Document:

<PAGE>

                                                                   EXHIBIT 10.48

                             OPTION POOL AGREEMENT

     THIS OPTION POOL AGREEMENT (this "AGREEMENT") is entered into effective
December 21, 2001 (the "EFFECTIVE DATE") by and between Industrial Data Systems
Corporation, a Nevada corporation (together with its existing and future
subsidiaries, "IDS" or the "COMPANY"), and Alliance 2000, Ltd., a Texas limited
partnership ("ALLIANCE").

                                    RECITALS

     Alliance and IDS desire to provide an incentive for key employees of IDS to
remain in the service of IDS, to extend to them the opportunity to acquire a
proprietary interest in IDS so that they will apply their best efforts for the
benefit of IDS, and to aid IDS in attracting able persons to enter the service
of IDS;

     Alliance has agreed, in accordance with the terms of that certain Agreement
and Plan of Merger dated July 31, 2001, to give certain employees of Petrocon
and certain current and future employees of IDS an option to acquire up to
2,600,000 shares of the common stock, par value $.001 per share (the "COMMON
STOCK"), of IDS held by Alliance in accordance with the terms of this Agreement;

     NOW, THEREFORE, the parties agree as follows:

     1.  Option Pool.  Alliance hereby agrees to hold 2,600,000 shares of Common
Stock, (the "OPTION SHARES") and to grant options (the "ALLIANCE OPTIONS") to
acquire the Option Shares, in such amounts and to such persons as are determined
from time to time from the Effective Date until the Termination Date (as defined
below) by the mutual agreement of the General Partner of Alliance and the
Shareholder Representative of the Significant PEI Shareholders as those terms
are defined in that certain Voting Agreement dated of even date herewith by and
between the Significant PEI Shareholders and Michael L. Burrow in his capacity
as the Shareholder Representative.  If any of the options granted pursuant to
this Agreement lapse prior to their exercise, then the General Partner of
Alliance and the Shareholder Representative shall determine, by mutual
agreement, the persons and the amounts in which further options shall be
granted; provided however, at no time shall the Alliance Options (including any
Alliance Options which have been exercised) exceed the right to acquire
2,600,000 shares of Common Stock.  This Agreement shall terminate on December
21, 2006 (the "TERMINATION DATE").

     2.  Option Agreements.  The options shall be granted pursuant to option
agreements in the form of the agreement set forth on Exhibit A and no changes
may be made in the form or substance of the Option Agreements without the prior
written consent of Alliance and the Company.

     3.  Reclassification.  If IDS at any time shall, by subdivision,
combination or reclassification of securities or otherwise, change any of the
securities covered by the Option Pool into the same or a different number of
securities of any class or classes, or a dividend or other distribution is
issued with respect to the Option Shares, this Agreement shall thereafter
represent a right to grant options with respect to such number and kind of
securities and the dividend or other distribution as were issued as the result
of such change.

                                       1
<PAGE>

        4. Miscellaneous.

           (a) Binding. This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors or assigns.
There are no third party beneficiaries to this Agreement, and the only
entitlement to receive an option hereunder shall be obtained by the grant of an
actual option agreement. THIS AGREEMENT SHALL CONSTITUTE A CONTRACT UNDER THE
LAWS OF THE STATE OF TEXAS AND SHALL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF TEXAS EXCLUDING CHOICE OF LAW AND CONFLICT OF LAW
PRINCIPLES THAT DIRECT THE APPLICATION OF THE LAWS OF A DIFFERENT STATE. Venue
for any disputes arising under this Agreement shall be in Harris County, Texas,
and the parties agree to submit such disputes to the state and federal courts
therein.

           (b) Restrictions. Alliance agrees that it shall, at all times, retain
at least the number of shares for which options have been granted or may be
granted hereunder, and that it shall not sell or transfer shares of Common Stock
to the extent such sale or transfer would reduce the number of Shares that it
holds to fewer shares than are redeemable hereunder.

           (c) Waivers and Amendments. This Agreement and any provisions hereof
may be changed, waived, discharged or terminated only by an instrument in
writing signed by the party against which enforcement of the same is sought;
provided that any agreement on the part of IDS to amend this Agreement must be
approved by a majority of the disinterested directors of IDS.

           (d) Assignment and Transferability. This Agreement may not be
assigned or transferred to any person or entity without the consent of the other
parties.

           (e)  Legend on Share Certificates.  The certificates representing
the Option Shares shall bear the following legend:

           THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO (I) AN
           OPTION POOL AGREEMENT TO WHICH THE COMPANY IS A PARTY AND (II) OPTION
           AGREEMENTS GRANTING CERTAIN INDIVIDUALS RIGHTS TO PURCHASE SOME OR
           ALL OF SUCH SHARES. COPIES OF THE OPTION POOL AGREEMENT AND THE
           OPTION AGREEMENTS ARE ON FILE AT THE PRINCIPAL OFFICES OF THE
           COMPANY.

           (f) Counterparts; Facsimile Signatures, Etc. This Agreement may be
executed by facsimile and in two or more counterparts, each of which shall be
deemed an original and all of which taken together shall constitute one
agreement. Signatures transmitted via facsimile shall be deemed originals for
purposes of this Agreement.

                                       2
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date set forth above.

                                          ALLIANCE 2000, LTD.,
                                          a Texas limited partnership

                                          By:
                                              ---------------------------------
                                              William A. Coskey, General Partner

                                          By:
                                              ----------------------------------
                                              Hulda Coskey, General Partner

                                          INDUSTRIAL DATA SYSTEMS CORPORATION,
                                          a Nevada corporation

                                          By:
                                              ---------------------------------
                                              William A. Coskey, President

                                          Address:  600 Century Plaza Drive,
                                                    Building 140
                                                    Houston, Texas 77073

                                       3
<PAGE>

                                   EXHIBIT A

                            FORM OF OPTION AGREEMENT

                                       4<PAGE>

                                                                   EXHIBIT 10.49

                        INDEMNIFICATION ESCROW AGREEMENT

     THIS INDEMNIFICATION ESCROW AGREEMENT (the "Agreement") is made effective
as of the Effective Time (as defined in the Merger Agreement (as defined
below)) by and among Industrial Data Systems Corporation, a Nevada corporation
("Parent"), PEI Acquisition, Inc., a Texas corporation, all of whose capital
stock is owned (indirectly through ownership of IDS Engineering Management, LC,
a Texas limited liability company) by Parent (the "Purchaser"), the persons and
entities listed on the attached Schedule 1 (the "Significant PEI
                                ----------
Shareholders"), Michael L. Burrow, acting as the shareholder representative for
the Significant PEI Shareholders (the "Shareholder Representative"), and Johnny
J. Williams, Esq., whose office address is 13831 Northwest Freeway, Suite 155,
Houston, Texas 77040 (the "Escrow Agent").

                                    RECITALS:
                                    --------

     A.   Parent, Purchaser, IDS Engineering Management, LC, a Texas limited
liability company, and Petrocon Engineering Inc., a Texas corporation ("PEI"),
entered into a Merger Agreement on or about July 31, 2001 (the "Merger
Agreement").

     B.   Pursuant to the Merger Agreement, the Significant PEI Shareholders
are to deposit 1,000,000 shares of the Parent's common stock, par value $.001
per share (the "Common Stock" or the "Escrow Shares"), into an escrow created
by this Agreement, which shall be a fund against which the Purchaser shall make
any claims for indemnity pursuant to the Merger Agreement.

     C.   This Agreement, together with the Merger Agreement, shall govern the
terms upon which Escrow Agent may distribute the Escrow Shares to Purchaser and
to the Significant PEI Shareholders. Capitalized terms used in this Agreement
but not defined herein shall have the definition ascribed to them in the Merger
Agreement.

     NOW, THEREFORE, in consideration of the promises contained herein and in
the Merger Agreement and other good and valuable consideration, the receipt of
which is hereby acknowledged, the parties hereto agree as follows:

                                   AGREEMENT:

     1.   Appointment of Escrow Agent; Delivery of Escrow Shares. Each of the
          ------------------------------------------------------
Parent, Purchaser, and the Shareholder Representative hereby appoints Johnny J.
Williams as Escrow Agent, and Escrow Agent hereby accepts such appointment.
Immediately after the Closing of the Merger Agreement, the Shareholder
Representative shall deliver or cause to be delivered to Escrow Agent, two
original share certificates, one in the amount of 230,993 shares and another in
the amount of 500,000 shares of Common Stock, registered in the name of the
Shareholder Representative as agent for the Significant PEI Shareholders, and
representing the Escrow Shares, together with a fully executed blank stock
power bearing the name of Escrow Agent as the transferee.

     2.   Claim Certificates. Purchaser or Parent (the "Claimant"), from time
          ------------------
to time on or prior to the second anniversary of the Closing, may make a claim
to some or all of the Escrow
<PAGE>

Shares (a "Claim") by delivering to Escrow Agent a certificate (a "Claim
Certificate") signed by the president or a vice president of Purchaser or
Parent, as applicable, stating:

          (a) That the Claimant is entitled to be indemnified under the Merger
Agreement or reasonably expects to have a claim for such indemnification;

          (b) The reasons therefor, set forth in reasonable detail;

          (c) The amount of the claim, which shall be the amount reasonably
estimated by the Purchaser or Parent where the amount of the claim is not a
liquidated sum, and which shall, together with all other claims, exceed the
$100,000 threshold specified in the Merger Agreement, and

          (d) That Claimant has delivered a copy of the Claim Certificate to
the Shareholder Representative and the date on which the copy was delivered.

     3.   Disputed Claims. The Shareholder Representative may dispute or object
          ---------------
to any Claim, in whole or in part, by delivering to Escrow Agent a notice (an
"Objection Notice") within 30 days of receipt of the Claim Certificate stating:

          (a) That the Shareholder Representative disputes or objects to such
Claim;

          (b) The reasons for such objections or dispute, set forth in
reasonable detail;

          (c) That the Shareholder Representative has delivered a copy of the
Objection Notice to Claimant and the date on which such copy was delivered; and

          (d) The portion of the Claim set forth in the Claim Certificate, if
any, which is not disputed or objected to.

     Whenever there shall be delivered to Escrow Agent an Objection Notice,
Claimant and the parties shall invoke the conciliation and arbitration
procedures set forth in the Merger Agreement. Any claim which is disputed or
objected to by the Shareholder Representative shall, to the extent of such
dispute or objection, constitute a "Disputed Claim."

     4.   Distribution of Escrow Shares.
          -----------------------------

          (a) If Escrow Agent receives from the Shareholder Representative
written notice of consent or agreement to all or part of a Claim, or fails to
receive a timely Objection Notice, Escrow Agent shall thereupon promptly
deliver to Claimant from the Escrow Shares a number of shares (rounded to the
nearest whole share) equal to the amount of such Claim divided by the Fair
Market Value (as herein defined) per share of the Escrow Shares. The "Fair
Market Value" per share of the Escrow Shares shall be the greater of (i) the
average closing price per share of the Escrow Shares over the 30 trading days
prior to the day before the delivery of such shares to Claimant; or (ii) $0.75.

                                       2
<PAGE>

          (b) If the Escrow Shares are not sufficient to pay in full any amounts
payable to Claimant under Section 4(a), Escrow Agent shall transfer all
remaining shares to Claimant.

          (c) If the Escrow Agent receives a timely Objection Notice with
respect to any Claim and the parties invoke the conciliation and arbitration
provisions in the Merger Agreement, then, upon obtaining a Final Decision with
respect to such Claim, Escrow Agent shall transfer the Escrow Shares to
Claimant or to the Significant PEI Shareholders, as provided in the Final
Decision. "Final Decision" means a decision, order, judgment or decree of an
arbitrator or court having jurisdiction which is either not subject to appeal
or as to which notice of appeal has not been timely filed or served.

          (d) With respect to any distribution of the Escrow Shares to the
Significant PEI Shareholders, each Significant PEI Shareholder shall be entitled
to receive such Significant PEI Shareholder's Pro Rata Share of the Escrow
Shares, and with respect to any delivery of Escrow Shares to the Claimant in
accordance with the terms hereof each Significant PEI Shareholder shall bear its
Pro Rata Share of such reduction in the Escrow Shares. Each Significant PEI
Shareholder's Pro Rata Share is as set forth on Schedule 1.
                                                ----------

     5.   Adjustments to Escrow Shares; Dividends; Voting.
          -----------------------------------------------

          (a) If Claimant or any Significant PEI Shareholder is entitled to
receive any securities or other distributions in respect of or in exchange for
any of the Escrow Shares (other than dividends declared by the Board of
Directors of Parent on the Escrow Shares that are payable in cash), whether by
way of stock dividends, share splits, recapitalizations, liquidations, mergers,
consolidations, split-ups, spin-offs, redemptions, exchanges or conversions of
shares and the like ("New Shares"), such Significant PEI Shareholder shall
deliver share certificates representing such New Shares and such other
distributions (registered in the name of the Shareholder Representative as agent
for such Significant PEI Shareholder) to Escrow Agent, along with a fully
executed blank stock power bearing the name of the Escrow Agent as the
transferee. Upon receipt of such New Shares and other distributions, Escrow
Agent shall hold in escrow such securities and the same shall be subject to all
of the provisions of this Agreement relating to the Escrow Shares.
Notwithstanding anything to the contrary herein, any dividend declared by the
Board of Directors of Parent that is payable in cash with respect to the Escrow
Shares shall not be delivered to the Escrow Agent and each Significant PEI
Shareholder shall be entitled to receive such Significant PEI Shareholder's Pro
Rata Share of such cash dividend.

          (b) Subject to the terms of the Voting Agreement, the Shareholder
Representative shall have all voting rights with respect to the Escrow Shares
for so long as such Escrow Shares are held in the Escrow Fund; provided that if
                                                               --------
so directed by the Requisite Shareholders (as herein defined) with respect to
any matter submitted to a vote of the stockholders of IDS, the Shareholder
Representative shall, subject to the Voting Agreement, vote the Escrow Shares
as directed by the Requisite Shareholders. "Requisite Shareholders" means, on
any date of determination, Significant PEI Shareholders having a Pro Rata Share
of 51% or more of the Escrow Shares.

                                      3
<PAGE>

     6.   Shareholder Representative as Agent.
          -----------------------------------

          (a) Appointment. Each Significant PEI Shareholder hereby designates
              -----------
and appoints the Shareholder Representative as its Shareholder Representative
and agent under this Agreement, and each Significant PEI Shareholder hereby
irrevocably authorizes Shareholder Representative to execute and deliver the
documents and to take such action or to refrain from taking such action on its
behalf under the provisions of this Agreement and to exercise such powers as are
set forth herein or therein, together with such other powers as are reasonably
incidental thereto. In performing its functions and duties under this Agreement,
Shareholder Representative shall act solely as agent of the Significant PEI
Shareholders and does not assume and shall not be deemed to have assumed any
obligation toward or relationship of agency or trust with or for Purchaser or
Parent.

          (b) Nature of Duties. The duties of the Shareholder Representative
              ----------------
shall be mechanical and administrative in nature. The Shareholder Representative
shall not have by reason of this Agreement a fiduciary relationship in respect
of any Significant PEI Shareholder. Nothing in this Agreement, express or
implied, is intended to or shall be construed to impose upon Shareholder
Representative any obligations in respect of this Agreement except as expressly
set forth herein or therein. If Shareholder Representative seeks the consent or
approval of any Significant PEI Shareholder to the taking or refraining from
taking any action hereunder, then Shareholder Representative shall send notice
thereof to each Significant PEI Shareholder. Shareholder Representative shall
promptly notify each Significant PEI Shareholder any time that the Requisite
Shareholders have instructed Shareholder Representative to act or refrain from
acting pursuant hereto.

          (c) Rights, Exculpation, Etc. Neither Shareholder Representative
              ------------------------
nor any of his agents shall be liable to any Significant PEI Shareholder for any
action taken or omitted by them hereunder or under the Merger Agreement, or in
connection herewith or therewith, except that Shareholder Representative shall
be liable to the extent of its own gross negligence or willful misconduct as
determined by a court of competent jurisdiction. Shareholder Representative may
at any time request instructions from the Significant PEI Shareholders with
respect to any actions or approvals which by the terms of this Agreement,
Shareholder Representative is permitted or required to take or to grant, and if
such instructions are promptly requested, Shareholder Representative shall be
absolutely entitled to refrain from taking any action or to withhold any
approval and shall not be under any liability whatsoever to any person or entity
for refraining from any action or withholding any approval under this Agreement
until it shall have received such instructions from Requisite Shareholders or
all or such other portion of the Significant PEI Shareholders as shall be
prescribed by this Agreement. Without limiting the foregoing, no Significant PEI
Shareholder shall have any right of action whatsoever against Shareholder
Representative as a result of Shareholder Representative acting or refraining
from acting under this Agreement in accordance with the instructions of
Requisite Shareholders and, notwithstanding the instructions of Requisite
Shareholders, the Shareholder Representative shall have no obligation to take
any action if it believes, in good faith, that such action exposes Shareholder
Representative to any liability for which it has not received satisfactory
indemnification in accordance with Section 6(d) of this Agreement.

                                      4
<PAGE>

          (d) Indemnification. Significant PEI Shareholders will reimburse and
              ---------------
indemnify Shareholder Representative for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses (including, without limitation, reasonable attorneys' fees and
expenses), advances or disbursements of any kind or nature whatsoever which may
be imposed on, incurred by, or asserted against Shareholder Representative in
any way relating to or arising out of this Agreement or any action taken or
omitted by Shareholder Representative under this Agreement, in proportion to
each Significant PEI Shareholders' Pro Rata Share, but only to the extent that
any of the foregoing is not reimbursed by Purchaser or Parent; provided,
                                                               --------
however, that no Significant PEI Shareholders shall be liable for any portion of
-------
such liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses, advances or disbursements to the extent resulting from
Shareholder Representative's gross negligence or willful misconduct as
determined by a court of competent jurisdiction. If any indemnity furnished to
Shareholder Representative for any purpose shall, in the opinion of Shareholder
Representative, be insufficient or become impaired, Shareholder Representative
may call for additional indemnity and cease, or not commence, to do the acts
indemnified against even if so directed by Requisite Shareholders until such
additional indemnity is furnished. The obligations of the Significant PEI
Shareholders under this Section 6(d) shall survive the termination of this
Agreement.

          (e) Successor Shareholder Representative.
              ------------------------------------

              (1) Resignation. Shareholder Representative may resign from the
                  -----------
performance of all its agency functions and duties hereunder at any time by
giving at least 30 days prior written notice to the Significant PEI
Shareholders. Such resignation shall take effect upon the acceptance by a
successor Shareholder Representative of appointment pursuant to Section 6(e)(2)
or as otherwise provided below.

              (2) Appointment of Successor. Upon any such notice of resignation
                  ------------------------
pursuant to Section 6(e)(1) or the death or disability of the Shareholder
Representative, the Requisite Shareholders shall appoint a successor Shareholder
Representative. If, with respect to a retiring Shareholder Representative, a
successor Shareholder Representative shall not have been so appointed within the
30 day period referred to in Section 6(e)(1), the retiring Shareholder
Representative, upon notice to the Escrow Agent, may petition any court of
competent jurisdiction to appoint a successor Escrow Agent. The Shareholder
Representative shall continue to serve until his successor is duly appointed and
accepts such service.

              (3) Successor Shareholder Representative. Upon the acceptance of
                  ------------------------------------
any appointment as Shareholder Representative under the Agreement by a successor
Shareholder Representative, such successor Shareholder Representative shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Shareholder Representative, and the retiring
Shareholder Representative shall be discharged from its duties and obligations
under this Agreement. After any retiring Shareholder Representative's
resignation as Shareholder Representative or upon the death or disability of the
Shareholder Representative, the provisions of this Section 6(e)(3) shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
Shareholder Representative.

                                      5
<PAGE>

     7.   Share Certificates. In connection with any issuance of Escrow Shares
          ------------------
to Claimant or to any Significant PEI Shareholder, Escrow Agent and Parent agree
to take any and all actions necessary to cause a stock certificate evidencing
the number of shares to be delivered to Claimant, delivered to the Significant
PEI Shareholders or to Escrow Agent, as the case may be, as required or
specified in this Agreement, including the issuance of stock certificates to
each Significant PEI Shareholder evidencing the Pro Rata Share Significant of
such Significant PEI Shareholder with respect to any distribution to the PEI
Shareholders required by this Agreement.

     8.   Notices. All notices (including Objection Notices), certificates
          -------
(including Claim Certificates), payment, and distributions required or permitted
to be given or delivered hereunder shall be deemed to have been properly given
or delivered to the following addresses, if delivered in person, or, if mailed,
on the second business day following the date when mailed by registered or
certified mail, postage prepaid and addressed as follows:

   If to Purchaser:                       PEI Acquisition, Inc.
                                          Attn: William A. Coskey
                                          600 Century Plaza Drive, Building 140
                                          Houston, Texas 77073

   With a copy (which shall not
   constitute notice) to:                 Jenkens & Gilchrist
                                          A Professional Corporation
                                          Attn: Kathryn K. Lindauer
                                          600 Congress Avenue, Suite 2200
                                          Austin, Texas 78701

   If to Parent:                          Industrial Data Systems Corporation
                                          Attn: William A. Coskey
                                          600 Century Plaza Drive, Building 140
                                          Houston, Texas 77073

   With a copy (which shall not
   constitute notice) to:                 Jenkens & Gilchrist
                                          A Professional Corporation
                                          Attn: Kathryn K. Lindauer
                                          600 Congress Avenue, Suite 2200
                                          Austin, Texas 78701

   If to Shareholder Representative:      Mr. Michael L. Burrow
                                          3155 Executive Blvd.
                                          Beaumont, Texas 77705

                                      6
<PAGE>

   With a copy (which shall not
   constitute notice) to:                 Gardere Wynne Sewell LLP
                                          Attn: Gary B. Clark
                                          1601 Elm Street, Suite 3000
                                          Dallas, Texas 75201

   If to Escrow Agent:                    Johnny J. Williams
                                          13831 Northwest Freeway, Suite 155
                                          Houston, Texas 77040

or to such other address as a party shall designate by written notice to all
other parties to the Agreement.

     9.   Escrow Agent.
          ------------

          (a) Reliance. The Escrow Agent may act upon any instrument or other
              --------
writing believed by it in good faith to be genuine and to be signed or presented
by the proper person or persons and shall not be liable in connection with the
performance by it of its duties pursuant to the provisions hereof, except for
its own willful misconduct or gross negligence. Purchaser and each Significant
PEI Shareholder shall, jointly and severally, indemnify and hold harmless the
Escrow Agent pursuant to Section 14 of the Agreement.

          (b) Successor Agent.
              ---------------

              (1) Resignation. Escrow Agent may resign from the performance of
                  -----------
all its agency functions and duties hereunder at any time by giving at least 30
days prior written notice to Parent and the Shareholder Representative. Such
resignation shall take effect upon the acceptance by a successor Escrow Agent of
appointment pursuant to Section 9(b)(2) or as otherwise provided below.

              (2) Appointment of Successor. Upon any such notice of resignation
                  ------------------------
pursuant to Section 9(b)(1) or the death or disability of the Escrow Agent,
Parent and the Shareholder Representative shall, by mutual agreement, appoint a
successor Escrow Agent. If, with respect to a retiring Escrow Agent, a successor
Escrow Agent shall not have been so appointed within the 30 day period referred
to in Section 9(b)(1), the retiring Escrow Agent, upon notice to Parent and the
Shareholder Representative, may petition any court of competent jurisdiction to
appoint a successor Escrow Agent. The retiring Escrow Agent shall continue to
serve until his successor is duly appointed and accepts such service.

              (3) Successor Escrow Agent. Upon the acceptance of any appointment
                  ----------------------
as Escrow Agent under the Agreement by a successor Escrow Agent, such successor
Escrow Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Escrow Agent, and the retiring
Escrow Agent shall be discharged from its duties and obligations under this
Agreement. After any retiring Escrow Agent's resignation as Escrow Agent or upon
the death or disability of the Escrow Agent, the provisions of this Section
9(b)(3) shall inure to its benefit as to any actions taken or omitted to be
taken by him while he was Escrow Agent.

                                      7
<PAGE>

     10.  Termination of Escrow. On the first anniversary of the date hereof,
          ---------------------
all shares in excess of 500,000 Escrow Shares held by Escrow Agent pursuant to
the terms of this Agreement, less a reasonable reserve (as determined by mutual
agreement of Purchaser and the Shareholder Representative, but if they cannot
agree, then by the Escrow Agent) to cover Disputed Claims (and interest thereon
at the rate of 6% per annum), shall be distributed by Escrow Agent to the
Significant PEI Shareholders or their respective successors or assigns. On the
second anniversary of the date hereof, all remaining Escrow Shares held by
Escrow Agent pursuant to the terms of this Agreement, less a reasonable reserve
(as determined by mutual agreement of Purchaser and the Shareholder
Representative, but if they cannot agree, then by the Escrow Agent) to cover
Disputed Claims (and interest thereon at the rate of 6% per annum), shall be
distributed by Escrow Agent to the Significant PEI Shareholders or their
respective successors or assigns. With respect to Escrow Shares reserved to
cover Disputed Claims, upon settlement of all such Disputed Claims, this escrow
shall terminate, and all remaining Escrow Shares held by Escrow Agent shall be
distributed by Escrow Agent to Parent or to the Significant PEI Shareholders, as
provided in the Final Decision.

     11.  Fees and Expenses. The Escrow Agent shall not be entitled to
          -----------------
compensation for its services. Escrow Agent shall be reasonably compensated for
services and reimbursed for all costs and expenses, including reasonable
attorney's fees, occasioned by any delay, controversy, litigation or event, and
the same shall be recoverable one-half from the Significant PEI Shareholders
(with each Significant PEI Shareholder being responsible for its Pro-Rata Share
of such one-half) and one-half from Purchaser.

     12.  Indemnification of Escrow Agent. Purchaser and each Significant PEI
          -------------------------------
Shareholder hereby agrees to jointly and severally indemnify and hold harmless
Escrow Agent from and against, any and all loss, liability, cost, damage and
expense, including, without limitation, reasonable attorneys' fees and expenses,
which Escrow Agent may suffer or incur by reason of any action, claim or
proceeding brought against Escrow Agent arising out of or relating in any way to
this Agreement or any transaction to which this Agreement relates unless such
action, claim or proceeding is the result of the willful misconduct or gross
negligence of Escrow Agent. Escrow Agent may consult counsel in respect of any
question arising under this Agreement or the Merger Agreement, and Escrow Agent
shall not be liable for any action taken or omitted in good faith upon advice of
such counsel. The Significant PEI Shareholders' portion of any indemnity
pursuant to this Agreement shall be deducted from the Escrow Shares.

     13.  Counterparts. This Agreement may be executed by facsimile and in two
          ------------
or more counterparts, each of which shall be deemed an original and all of
which taken together shall constitute one agreement. Signatures transmitted via
facsimile shall be deemed originals for purposes of this Agreement.

     14.  Governing Law. This Agreement shall be construed, performed, and
          -------------
enforced in accordance with, and governed by, the internal laws of the State of
Texas, without giving effect to the principles of conflict of laws thereof that
direct the application of the laws of a different state. Venue for any disputes
pursuant to this Agreement shall be in Harris County, Texas, and the parties
agree to submit to the jurisdiction of the state and federal courts in Harris
County, Texas.

                                      8
<PAGE>

     15.  Amendments. This Agreement may be amended or modified, and any of the
          ----------
terms, covenants, representations, warranties, or conditions hereof may be
waived, only by a written instrument executed by the parties hereto, or in the
case of a waiver, by the party waiving compliance. Any waiver by any party of
any condition, or of the breach of any provision, term, covenant,
representation, or warranty contained in this Agreement, in any one or more
instances, shall not be deemed to be nor construed as further or continuing
waiver of any such conditions, or of the breach of any other provision, term,
covenant, representation, or warranty of this Agreement.

     16.  Section Headings. The section headings in this Agreement are for
          ----------------
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.

     17.  Severability. If any provision of this Agreement is held by final
          ------------
judgment of a court of competent jurisdiction to be invalid, illegal or
unenforceable, such invalid, illegal or unenforceable provision shall be severed
from the remainder of this Agreement, and the remainder of this Agreement shall
be enforced. In addition, the invalid, illegal or unenforceable provision shall
be deemed to be automatically modified, and, as so modified, to be included in
this Agreement, such modification being made to the minimum extent necessary to
render the provision valid, legal and enforceable. Notwithstanding the
foregoing, however, if the severed or modified provision concerns all or a
portion of the essential consideration to be delivered under this Agreement by
one party to the other, the remaining provisions of this Agreement shall also be
modified to the extent necessary to equitably adjust the parties' respective
rights and obligations hereunder.

            [The Remainder of this Page is Intentionally Left Blank]

                                      9
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed the day and year first above written.

                   PETROCON ENGINEERING, INC.

                   By: ______________________________________
                       Michael L. Burrow, President and Chief
                       Executive Officer

                   INDUSTRIAL DATA SYSTEMS
                   CORPORATION

                   By: ______________________________________
                       William A. Coskey, President

                   PEI ACQUISITION, INC.

                   By: ______________________________________
                       William A. Coskey, President

                   SHAREHOLDER REPRESENTATIVE

                   ______________________________________
                   Michael L. Burrow

                   ESCROW AGENT

                   ______________________________________
                   Johnny J. Williams, Esq.

           [Signature Page to Indemnification Escrow Agreement]
<PAGE>

                   SIGNIFICANT PEI SHAREHOLDERS:

                   EQUUS II INCORPORATED, a Delaware
                   corporation

                   By:
                      ______________________________________
                      Randall B. Hale, Vice President

                   M.L. Burrow Family Partnership, Ltd.*
                   Michael L. Burrow*
                   Fahad Al-Tamimi*
                   Norbert C. Roobaert*
                   David L. Hopson*
                   Jimmie N. Carpenter*
                   Thomas H. Noble*
                   Douglas W. Eckols Family Partnership, Ltd.*
                   The Olan Weeks Family Limited Partnership, Ltd.*
                   Olan B. Weeks*
                   Terry D. Allen*
                   Lowell J. Walker, Sr.*
                   Mills Group, Ltd.*
                   Robert W. Raiford*
                   Robert G. Chapman Family Partnership, Ltd.*
                   Owen G. Vaughn, Jr.*
                   The Lawrence J. Bradford Family Partnership,
                   Ltd.*
                   Robert A. Knost*
                   David Smith*
                   William or Carolyn Miller*
                   Willie E. Rigsby*
                   Byron P. Walker, Sr.*

     *  Indicates that the Shareholder has executed this Indemnification Escrow
        Agreement by execution of a Master Signature Page.
<PAGE>

                                   SCHEDULE 1
                          Significant PEI Shareholders
                          ----------------------------

               Name                                        Pro Rata Share
               ----                                        --------------

        M.L. Burrow Family Partnership, Ltd.                  10.759%
       Michael L. Burrow                                       8.967%
       Equus II Incorporated                                  13.208%
       Fahad Al-Tamimi                                         9.051%
       Norbert C. Roobaert                                     8.627%
       David L. Hopson                                         7.780%
       Jimmie N. Carpenter                                     4.766%
       Thomas H. Noble                                         3.830%
       Douglas W. Eckols Family Partnership, Ltd.              3.666%
       The Olan Weeks Family Limited Partnership, Ltd.         3.370%
       Olan B. Weeks                                           1.628%
       Terry D. Allen                                          3.346%
       Lowell J. Walker, Sr.                                   2.803%
       Mills Group, Ltd.                                       2.298%
       Robert W. Raiford                                       2.162%
       Robert G. Chapman Family Partnership, Ltd.              2.073%
       Owen G. Vaughn, Jr.                                     2.036%
       The Lawrence J. Bradford Family Partnership, Ltd.       2.022%
       Robert A. Knost                                         1.755%
       David Smith                                             1.594%
       William or Carolyn Miller                               1.460%
       Willie E. Rigsby                                        1.628%
       Byron P. Walker, Sr.                                    1.169%

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00036-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00036-of-00352.parquet"}]]