60) days
of filing, or any of Principal or Indemnitors will discontinue their business or materially change
the nature of their business; or



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



     (l) failure to pay any Bond premiums due and payable to Surety; or




     (m) any Indemnitor fails to comply with the terms of the Plan of Reorganization in any
material respect after the Effective Date.



     “Existing Bonds” means any Bonds issued prior to May 31, 2006.



     “Existing Letters of Credit” means and includes 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); 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); that certain Irrevocable
Letter of Credit No. ASL-7420346-140INE issued by Bank



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of America, N.A. on January 20, 2006, in the face amount of Three Million Five Hundred Ninety-Nine
Thousand Two Hundred Seven 50/100 Dollars ($3,599,207.50); that certain Irrevocable Letter of
Credit No. ASL-7420422-140INE issued by Bank of America, N.A. on February 16, 2006, in the face
amount of One Million Five Hundred Thousand Dollars ($1,500,000); that certain Irrevocable Letter
of Credit No. ASL-7420438-140INE issued by Bank of America, N.A. on March 1, 2006, in the face
amount of One Million Five Hundred Thousand Dollars ($1,500,000); that certain Irrevocable Letter
of Credit No. ASL-740641-140INE— issued by Bank of American, N.A. on April 7, 2006, in the face
amount of One Million Five Hundred Thousand Dollars ($1,500,000); and that certain Irrevocable
Letter of Credit No. ASL-7420660-140INE issued by Bank of America, N.A. on May 8, 2006, in the face
amount of One Million Five Hundred Thousand Dollars ($1,500,000).



     “Existing Pledged Collateral” means that certain cash collateral in the aggregate original
principal amount of Eighteen Million One Hundred Thirteen Thousand Seventy-Eight 50/100 Dollars
($18,113,078.50) (and all interest, proceeds, and substitutions therefore) delivered to Surety
pursuant to that certain Interim Pledge Agreement dated September 9, 2004, Integrated Electrical
Services, Inc., as Pledgor, in favor of Surety, 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, by Integrated Electrical Services, Inc. in favor of Surety, and as amended by that Amendment
to Pledge Agreement and Underwriting, Continuing Indemnity and Security Agreement dated January 17,
2006.



     “Final Order” means the Final Order (A) Granting Authority to Enter into a Post-Petition
Financing Agreement with Federal Insurance Company and Approving Debtors’ Assumption of Surety
Contracts; (B) allowing Debtors’ Use of Federal Insurance Company’s Cash Collateral and Granting of
Adequate Protection; and (C) Lifting the Automatic Stay as to Federal Insurance Company entered by
the Bankruptcy Court on March 10, 2006.



     “GAAP” means generally accepted accounting principles in the United States of America, as set
forth in the opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board, consistently applied.



     “Goochland Letter of Credit” means any Irrevocable Letter of Credit issued in favor of Surety
pursuant to Section 3.



     “Goochland Project” that certain construction project that is the subject of Agreement dated
December 12, 2003, by and between the County of Goochland, Virginia, as the owner and Bryant
Electric, as the contractor, that is the subject of Bond No. 81955895 in the original penal sum of
Nine Million Sixty Five Thousand Eight Hundred Forty Six 51/100 Dollars ($9,065,846.51).



     “Indebtedness” means, without duplication, any and all Surety Loss, and the payment and
performance of all other obligations and undertakings now or hereafter owing to Surety with



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respect to the Bonds and/or under the Surety Credit Documents, as same may now or hereafter be
modified, replaced, extended, or renewed, in accordance with their terms.



     “Indemnitors” means Integrated Electrical Services, Inc., a Delaware corporation, certain of
its Affiliates and Subsidiaries listed on Exhibit B, any Affiliate or Subsidiary that is a named
Principal on any Bond, and any new Indemnitor added to this Agreement by rider as provided in
Section 52, and all of their successors and assigns.



     “Indemnity Agreement” means and includes that certain General Agreement of Indemnity dated
January 9, 1998, executed by Integrated Electrical Services, Inc. on its behalf and on behalf of
any of its subsidiaries or on behalf of any subsidiary of a subsidiary or successive subsidiaries,
direct or indirect, now existing or hereafter created, in favor of Surety, and that certain General
Agreement of Indemnity dated September 9, 2004, executed by Integrated Electrical Services, Inc.,
Anderson & Wood Construction Co., Inc., Kayton Electric, Inc., Bryant Electric Company, Inc., Pan
American Electric, Inc., DKD Electric Company, Inc., Mills Electric LP d/b/a Mills Electrical
Contractors, H.R. Allen, Inc., and T&H Electrical Corporation in favor of Surety.



     “Intercreditor
Agreement” means that certain Intercreditor Agreement dated May
12, 2006,
between Surety and Bank of America, N.A., as it may be amended, modified, or supplemented from time
to time.



     “Interim Order” means the Interim Order (A) Granting Authority to Enter into a Post-Petition
Financing Agreement with Federal Insurance Company and Approving Debtor’s Assumption of Surety
Contracts; (B) Allowing Debtor’s Use of Federal Insurance Company’s Cash Collateral and Granting of
Adequate Protection Pending Final Hearing; (C) Lifting Automatic Stay as to Federal Insurance
Company; and (D) Scheduling a Final Hearing Pursuant to Rule 4001(c) of the Federal Rules of Civil
Procedure entered by the Bankruptcy Court on February 15, 2006.



     “Inventory” means and includes all of Indemnitors’ now owned and hereafter acquired inventory,
including, without limitation, goods, merchandise, and other personal property furnished under any
contract of service, Bonded Contract, or intended for sale or lease, all raw materials, work in
process, finished goods and materials, and supplies of any kind, nature, or description in each
case which is delivered to, prefabricated for, or specifically ordered for a Bonded Job Site.



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



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



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



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



     “Overhead” means the general operating and administrative expenses of any Indemnitor,
including, but not limited to, the cost of rent, utilities, taxes, governmental charges, and all
other expenses of any Indemnitor not allocated to a specific Bonded Contract.



     “Permitted Liens” means:



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



     (b) mechanics’, workmen’s, materialmen’s and repairmen’s Liens or other Liens arising by
operation of law in the ordinary course of business, or pursuant to customary reservations or
retentions of title arising in the ordinary course of business, of any Indemnitor securing
obligations that are not past due, or if past due contested in good faith by appropriate
proceedings and that are unfiled and no other action has been taken to enforce the same;



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



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



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



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



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



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



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



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



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



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



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



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



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



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



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



     “Principal” means Integrated Electrical Services, Inc., a Delaware corporation, certain of its
Affiliates and Subsidiaries listed on Exhibit A and any other Affiliates and Subsidiaries of
Integrated Electrical Services, Inc. for whom Surety executes Bonds, in each case in their
respective capacity as a named principal under any Bond, and any new Principal added to this
Agreement by rider as provided in Section 52, and any joint ventures in which one or more of them
are involved for which any Bond is issued.



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



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



     “Retainage” means contract proceeds periodically withheld by an Obligee to provide further
security for Principal’s performance of a Bonded Contract, and as such are payable to Principal
only upon a clear demonstration of compliance with the terms of the Bonded Contract.



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



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



     “Surety Credit Documents” means the following: (i) the Bonds; (ii) the Indemnity Agreement;
(iii) this Agreement; (iv) UCC Financing Statements listing any of Indemnitors as debtor and
Surety as secured party; (v) any intercreditor agreement by and between Surety and any banking
institution; (vi) Interim Pledge Agreement dated September 9, 2004, Integrated Electrical Services,
Inc., as Pledgor, in favor of Surety, as modified by First Amendment to Interim Pledge Agreement
dated October 6, 2004, as further modified by Second Amendment to Interim Pledge Agreement dated
October 12, 2004, as further modified by Third Amendment to Interim Pledge Agreement dated November
3, 2004, as restated by that certain Restated Pledge Agreement dated January 14, 2005, by
Integrated Electrical Services, Inc. in favor of Surety, as amended by that Amendment to Pledge
Agreement and Underwriting, Continuing Indemnity and Security Agreement dated January 17, 2006;
(vii) the Interim Order; (viii) the Final Order; and



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(ix) all amendments, modifications, extensions, additions, substitutions, or other documents
hereafter executed or delivered by any of Indemnitors, which relate to any of the foregoing
documents.



     “Surety Loss” means:



     (a) all damages, costs, reasonable attorney fees, and liabilities (including all expenses
incurred in connection therewith) which Surety may sustain or incur by reason of executing or
procuring the execution of any Bonds, or any other bonds, which may be already or hereafter
executed on behalf of any Principal, or renewal or continuation thereof; or which may be sustained
or incurred by reason of making any investigation on account thereof, prosecuting or defending any
action in connection therewith, obtaining a release, recovering, or attempting to recover any
salvage in connection therewith or enforcing by litigation or otherwise any of the provisions of
this Agreement, including, but not limited to:



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




          (2) any loss which Surety may sustain or incur as a result of any Bonded Contract or any Bonds
(including any loss incurred as a result of the forfeiture of any bid Bond), whether that loss
results from any activity of any Principal individually or as part of a joint venture, partnership,
or other entity which has been or may be formed;




          (3) any loss which Surety may sustain or incur as a result of any actions taken by Surety upon
information provided by any Indemnitor with respect to the issuance of any Bonds;




          (4) any Bond premiums due Surety;




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




     (b) legal, accounting, consulting, and related fees reasonably incurred in connection with
claims made under any particular Bond, including but not limited to, any claims made under any Bond
related to the Goochland Project; and



     (c) legal, accounting, consulting, and related fees and expenses reasonably incurred after
April 30, 2006, in connection with the Bonds, the Surety Credit Documents, and/or any application
or submission by any of Indemnitors for the issuance of any Bond or renewal of any existing Bond,
whether or not Surety decides to issue said Bond. The foregoing exclusion of certain professional
fees incurred on or before April 30, 2006, is conditioned on Surety’s receipt



12









 







of the facility fee required under with Section 2. Notwithstanding the foregoing, Indemnitors
will be required to reimburse Surety for one hundred percent (100%) of any filing fees and
recording taxes incurred to perfect and continue Surety’s security interest in the Collateral
regardless of when those fees are incurred.



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



     “Work” means the specialized electrical and communication services required of any Principal
by any Bonded Contract, whether completed or partially completed, of such Principal, and includes
all other labor, materials, equipment, and services provided or to be provided by Principal to
fulfill such Principal or Indemnitor’s obligations pursuant to such Bonded Contract.



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



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



     (a) Favorable opinion of counsel to Principal and Indemnitors in form acceptable to Surety and
its counsel, opining as to the validity and enforceability of the documents entered into between
and among Surety and Indemnitors and opining to the perfection of the security interests of Surety
in the Collateral. Said enforceability opinion will include an opinion that Integrated Electrical
Services, Inc. is duly formed and that Indemnitors are validly existing, the execution and delivery
of the documents, the fulfillment of the respective terms and conditions thereof, and the
consummation of the respective transactions contemplated thereby will not violate any provisions of
applicable law or any applicable order or regulation of any court or public governmental agency,
and will not conflict with or constitute a breach a default under the charter of incorporation,
bylaws, or other governing documents of any of Indemnitors, as amended, or any material agreement,
indenture, or other Debt instrument to which any of Indemnitors are a party or by which any of
Indemnitors are bound, or any law, ordinance, administrative regulation, or decree of court, that
is applicable to any of Indemnitors;



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



13









 





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



     (d) evidence that Indemnitors have entered into the Bank of America Credit Agreement by
delivering an executed copy of such credit agreement to Surety; and



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



     Contemporaneously with the execution of this Agreement, Principal will pay Surety a facility
fee in the amount of One Million Dollars ($1,000,000). The delivery of said facility fee will not
reduce Surety Loss (other than the exclusion of professional fees through April 30, 2006, provided
for in subparagraph (c) of the definition of Surety Loss), or otherwise affect Surety’s rights
under the Indemnity Agreement or any other of the Surety Credit Documents. In addition,
contemporaneously with the execution of this Agreement, Indemnitors will remit to Surety any and
all unpaid bond premiums.



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



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



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



          (1) the representations and warranties contained in this Agreement and the Surety Credit
Documents are correct in all material respects on and as of the date of such issuance as though
made on and as of such date, except to the extent that such representations and warranties
specifically refer to an earlier date, in which case they are true and correct as of such earlier
date; and




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




14









 








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



     (c) Indemnitors will have and maintain sufficient unrestricted liquidity to support their
operations in the ordinary course, the adequacy of which will be determined from time to time by
Surety in its sole and absolute discretion.



     (d) Any banking or other financial institutions that have any security interest in the assets
of Indemnitors will have entered into an intercreditor agreement with Surety which will: (i)
confirm that such lender will not have a security interest in the Collateral; (ii) limit the rights
of a such lender to challenge Surety’s Lien; and (iii) provide an acknowledgement from the lenders
of Surety’s equitable subrogation rights. In addition, Surety will acknowledge that, absent an
Event of Default, pursuant to Indemnitors cash management system cash proceeds of the Bonded
Contracts may be co-mingled with the proceeds of other accounts receivable on deposit and in lock
box accounts in which such lender may have a security interest or other rights and that Surety will
not have any security interest in or to such accounts and/or proceeds of Bonded Contracts that from
time to time have been are deposited into such accounts in which such lender may have a security
interest (the foregoing will not be deemed a waiver of Surety’s rights under this Agreement to
require Indemnitors to segregate proceeds of Bonded Contracts and proceeds of Collateral following
the occurrence of an Event of Default).



     (e) Any request for a Bond will contemplate any of Indemnitors (exclusive of Bryant Electric
Company, Inc., Daniel Electrical Contractors, Inc., Mark Henderson Incorporated, Mills Electric
L.P., Pan American Electric, Inc., Pan American Electric Company, Inc., Thomas Popp & Company, and
Valentine Electrical, Inc.) being named as the principal.



     (f) Surety will be the holder of a first priority security interest in the Collateral subject
only to Permitted Liens.



     (g) Principal will notify Surety of any additive change order that results in a corresponding
increase in the penal limit of any Existing Bond. Surety will treat any such increase in the penal
limit of any Existing Bond as an issuance under the terms of the surety credit facility established
in this Agreement. Indemnitors will remit to Surety any additional bond premiums due as a result
of the increase in the penal sum of any Existing Bond.



     (h) From and after June 1, 2006, the total aggregate penal amount of Bonds to be issued by
Surety in any calendar month will not exceed Ten Million Dollars ($10,000,000); provided, however,
in the event Indemnitors do not deliver the Goochland Letter of Credit to Surety as required under
Section 5, the foregoing Ten Million Dollars ($10,000,000) limit will automatically be reduced to
Eight Million Dollars ($8,000,000). For purposes of determining the total aggregate penal amount
of Bonds issued in any calendar month, the following penal amounts of the Bonds will be included
(without duplication): (i) the aggregate penal amount of any bid Bonds issued during such calendar
month; (ii) in the event Surety issues a written consent during such calendar month with respect to
any bid Bonds, the full aggregate penal amount of the resulting Bonds; (iii) the aggregate penal
amount of all renewals of any Bonds issued during such calendar



15









 







month; (iv) the aggregate penal amount of all other Bonds issued during such calendar month; plus
(v) any increase during such month in the penal sum of any Existing Bond.



     (i) From and after June 1, 2006, the total aggregate penal amount of the Bonds (excluding the
Existing Bonds other than any increases in the penal sum of any Existing Bond) issued by Surety
will not exceed Seventy Million Dollars ($70,000,000). For purposes of determining the total
aggregate penal amount of the foregoing line of surety credit that has been used by Principal, the
following penal amounts of the Bonds will be included (without duplication): (i) the aggregate
penal amount of any bid Bonds (excluding the Existing Bonds) issued; (ii) in the event Surety
issues a written consent with respect to any bid Bonds, the full aggregate penal amount of the
resulting Bonds (excluding the Existing Bonds); (iii) the aggregate penal amount of all renewals of
any Bonds; (iv) the aggregate penal amount of all other Bonds (excluding the Existing Bonds) ; plus
(v) any increase in the penal sum of any Existing Bond.



     (j) In the event any of Indemnitors request that Surety issue a low penalty Bond (a Bond in a
penal sum that is less than the original contract amount) and Surety agrees to issue such low
penalty Bond, Indemnitors will be required to deliver to Surety cash collateral in an amount equal
to one hundred percent (100%) of the penal sum of such low penalty Bond.



     (k) Any request for a bond under this facility will not be made prior to the last to occur of
the Effective Date and May 31, 2006.



     (l) No bonds will be issued under this facility after December 31, 2006.



     (m) The Bonded Backlog will not exceed Eighty Million Dollars ($80,000,000) at any time.



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



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



16









 





     Principal will pay Surety’s reasonable legal, accounting, consulting, and related fees
reasonably incurred in connection with claims made under any particular Bond, including but not
limited to, any claims made under any Bond related to the Goochland Project and Principal will pay
Surety’s reasonable legal, accounting, consulting and related fees and expenses reasonably incurred
after April 30, 2006, in connection with the Bonds, the Surety Credit Documents, and/or any
application or submission by any of Indemnitors for the issuance of any Bond or renewal of any
existing Bond, whether or not Surety decides to issue said Bond. Notwithstanding the foregoing,
Indemnitors will be required to reimburse Surety for one hundred percent (100%) of any filing fees
and recording taxes incurred and required to perfect and continue Surety’s security interest in the
Collateral regardless of when those fees are incurred.



     In order to facilitate the sale of the equity of any Principal or the Collateral (other than
the transfer of Inventory or Equipment that is required pursuant to the terms of any Bonded
Contract to be transferred to any Obligee on any Bond (or any assignee of such Obligee or any other
owner, or assignee of any owner, of the Work) upon completion or termination of the Work in the
ordinary course of business, as to which no release is necessary) of any Principal and Indemnitor
(exclusive of Integrated Electrical Services, Inc.): (i) in the event the sale is of the equity or
of any such Collateral of any Indemnitor that is not also a Principal under any outstanding Bonds
and provided, that, the sales proceeds are remitted to and used in the ordinary course of business
of the continuing Indemnitors, then Surety will upon request of any such Indemnitor (y) in the
event the sale is of the equity interest, release such Indemnitor from its guaranty and other
obligations (including the pledge of its assets as collateral)of any such Surety; and (z) in the
event the sale is of Collateral, release such Collateral as collateral; and (ii) in the event the
sale is of the equity or of any Collateral (other than the transfer of Inventory or Equipment that
is required pursuant to the terms of any Bonded Contract to be transferred to any Obligee on any
Bond (or any assignee of such Obligee of any other owner, or assignee of any owner, of the Work)
upon completion or termination of the Work in the ordinary course of business, as to which no
release is necessary) of any Principal under any outstanding Bonds and provided, that, the sales
proceeds are remitted to and used in the ordinary course of business of the continuing Indemnitors,
then Surety will upon request of any such Principal (y) in the event the sale is of equity
interest, release such Principal from its guaranty and other obligations (including the pledge of
its assets as collateral) with respect to the Bonds issued by Surety for the other Principals and
Indemnitors; and (z) in the event the sale is of any such Collateral release such Collateral as
collateral with respect to Bonds issued by Surety for the other Principals and Indemnitors;
provided, that, in each of (y) and (z) (a) such Principal continues as an Indemnitor with respect
to all Bonds issued on behalf of such Principal and Surety will retain all Collateral of such
Principal to secure all Surety Loss and other obligations on such Bonds; (b) Surety is provided
with the indemnity of a Person(s), acceptable to Surety in its sole and absolute discretion, with
respect to all Bonds issued on behalf of such Principal and such new indemnitor(s) executes an
indemnity agreement in favor of Surety, in a form that is acceptable to Surety, in its sole and
absolute discretion; and (c) all Bonds other than payment and performance Bonds are replaced within
ninety (90) days of the sale. Notwithstanding the foregoing, the provisions of this paragraph will
not require Surety to release or return: (w) the Existing Letters of Credit; (x) the Existing
Pledged Collateral; (y) any Proceeds of Collateral that are required to be delivered to Surety or
to any separate account following an Event of Default; and (z) any cash delivered to Surety
pursuant to the terms of this Agreement.



17









 





     5. Security Interest; Obligation Secured. To secure payment or other performance of
any and all Surety Loss (including, but not limited to, any Surety Loss incurred in connection with
the Goochland Project), and the payment and performance of all other obligations and undertakings
now or hereafter owing to Surety with respect to the Bonds and/or under the Surety Credit
Documents, as same may now or hereafter be modified, replaced, extended, or renewed, Indemnitors
have granted and hereby grant to Surety a perfected first priority (subject to Permitted Liens)
security interest in the Collateral. The security interest created herein will attach without the
execution or delivery to Surety of any instruments, documents, assignments, or other agreements of
transfer, and in the event any such instruments, documents, or other agreements of transfer are or
will be delivered to Surety, the same are and will be in furtherance of and in addition to the
security interest created by virtue of this Agreement. As additional security for any and all
Surety Loss (including, but not limited to, any Surety Loss incurred in connection with the
Goochland Project), Indemnitors have caused to be delivered to Surety and named Surety as the
beneficiary of the Existing Letters of Credit, and have pledged to Surety the Existing Pledged
Collateral. Pursuant to the Interim Order, the Final Order, and the Plan of Reorganization, the
first priority lien and security interest of Surety in the Existing Pledged Collateral was
confirmed and Indemnitors assumed, and Indemnitors hereby confirm and acknowledge, all of their
obligations to Surety under the Pledge Agreements referred to in item (vi) of the definition of
Surety Credit Documents.



     In the event Surety is named as a party in any lawsuit, arbitration, or other proceeding with
respect to the Goochland Project or any Obligee named in the Bonds issued by Surety in connection
with the Goochland Project declares a default, then, Indemnitors will deliver to Surety the
Goochland Letter of Credit to secure any Surety Loss that may be incurred in connection with the
Goochland Project. The Goochland Letter of Credit will be delivered to Surety within three (3)
Business Days of notice by Surety to Indemnitors that they are required to deliver the Goochland
Letter of Credit, or within three (3) Business Days of any Indemnitor’s actual knowledge that it is
required to deliver the Goochland Letter of Credit to Surety, whichever first occurs. The
Goochland Letter of Credit will be from a financial institution acceptable to Surety and in a form
acceptable to Surety, all as determined in Surety’s sole and absolute discretion. The Goochland
Letter of Credit will be returned upon the complete discharge, release, and termination without
Surety Loss of the Bonds issued by Surety in connection with the Goochland Project. The Goochland
Letter of Credit will secure only the obligation to reimburse Surety for Surety Loss in connection
with the Goochland Project and will not secure any other obligation of Indemnitors to Surety. In
the event that Surety Loss with respect to the Goochland Project is not satisfied by Indemnitors,
Surety will first draw on the Goochland Letter of Credit to satisfy such Surety Loss before looking
to other Collateral. In the event Surety obtains a complete discharge of its obligations under the
Bonds issued in connection with the Goochland Project for less than the amount that is paid to
Surety under the Goochland Letter of Credit, the balance thereof will be returned or released upon
receipt of such discharge. Notwithstanding the foregoing, in lieu of delivery of the Goochland
Letter of Credit to Surety, Indemnitors may elect to reduce the total aggregate penal amount of
Bonds to be issued by Surety to Eight Million Dollars ($8,000,000) in each calendar month from and
after June 1, 2006, as provided in Section 3(h) of this Agreement.



18









 





     Indemnitors will at all times keep Surety’s security interest properly perfected and hereby
designate Surety as their attorney in fact to do any acts or deeds or execute such documents
reasonably appropriate to accomplish said perfection. Said designation will be irrevocable as long
as any obligation of any of Indemnitors to Surety under this Agreement and/or any of the Surety
Credit Documents is outstanding. The right is expressly granted to Surety, at Surety’s discretion,
to file in those jurisdictions where the same is permitted, one or more financing statements under
the UCC and indicating therein the types or describing the items of the Collateral. Without the
prior written consent of Surety, none of Indemnitors will, after the date hereof, file or authorize
or permit to be filed in any jurisdiction any financing or like statement relating to the
Collateral other than filings of Permitted Liens. Surety’s security interest will be first and
prior to any other Liens on the Collateral except for Permitted Liens. Surety reserves all rights
to contest the validity or priority of any Lien.



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



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



     Upon the Indebtedness being paid and satisfied in full, Surety will, with reasonable
promptness, execute all necessary documents and file same in every jurisdiction in which the
security agreement or any Surety Credit Document was filed to effectuate a termination of said
security agreement and all Liens evidenced thereby.



     6. Set Off Rights; Description of Collateral. Indemnitors confirm and acknowledge
that Surety has the right to set off against Surety Loss any and all amounts that may be owing from
time to time by Surety to any Indemnitor in any capacity, including, but without limitation, any
balance or share belonging to any Indemnitor of any deposit or other account with Surety. The
Collateral includes all of any Principal’s or Indemnitor’s right, title, and interest in and to all
existing and future Bonded Contracts and associated contract rights; Accounts; all claims, rights,
and choses in action against any Obligee on any Bond or against any other Person with respect to
any Bond or Bonded Contract; Bonded Contracts Balances; to the extent assignable (provided, that,
any such prohibition on assignment would not be rendered ineffective pursuant to Article 9 of the
UCC, including, without limitation Section 9-406 and 9-408 of the UCC, or any successor provisions
and further, provided, that, any such prohibition on assignment has not otherwise been rendered
ineffective, lapsed, or terminated) all rights and actions that any Indemnitor may have or acquire
in any subcontract, purchase order, or other agreement in connection with any Bonded



19









 







Contract, and against any subcontract, purchase order, or other agreement with any Person
furnishing or agreeing to furnish or supply vehicles, labor, supplies, machinery, or other
inventory or equipment in connection with or on account of any Bonded Contract, and against any
surety or sureties of any such subcontractor, laborer, or other Person; any and all Equipment;
any and all Inventory; any and all books, accounts, computer software, and other computer stored
information, and any and all drawings, plans, specifications, shop and as built drawings, utilized
in or necessary to fully perform all obligations and services required of Principal under the
Bonded Contracts; all progress schedules, work in process schedules (including, but not limited to,
estimates of completion costs), accounts receivable ledgers, accounts payable ledgers, and
estimates of completion costs relating to any and all Bonded Contracts; and any and all proceeds
and products arising with respect thereto.



     Anything herein to the contrary notwithstanding, (i) Indemnitors will remain liable under any
contracts and agreements included in the Collateral, solely to the extent set forth therein, to
perform all of their duties and obligations thereunder to the same extent as if this Agreement had
not been executed, (ii) the exercise by Surety of any of the rights hereunder will not release any
Indemnitor from any of its duties or obligations under the contracts and agreements included in the
Collateral, and (iii) Surety will not have any obligation or liability under any contracts and
agreements included in the Collateral by reason of this Agreement, nor will Surety be obligated to
perform any of the obligations or duties of Indemnitor thereunder or take any action to collect or
enforce any claim for payment assigned hereunder.



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



     (a) Indemnitors are the exclusive owners of the Collateral and have good and marketable title
to the Collateral and that on the date of this Agreement the Collateral is free of any and all
Liens (excluding Permitted Liens).



     (b) Until such time as all of the Indebtedness has been paid and satisfied in full, none of
Indemnitors will sell, transfer, convey, or assign any of the Collateral without prior written
consent of Surety or permit any Lien on the Collateral (other than Permitted Liens).



     (c) If, at any time, the Collateral will be deemed unsatisfactory to and by Surety or in the
event Surety will otherwise deem itself, its security interests, its Collateral, or its recovery of
Surety Loss unsafe or insecure, then and on demand of Surety, Indemnitors will immediately furnish
such further collateral or make such payment on said account as will be reasonably satisfactory to
Surety to be held by Surety as if originally pledged hereunder.



     (d) The current jurisdiction of formation as of the date of this Agreement, of each of
Principal and Indemnitors is correctly reflected on page one and/or the attached Exhibits A and B,
respectively. Indemnitors will notify Surety of any change in any Indemnitor’s name, identity,
corporate structure, or change in jurisdiction in which it is formed or exists thirty (30) days
prior to such change. Indemnitors will not be required to give any additional advance notice to
Surety of the name changes that are contemplated on the attached Exhibit A, but will give Surety
notice of any such name change within ten (10) days of the effective date of the change.



20









 





     (e) Indemnitors are not in default with respect to any of their existing Debt as of the
Effective Date except for defaults arising from the filing of the Bankruptcy Case and such defaults
that would not, individually or in the aggregate, have a Material Adverse Effect, and the making
and performance of this Agreement and the Surety Credit Documents by Principal and Indemnitors will
not (immediately or with the passage of time, the giving of notice, or both):



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




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




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



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



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



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



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



          (i) Such rights arise under one or more existing binding written contracts between a Principal
and the other party or parties thereto, or will be evidenced by a binding




21









 







written contract before performance thereunder, and do or will represent a bona fide transaction,
enforceable in accordance with its terms;




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




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




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




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




          (vi) To the best of Indemnitors’ knowledge, information, and belief, all parties to any Bonded
Contracts, and other commitments that constitute Collateral and to which any of Indemnitors are a
party, have complied in all material respects with the provisions of such Bonded Contracts and
other commitments; no party is in default in any material respect under any provision thereof; and
no event has occurred which, but for the giving of notice or the passage of time, or both, would
constitute a default.




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



     (l) As of the Effective Date, none of Indemnitors is insolvent within the meaning of the
Bankruptcy Code; provided, however, this representation and warranty shall not apply to Bryant
Electric Company, Inc., Daniel Electrical Contractors, Inc., Mark Henderson, Incorporated, Pan
American Electric, Inc., Pan American Electric Company, Inc., Thomas Popp & Company, Valentine
Electrical, Inc., and Mills Electric L.P.



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



22









 





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



     (o) Indemnitors perform minimal work as a party contracting directly with the Federal
Government or any of its agencies and do not anticipate that changing.



     (p) Bonds have been issued in the names of Riviera Electric, LLC, Riviera Electric LP, Riviera
Electric Inc., and Riviera Electric as the named Principal. Indemnitors represent and warrant to
Surety that the proper name of the entity is Riviera Electric LLC. If Surety requests that
Integrated Electrical Services, Inc. take the necessary steps to correct any Bonded Contracts and
Bonds that may have been issued with the names Riviera Electric, Riviera Electric LP, or Riviera
Electric Inc. to change the name to Riviera Electric LLC, Indemnitors will take such steps.



     (q) Exclusive of the documents set out on Exhibit D hereto, as of the date hereof, none of
Indemnitors (exclusive of Integrated Electrical Services, Inc.) is bound by any agreement,
indenture, or other Debt instrument for borrowed money involving a principal amount in excess of
Two Hundred Fifty Thousand Dollars ($250,000).



     8. Use of Licensed Property. Indemnitors hereby grant to Surety an irrevocable, non
exclusive, royalty-free, and fully paid-up license and right to use the Licensed Property upon the
occurrence of and during the continuance of any Event of Default for the limited purpose of: (i)
obtaining bids for the completion of any Bonded Contract; (ii) taking possession of the Work under
any Bonded Contract; (iii) completing, or consenting to the completion of, any Bonded Contract;
and (iv) tendering the completion of any Bonded Contract to any Obligee that has agreed to accept a
tender of completion of the Bonded Contract.



     9. Preservation of the Collateral. Principal and Indemnitors will use reasonable
efforts to preserve the Collateral and defend the title and Surety’s security interest therein, at
Principal and Indemnitors’ cost and expense. Each Principal and Indemnitors’ principal place of
business and chief executive office as of the date of this Agreement is correctly reflected on
Exhibits A and B, respectively. The principal place of business and chief executive office of
Integrated Electrical Services, Inc., and location of its Records related to the Bonded Contracts,
is correctly reflected in Section 38. The Records of each Principal and Indemnitor related to the
Collateral are located at the principal places of business and chief executive offices reflected on
Exhibits A and B, respectively. Indemnitors agree to give Surety immediate prior written
notification of the establishment of any new chief executive office or principal place of business;
and the discontinuance of any office or place of business.



     Indemnitors will pay and discharge promptly all taxes, assessments, and governmental charges
or levies imposed upon the Collateral, as well as all judgment liens and all claims for labor and
materials which, if unpaid, might constitute a Lien or charge upon the Collateral (other than
Permitted Liens), unless and only to the extent that the same will currently be duly contested in
good faith (and for which adequate reserves have been established) by appropriate



23









 







proceedings and as to which foreclosure and other enforcement proceedings will not have been
commenced (unless fully bonded or otherwise effectively stayed).



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



     10. Indemnitors to Hold Contract Funds in Trust. Indemnitors agree and expressly
declare that all funds due or to become due under the Bonded Contracts are trust funds, whether in
possession of Indemnitors or another, for the benefit and the payment of all Persons to whom
Indemnitors incur obligations in the performance of the Bonded Contracts, for which Surety is or
may be liable under the Bonds. If Surety discharges any such obligations, with or without a claim
asserted against Surety under the Bonds, it will be entitled to assert the right of such Person to
the trust fund. All payments received for or on account of any Bonded Contract will be held in a
trust fund to assure the payment of obligations incurred or to be incurred in the performance of
any Bonded Contract and for labor, materials, and services furnished in the prosecution of the
performance required by any Bonded Contract or any extension or modification thereof. All monies
due and to become due under any Bonded Contract are also trust funds, whether in the possession of
Indemnitors, or otherwise. Such trust funds will be for the benefit and payment of all obligations
for which Surety is or may be liable under any Bonds. Such trust funds will inure to the benefit
of Surety for any liability or Surety Loss it may have or sustain under any Bond, and this
Agreement and declaration constitute notice of such trust. As long as no Event of Default has
occurred, the trust funds, unless otherwise restricted or regulated by state or local laws, can be
commingled with other funds, but the trust fund nature and purpose as stated in this paragraph will
not be modified nor waived by this commingling provision.



     Upon the occurrence of an Event of Default, Indemnitors will, upon demand of Surety, open an
account(s) with a bank or similar depository designated by Indemnitors and approved by Surety,
which account(s) will be designated as trust account(s) for the deposit of such trust funds, and
will deposit therein following such demand, all monies paid or to be paid under the Bonded
Contracts. Withdrawals from such account(s) will be by check or similar instruments signed by a
representative of Surety and, at Surety’s option, countersigned by Indemnitors. Said trust(s) will
terminate on the payment by Indemnitors of all the contractual obligations for the payment of which
the trust(s) is created. In furtherance of the foregoing, Surety acknowledges that absent the
occurrence of an Event of Default and such demand by Surety, Principal’s cash management system
will not be affected or changed by the terms of this Agreement.



     11. Premium Payment. Indemnitors agree to pay all premiums on the Bonds issued after
the Effective Date, computed at a rate of Seventeen 50/100 Dollars ($17.50) per One



24









 







Thousand Dollars ($1,000) of the contract price. The failure of any Indemnitor to pay the bond
premiums or the failure of Surety to receive premiums will not provide Indemnitors with any defense
to an action under this Agreement. Indemnitors also agree to pay all premiums due Surety on any
insurance policy(ies) issued by Surety for the benefit of any Indemnitor.



     12. Corporate Identity and Existence. None of Principal or Indemnitors has used any
trade name (other than its legal name) or previous names during the time period of July 1, 2005,
through the date of this Agreement other than those set out on Exhibits A and B, respectively.
Each of Principal and Indemnitors is a corporation or other legal entity duly organized, validly
existing, and in good standing under the laws of the state and/or other jurisdiction as indicated
in Exhibits A and B, respectively. Each of Principal and Indemnitors has the corporate or other
power to own its properties and to engage in the business it conducts, and is duly qualified and in
good standing as a foreign corporation in the jurisdictions wherein the nature of the business
transacted by it or property owned by it makes such qualification necessary, except where the
failure to be so qualified could not reasonably be expected to have a Material Adverse Effect.
Each of Principal and Indemnitors will maintain their formal existence (in good standing where
appropriate under state or other governing law) and remain or become duly qualified (and in good
standing where appropriate under state or other governing law) as a foreign entity in each
jurisdiction in which the conduct of their respective businesses requires such qualification or
license except in each case where the failure to maintain such existence to be so qualified would
not reasonably be expected to have a Material Adverse Effect. Principal and Indemnitors will use
reasonable efforts to furnish Surety with any financial information related to Indemnitors or the
Collateral in the form and at the time reasonably appropriate and as reasonably requested by Surety
and as set out in Section 13 of this Agreement.



     13. Accounts; Financial Reporting; Books and Records. Indemnitors will: (a) provide
Surety with copies of yearly audited consolidated financial statements as soon as possible upon
completion and in no event later than one hundred twenty (120) days after the end of the period
under audit; (b) furnish Surety with true copies of unaudited quarterly consolidated and
consolidating financial statements for Indemnitors as soon as reasonably practicable and in no
event later than sixty (60) days after the end of the period under audit; (c) provide Surety with
copies of any and all financial records or similar financial disclosures that Indemnitors provide
to any lender under the terms set out in any credit facility entered into or to be entered into by
any Indemnitors; (d) provide Surety with a quarterly summary of any contracts entered into with
the Federal Government or any of its instrumentalities and identifying any contracts that they
anticipate pursuing with any Federal Government or instrumentality within the next following three
(3) months; (e) provide Surety with monthly work in process schedules reflecting activities under
all of the Bonded Contracts that relate to projects of Indemnitors and such other information on
Bonded Contracts that relate to projects that have been transferred to third party entities that is
actually received by Indemnitors no later than twenty (20) days after the end of each calendar
month; and (f) such other financial information in a form as Surety will reasonably require upon
completion and in no event later than sixty (60) days after the period under review. In the event
Surety is not provided with work in process schedules as required by the foregoing item (e), then
Surety will be unable to calculate Bonded Backlog and the availability of Bonds will be suspended
until the necessary schedules are provided and Surety has had sufficient time to analyze these
schedules. These financial documents described in (a) and (b) above will be



25









 







prepared in conformity with GAAP, subject to normal year-end audit adjustments and the absence of
footnotes as applicable, and in each instance will present fairly and accurately the financial
condition of Indemnitors, as applicable, as of the dates of the statements and the results of their
operations for the periods then ended. Indemnitors agree to immediately notify Surety of the
occurrence of any material change in their financial condition that would reasonably be expected to
have a Material Adverse Effect. Indemnitors represent that their books and records will be kept
accurately and in a timely manner and in accordance with good business practices.



     Indemnitors at all times will keep accurate and complete Records of Indemnitors’ Accounts and
Bonded Contracts, and make those Records available for review, upon a reasonable and appropriate
request by Surety. Surety will have the right at all times during regular business hours to free
access to the papers of each Indemnitor including, without limitation, its books, records,
accounts, computer software, and other computer stored information, licenses, copyrights, patents,
and other intellectual property, for the purpose of examining, copying, or reproducing the same.
Each Indemnitor authorizes and requests any and all depositories in which funds of any Indemnitor
may be deposited to furnish to Surety, upon reasonable request by Surety, statements of account and
any other documents reflecting receipts and disbursements and any Person doing business with
Indemnitors is authorized to furnish any information requested by Surety concerning any
transaction. Subject to the terms and conditions of that certain Nondisclosure and Confidentiality
Agreement effective October 1, 2004, executed by and between Chubb & Son, a division of Federal
Insurance Company, and Integrated Electrical Services, Inc., Surety may furnish copies of any and
all statements, agreements, and financial statements and any information which it now has or may
obtain concerning each of the Indemnitors to other Persons or companies for the purpose of
procuring co suretyship or reinsurance, or during the investigation of claims that may be, or have
been, asserted against Surety.



     14. Representations; Duty to Notify Surety. The representations and warranties of
Indemnitors contained in this Agreement are true and correct and complete on and as of the date of
this Agreement.



     Indemnitors hereby undertake the duty to notify Surety at the earliest practicable moment of:
(i) any material change in the terms or provisions of any of the Bonded Contracts that would
materially and adversely affect Surety; and (ii) any material change in any representation made in
this Agreement or in any other document or provided to Surety in connection with its obligations of
suretyship that would materially and adversely affect Surety. Indemnitors acknowledge hereby that
Surety has and will continue to rely upon such information in undertaking its obligations to third
parties under said Bonds. Indemnitors will promptly notify Surety immediately if any of them
becomes aware of the occurrence of any Event of Default or of any fact, condition, or event that
only with the giving of notice or passage of time or both, could become an Event of Default, or of
the failure of Indemnitors to observe any of their respective undertakings hereunder and under any
of the Surety Credit Documents.



     15. Bankruptcy Court Approval. In the event any of Indemnitors file for relief under
the Bankruptcy Code after the Effective Date and Surety determines that it is necessary or
desirable that bankruptcy court approval be obtained with respect to this Agreement or the



26









 







transactions contemplated hereunder, subject to compliance with law and any applicable orders of
the bankruptcy court, trustee, receiver or equivalent Person, Indemnitors will use their respective
reasonable best efforts to obtain a court order which, among other things, (i) determines that this
Agreement (and any other Surety Credit Documents entered into by Indemnitors with Surety) was
proposed by Surety in good faith and should be approved; (ii) determines that Surety is a creditor
who gave “new value” and entered into a “contemporaneous exchange for value” with Indemnitors as
contemplated by the Bankruptcy Code, including, but not limited to, Sections 547(a)(2) and 547(c)
of the Bankruptcy Code, when entering into this Agreement (and any other documents entered into by
any of Indemnitors with Surety) and that the transfers made by Indemnitors do not constitute
preferences under the provisions of Section 547 of the Bankruptcy Code; (iii) authorizes and
directs Indemnitors, as applicable, to ratify this Agreement (and any other Surety Credit Documents
entered into by Indemnitors with Surety); (iv) authorizes and directs Indemnitors, as applicable,
to execute, deliver, perform under, consummate, and implement, this Agreement, together with all
additional instruments and documents that may be reasonably necessary or desirable to implement the
transactions contemplated in this Agreement; (v) authorizes claims and recourse by Surety against
the Collateral for any reason set forth in this Agreement (and any other documents entered into by
Indemnitors with Surety); and (vi) approves any post petition security interest, as provided in
Section 552 of the Bankruptcy Code. The provisions of this Section 15 will apply regardless of
whether any of Indemnitors is a debtor in any bankruptcy cases.



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



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



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



     16. Adequate Assurance of Future Performance. Regardless of whether an Event of
Default has occurred, Indemnitors agree that in the event of a filing after the Effective Date by
or against any of Indemnitors of a proceeding under the Bankruptcy Code:



          (a) Surety is the holder of a “claim” and is a claimant within the meaning of Section 101(5)
of the Bankruptcy Code and is a “party in interest” within the meaning of Sections 362(d) of the
Bankruptcy Code. Surety has standing as a party in interest to be heard in all matters including,
without limitation, the right to seek relief pursuant to Sections 361 and 365 of the Bankruptcy
Code;




27









 








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




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




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




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



     18. Termination of Automatic Stay. Indemnitors hereby acknowledge, confirm, and agree
that, in the event Surety elects to enforce any rights it may have under and of the Surety Credit
Documents with respect to the Existing Pledged Collateral and the Collateral, or any other
collateral provided as security to secure Surety Loss, any such action will be deemed to be in the
nature of a recoupment, rather than a set-off, as contemplated by Section 553 of the Bankruptcy
Code. Notwithstanding the foregoing, should Surety deem it advisable and elect to seek relief from
the automatic stay imposed by Section 362 of the Bankruptcy Code, Indemnitors hereby covenant to
the immediate lifting of such automatic stay and will not contest any motion by Surety to lift such
stay upon a showing that: (i) the cost to fully perform the obligations and



28









 







services required under any Bonded Contract exceeds the remaining amounts payable under such Bonded
Contract; or (ii) the aggregate of the cost to fully perform the obligations and services required
under any and all Bonded Contracts exceeds the aggregate of the remaining amounts payable under all
Bonded Contracts. Indemnitors stipulate that in the event that the cost to fully perform the
obligations and services required under a Bonded Contract exceeds the remaining amounts payable
under such Bonded Contract, then such Bonded Contract is not necessary to an effective
reorganization of Indemnitors within the meaning of Section 362 of the Bankruptcy Code.



     19. Contract Proceeds as Cash Collateral — Priority. Surety and Indemnitors expressly
agree that the proceeds arising from Bonded Contracts constitute “cash collateral” as that term is
defined under Section 363 of the Bankruptcy Code. Surety and Indemnitors further agree that Surety
will have a claim to the proceeds arising from such Bonded Contracts, and said claim will have
priority over all expenses of the kind specified or ordered pursuant to Sections 105, 326, 330,
331, 503(b), 503(c), 507(a), 507(b), 546(c), or 726 of the Bankruptcy Code, and will also have
priority over any other priority claims. Indemnitors further acknowledge that this claim of Surety
will at all times be senior to the rights of Indemnitors or any Trustee in any case or proceeding
in which any of Indemnitors becomes a debtor or debtor-in-possession under the Bankruptcy Code.



     20. One General Obligation — Default. Indemnitors will notify Surety promptly if any
of them becomes aware of the occurrence of any Event of Default or of any fact, condition, or event
that only with the giving of notice or passage of time or both, could become an Event of Default,
or of the failure of Indemnitors to observe any of their respective undertakings hereunder or under
any of the Surety Credit Documents. It is distinctly understood and agreed that all of the rights
of Surety contained in this Agreement will likewise apply insofar as applicable to any modification
of or supplement to this Agreement and to any other of the Surety Credit Documents. Any default
under the terms of this Agreement or any of the Surety Credit Documents will constitute, likewise,
a default by Indemnitors of every existing agreement with Surety, and any default by Indemnitors of
any other agreement with Surety will constitute a default of this Agreement.



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



     22. Indemnitors’ Waiver of Notice; Rights of Surety. Except as set forth in Section
33, upon any execution, continuation, modification, renewal, enlargement, or amendment of any



29









 







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



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



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



     25. Indemnitors’ Duty to Deliver and Execute Papers and Other Instruments.
Indemnitors agree upon the request of Surety, to sign, execute, file, and/or deliver to Surety all
documents, reports, papers, pleadings, and/or instruments reasonably required to obtain and/or
confirm any of Surety’s rights under this Agreement or the Surety Credit Documents. During the



30









 







term of this Agreement and following the occurrence of any Event of Default, Indemnitors will
furnish to Surety upon its reasonable written request a statement of all deposits by source and
amount of all withdrawals by payee and amount and all beginning and ending balances for all bank
accounts maintained by any Indemnitor. Furthermore, Surety will be allowed access to all of
Indemnitors’ business records during regular business hours.



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



     27. Payment of Labor, Material, and Other Costs. Principal agrees to first use any
Bonded Contract Balances generated by Bonded Contracts to pay valid labor, materials, and any other
costs or expenses incurred when due in connection with the performance of the Bonded Contracts. As
long as no Event of Default has occurred, unless otherwise restricted or regulated by state or
local laws, Bonded Contract Balances can be co-mingled with other funds. Surety further
acknowledges that absent the occurrence of an Event of Default and demand by Surety, Principal’s
cash management system will not be affected or changed by the terms of this Agreement.



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



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



31









 





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



     31. Authority of Surety to Make Loans to Indemnitors. In addition to the other
remedies provided herein, at the request of any Indemnitor, Surety is authorized and empowered, but
is not obligated to advance or loan money or guarantee loans to any Indemnitors as Surety may see
fit for the purpose of completing performance of any of the Bonded Contracts, or for the purpose of
meeting operational expenses or paying other obligations, bonded or unbonded. Such funds may be
advanced or guaranteed at any time, whether before or after default of such Indemnitor under the
Bonded Contracts. Upon demand by Surety, Indemnitors will be responsible to reimburse Surety for
all funds advanced, loaned, or guaranteed by Surety to any Indemnitor and all Surety Loss incurred
by Surety in relation thereto, notwithstanding the failure of such Indemnitor to so use those
funds. Indemnitors waive all notice of such advance, loan, or guarantee, and acknowledge that
whether to make any such advances, loans, or guarantees will be made in the sole and absolute
discretion of Surety.



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



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



32









 





     In the event of the refusal or failure of Indemnitors to exonerate Surety as required under
the Indemnity Agreement, Indemnitors agree upon written demand to provide to Surety a reasonable
amount of money designated by Surety and/or other collateral decided upon by Surety. Such funds
and/or other collateral will be held by Surety as collateral in addition to the indemnity and other
collateral afforded by this Agreement, with the right to use such funds and/or other collateral or
any part thereof, at any time in performance, payment, or compromise of any obligations or
liability, claims, demands, judgments, damages, fees, and disbursements or other expenses. Said
deposit and/or provision of money and/or other collateral designated by Surety will be required
regardless of whether any Reserve has been established by Surety. Without limiting the generality
of the foregoing, in the event Surety posts a Reserve, then Indemnitors will deliver to Surety cash
in an amount equal to the Reserve posted in addition to the Collateral. Demand will be sufficient
if sent by certified mail, return receipt requested, to Indemnitors at the address or addresses
given herein or last known to Surety, whether or not actually received. Indemnitors acknowledge
that the failure of Indemnitors to deposit with Surety, immediately upon demand, the sum demanded
by Surety as collateral security will cause irreparable harm to Surety for which Surety has no
adequate remedy at law. Indemnitors agree that Surety will be entitled to injunctive relief for
specific performance of the obligations of Indemnitors to deposit with Surety the sum demanded as
collateral security and hereby waives any claims or defenses to the contrary. The deposit of
collateral pursuant to this Section 33 will not be deemed to cure any default under the Bonded
Contract(s) and Surety may, in its sole and absolute discretion, refuse to issue any bonds;
provided, however, the foregoing will not be deemed to alter certain of the provisions under the
definition of Event of Default that permit certain Events of Default to be cured upon the deposit
of cash collateral.



     Without limiting the generality of the foregoing, upon any Event of Default, Surety is
entitled to require Indemnitors to deposit or cause to be deposited, all checks, drafts, cash, and
other remittances received in payment upon any or all of the Bonded Contracts or other Collateral
in a special “lockbox” bank account at a financial institution designated by Surety, over which
account Surety alone has power of withdrawal. During the continuance of any Event of Default,
Surety may further instruct any Obligee on any Bond, on behalf of Indemnitors and/or Surety, to pay
said remittances directly to Surety. The funds in said special bank account will be held by Surety
as security for all Indebtedness. Said proceeds will be deposited in precisely the form received,
except for the endorsement of Indemnitors where necessary to permit collection, which endorsement
Indemnitors agree to make and which Surety is hereby irrevocably authorized to make on Indemnitors’
behalf. Pending such deposit, Indemnitors agree that they will not commingle any such checks,
drafts, cash, and other remittances with any of Indemnitors’ funds or property, but will hold them
separate and apart therefrom and upon an express trust for Surety until deposit thereof is made in
the said special bank account. Subject to the trust fund provisions set out in Section 10, Surety
will apply, as Surety deems appropriate, any and all of the collected funds on deposit in the said
special bank account against the Indebtedness, the order and method of such application to be in
the discretion of Surety. Indemnitors agree to execute any documents and perform any acts
necessary to assure that remittances described in this paragraph are received by Surety as
contemplated herein, including, but not limited to, letters of direction to remit said funds to
Surety as contemplated herein.



33









 





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



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



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



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



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



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



34









 







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



     38. Notices. It is mutually agreed that any and all notices herein provided for must
be given in writing and will be deemed given if and when delivered in person or duly deposited in
the United States Mails, postage prepaid for certified mail, return receipt requested or delivered
to a nationally overnight carrier, properly addressed to the party to whom given at the address of
such party shown in this Agreement, provided however, that any party may specify any other post
office address in the United States by giving at least ten (10) days written notice thereof to the
other party.



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

	 	Attn.:
	 	Edward J. Reilly
	 

	 	 	 	Matt Lubin
	 
	 	 	 	 
	          With a copy to:	 	Manier & Herod
	 	 	2200 First Union Tower
	 	 	150 Fourth Avenue, North
	 	 	Nashville, Tennessee 37219
	 

	 	Attn.:
	 	Sam H. Poteet, Jr.
	 

	 	 	 	Mary Paty Lynn LeVan
	 
	 	 	 	 
	          Indemnitors:	 	Integrated Electrical Services, Inc.
	 	 	1800 West Loop South, Suite 500
	 	 	Houston, Texas 77027
	 

	 	Attn:
	 	David Miller
	 
	 	 	 	 
	          With a copy to:	 	Vinson & Elkins L.P.P.
	 	 	2001 Ross Avenue, Suite 3700
	 	 	Dallas, Texas 75201
	 

	 	Attn:
	 	James A. Markus






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



     40. Governing Law. This Agreement will be governed by and construed and enforced in
accordance with the laws of the State of Texas (without giving effect to its conflict of laws
principles). The parties hereto irrevocably consent to the non-exclusive jurisdiction of the



35









 







United States District Court or to the extent not available because the jurisdictional
pre-requisites are not met, the Supreme Court of the State of New York, in each instance located in
New York County, New York, New York for the purpose of any litigation concerning this Agreement.
No party hereto will object to or contest New York County, New York, New York as the proper venue
for any action or proceeding to enforce the terms hereof. Notwithstanding the foregoing, all
disputes regarding the enforcement or interpretation of the Plan of Reorganization will be heard
and decided by the Bankruptcy Court.



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



     42. Waiver by Indemnitors; No Marshaling of Assets. To the maximum extent permitted
by applicable laws, Indemnitors:



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




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




          (c) waive any defense arising by reason of, and agree that the rights of Surety and the
Indebtedness of Indemnitors will be absolute and unconditional irrespective of: (i) any




36









 







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




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




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




     43. Entire Agreement. This Agreement and the Surety Credit Documents represent the
entire agreement between the parties concerning the subject matter hereof, and all oral discussions
and prior agreements are merged herein. Provided, if there is a conflict between this Agreement
and any other of the Surety Credit Documents, the provision most favorable to Surety will control.



     44. Security Agreement. This Agreement constitutes a security agreement to Surety and
also a financing statement, both in accordance with the provisions of the Uniform Commercial Code
of every jurisdiction wherein such Code is in effect, but the filing or recording of this
Agreement, or an abstract hereof or financing statement will be solely at the option of Surety and
the failure to do so will not release or excuse any of the obligations of Indemnitor under this
Agreement. For the purpose of recording this Agreement, a photocopy acknowledged before a Notary
Public to be a true copy hereof will be regarded as an original.



     45. Further Assurances. Indemnitors agree to do such further acts and things, and to
execute and deliver such additional conveyances, assignments, agreements, and instruments, as
Surety may at any time request in connection with the administration and enforcement of this



37









 







Agreement, and the other Surety Credit Documents or any part thereof or in order better to
assure and confirm unto Surety its rights and remedies hereunder and thereunder.



     46. Binding Agreement; Assignment. This Agreement, and the terms, covenants, and
conditions hereof, will be binding upon the parties hereto and their respective successors and
assigns, and will inure to the benefit of the parties, and their respective successors and assigns,
except that Indemnitors will not be permitted to assign this Agreement or any interest herein.



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



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



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



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



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



     52. Additional Principals and/or Indemnitors. Indemnitors and Principals acknowledge
this Agreement can be amended via rider executed by Integrated Electrical Services, Inc. to add
other Persons as Indemnitor and/or Principal to this Agreement and Indemnitors and Principals waive
any and all notice in connection with the addition of additional Indemnitors and Principals and
further acknowledge the rights and obligations provided herein will apply to all Indemnitors and
Principals whenever made a party to this Agreement. Integrated Electrical Services, Inc. has full
right and authority to execute any and all documents on behalf of any Principals and Indemnitors to
be added to this Agreement without requiring the separate signature of any such additional
Principal and Indemnitors.



     53. Power of Attorney. Each Principal and Indemnitor hereby irrevocably constitutes
and appoints Integrated Electrical Services, Inc. (and all officers, employees, or agents
designated by Integrated Electrical Services, Inc.), with full power of substitution, as such
Principal’s and/or Indemnitor’s true and lawful attorney-in-fact with full irrevocable power and
authority in the place and stead of such Principal and/or Indemnitor and in the name of such




38










 







Principal and/or Indemnitor or in its own name, from time to time in Integrated Electrical
Services, Inc.’s discretion, to take any and all appropriate action and to execute and deliver any
and all documents and instruments which may be necessary or desirable to accomplish the purpose of
this Agreement and to amend, modify, or supplement this Agreement or other Surety Credit Documents
in any manner. Each Principal and Indemnitor hereby ratifies and agrees to be bound by all that
Integrated Electrical Services, Inc. will lawfully do or cause to be done by virtue hereof.




     54. Possible Future Modification. Any provisions of this Agreement may be waived,
amended, or modified pursuant to an agreement or agreements in writing entered into by the Surety
and Integrated Electrical Services, Inc.



     55. No Contrary Action. Indemnitors will not apply to the Bankruptcy Court in the
Bankruptcy Case for the authority to take any action that is prohibited by the terms of this
Agreement or any of the other Surety Credit Documents or refrain from taking any action that is
required to be taken by the terms of this Agreement or any of the other Surety Credit Documents.



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



	 	 	 	 	 	 	 
	 	 	SURETY:	 	 
	 
	 	 	 	 	 	 
	 	 	FEDERAL INSURANCE COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Edward J. Reilly 	 	 
	 

	 	 	 	Edward J. Reilly 	 	 
	 

	 	Its:	 	Assistant
Secretary 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	PRINCIPAL:	 	 
	 
	 	 	 	 	 	 
	 	 	INTEGRATED ELECTRICAL SERVICES, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Curt L. Warnock 	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Curt L. Warnock, Senior Vice President
	 	 






39









 







	 	 	 
	 

	 	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
	 

	 	VALENTINE ELECTRICAL, INC.






	 	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ Curt L. Warnock 
	 	 	 	 	 	 	 
	 	 	 	 	Curt L. Warnock	 	 
	 	 	 	 	Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BEXAR ELECTRIC COMPANY, LTD.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	BW/BEC Inc., its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Curt L. Warnock 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Curt L. Warnock	 	 
	 

	 	 	 	 	 	Vice President	 	 






40









 






	 	 	 	 	 	 	 	 	 
	 	 	HAYMAKER ELECTRIC, LTD.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	General Partner, Inc., its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Curt L. Warnock 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Curt L. Warnock	 	 
	 

	 	 	 	 	 	Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	HOUSTON-STAFFORD
ELECTRICAL CONTRACTORS LP	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Houston-Stafford
Management LLC, its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Curt L. Warnock 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Curt L. Warnock	 	 
	 

	 	 	 	 	 	Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	J.W. GRAY ELECTRICAL CONTRACTORS LP	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	J.W. Gray Management
LLC, its general partner
	 

	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Curt L. Warnock 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Curt L. Warnock	 	 
	 

	 	 	 	 	 	Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	MILLS ELECTRIC LP	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Mills Management LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	   By:	 	/s/ Curt L. Warnock 	 	 
	 

	 	 	 	 	 	 

Curt L. Warnock
	 	 
	 

	 	 	 	 	 	Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	NEAL ELECTRIC LP	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	BW/BEC Inc., its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	   By:	 	/s/ Curt L. Warnock 	 	 
	 

	 	 	 	 	 	 

Curt L. Warnock
	 	 
	 

	 	 	 	 	 	Vice President	 	 






41









 






	 	 	 	 	 	 	 	 	 
	 	 	POLLOCK SUMMIT ELECTRIC LP	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Pollock Electric, Inc. and Summit Electric of Texas,
	 	 	 	 	Inc., its general partners	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Curt L. Warnock 	 	 
	 

	 	 	 	 	 	 

Curt L. Warnock
	 	 
	 

	 	 	 	 	 	Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	RAINES ELECTRIC LP	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Raines Management LLC, its general partner
	 
	 

	 	 	 	By:	 	/s/ Curt L. Warnock 	 	 
	 

	 	 	 	 	 	 

Curt L. Warnock
	 	 
	 

	 	 	 	 	 	Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	RIVIERA ELECTRIC, LLC	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	/s/ Curt L. Warnock 
	 

	 	 	 

	 	 
	 

	 	 	Curt L. Warnock	 	 
	 

	 	 	Vice President	 	 
	 
	 	 	TESLA POWER AND AUTOMATION, L.P.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Tesla Power GP, Inc., its general partner
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Curt L. Warnock 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Curt L. Warnock	 	 
	 

	 	 	 	 	 	Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	INDEMNITORS:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	INTEGRATED ELECTRICAL SERVICES, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Curt L. Warnock 	 	 
	 

	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Curt L. Warnock, Senior Vice President






42









 






	 	 	 	 	 	 	 	 	 
	 	 	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	 	 
	 	 	VALENTINE ELECTRICAL, INC.	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ Curt L. Warnock 	 	 
	 

	 	 	 	 	 
	 

	 	 	Curt L. Warnock	 	 
	 

	 	 	Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	BEXAR ELECTRIC COMPANY, LTD.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	BW/BEC Inc., its general partner
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Curt L. Warnock 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Curt L. Warnock	 	 
	 

	 	 	 	 	 	Vice President	 	 






43









 






	 	 	 	 	 	 	 	 	 
	 	 	HAYMAKER ELECTRIC, LTD.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	General Partner, Inc., its general partner
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Curt L. Warnock 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Curt L. Warnock	 	 
	 

	 	 	 	 	 	Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	HOUSTON-STAFFORD
ELECTRICAL CONTRACTORS LP	 	 
	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Houston-Stafford
Management LLC, its general partner
	 

	 	 	 	
	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Curt L. Warnock 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Curt L. Warnock	 	 
	 

	 	 	 	 	 	Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	J.W. GRAY ELECTRICAL CONTRACTORS LP	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	J.W. Gray Management
LLC, its general partner
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Curt L. Warnock 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Curt L. Warnock	 	 
	 

	 	 	 	 	 	Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	MILLS ELECTRIC LP	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Mills Management LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Curt L. Warnock 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Curt L. Warnock	 	 
	 

	 	 	 	 	 	Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	NEAL ELECTRIC LP	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	BW/BEC Inc., its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	/s/ Curt L. Warnock 	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Curt L. Warnock	 	 
	 

	 	 	 	 	 	Vice President	 	 






44









 






	 	 	 	 	 	 	 	 	 
	 	 	POLLOCK SUMMIT ELECTRIC LP	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Pollock Electric, Inc. and Summit Electric of Texas,
	 	 	 	 	Inc., its general partners	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 /s/ Curt L. Warnock	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Curt L. Warnock	 	 
	 

	 	 	 	 	 	Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	RAINES ELECTRIC LP	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Raines Management LLC, its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 /s/ Curt L. Warnock	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Curt L. Warnock	 	 
	 

	 	 	 	 	 	Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	RIVIERA ELECTRIC, LLC	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 /s/ Curt L. Warnock	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Curt L. Warnock	 	 
	 

	 	 	 	 	 	Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	TESLA POWER AND AUTOMATION, L.P.	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Tesla Power GP, Inc., its general partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:	 	 /s/ Curt L. Warnock	 	 
	 

	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	Curt L. Warnock	 	 
	 

	 	 	 	 	 	Vice President	 	 







45










 







PRINCIPAL





	 	 	 	 	 	 	 	 	 	 	 
	 	 	PRINCIPAL PLACE OF	 	 	 	 	 	 	 	 
	 	 	BUSINESS/CHIEF	 	 	 	STATE OF	 	 	 	 
	 	 	EXECUTIVE OFFICE	 	TYPE OF	 	FORMATION/	 	TAX I.D.	 	TRADE NAME
	PRINCIPAL	 	(Six Months and Current)	 	ENTITY	 	REGISTRATION	 	NUMBER	 	(Past Six Months)
	Integrated Electrical Services, Inc.
	 	1800 West Loop South, Suite 500	 	Corporation	 	Delaware	 	76-0542208	 	IES
	 
	 	Houston, Texas 77027	 	 	 	 	 	 	 	 
	Aladdin Ward Electric & Air, Inc.
	 	7011 15th Street East	 	Corporation	 	Florida	 	59-2137098	 	None
	
	 	Sarasota, Florida 34243	 	 	 	 	 	 	 	 
	Amber Electric, Inc.
	 	630 Kissimmee Avenue	 	Corporation	 	Florida	 	59-1888807	 	None
	 
	 	Ocoee, Florida 34761	 	 	 	 	 	 	 	 
	ARC Electric, Incorporated
	 	500 Woodlake Drive	 	Corporation	 	Delaware	 	76-0581695	 	ARC Electric
	 
	 	Suite 105	 	 	 	 	 	 	 	 
	 
	 	Chesapeake, Virginia 23320	 	 	 	 	 	 	 	PrimeNet
	Bachofner Electric, Inc.
	 	20811 NW Cornell Road,	 	Corporation	 	Delaware	 	76-0593514	 	None
	 
	 	Suite 400	 	 	 	 	 	 	 	 
	 
	 	Hillsboro, Oregon 97124	 	 	 	 	 	 	 	 
	Bexar Electric Company, Ltd.
	 	6223 IH 10 West	 	Limited	 	Texas	 	74-2767532	 	Bexar Electric
	 
	 	San Antonio, Texas 78201	 	Partnership	 	 	 	 	 	Company
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Galbraith Electric
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Bexar 
Communications
	Bryant Electric Company, Inc.
	 	215 Balfour Drive	 	Corporation	 	North Carolina	 	56-0154780	 	None
	 
	 	Archdale, North Carolina	 	 	 	 	 	 	 	 
	 
	 	27263-3117	 	 	 	 	 	 	 	 
	Commercial
Electrical Contractors, Inc.
	 	975 Millbury Street	 	Corporation	 	Delaware	 	76-0587343	 	Commercial
	 
	 	Worcester, Massachusetts	 	 	 	 	 	 	 	Communications
	 
	 	01607	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Advantage Controls
	Cross State Electric, Inc.
	 	2445 Railroad Street	 	Corporation	 	California	 	95-3657116	 	None
	 
	 	Corona, California 92880-	 	 	 	 	 	 	 	 
	 
	 	5419	 	 	 	 	 	 	 	 
	Daniel
Electrical Contractors, Inc
	 	5965 NW 82nd Avenue	 	Corporation	 	Florida	 	59-2622624	 	Daniel Electrical
	 
	 	Miami, Florida 33166	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Daniel Electrical of
	 
	 	 	 	 	 	 	 	 	 	West Palm Beach
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Daniel Electrical –
	 
	 	 	 	 	 	 	 	 	 	Treasure Coast
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	East Coast Electric
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Collier Electric
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Collier-Daniel
	 
	 	 	 	 	 	 	 	 	 	Electric






EXHIBIT A






 









 






	 	 	 	 	 	 	 	 	 	 	 
	 	 	PRINCIPAL PLACE OF	 	 	 	 	 	 	 	 
	 	 	BUSINESS/CHIEF	 	 	 	STATE OF	 	 	 	 
	 	 	EXECUTIVE OFFICE	 	TYPE OF	 	FORMATION/	 	TAX I.D.	 	TRADE NAME
	PRINCIPAL	 	(Six Months and Current)	 	ENTITY	 	REGISTRATION	 	NUMBER	 	(Past Six Months)
	Davis Electrical Constructors, Inc.
	 	429 N. Main Street	 	Corporation	 	South Carolina	 	57-0474303	 	Davis International,
	
	 	Greenville, South Carolina	 	 	 	 	 	 	 	a division of Davis
	 
	 	29601	 	 	 	 	 	 	 	Electrical
	 
	 	 	 	 	 	 	 	 	 	Constructors, Inc.
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Davis Constructors
	Electro-Tech, Inc.
	 	1235 Coney Island Drive	 	Corporation	 	Nevada	 	88-0200302	 	Electro-Tech of
	 
	 	Sparks, Nevada 89431-6035	 	 	 	 	 	 	 	Nevada
	Federal
Communications Group, Inc.
	 	2328 West Huntington	 	Corporation	 	Delaware	 	85-0461441	 	Apex Tele-
	 
	 	Drive	 	 	 	 	 	 	 	Communications
	 
	 	Tempe, Arizona 85282	 	 	 	 	 	 	 	Training Solutions
	Hatfield
Reynolds Electric Company
	 	945 West Deer Valley Road,	 	Corporation	 	Arizona	 	86-0565738	 	Hatfield Reynolds
	 
	 	Suite 1	 	 	 	 	 	 	 	Electric
	 
	 	Phoenix, Arizona 85027	 	 	 	 	 	 	 	 
	Haymaker Electric, Ltd.
	 	2928 6th Avenue South	 	Limited	 	Alabama	 	63-1080688	 	None
	 
	 	Birmingham, Alabama	 	Partnership	 	 	 	 	 	 
	 
	 	35233-2902	 	 	 	 	 	 	 	 
	Houston-Stafford Electrical Contractors LP
	 	10203 Mula Circle	 	Limited	 	Texas	 	52-2095983	 	Houston Stafford
	 
	 	Stafford, Texas 77477	 	Partnership	 	 	 	 	 	Electric
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	HSE Electrical
	 
	 	 	 	 	 	 	 	 	 	Contractors
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	HSE Alarm Systems
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	HSE Special Systems
	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Austin-Stafford
	 
	 	 	 	 	 	 	 	 	 	Electric
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Copious Technologies
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	HSE Electrical
	 
	 	 	 	 	 	 	 	 	 	Services
	J.W. Gray
Electrical Contractors LP
	 	6510 Burgeois Road	 	Limited	 	Texas	 	52-2097983	 	Gray Electric
	 
	 	Houston, TX 77066	 	Partnership	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	SecurePro Alarm
	 
	 	 	 	 	 	 	 	 	 	Systems
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	IES Multifamily
	 
	 	 	 	 	 	 	 	 	 	Resources
	 
	 	 	 	 	 	 	 	 	 	 
	Kayton Electric, Inc.
	 	120 South Lincoln Street	 	Corporation	 	Nebraska	 	47-0623159	 	None
	 
	 	Holdrege, Nebraska 68949	 	 	 	 	 	 	 	 






2









 






	 	 	 	 	 	 	 	 	 	 	 
	 	 	PRINCIPAL PLACE OF	 	 	 	 	 	 	 	 
	 	 	BUSINESS/CHIEF	 	 	 	STATE OF	 	 	 	 
	 	 	EXECUTIVE OFFICE	 	TYPE OF	 	FORMATION/	 	TAX I.D.	 	TRADE NAME
	PRINCIPAL	 	(Six Months and Current)	 	ENTITY	 	REGISTRATION	 	NUMBER	 	(Past Six Months)
	Mark Henderson, Incorporated
	 	5322 Snapfinger Park Drive	 	Corporation	 	Delaware	 	76-0576830	 	Mark Henderson
	 
	 	Decatur, Georgia 30035-	 	 	 	 	 	 	 	 
	 
	 	4040	 	 	 	 	 	 	 	 
	Menninga Electric, Inc.
	 	905 West 8th Street	 	Corporation	 	Delaware	 	76-0575872	 	None
	 
	 	Pella, Iowa 50219	 	 	 	 	 	 	 	 
	Mid-States
Electric Company, Inc.
	 	117 North Conalco Drive	 	Corporation	 	Delaware	 	62-1746956	 	None
	 
	 	Jackson, Tennessee 38301	 	 	 	 	 	 	 	 
	Mills Electric LP
	 	2525 Walnut Hill Lane	 	Limited	 	Texas	 	52-2095984	 	Mills Electrical
	 
	 	Dallas, Texas 75229	 	Partnership	 	 	 	 	 	Contractors
	Mitchell Electric Company, Inc.
	 	7138 North 110th Avenue	 	Corporation	 	Arizona	 	86-0141057	 	None
	 
	 	Glendale, Arizona 85307-	 	 	 	 	 	 	 	 
	 
	 	2800	 	 	 	 	 	 	 	 
	Murray
Electrical Contractors, Inc.
	 	2250 Aviation Drive	 	Corporation	 	Delaware	 	74-2913067	 	None
	 
	 	Roseburg, Oregon 97470	 	 	 	 	 	 	 	 
	Neal Electric LP
	 	1608 Royston Lane	 	Limited	 	Texas	 	76-0657784	 	None
	 
	 	Building 2	 	Partnership	 	 	 	 	 	 
	 
	 	Round Rock, Texas 78664	 	 	 	 	 	 	 	 
	Newcomb Electric Company, Inc.
	 	2708 Shenandoah Avenue	 	Corporation	 	Delaware	 	76-0611653	 	None
	 
	 	Roanoke, Virginia 24017	 	 	 	 	 	 	 	 
	New
Technology Electrical Contractors, Inc.
	 	20811 NW Cornell Road	 	Corporation	 	Delaware	 	74-2918933	 	New Tech Electric
	 
	 	Suite 400	 	 	 	 	 	 	 	 
	 
	 	Hillsboro, Oregon 97124-5611	 	 	 	 	 	 	 	New Tech Services
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Data Tech
	 
	 	 	 	 	 	 	 	 	 	Communications
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Bachofner
	 
	 	 	 	 	 	 	 	 	 	Electric-Oregon
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Bachofner Datacomm,
	 
	 	 	 	 	 	 	 	 	 	Inc.
	Pan American Electric, Inc.
	 	1300 Fort Negley Boulevard	 	Corporation	 	Tennessee	 	62-0985675	 	None
	 
	 	Nashville, Tennessee 37203	 	 	 	 	 	 	 	 
	Paulin Electric Company, Inc.
	 	8803 National Turnpike	 	Corporation	 	Delaware	 	74-2879154	 	Paulin Electric
	 
	 	Fairdale, Kentucky 40118	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Woods Electric
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Hanen Electric
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	T&O Controls
	Pollock Summit Electric LP
	 	6510 Burgeois Road	 	Limited	 	Texas	 	76-0569180	 	Pollock Summit
	 
	 	Houston, TX 77066	 	Partnership	 	 	 	 	 	Electric
	PrimeNet, Inc.
	 	220 Eighth Avenue NW	 	Corporation	 	Delaware	 	74-2902100	 	None
	 
	 	Glen Burnie, Maryland 21061	 	 	 	 	 	 	 	 
	Primo Electric Company
	 	220 Eighth Avenue NW	 	Corporation	 	Delaware	 	74-2902099	 	B&D Electric, Inc.
	 
	 	Glen Burnie, Maryland	 	 	 	 	 	 	 	 
	 
	 	21061	 	 	 	 	 	 	 	PrimeNet






3









 






	 	 	 	 	 	 	 	 	 	 	 
	 	 	PRINCIPAL PLACE OF	 	 	 	 	 	 	 	 
	 	 	BUSINESS/CHIEF	 	 	 	STATE OF	 	 	 	 
	 	 	EXECUTIVE OFFICE	 	TYPE OF	 	FORMATION/	 	TAX I.D.	 	TRADE NAME
	PRINCIPAL	 	(Six Months and Current)	 	ENTITY	 	REGISTRATION	 	NUMBER	 	(Past Six Months)
	Raines Electric LP
	 	2525 Walnut Hill Lane	 	Limited	 	Texas	 	52-2132532	 	Raines Electrical
	 
	 	Dallas, Texas 75229	 	Partnership	 	 	 	 	 	Contractors
	Riviera Electric, LLC
	 	5001 South Zuni	 	Limited	 	Delaware	 	03-0507360	 	Riviera Electric
	 
	 	Littleton, Colorado 80120	 	Liability	 	 	 	 	 	 
	 
	 	 	 	Company	 	 	 	 	 	 
	Rodgers Electric Company, Inc.
	 	1611 East Marine View Drive	 	Corporation	 	Washington	 	91-1004905	 	None
	 
	 	Everett, Washington 98201	 	 	 	 	 	 	 	 
	Ron’s Electric, Inc.
	 	2017 Demers Avenue	 	Corporation	 	Delaware	 	74-2925506	 	IES-North Plains
	 
	 	Grand Forks, North Dakota	 	 	 	 	 	 	 	 
	 
	 	58201	 	 	 	 	 	 	 	 
	Tesla Power and Automation, L.P.
	 	6510 Bourgeois	 	Limited	 	Texas	 	76-0592351	 	 
	 
	 	Houston, Texas 77066	 	Partnership	 	 	 	 	 	 
	Thomas Popp & Company
	 	10152 International Blvd.	 	Corporation	 	Ohio	 	31-1112666	 	None
	 
	 	Cincinnati, Ohio 45246	 	 	 	 	 	 	 	 
	Valentine Electrical, Inc.
	 	104 Green Chimneys Court	 	Corporation	 	Delaware	 	74-2916344	 	Valentine
	 
	 	Ashland, Virginia 23005	 	 	 	 	 	 	 	Communications






4









 






INDEMNITORS




	 	 	 	 	 	 	 	 	 	 	 
	 	 	PRINCIPAL PLACE OF	 	 	 	 	 	 	 	 
	 	 	BUSINESS/CHIEF	 	 	 	STATE OF	 	 	 	 
	 	 	EXECUTIVE OFFICE	 	TYPE OF	 	FORMATION/	 	TAX I.D.	 	TRADE NAME
	INDEMNITOR	 	(Six Months and Current)	 	ENTITY	 	REGISTRATION	 	NUMBER	 	(Past Six Months)
	Integrated
Electrical Services, Inc.
	 	1800 West Loop South, Suite 500	 	Corporation	 	Delaware	 	76-0542208	 	IES
	 
	 	Houston, Texas 77027	 	 	 	 	 	 	 	 
	Aladdin Ward
Electric & Air, Inc.
	 	7011 15th Street East	 	Corporation	 	Florida	 	59-2137098	 	None
	
	 	Sarasota, Florida 34243	 	 	 	 	 	 	 	 
	Amber Electric, Inc.
	 	630 Kissimmee Avenue	 	Corporation	 	Florida	 	59-1888807	 	None
	 
	 	Ocoee, Florida 34761	 	 	 	 	 	 	 	 
	ARC Electric, Incorporated
	 	500 Woodlake Drive	 	Corporation	 	Delaware	 	76-0581695	 	ARC Electric
	 
	 	Suite 105	 	 	 	 	 	 	 	 
	 
	 	Chesapeake, Virginia 23320	 	 	 	 	 	 	 	PrimeNet
	Bachofner Electric, Inc.
	 	20811 NW Cornell Road,	 	Corporation	 	Delaware	 	76-0593514	 	None
	 
	 	Suite 400	 	 	 	 	 	 	 	 
	 
	 	Hillsboro, Oregon 97124	 	 	 	 	 	 	 	 
	Bexar Electric Company, Ltd.
	 	6223 IH 10 West	 	Limited	 	Texas	 	74-2767532	 	Bexar Electric
	 
	 	San Antonio, Texas 78201	 	Partnership	 	 	 	 	 	Company
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Galbraith Electric
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Bexar Communications
	Bryant Electric Company, Inc.
	 	215 Balfour Drive	 	Corporation	 	North Carolina	 	56-0154780	 	None
	 
	 	Archdale, North Carolina	 	 	 	 	 	 	 	 
	 
	 	27263-3117	 	 	 	 	 	 	 	 
	Commercial
Electrical Contractors, Inc.
	 	975 Millbury Street	 	Corporation	 	Delaware	 	76-0587343	 	Commercial
	 
	 	Worcester, Massachusetts	 	 	 	 	 	 	 	Communications
	 
	 	01607	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Advantage Controls
	Cross State Electric, Inc.
	 	2445 Railroad Street	 	Corporation	 	California	 	95-3657116	 	None
	 
	 	Corona, California 92880-5419	 	 	 	 	 	 	 	 
	Daniel
Electrical Contractors, Inc.
	 	5965 NW 82nd Avenue	 	Corporation	 	Florida	 	59-2622624	 	Daniel Electrical
	
	 	Miami, Florida 33166	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Daniel Electrical of
	 
	 	 	 	 	 	 	 	 	 	West Palm Beach
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Daniel Electrical –
	 
	 	 	 	 	 	 	 	 	 	Treasure Coast
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	East Coast Electric
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Collier Electric
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Collier-Daniel
	 
	 	 	 	 	 	 	 	 	 	Electric





 EXHIBIT B





 









 






	 	 	 	 	 	 	 	 	 	 	 
	 	 	PRINCIPAL PLACE OF	 	 	 	 	 	 	 	 
	 	 	BUSINESS/CHIEF	 	 	 	STATE OF	 	 	 	 
	 	 	EXECUTIVE OFFICE	 	TYPE OF	 	FORMATION/	 	TAX I.D.	 	TRADE NAME
	INDEMNITOR	 	(Six Months and Current)	 	ENTITY	 	REGISTRATION	 	NUMBER	 	(Past Six Months)
	Davis
Electrical Constructors, Inc.
	 	429 N. Main Street	 	Corporation	 	South Carolina	 	57-0474303	 	Davis International,
	 
	 	Greenville, South Carolina	 	 	 	 	 	 	 	a division of Davis
	 
	 	29601	 	 	 	 	 	 	 	Electrical
	 
	 	 	 	 	 	 	 	 	 	Constructors, Inc.
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Davis Constructors
	Electro-Tech, Inc.
	 	1235 Coney Island Drive	 	Corporation	 	Nevada	 	88-0200302	 	Electro-Tech of
	 
	 	Sparks, Nevada 89431-6035	 	 	 	 	 	 	 	Nevada
	Federal
Communications Group, Inc.
	 	2328 West Huntington Drive	 	Corporation	 	Delaware	 	85-0461441	 	Apex
	 
	 	Tempe, Arizona 85282	 	 	 	 	 	 	 	Tele-Communications
	 
	 	 	 	 	 	 	 	 	 	Training Solutions
	Hatfield
Reynolds Electric Company
	 	945 West Deer Valley Road,	 	Corporation	 	Arizona	 	86-0565738	 	Hatfield Reynolds
	 
	 	Suite 1	 	 	 	 	 	 	 	Electric
	 
	 	Phoenix, Arizona 85027	 	 	 	 	 	 	 	 
	Haymaker Electric, Ltd.
	 	2928 6th Avenue South	 	Limited	 	Alabama	 	63-1080688	 	None
	 
	 	Birmingham, Alabama	 	Partnership	 	 	 	 	 	 
	 
	 	35233-2902	 	 	 	 	 	 	 	 
	Houston-Stafford Electrical Contractors LP
	 	10203 Mula Circle	 	Limited	 	Texas	 	52-2095983	 	Houston Stafford
	 
	 	Stafford, Texas 77477	 	Partnership	 	 	 	 	 	Electric
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	HSE Electrical
	 
	 	 	 	 	 	 	 	 	 	Contractors
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	HSE Alarm Systems
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	HSE Special Systems
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Austin-Stafford
	 
	 	 	 	 	 	 	 	 	 	Electric
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Copious Technologies
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	HSE Electrical
	 
	 	 	 	 	 	 	 	 	 	Services
	J.W. Gray
Electrical Contractors LP
	 	6510 Burgeois Road	 	Limited	 	Texas	 	52-2097983	 	Gray Electric
	 
	 	Houston, TX 77066	 	Partnership	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	SecurePro Alarm
	 
	 	 	 	 	 	 	 	 	 	Systems
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	IES Multifamily
	 
	 	 	 	 	 	 	 	 	 	Resources
	Kayton Electric, Inc.
	 	120 South Lincoln Street	 	Corporation	 	Nebraska	 	47-0623159	 	None
	 
	 	Holdrege, Nebraska 68949	 	 	 	 	 	 	 	 






2









 






	 	 	 	 	 	 	 	 	 	 	 
	 	 	PRINCIPAL PLACE OF	 	 	 	 	 	 	 	 
	 	 	BUSINESS/CHIEF	 	 	 	STATE OF	 	 	 	 
	 	 	EXECUTIVE OFFICE	 	TYPE OF	 	FORMATION/	 	TAX I.D.	 	TRADE NAME
	INDEMNITOR	 	(Six Months and Current)	 	ENTITY	 	REGISTRATION	 	NUMBER	 	(Past Six Months)
	Mark Henderson, Incorporated
	 	5322 Snapfinger Park Drive	 	Corporation	 	Delaware	 	76-0576830	 	Mark Henderson
	 
	 	Decatur, Georgia 30035-4040	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Menninga Electric, Inc.
	 	905 West 8th Street	 	Corporation	 	Delaware	 	76-0575872	 	None
	 
	 	Pella, Iowa 50219	 	 	 	 	 	 	 	 
	Mid-States Electric Company,
	 	117 North Conalco Drive	 	Corporation	 	Delaware	 	62-1746956	 	None
	Inc.
	 	Jackson, Tennessee 38301	 	 	 	 	 	 	 	 
	Mills Electric LP
	 	2525 Walnut Hill Lane	 	Limited	 	Texas	 	52-2095984	 	Mills Electrical
	 
	 	Dallas, Texas 75229	 	Partnership	 	 	 	 	 	Contractors
	Mitchell Electric Company, Inc.
	 	7138 North 110th Avenue	 	Corporation	 	Arizona	 	86-0141057	 	None
	 
	 	Glendale, Arizona 85307-2800	 	 	 	 	 	 	 	 
	Murray Electrical Contractors,
	 	2250 Aviation Drive	 	Corporation	 	Delaware	 	74-2913067	 	None
	Inc.
	 	Roseburg, Oregon 97470	 	 	 	 	 	 	 	 
	Neal Electric LP
	 	1608 Royston Lane	 	Limited	 	Texas	 	76-0657784	 	None
	 
	 	Building 2	 	Partnership	 	 	 	 	 	 
	 
	 	Round Rock, Texas 78664	 	 	 	 	 	 	 	 
	Newcomb Electric Company, Inc.
	 	2708 Shenandoah Avenue	 	Corporation	 	Delaware	 	76-0611653	 	None
	 
	 	Roanoke, Virginia 24017	 	 	 	 	 	 	 	 
	New Technology Electrical
	 	20811 NW Cornell Road	 	Corporation	 	Delaware	 	74-2918933	 	New Tech Electric
	Contractors, Inc.
	 	Suite 400	 	 	 	 	 	 	 	 
	 
	 	Hillsboro, Oregon 97124-5611	 	 	 	 	 	 	 	New Tech Services
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Data Tech
	 
	 	 	 	 	 	 	 	 	 	Communications
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Bachofner
	 
	 	 	 	 	 	 	 	 	 	Electric-Oregon
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Bachofner Datacomm,
	 
	 	 	 	 	 	 	 	 	 	Inc.
	Pan American Electric, Inc.
	 	1300 Fort Negley Boulevard	 	Corporation	 	Tennessee	 	62-0985675	 	None
	 
	 	Nashville, Tennessee 37203	 	 	 	 	 	 	 	 
	Paulin Electric Company, Inc.
	 	8803 National Turnpike	 	Corporation	 	Delaware	 	74-2879154	 	Paulin Electric
	 
	 	Fairdale, Kentucky 40118	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Woods Electric
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	Hanen Electric
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	T&O Controls
	Pollock Summit Electric LP
	 	6510 Bourgeouis Road	 	Limited	 	Texas	 	76-0569180	 	Pollock Summit
	 
	 	Houston, TX 77066	 	Partnership	 	 	 	 	 	Electric
	PrimeNet, Inc.
	 	220 Eighth Avenue NW	 	Corporation	 	Delaware	 	74-2902100	 	None
	 
	 	Glen Burnie, Maryland	 	 	 	 	 	 	 	 
	 
	 	21061	 	 	 	 	 	 	 	 
	Primo Electric Company
	 	220 Eighth Avenue NW	 	Corporation	 	Delaware	 	74-2902099	 	B&D Electric, Inc.
	 
	 	Glen Burnie, Maryland	 	 	 	 	 	 	 	 
	 
	 	21061	 	 	 	 	 	 	 	PrimeNet






3









 






	 	 	 	 	 	 	 	 	 	 	 
	 	 	PRINCIPAL PLACE OF	 	 	 	 	 	 	 	 
	 	 	BUSINESS/CHIEF	 	 	 	STATE OF	 	 	 	 
	 	 	EXECUTIVE OFFICE	 	TYPE OF	 	FORMATION/	 	TAX I.D.	 	TRADE NAME
	INDEMNITOR	 	(Six Months and Current)	 	ENTITY	 	REGISTRATION	 	NUMBER	 	(Past Six Months)
	Raines Electric LP
	 	2525 Walnut Hill Lane	 	Limited	 	Texas	 	52-2132532	 	Raines Electrical
	 
	 	Dallas, Texas 75229	 	Partnership	 	 	 	 	 	Contractors
	Riviera Electric, LLC
	 	5001 South Zuni	 	Limited	 	Delaware	 	03-0507360	 	Riviera Electric
	 
	 	Littleton, Colorado 80120	 	Liability	 	 	 	 	 	 
	 
	 	 	 	Company	 	 	 	 	 	 
	Rodgers Electric Company, Inc.
	 	1611 East Marine View Drive	 	Corporation	 	Washington	 	91-1004905	 	None
	 
	 	Everett, Washington 98201	 	 	 	 	 	 	 	 
	Ron’s Electric, Inc.
	 	2017 Demers Avenue	 	Corporation	 	Delaware	 	74-2925506	 	IES-North Plains
	 
	 	Grand Forks, North Dakota	 	 	 	 	 	 	 	 
	 
	 	58201	 	 	 	 	 	 	 	 
	Tesla Power and Automation, L.P.
	 	6510 Bourgeois	 	Limited	 	Texas	 	76-0592351	 	 
	 
	 	Houston, Texas 77066	 	Partnership	 	 	 	 	 	 
	Thomas Popp & Company
	 	10152 International Blvd.	 	Corporation	 	Ohio	 	31-1112666	 	None
	 
	 	Cincinnati, Ohio 45246	 	 	 	 	 	 	 	 
	Valentine Electrical, Inc.
	 	104 Green Chimneys Court	 	Corporation	 	Delaware	 	74-2916344	 	Valentine
	 
	 	Ashland, Virginia 23005	 	 	 	 	 	 	 	Communications






4









 






ADDITIONAL PERMITTED LIENS




None




EXHIBIT C




 









 








DEBT INSTRUMENTS





1.
Loan and Security Agreement dated May 12, 2006, among Integrated Electrical Services, Inc., certain
of its subsidiaries, the lenders named therein and Bank of America, N.A. as collateral and administrative
agent, as it may be amended, modified or supplemented from time to time prior to the date hereof.



2.
Term Loan Agreement dated May 12, 2006, among Integrated Electrical Services, Inc., as it may be
amended, modified or supplemented from time to time, certain lenders from time to time party thereto and
Wilmington Trust Company, as administrative agent.



EXHIBIT D