Document:

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EXHIBIT 10.1

                    AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     This Amended and Restated Employment Agreement (the "Agreement") by and
between Integrated Electrical Services, Inc., a Delaware Corporation ("IES") and
David A. Miller ("Executive") is hereby entered into effective as of this 6th
day of January, 2005.

                                    RECITALS

     Whereas, Executive and IES have previously entered into an Employment
Agreement (the "Original Agreement") as of the 13th day of August, 2004; and

     Whereas, the parties to the Original Agreement deem it desirable to amend
and restate such Agreement in its entirety; and

     Whereas, as of the Effective Date, IES and the subsidiary companies of IES
(collectively, the "IES Companies") are engaged primarily in the providing of
any electrical contracting, information technology principally related to the
electrical contracting or cabling industry, and related services business; and

     Whereas, Executive is employed hereunder by IES in a confidential
relationship wherein Executive, in the course of his employment with IES, has
and will continue to become familiar with and aware of information as to IES's
customers and specific manner of doing business, including the processes,
techniques and trade secrets utilized by IES, and future plans with respect
thereto, all of which has been and will be established and maintained at great
expense to IES. This information is a trade secret and constitutes the valuable
goodwill of IES.

     Therefore, in consideration of the mutual promises, terms, covenants and
conditions set forth herein and the performance of each, the Original Agreement
is hereby amended and restated in its entirety as follows:

                                   AGREEMENTS

     1. Employment and Duties.

          (a) IES hereby employs Executive as Senior Vice President and Chief
     Financial Officer. As such, Executive shall have responsibilities, duties
     and authority reasonably accorded to, expected of and consistent with
     Executive's position. Executive hereby accepts this employment upon the
     terms and conditions herein and agrees to devote substantially all of his
     time, attention and efforts to promote and further the business and
     interests of IES and its affiliates.

          (b) Executive shall faithfully adhere to, execute and fulfill all
     lawful policies established by IES.

          (c) Executive shall not, during the term of his employment hereunder,
     engage in any other business activity pursued for gain, profit or other
     pecuniary advantage if

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     such activity interferes in any material respect with Executive's duties
     and responsibilities hereunder. The foregoing limitations shall not be
     construed as prohibiting Executive from making personal investments in such
     form or manner as will neither require his services in the operation or
     affairs of the companies or enterprises in which such investments are made
     nor violate the terms of paragraph 3 hereof.

     2. Compensation.  For all services rendered by Executive, IES shall
compensate Executive as follows:

          (a) Base Salary. The base salary payable to Executive during the term
     shall be $22,916.67 monthly ($275,000 on an annualized basis), payable in
     accordance with IES' payroll procedures for officers, but not less
     frequently than monthly. Such base salary may be increased from time to
     time, at the discretion of the Board of Directors of IES (the "IES Board"),
     in light of the Executive's position, responsibilities and performance.

          (b) Executive Perquisites, Benefits and Other Compensation. Executive
     shall be entitled to receive additional benefits and compensation from IES
     in such form and to such extent as specified below:

               (i) Reimbursement for all business travel and other out-of-pocket
          expenses (including those costs to maintain any professional
          certifications held or obtained by Executive) reasonably incurred by
          Executive in the performance of his duties pursuant to this Agreement
          and in accordance with IES' policy for executives of IES. All such
          expenses shall be appropriately documented in reasonable detail by
          Executive upon submission of any request for reimbursement, and in a
          format and manner consistent with IES' expense reporting policy.

               (ii) Executive shall, subject to the satisfaction of any general
          eligibility criteria, be eligible to participate in all compensation
          and

               (iii) Provided Executive is the Senior Vice President and Chief
          Financial Officer of IES, he may receive an incentive payment equal to
          a percentage of his annualized base, as set forth in paragraph 2(a)
          above, developed based on mutually agreeable goals, objectives and
          incremental performance of the business unit for which Executive is
          directly responsible, all subject to approval of the Compensation
          Committee of the Board of Directors. The actual payout of any
          incentive payment is typically made in December of each year.

               (iv) IES shall provide Executive with such other perquisites as
          may be deemed appropriate for Executive by the IES Board.

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     3. Non-Competition Agreement.

          (a) Executive recognizes that IES' willingness to enter into this
     Agreement is based in material part on Executive's agreement to the
     provisions of this paragraph 3 and that Executive's breach of the
     provisions of this paragraph 3 could materially damage IES. Subject to the
     further provisions of this Agreement, Executive will not, during the term
     of his employment with IES, and for a period of two years immediately
     following the termination of such for any reason whatsoever, either for
     Cause or in the event the Executive terminates his employment without Good
     Reason, except as may be set forth herein, directly or indirectly, for
     himself or on behalf of or in conjunction with any other person, company,
     partnership, corporation or business of whatever nature:

               (i) engage, as an officer, director, shareholder, owner, partner,
          joint venturer, or in a managerial capacity, whether as an employee,
          independent contractor, consultant or advisor, or as a sales
          representative, in any electrical contracting, information technology
          principally related to the electrical contracting or cabling industry,
          and related services business in direct competition with any IES
          Company within 100 miles of where any IES Company conducts business,
          including any territory serviced by an IES Company during the term of
          Executive's employment (the "Territory");

               (ii) call upon any person who is, at that time, an employee of an
          IES Company for the purpose or with the intent of enticing such
          employee away from or out of the employ of the IES Company;

               (iii) call upon any person or entity which is, at that time, or
          which has been, within one year prior to that time, a customer of an
          IES Company within the Territory for the purpose of soliciting or
          selling electrical contracting, information technology principally
          related to the electrical contracting or cabling industry, and related
          products or services in direct competition with the IES Companies
          within the Territory;

               (iv) call upon any prospective acquisition candidate, on
          Executive's own behalf or on behalf of any competitor, which candidate
          was, to Executive's knowledge after due inquiry, either called upon by
          an IES Company or for which an IES Company made an acquisition
          analysis, for the purpose of acquiring such entity; or

               (v) disclose customers, whether in existence or proposed, of IES
          to any person, firm, partnership, corporation or business for any
          reason or purpose whatsoever except to the extent that IES has in the
          past disclosed such information to the public for valid business
          reasons.

          Notwithstanding the above, the foregoing covenant shall not be deemed
     to prohibit Executive from acquiring as an investment not more than 1% of
     the capital stock of a competing business, whose stock is traded on a
     national securities exchange, the Nasdaq Stock Market or on an
     over-the-counter or similar market, unless the Board of Directors of IES
     consents to such acquisition.

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          (b) Because of the difficulty of measuring economic losses to IES as a
     result of a breach of the foregoing covenant, and because of the immediate
     and irreparable damage that could be caused to IES for which they would
     have no other adequate remedy, Executive agrees that foregoing covenant may
     be enforced by IES, in the event of breach by him, by injunctions and
     restraining orders. Executive further agrees to waive any requirement for
     IES' securing or posting of any bond in connection with such remedies.

          (c) It is agreed by the parties that the foregoing covenants in this
     paragraph 3 impose a reasonable restraint on Executive in light of the
     activities and business of the IES Companies on the date of the execution
     of this Agreement and the current plans of the IES Companies; but it is
     also the intent of IES and Executive that such covenants be construed and
     enforced in accordance with the changing activities, business and locations
     of the IES Companies throughout the term of this covenant, whether before
     or after the date of termination of the employment of Executive, unless the
     Executive was conducting such new business prior to any IES Company
     conducting such new business. For example, if, during the term of this
     Agreement, an IES Company engages in new and different activities, enters a
     new business or establishes new locations for its current activities or
     business in addition to or other than the activities or business enumerated
     under the Recitals above or the locations currently established therefore,
     then Executive will be precluded from soliciting the customers or employees
     of such new activities or business or from such new location and from
     directly competing with such new business within 100 miles of its
     then-established operating location(s) through the term of this covenant,
     unless the Executive was conducting such new business prior to any IES
     Company conducting such new business.

          (d) It is further agreed by the parties hereto that, in the event that
     Executive shall cease to be employed hereunder and shall enter into a
     business or pursue other activities not in competition with the electrical
     contracting activities of the IES Companies or similar activities or
     business in locations the operation of which, under such circumstances,
     does not violate clause (a)(i) of this paragraph 3, and in any event such
     new business, activities or location are not in violation of this paragraph
     3 or of Executive's obligations under this paragraph 3, if any, Executive
     shall not be chargeable with a violation of this paragraph 3 if the IES
     Companies shall thereafter enter the same, similar or a competitive (i)
     business, (ii) course of activities or (iii) location, as applicable.

          (e) The covenants in this paragraph 3 are severable and separate, and
     the unenforceability of any specific covenant shall not affect the
     provisions of any other covenant. Moreover, in the event any court of
     competent jurisdiction shall determine that the scope, time or territorial
     restrictions set forth are unreasonable, then it is the intention of the
     parties that such restrictions be enforced to the fullest extent which the
     court deems reasonable, and the Agreement shall thereby be reformed.

          (f) All of the covenants in this paragraph 3 shall be construed as an
     agreement independent of any other provision in this Agreement, and the
     existence of any claim or cause of action of Executive against IES, whether
     predicated on this Agreement or

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     otherwise, shall not constitute a defense to the enforcement by IES of such
     covenants. It is specifically agreed that the period of two years (subject
     to the further provisions of this Agreement) following termination of
     employment stated at the beginning of this paragraph 3, during which the
     agreements and covenants of Executive made in this paragraph 3 shall be
     effective, shall be computed by excluding from such computation any time
     during which Executive is in violation of any provision of this paragraph
     3.

          (g) IES and the Executive hereby agree that this covenant is a
     material and substantial part of this transaction.

     4. Term; Termination; Rights on Termination.  The term of this Agreement
shall begin on the Effective Date and continue for three years (the "Initial
Term") and, unless terminated sooner as herein provided, shall continue on a
year-to-year basis on the same terms and conditions contained herein in effect
as of the time of renewal (the "Extended Term"). This Agreement and Executive's
employment may be terminated in any one of the following ways:

          (a) Notice of Non-Renewal. This amended and restated agreement may be
     terminated by the Company by serving notice of intent not to continue the
     agreement no later than ninety (90) days prior to the expiration of the
     Initial or Extended Term. Notwithstanding the foregoing, in the event a
     change of control (as defined in Paragraph 9) occurs during either the
     Initial Term or the Extended Term, this Agreement may not be terminated by
     the Company for a period of two (2) years following such change in control.

          (b) Death. The death of Executive shall immediately terminate this
     Agreement with no severance compensation due to Executive's estate.

          (c) Disability. If, as a result of incapacity due to physical or
     mental illness or injury, Executive shall have been absent from his
     full-time duties hereunder for four consecutive months, then 30 days after
     receiving written notice (which notice may occur before or after the end of
     such four-month period, but which shall not be effective earlier than the
     last day of such four-month period), IES may terminate Executive's
     employment hereunder, provided that Executive is unable to resume his
     full-time duties at the conclusion of such notice period. Also, Executive
     may terminate his employment hereunder if his health should become impaired
     to an extent that makes the continued performance of his duties hereunder
     hazardous to his physical or mental health, provided that Executive shall
     have furnished IES with a written statement from a doctor reasonably
     acceptable to IES to such effect and provided, further, that, at IES'
     request made within 30 days of the date of such written statement,
     Executive shall submit to an examination by a doctor selected by IES who is
     reasonably acceptable to Executive or Executive's doctor and such second
     doctor shall have concurred in the conclusion of Executive's doctor. In the
     event this Agreement is terminated as a result of Executive's disability,
     Executive shall receive from IES, in a lump sum payment due within 10 days
     of the effective date of termination, six months of base salary at the rate
     then in effect.

          (d) Cause. The Company may terminate this Agreement and Executive's
     employment 10 days after written notice to Executive for "Cause", which
     shall be: (1) Executive's willful, material and irreparable breach of this
     Agreement (which remains

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     uncured 5 days after delivery of written notice); (2) Executive's gross
     negligence in the performance or intentional nonperformance (in either case
     continuing for 10 days after receipt of written notice of need to cure) of
     any of Executive's material duties and responsibilities hereunder; (3)
     Executive's dishonesty or fraud with respect to the business, reputation or
     affairs of the Company or IES which materially and adversely affects the
     Company or IES (monetarily or otherwise); (4) Executive's conviction of a
     felony crime or crime involving moral turpitude; (5) Executive's drug or
     alcohol abuse; or (6) Executive's violation of Company policy (which
     remains uncured or continues 5 days after delivery of written notice). In
     the event of a termination for Cause, Executive shall have no right to any
     severance compensation.

          (e) Without Cause. Executive may, without Good Reason (as hereinafter
     defined) terminate this Agreement and Executive's employment, effective 30
     days after written notice is provided to the Company. Executive may be
     terminated without Cause by the Company during either the Initial Term or
     Extended Term. Should Executive be terminated by the Company without Cause
     or should Executive terminate with Good Reason during the Initial Term or
     Extended Term, Executive shall receive from the Company, in a lump sum
     payment due on the effective date of termination, the base salary at the
     rate then in effect for whatever time period is remaining under the Initial
     Term or the Extended Term, as applicable, or for one year, whichever amount
     is greater. Further, any termination without Cause by the Company or by
     Executive for Good Reason shall operate to eliminate the period set forth
     in paragraph 3(a) and during which the terms of paragraph 3 apply. If
     Executive resigns or otherwise terminates his employment without Good
     Reason, rather than the Company terminating his employment pursuant to this
     paragraph 4(d), Executive shall receive no severance compensation.

          (f) Good Reason. Executive shall have "Good Reason" to terminate his
     employment hereunder upon the occurrence of any of the following events,
     unless such event is agreed to in writing by Executive: (a) Executive is
     demoted by means of a material reduction in authority, responsibilities or
     duties to a position of less stature or importance within the Company than
     the position described in Section 1 hereof; (b) Executive's annual base
     salary as then in effect is reduced; or (c) the relocation of the Company's
     principal executive offices to a location outside the greater Houston,
     Texas area.

     5. Return of Company Property.  All records, designs, patents, business
plans, financial statements, manuals, memoranda, lists and other property
delivered to or compiled by Executive by or on behalf of IES or any IES
Companies or their representatives, vendors or customers which pertain to the
business of IES or any IES Companies shall be and remain the property of IES or
the IES Company, as the case may be, and be subject at all times to their
discretion and control. Likewise, all correspondence, reports, records, charts,
advertising materials and other similar data pertaining to the business,
activities or future plans of IES or the IES Company which is collected by
Executive shall be delivered promptly to IES without request by it upon
termination of Executive's employment.

     6. Inventions.  Executive shall disclose promptly to IES any and all
significant conceptions and ideas for inventions, improvements and valuable
discoveries, whether patentable or not, which are conceived or made by
Executive, solely or jointly with another, during the

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period of employment or within one year thereafter, if conceived during
employment, and which are directly related to the business or activities of IES
and which Executive conceives as a result of his employment by IES. Executive
hereby assigns and agrees to assign all his interests therein to IES or its
nominee. Whenever requested to do so by IES, Executive shall execute any and all
applications, assignments or other instruments that IES shall deem necessary to
apply for and obtain Letters Patent of the United States or any foreign country
or to otherwise protect IES' interest therein.

     7. Trade Secrets.  Executive agrees that he will not, during or after the
term of this Agreement, disclose the specific terms of IES' relationships or
agreements with their respective significant vendors or customers or any other
significant and material trade secret of IES, whether in existence or proposed,
to any person, firm, partnership, corporation or business for any reason or
purpose whatsoever.

     8. Confidentiality.

          (a) Executive acknowledges and agrees that all Confidential
     Information (as defined below) of IES is confidential and a valuable,
     special and unique asset of IES that gives IES an advantage over its actual
     and potential, current and future competitors. Executive further
     acknowledges and agrees that Executive owes IES a fiduciary duty to
     preserve and protect all Confidential Information from unauthorized
     disclosure or unauthorized use, that certain Confidential Information
     constitutes "trade secrets" under applicable laws and, that unauthorized
     disclosure or unauthorized use of IES' Confidential Information would
     irreparably injure IES.

          (b) Both during the term of Executive's employment and after the
     termination of Executive's employment for any reason (including wrongful
     termination), Executive shall hold all Confidential Information in strict
     confidence, and shall not use any Confidential Information except for the
     benefit of IES, in accordance with the duties assigned to Executive.
     Executive shall not, at any time (either during or after the term of
     Executive's employment), disclose any Confidential Information to any
     person or entity (except other employees of IES who have a need to know the
     information in connection with the performance of their employment duties),
     or copy, reproduce, modify, decompile or reverse engineer any Confidential
     Information, or remove any Confidential Information from IES' premises,
     without the prior written consent of the President of IES, or permit any
     other person to do so. Executive shall take reasonable precautions to
     protect the physical security of all documents and other material
     containing Confidential Information (regardless of the medium on which the
     Confidential Information is stored). This Agreement applies to all
     Confidential Information, whether now known or later to become known to
     Executive.

          (c) Upon the termination of Executive's employment with IES for any
     reason, and upon request of IES at any other time, Executive shall promptly
     surrender and deliver to IES all documents and other written material of
     any nature containing or pertaining to any Confidential Information and
     shall not retain any such document or other material. Within five days of
     any such request, Executive shall certify to IES in writing that all such
     materials have been returned.

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          (d) As used in this Agreement, the term "Confidential Information"
     shall mean any information or material known to or used by or for IES
     (whether or not owned or developed by IES and whether or not developed by
     Executive) that is not generally known to persons in the electrical
     contracting business. Confidential information includes, but is not limited
     to, the following: all trade secrets of IES; all information that IES has
     marked as confidential or has otherwise described to Executive (either in
     writing or orally) as confidential; all nonpublic information concerning
     IES' products, services, prospective products or services, research,
     product designs, prices, discounts, costs, marketing plans, marketing
     techniques, market studies, test data, customers, customer lists and
     records, suppliers and contracts; all Company business records and plans;
     all Company personnel files; all financial information of or concerning
     IES; all information relating to operating system software, application
     software, software and system methodology, hardware platforms, technical
     information, inventions, computer programs and listings, source codes,
     object codes, copyrights and other intellectual property; all technical
     specifications; any proprietary information belonging to IES; all computer
     hardware or software manual; all training or instruction manuals; and all
     data and all computer system passwords and user codes.

     9. Change in Control.

          (a) Executive understands and acknowledges that the Company may be
     merged or consolidated with or into another entity and that such entity
     shall automatically succeed to the rights and obligations of the Company
     hereunder or that the Company may undergo a Change in Control (as defined
     below). In the event a Change in Control is initiated or occurs during the
     Initial Term or Extended Term, then the provisions of this paragraph 9
     shall be applicable.

          (b) In the event of a Change in Control wherein the Company and
     Executive have not received written notice at least ten business days prior
     to the date of the event giving rise to the Change in Control from the
     successor to all or a substantial portion of the Company's business and/or
     assets that such successor is willing as of the closing to assume and agree
     to perform the Company's obligations under this Agreement in the same
     manner and to the same extent that the Company is hereby required to
     perform, then Executive may, at Executive's sole discretion, elect to
     terminate Executive's employment on such Change in Control by providing
     written notice to the Company prior to the closing of the transaction
     giving rise to the Change in Control. In such case, Executive shall receive
     from Company, in a lump sum payment due on the effective date of
     termination the base salary at the rate then in effect for two years, one
     year's bonus payment with all goals deemed met in full, and two years'
     coverage under the Company's medical benefit plan on a tax neutral basis.

          (c) If, on or within six months following the effective date of a
     Change in Control the Company terminates Executive's employment other than
     for Cause or Executive terminates his employment for Good Reason, or if
     Executive's employment with the Company is terminated by the Company within
     thirty days before the effective date of a Change in Control and it is
     reasonably demonstrated that such termination (i) was at the request of a
     third party that has taken steps reasonably calculated to effect a Change
     in Control, or (ii) otherwise arose in connection with or anticipation of a
     Change

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     in Control, then Executive shall receive from Company, in a lump sum
     payment due on the effective date of termination the base salary at the
     rate then in effect for two years, one year's bonus payment with all goals
     met in full, and two years' coverage under the Company's medical benefit
     plan on a tax neutral basis.

          (d) A "Change in Control" shall be deemed to have occurred if:

               (i) any person, entity or group (as such terms are used in
          Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
          amended (the "Act"), other than the IES Companies or an employee
          benefit plan of the IES Companies, acquires, directly or indirectly,
          the beneficial ownership (as defined in Section 13(d) of the Act) of
          any voting security of the Company and immediately after such
          acquisition such person is, directly or indirectly, the beneficial
          owner of voting securities representing 20% or more of the total
          voting power of all of the then outstanding voting securities of the
          Company entitled to vote generally in the election of directors;

               (ii) upon the first purchase of the Company's common stock
          pursuant to a tender or exchange offer (other than a tender or
          exchange offer made by the Company);

               (iii) the stockholders of the Company shall approve a merger,
          consolidation, recapitalization or reorganization of the Company, or a
          reverse stock split of outstanding voting securities, or consummation
          of any such transaction if stockholder approval is not obtained, other
          than any such transaction which would result in at least 75% of the
          total voting power represented by the voting securities of the
          surviving entity outstanding immediately after such transaction being
          beneficially owned by the holders of all of the outstanding voting
          securities of the Company immediately prior to the transactions with
          the voting power of each such continuing holder relative to other such
          continuing holders not substantially altered in the transaction;

               (iv) the stockholders of the Company shall approve a plan of
          complete liquidation or dissolution of the Company or an agreement for
          the sale or disposition by the Company of all or substantially all of
          the Company's assets; or

               (v) if, at any time during any period of two consecutive years,
          individuals who at the beginning of such period constitute the Board
          cease for any reason to constitute at least a majority thereof, unless
          the election or nomination for the election by the Company's
          stockholders of each new director was approved by a vote of at least
          two-thirds of the directors then still in office who were directors at
          the beginning of the period.

          (e) Notwithstanding anything in this Agreement to the contrary, a
     termination pursuant to paragraph 9(b), (c), or (d) shall operate to
     automatically waive in full the non-competition restrictions imposed on
     Executive pursuant to paragraph 3(a).

          (f) If it shall be finally determined that any payment made or benefit
     provided

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     to Executive in connection with a Change in Control of the Company, whether
     or not made or provided pursuant to this Agreement, is subject to the
     excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
     amended, or any successor thereto, the Company shall pay Executive an
     amount of cash (the "Additional Amount") such that the net amount received
     by Executive after paying all applicable taxes on such Additional Amount
     shall be equal to the amount that Executive would have received if Section
     4999 were not applicable.

     10. Indemnification.  In the event Executive is made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by the Company
against Executive), by reason of the fact that he is or was performing services
under this Agreement, then the Company shall indemnify Executive against all
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement, as actually and reasonably incurred by Executive in connection
therewith. In the event that both Executive and the Company are made a party to
the same third-party action, complaint, suit or proceeding, the Company agrees
to engage competent legal representation, and Executive agrees to use the same
representation, provided that if counsel selected by the Company shall have a
conflict of interest that prevents such counsel from representing Executive,
Executive may engage separate counsel and the Company shall pay all reasonable
attorneys' fees and reasonable expenses of such separate counsel. Further, while
Executive is expected at all times to use his best efforts to faithfully
discharge his duties under this Agreement, Executive cannot be held liable to
the Company for errors or omissions made in good faith where Executive has not
exhibited gross, willful and wanton negligence and misconduct nor performed
criminal and fraudulent acts which materially damage the business of the
Company.

     11. Outplacement Services.  Should Executive be terminated Without Cause or
resign with Good Reason, he shall be entitled to outplacement services
commensurate with Executive's position for a period of one year or until he
obtains comparable employment, whichever is less.

     12. No Prior Agreements.  Executive hereby represents and warrants to IES
that the execution of this Agreement by Executive and his employment by IES and
the performance of his duties hereunder will not violate or be a breach of any
agreement with a former employer, client or any other person or entity. Further,
Executive agrees to indemnify IES for any claim, including, but not limited to,
reasonable attorneys' fees and expenses of investigation, by any such third
party that such third party may now have or may hereafter come to have against
IES based upon or arising out of any non-competition agreement, invention or
secrecy agreement between Executive and such third party which was in existence
as of the date of this Agreement.

     13. Assignment; Binding Effect.  Executive understands that he has been
selected for employment by IES on the basis of his personal qualifications,
experience and skills. Executive agrees, therefore, that he cannot assign all or
any portion of his performance under this Agreement. Subject to the preceding
two sentences and the express provisions of paragraph 11 above, this Agreement
shall be binding upon, inure to the benefit of and be enforceable by the parties
hereto and their respective heirs, legal representatives, successors and
assigns.

     14. Release.  Notwithstanding anything in this Agreement to the contrary,
Executive shall not be entitled to receive any payments pursuant to this
Agreement unless Executive has

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executed (and not revoked) a general release of all claims Executive may have
against IES and its affiliates in a form of such release reasonably acceptable
to IES.

     15. Complete Agreement.  Executive has no oral representations,
understandings or agreements with IES, IES or any of their officers, directors
or representatives covering the same subject matter as this Agreement. This
written Agreement is the final, complete and exclusive statement and expression
of the agreement between IES, IES and Executive and of all the terms of this
Agreement, and it cannot be varied, contradicted or supplemented by evidence of
any prior or contemporaneous oral or written agreements. This written Agreement
may not be later modified, except by a further writing signed by an officer of
IES who must be duly authorized by IES' Board of Directors and Executive, and no
term of this Agreement may be waived except by writing signed by the party
waiving the benefit of such term. Without limiting the generality of the
foregoing, either party's failure to insist on strict compliance with this
Agreement shall not be deemed a waiver thereof.

     16. Notice.  Whenever any notice is required hereunder, it shall be given
in writing addressed as follows:

     To IES:         Law Department
                     Integrated Electrical Services, Inc.
                     1800 West Loop South, Suite 500
                     Houston, Texas 77027

     To Executive:   David A. Miller
                     10618 Shady River
                     Houston, Texas 77042

Notice shall be deemed given and effective on the earlier of three days after
the deposit in the U.S. mail of a writing addressed as above and sent first
class mail, certified, return receipt requested, or when actually received.
Either party may change the address for notice by notifying the other party of
such change in accordance with this paragraph 16.

     17. Severability; Headings.  If any portion of this Agreement is held
invalid or inoperative, the other portions of this Agreement shall be deemed
valid and operative and, so far as is reasonable and possible, effect shall be
given to the intent manifested by the portion held invalid or inoperative. The
paragraph headings herein are for reference purposes only and are not intended
in any way to describe, interpret, define or limit the extent or intent of the
Agreement or of any part hereof.

     18. Dispute Resolutions.  Except with respect to injunctive relief as
provided in paragraph 3(b), neither party shall institute a proceeding in any
court or administrative agency to resolve a dispute between the parties before
that party has sought to resolve the dispute through direct negotiation with the
other party. If the dispute is not resolved within two weeks after a demand for
direct negotiation, the parties shall attempt to resolve the dispute through
mediation. If the parties do not promptly agree on a mediator, the parties shall
request the Association of Attorney Mediators in Harris County, Texas to appoint
a mediator certified by the Supreme Court of Texas. If the mediator is unable to
facilitate a settlement of the dispute within a

                                    11 of 12
<PAGE>
reasonable period of time, as determined by the mediator, the mediator shall
issue a written statement to the parties to that effect and any unresolved
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration, conducted before a panel of three
arbitrators in Houston, Texas, in accordance with the rules of the American
Arbitration Association then in effect. A decision by a majority of the
arbitration panel shall be final and binding. Judgment may be entered on the
arbitrators' award in any court having jurisdiction. The costs and expenses,
including reasonable attorneys' fees, of the prevailing party in any dispute
arising under this Agreement will be promptly paid by the other party.

     19. Governing Law.  This Agreement shall in all respects be construed
according to the laws of the State of Texas without regard to its conflicts of
law provisions.

     20. Counterparts.  This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original and all of which
together shall constitute but one and the same instrument.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement effective
for all purposes as of the Effective Date.

                                    INTEGRATED ELECTRICAL SERVICES, INC.

                                    By: /s/ H. Roddy Allen, Sr.
                                        ----------------------------------------
                                    Name: H. Roddy Allen, Sr.
                                    Title: President and Chief Executive Officer

                                    EXECUTIVE

                                    /s/ David A. Miller
                                    --------------------------------------------
                                    David A. Miller

                                    12 of 12<PAGE>

EXHIBIT 10.2

                            ASSET PURCHASE AGREEMENT

         This ASSET PURCHASE AGREEMENT (this "AGREEMENT") is made and entered
into as of January 31, 2005 by and among INTEGRATED ELECTRICAL SERVICES, INC., a
Delaware corporation (the "PARENT"), DKD ELECTRIC CO., INC., a New Mexico
corporation (the "COMPANY"), DKD ELECTRIC LLC, a New Mexico limited liability
company (the "BUYER"), and J. DEE DENNIS, JR., an individual and resident of the
State of New Mexico ("INDEMNITOR").

                                   WITNESSETH:

         WHEREAS, the Parent owns, either directly or indirectly, all of the
issued and outstanding capital stock of the Company, which is engaged in the
electrical construction and services business (the "BUSINESS");

         WHEREAS, the Parent and the Company desire to sell to the Buyer
substantially all of the Company's assets, which are more fully described in
Section 1.1 hereof, and the Buyer desires to acquire such assets in
consideration of the payment by the Buyer of the purchase price and the
assumption by the Buyer of the liabilities provided for herein, all upon the
terms and subject to the conditions hereinafter set forth;

         WHEREAS, Indemnitor is a Member of the Buyer and has agreed to
personally guarantee to the Parent and the Company the Buyer's performance of
all representations, warranties, covenants, agreements and conditions set forth
herein;

         NOW, THEREFORE, for and in consideration of the premises and of the
respective representations, warranties, covenants, agreements and conditions of
the parties contained herein, it is hereby agreed as follows:

1. PURCHASE AND SALE OF ASSETS.

         1.1 Transfer of Assets. On the terms and subject to the conditions set
forth in this Agreement, on the Closing Date (as defined in Section 2.1 hereof),
the Company shall sell, convey, assign, transfer and deliver to the Buyer, and
the Buyer shall purchase and acquire from the Company (except as provided in
Section 1.2 hereof) all of the assets, rights and properties of the Parent or
the Company set forth on Schedule 1.1. The assets described in this Section 1.1
as being sold, conveyed, assigned, transferred and delivered to the Buyer
hereunder are sometimes hereinafter referred to collectively as the "ASSETS".

         1.2 Excluded Assets. It is expressly understood and agreed that the
Assets shall not include the following (such assets are hereinafter referred to
collectively as the "EXCLUDED ASSETS"):

                  (a) Cash and cash equivalents or similar type investments,
         such as certificates of deposit, Treasury bills and other marketable
         securities;
<PAGE>
                  (b) Claims for refunds of taxes and other governmental charges
         to the extent such refunds relate to periods ending on or prior to the
         Closing Date;

                  (c) Any asset, tangible or intangible, which is not freely
         transferable without the consent of a third party, upon the failure to
         obtain such consent;

                  (d) The original corporate minute books, stock books,
         financial records, tax returns, personnel and payroll records and
         corporate policies and procedures manuals of the Company and other
         records required by applicable laws to be retained;

                  (e) Any contract or agreement, whether written or oral,
         between the Company and IES Contractors, Inc.; and

                  (f) Any asset not set forth on Schedule 1.1.

         1.3 Instruments of Conveyance and Transfer.

                  (a) At the Closing, the Buyer, the Company and the Parent
         shall enter into a Bill of Sale, Assignment and Assumption Agreement in
         the form attached hereto as Exhibit A, transferring to the Buyer good
         and indefeasible title to all of the tangible personal property
         included in the Assets, subject only to Permitted Encumbrances.

                  (b) At the Closing, the Buyer and the Parent shall deliver
         such other instruments of transfer and assignment in respect of the
         Assets as the Buyer shall reasonably require and as shall be consistent
         with the terms and provisions of this Agreement.

                  (c) At the Closing, the Buyer shall, and shall cause the
         Transferred Employees (as hereinafter defined) to, resign as officers
         and directors of the Company and any other affiliates of the Parent.

         1.4 Further Assurances. From time to time after the Closing, the Parent
and the Company will execute and deliver, or cause to be executed and delivered,
without further consideration, such other instruments of conveyance, assignment,
transfer and delivery and will take such other actions as the Buyer may
reasonably request in order to more effectively transfer, convey, assign and
deliver to the Buyer, and to place the Buyer in possession and control of any of
the Assets or to enable the Buyer to exercise and enjoy all rights and benefits
of the Company with respect thereto.

         1.5 Liabilities. On the Closing Date, the Buyer will assume and agree
to pay and discharge all liabilities of the Company, known or unknown, absolute
or contingent (the "ASSUMED LIABILITIES") other than the liabilities set forth
on Schedule 1.5 (the "RETAINED LIABILITIES"), which shall be retained by the
Parent or the Company, respectively.

         1.6 Expenses: Consents and Taxes. The Buyer shall pay, or cause to be
paid (i) all costs and expenses of obtaining all consents of third parties for
the assignment of any of the Assets, and (ii) all transfer, stamp, sales, use or
other similar taxes or duties payable in connection with the sale and transfer
of the Assets to the Buyer.

                                       2
<PAGE>
2. CLOSING; PURCHASE PRICE.

         2.1 Closing Date. The consummation of the transactions contemplated in
this Agreement (the "CLOSING") shall take place at the offices of Gardere Wynne
Sewell LLP, 1000 Louisiana, Suite 3400, Houston, Texas at 10:00 a.m., Central
time, January 31, 2005 (the "CLOSING DATE") contemporaneously with the execution
of this Agreement or at such other place and time as the parties hereto may
mutually agree.

         2.2 Purchase Price. The aggregate purchase price for the Assets shall
be $3,000,000 (the "PURCHASE PRICE"), subject to adjustment pursuant to Section
2.3 below, plus the Buyer's assumption of the Assumed Liabilities pursuant to
Section 1.5 above. The Purchase Price shall be payable by the Buyer at the
Closing to the Company in immediately available funds by confirmed wire transfer
to a bank account to be designated by the Company.

         2.3 Cash Reconciliation. (a) Within 90 days following the Closing Date,
the Company shall prepare and deliver to the Buyer a schedule setting forth, for
the period commencing on October 1, 2004, and ending as of the Closing, (a) the
cash disbursements funded by the Company, the Parent or any of their affiliates
for the benefit of the Company, to include those made in the ordinary course to
trade vendors and those made in the ordinary course for Company employee benefit
plans (the "DISBURSEMENTS"), and (b) the cash deposits made by the Company (the
"DEPOSITS"). Within three business days of the receipt of such schedule, (i) the
Buyer shall remit to the Company in immediately available funds, the amount by
which the Disbursements exceed the Deposits, if any; provided, however, that if
such amount exceeds $250,000, then $250,000 shall be due and payable on such
third business day and the amounts in excess of $250,000 shall be due and
payable on the 180th day following the Closing, or (ii) the Company shall remit
to the Buyer, in like manner and within such period, the amount by which
Deposits exceed the Disbursements, if any. Disbursements shall include, but not
be limited to, actual cash amounts paid by the Company or the Parent on behalf
of the Company with respect to pre-Closing periods, including (i) amounts paid
after September 30, 2004 for checks issued by the Company or Parent on behalf of
the Company on or before September 30, 2004 that had not cleared the banks on
September 30, 2004, which amounts were reflected on the September 30, 2004
balance sheet as negative cash amounts, (ii) checks issued by the Company or
Parent on behalf of the Company subsequent to September 30, 2004, but before the
Closing that have not cleared the banks as of the Closing, (iii) workers
compensation, general liability, auto insurance, health and similar insurance
premiums paid by the Parent on behalf of the Company with respect to periods
prior to the Closing, whether accrued prior to or after the Closing, and (iv)
other amounts paid by the Company or by the Parent on behalf of the Company with
respect to periods prior to the Closing, but for which invoices are received or
accruals are made after the Closing Date. Deposits shall include, but not be
limited to, actual cash amounts received by the Company or the Parent on behalf
of the Company subsequent to September 30, 2004, but before the Closing that
have not been reflected in the Company's accounts as of the Closing. Except as
specifically set forth in paragraph 2.3(b) below, Disbursements and Deposits
will be accounted for in accordance with Parent's accounting practices
consistent with past periods.

         (b) At the Closing, the Parent shall pay to the Buyer a total of
$118,000 on behalf of Pan American Electric Company, Inc. ("PAN AM"), through an
offset to the Purchase Price, on account of certain accounts receivable and work
in process owed to the Company by Pan Am for work done on the Holy Cross job,
which accounts receivable and work in process would otherwise be included

                                       3
<PAGE>
among the Assets, in full and final satisfaction of all amounts owed to the
Company by the Parent, Pan Am, or any of their respective affiliates in
connection with the Holy Cross project. At the Closing, the Parent shall pay to
the Buyer a total of $51,643.10 on behalf of Federal Communications Group, Inc.
("FCG"), through an offset to the Purchase Price, on account of amounts owed by
FCG to the Company, which amounts would otherwise be an account receivable or
work in process included among the Assets, in full and final satisfaction of all
amounts owed by FCG to the Company. Amounts offset against the Purchase Price in
accordance with the above will not be treated as Disbursements. Further,
Disbursements shall not include (i) lease payments and associated costs paid by
the Company to FCG for the Xerox machine listed in Schedule 1.5, 7(b), or (ii)
fees in the amount of $5,700 paid to Cushman & Wakefield in connection with the
early termination of the Las Vegas, NV lease.

         (c) The Buyer and Parent, on its own behalf and on behalf of FCG, agree
that $68,311.91 is owed by the Company to FCG at the Closing and shall not be
due and payable until 180 days following the Closing Date. All amounts owed by
the Company or the Buyer to FCG other than such $68,311.91 amount shall be paid
in full by Buyer to FCG when due.

         2.4 Purchase Price Allocation. As soon as practicable after the Closing
Date, the Company and the Buyer shall jointly attempt to agree to and prepare
IRS Form 8594 to report the allocation of the Purchase Price among the Assets.
Each party hereto agrees not to assert, in connection with any tax return, tax
audit or similar proceeding, any allocation that differs from that set forth in
such Form 8594. If the Company and the Buyer cannot reach agreement as to the
allocation of the Purchase Price among the Assets, the parties agree to allocate
the Purchase Price among the Assets for all purposes (including financial
accounting and tax purposes) independently.

3. REPRESENTATIONS AND WARRANTIES.

         3.1 Representations and Warranties of the Company and the Parent. The
Company and the Parent represent and warrant to the Buyer as follows:

                  (a) Organization, Authority and Qualification of the Company.
         The Company is a corporation duly organized and validly existing under
         the laws of the State of New Mexico and the Company has full corporate
         power and authority to own or lease its properties and to carry on its
         business in such state. The Company has the full corporate power and
         authority to execute, deliver and perform this Agreement, and this
         Agreement has been duly and validly executed and delivered by the
         Company and constitutes the valid and legally binding obligation of the
         Company, subject to general equity principles, enforceable in
         accordance with its terms, except as the same may be limited by
         bankruptcy, insolvency, reorganization or similar laws affecting the
         rights of creditors generally.

                  (b) No Violation. The Company is not in default under or in
         violation of its Articles of Incorporation or Bylaws.

                  (c) Title to Properties; Absence of Liens and Encumbrances.
         The Company owns good and indefeasible title to the Assets, free and
         clear of all claims, liens, security interests, charges, leases,
         encumbrances, licenses or sublicenses and other restrictions of any
         kind and nature, other than the claims, liens, security interests,
         charges,

                                       4
<PAGE>
         leases, encumbrances, licenses or sublicenses either included among the
         Assumed Liabilities or specifically set forth on Schedule 3.1(c) hereto
         ("PERMITTED ENCUMBRANCES").

         3.2 Representations and Warranties of the Buyer. The Buyer and
Indemnitor, jointly and severally, represent and warrant to the Parent and the
Company as follows:

                  (a) Organization, Authority and Qualification of the Buyer.
         The Buyer is a limited liability company duly organized and validly
         existing under the laws of the State of New Mexico and the Buyer has
         full corporate power and authority to own or lease its properties and
         to carry on its business in such state. The Buyer has the full
         corporate power and authority to execute, deliver and perform this
         Agreement, and this Agreement has been duly and validly executed and
         delivered by the Buyer and constitutes the valid and legally binding
         obligation of the Buyer, subject to general equity principles,
         enforceable in accordance with its terms, except as the same may be
         limited by bankruptcy, insolvency, reorganization or similar laws
         affecting the rights of creditors generally.

                  (b) No Violation. The Buyer is not in default under or in
         violation of its Articles of Organization or Operating Agreement.

                  (c) Certain Fees. The Buyer has not employed any broker or
         finder or incurred any other liability for any brokerage fees,
         commissions or finders' fees in connection with the transactions
         contemplated hereby.

                  (d) Financial Information. The financial and management
         reports (including, without limitation, WIP schedules) heretofore
         delivered or made by Indemnitor or the Company to the Parent are true
         and correct in all material respects and do not omit to state any fact
         necessary to make any of them, in light of the circumstances in which
         made, not misleading. All executed change orders have been recorded,
         all agreed change orders have been executed or are listed on Schedule
         3.2(d), and all checks and cash received by the Company and its
         affiliates have been deposited.

         3.3 No Warranty. The Buyer and the Indemnitor acknowledge that the
Indemnitor, through previous ownership and/or management of the Company, is
familiar with the Assets and the operations of the Company, and has access to
any information pertaining thereto and has made such information available to
Buyer. Neither the Company nor the Parent, nor any of their respective
directors, officers, employees, agents or representatives has made, or shall be
deemed to have made, and no such person shall be liable for, or bound in any
manner by, and Buyer and the Indemnitor have not relied upon and will not rely
upon, any express or implied representations, warranties, guaranties, promises
or statements pertaining to the Business or Assets except as specifically
provided in this Agreement. The Buyer and the Indemnitor acknowledge that in
making the decision to enter into this Agreement and to consummate the
transactions contemplated hereby, they have relied solely on the basis of their
own independent investigation of the Business and the Assets and upon the
express written representations, warranties and covenants in this Agreement.
Without diminishing the scope of the express written representations, warranties
and covenants of the Company and the Parent in this Agreement and without
affecting or impairing their right to rely thereon, the Buyer and the Indemnitor
acknowledge that (a) they have not relied, in whole or in part, on any
information contained in documents, materials or other information provided to
them by, or

                                       5
<PAGE>
on behalf of, Company or the Parent, and (b) neither Company nor the Parent is
making any representations or warranties with respect to (i) any such documents,
materials or other information, other than, in each case, as set forth in this
Agreement or (ii) the value, condition, merchantability, marketability,
profitability, suitability or fitness for a particular use or purpose of the
Assets. ACCORDINGLY, THE ASSETS ARE BEING TRANSFERRED "AS IS, WHERE IS." EXCEPT
FOR THE REPRESENTATIONS AND WARRANTIES SET FORTH IN SECTION 3.1 OF THIS
AGREEMENT, THE COMPANY AND PARENT MAKE ABSOLUTELY NO REPRESENTATIONS OR
WARRANTIES WHATSOEVER, EXPRESS OR IMPLIED, REGARDING THE ASSETS, INCLUDING
WITHOUT LIMITATION ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE, OR THE ABILITY OF THE COMPANY TO ASSIGN THE ASSETS, OR
OBTAIN CONSENTS TO ANY ASSIGNMENT.

4. COVENANTS; ACTION SUBSEQUENT TO CLOSING.

         4.1 Access to Books and Records. Until the third anniversary of the
Closing Date, the Parent and the Company shall afford, and will cause its
affiliates to afford, to the Buyer, its counsel, accountants and other
authorized representatives, during normal business hours, reasonable access to
the books, records and other data of the Company and the Business with respect
to periods ending on or prior to the Closing Date to the extent that such access
may be reasonably required by the Buyer to facilitate (i) the investigation,
litigation and final disposition of any claims which may have been or may be
made against the Buyer in connection with the Business or (ii) for any other
reasonable business purpose. Following the Closing, the Buyer shall prepare and
deliver to the Parent on or before February 12, 2005, on behalf of the Company,
all regularly prepared financial reports and statements for periods up to and
including the Closing Date, and shall cooperate with and provide assistance to
the Parent and the Company in their financial and tax reporting obligations for
the periods up to and including the Closing Date.

         4.2 Mail. The Parent and the Company authorize and empower the Buyer on
and after the Closing Date to receive and open all mail received by the Buyer
relating to the Business or the Assets and to deal with the contents of such
communications in any proper manner. The Parent and the Company shall promptly
deliver to the Buyer any mail or other communication received by them after the
Closing Date pertaining to the Business or the Assets. The Buyer shall promptly
deliver to the Parent any mail or other communication received by it after the
Closing Date pertaining to the Excluded Assets or Retained Liabilities, and any
cash, checks or other instruments of payment in respect of the Excluded Assets.
As soon as is practicable after the Closing Date, and in no event more than ten
days thereafter, the Buyer shall mail to its customers and vendors a notice of
the sale in the form provided by the Parent, with such changes thereto as Buyer
and Parent shall agree.

         4.3 No Consent Contracts. To the extent that any contract of the
Company included in the Assets may not be assigned without the consent of any
third party, and such consent is not obtained prior to Closing (such contracts
referred to as "NO CONSENT CONTRACTS"), this Agreement and any assignment
executed at Closing pursuant hereto shall not constitute an assignment thereof,
but to the extent permitted by law shall constitute an equitable assignment by
the Company and assumption by the Buyer of the Company's rights and obligations
under the applicable No Consent

                                       6
<PAGE>
Contract, with the Company making available to the Buyer the benefits thereof
and the Buyer performing the obligations thereunder on the Company's behalf.

         4.4 Preparation and Filing of Certain Tax Forms. The Buyer shall
prepare and submit to the Parent for signature and timely filing all Forms W-2,
940, 941 and 1099 with all appropriate Governmental Entities, including without
limitation any summary schedules and transmittal forms, as well as any similar
filings required by any state or local Governmental Entity, with respect to all
wages and other reportable payments for the calendar year 2004 and for the
partial year in 2005 ending on the Closing Date. As used herein, "GOVERNMENTAL
ENTITY" means any court or tribunal in any jurisdiction (domestic or foreign) or
any public, governmental or regulatory body, agency, department, commission,
board, bureau or other authority or instrumentality, domestic or foreign. The
Buyer shall pay all administrative amounts owed as a result of or otherwise
related to such filings with the exception of any tax, interest, or penalties
associated with periods prior to the Closing. The Company will pay, on or before
they become due, any employment taxes withheld by it which have not been
previously paid. The Buyer, Parent and the Company shall cooperate in making all
such filings and shall make available to the others such information as any of
them requires to assure such filings are made on a timely and accurate basis.

         4.5 The Parent Name and Logos. As soon as practicable (but in any event
within 90 days) after the Closing Date, the Buyer, at its expense, shall remove
all the Parent and its affiliates' names and logos from all of the Assets.
Except as specifically provided in Section 1, nothing in this Agreement shall
constitute a license or authorization for the Buyer to use in any manner any
name, logo or mark owned by or licensed to the Company, the Parent or their
respective affiliates which bears any reference to IES or any subsidiary of IES
other than the Company. The name "DKD" and "DKD Electric" shall become the
exclusive property of the Buyer following the Closing and shall not be used by
the Company, Parent or their respective affiliates; provided that Parent will be
given a reasonable period of time (not to exceed 90 days) to change the
Company's name after the Closing Date.

         4.6 Leased Assets. At the Closing, the Buyer, at its expense, shall pay
off or refinance the leases on the vehicles listed on Schedule 4.6 attached
hereto, and in connection therewith shall obtain the release of Parent and the
Company for all liability under such vehicle leases. As soon as practicable (but
in any event within 90 days) after the Closing Date, the Buyer, at its expense,
shall pay off or refinance the leases on the other assets listed on Schedule 4.6
attached hereto, and in connection therewith shall obtain the release of Parent
and the Company for all liability under such leases.

         4.7 Chubb Bonds. Buyer agrees that at the Closing it shall execute and
deliver to the Federal Insurance Company and its subsidiary or affiliated
insurers and any applicable co-sureties (collectively, "FEDERAL"), a General
Agreement of Indemnity in the form attached as Exhibit B, pursuant to which
Buyer and Indemnitor agree to (i) indemnify Federal with respect to the
performance and completion of the bonded obligations as set forth therein; and
(ii) replace within ninety (90) days the bonds identified as Cancelable Bonds
therein. Buyer further agrees to continue to provide to Federal monthly written
reports (with a copy to the Parent) as to the progress of the completion of the
bonded jobs. Buyer and Indemnitor further agree to provide, from time to time
and at the request of the Parent, a certificate or certificates certifying that
the Cancelable Bonds have

                                       7
<PAGE>
been replaced, and as to such other matters concerning the performance by the
Buyer of its post-closing obligations under this Agreement as Parent shall
request.

         4.8 Retained Claims. The Company shall retain liability for certain
insured claims as set forth in Schedule 1.5, paragraphs 5 and 9 (the "RETAINED
CLAIMS"). The Buyer and the Indemnitor agree to cooperate with the Company and
the Parent in the defense of the Retained Claims and to make available the
Buyer's personnel and facilities for that purpose. The Company shall retain as
Excluded Assets and not transfer to the Buyer all books and records associated
with the Retained Claims, as well as reserves established on the books of the
Company for the Retained Claims.

5. INDEMNIFICATION.

         5.1 Survival. The representations and warranties of the Company, the
Parent, the Buyer and the Indemnitor contained in this Agreement, any schedules
delivered by or on behalf of the Company and the Buyer pursuant to this
Agreement, or in any certificate, instrument, agreement or other writing
delivered by or on behalf of the Company, the Parent, the Buyer or the
Indemnitor pursuant to this Agreement shall survive the consummation of the
transactions contemplated herein; provided that all such representations and
warranties of the Company and the Parent shall be of no further force and
effect, and no claim for indemnification by the Buyer pursuant to this Section 5
may be brought for any reason, after the expiration of twelve (12) months from
the Closing Date (the "SURVIVAL PERIOD"), except for the representations and
warranties contained in Section 3.1(c), which shall survive indefinitely.
Anything to the contrary notwithstanding, a claim for indemnification which is
made but not resolved prior to the expiration of the Survival Period may be
pursued and resolved after such expiration.

         5.2 Indemnification by the Company.

                  (a) In accordance with and subject to the provisions of this
         Section 5, the Company and the Parent shall indemnify and hold harmless
         the Buyer from and against and in respect of any and all loss, damage,
         diminution in value, liability, cost and expense, including reasonable
         attorneys' fees and amounts paid in settlement (collectively, the
         "BUYER INDEMNIFIED LOSSES"), suffered or incurred by the Buyer by
         reason of, or arising out of (i) any misrepresentation or breach of
         representation or warranty of the Company or the Parent contained in
         this Agreement, or in any schedules delivered to the Buyer by or on
         behalf of the Company or the Parent pursuant to this Agreement; (ii)
         the breach of any covenant or agreement of the Company or the Parent
         contained in this Agreement; or (iii) the Retained Liabilities.

                  (b) The Company and the Parent shall reimburse the Buyer on
         demand for any Buyer Indemnified Losses suffered by the Buyer with
         respect to matters other than claims, actions or demands brought, made
         or instituted by a third party ("THIRD PARTY CLAIMS"). With respect to
         Third Party Claims, the Company and the Parent shall reimburse the
         Buyer on demand for any Buyer Indemnified Losses suffered by the Buyer,
         based on the judgment of any court of competent jurisdiction or
         pursuant to a bona fide compromise or settlement in respect of any
         Buyer Indemnified Losses. The Company and the Parent shall have the
         opportunity to defend at their expense any claim, action or demand for
         which the Buyer claims indemnity against the Company or the Parent;
         provided that: (i) the defense is

                                       8
<PAGE>
         conducted by reputable counsel; (ii) the defense is expressly assumed
         in writing within twenty (20) days after written notice of the claim,
         action or demand is delivered to the Company and the Parent; and (iii)
         counsel for the Buyer may participate at all times and in all
         proceedings (formal and informal) relating to the defense, compromise
         and settlement of the claim, action or demand at the expense of the
         Buyer.

         5.3 Indemnification by the Buyer.

                  (a) In accordance with and subject to the provisions of this
         Section 5, the Buyer and Indemnitor shall, jointly and severally,
         indemnify and hold harmless the Company, the Parent and their
         respective affiliates (for purposes of this Section 5, the "COMPANY
         INDEMNITEES") from and against and in respect of any and all loss,
         damage, diminution in value, liability, cost and expense, including
         reasonable attorneys' fees and amounts paid in settlement
         (collectively, the "COMPANY INDEMNIFIED LOSSES"), suffered or incurred
         by the Company Indemnitees by reason of, or arising out of (i) any
         misrepresentation or breach of representation or warranty of the Buyer
         or Indemnitor contained in this Agreement, or in any schedules
         delivered to the Company or the Parent by or on behalf of the Buyer or
         Indemnitor pursuant to this Agreement; (ii) or the breach of any
         covenant or agreement of the Buyer or Indemnitor contained in this
         Agreement; (iii) the Assumed Liabilities, including, without
         limitation, any liability to sureties with respect to bonded jobs; or
         (iv) the operation of the Business following the Closing, including,
         but not limited to, any claims made by Transferred Employees concerning
         COBRA, the WARN Act, unemployment claim liability, or any similar
         matters as a result of the termination by Buyer of the Transferred
         Employees.

                  (b) The Buyer and the Indemnitor, jointly and severally (the
         "BUYER INDEMNIFYING PARTIES"), shall reimburse the Company Indemnitees
         on demand for any Company Indemnified Losses suffered by the Company
         Indemnitees with respect to matters other than Third Party Claims. With
         respect to Third Party Claims, the Buyer Indemnifying Parties shall
         reimburse the Company Indemnitees on demand for any Company Indemnified
         Losses suffered by the Company Indemnitees, based on the judgment of
         any court of competent jurisdiction or pursuant to a bona fide
         compromise or settlement in respect of any Company Indemnified Losses.
         The Buyer Indemnifying Parties shall have the opportunity to defend at
         their expense any claim, action or demand for which the Company
         Indemnitees claim indemnity against the Buyer Indemnifying Parties;
         provided that: (i) the defense is conducted by reputable counsel; (ii)
         the defense is expressly assumed in writing within twenty (20) days
         after written notice of the claim, action or demand is delivered to the
         Buyer Indemnifying Parties; and (iii) counsel for the Company and the
         Parent may participate at all times and in all proceedings (formal and
         informal) relating to the defense, compromise and settlement of the
         claim, action or demand at the expense of the Company and the Parent.

         5.4 Limitation and Payment on Claims. No claim shall be brought under
this Section 5 for breach of any Representation or Warranty in Section 3.1, and
no party hereto shall be entitled to receive any payment with respect thereto,
until such time as, and only to the extent that, the aggregate amount of such
claim(s) that such party has equals or exceeds $100,000 (the "DEDUCTIBLE");
provided, however, that the Deductible shall not apply to any obligations under

                                       9
<PAGE>
Section 2.3. Anything to the contrary notwithstanding, the Company and the
Parent shall not be liable under this Section 5 for Buyer Indemnified Losses in
excess of the Purchase Price.

         5.5 Sole Remedy. The sole remedy of the Company, the Parent and the
Buyer Indemnifying Parties for breach of the representations and warranties set
forth in Section 3 shall be pursuant to this Section 5.

         5.6 No Construction Contract. Parent, Company, Buyer and Guarantor each
agree that N.M.S.A. 1978 Section 56-7-1 is not applicable to this Agreement
because this Agreement is not a "construction contract" as defined by N.M.S.A.
1978 Section 56-7-1(D), and because the Parties have agreed that the internal
laws of the State of Texas will govern their relationship. Parent, Company and
Buyer each agree that this Agreement pertains solely to the purchase of assets
by Buyer from Parent and Company and not to an agreement relating to the
construction, alteration, repair or maintenance of any real property in New
Mexico.

6. DISPUTE RESOLUTION.

         6.1 Arbitration.

                  (a) Any controversy, dispute or claim arising out of or
         relating in any way to this Agreement or the other agreements
         contemplated by this Agreement or the transactions arising hereunder
         (including the validity, interpretation or applicability of this
         Section 6.1) shall be settled exclusively by final and binding
         arbitration in Houston, Texas. Such arbitration will apply the laws of
         the State of Texas and the commercial arbitration rules of AAA to
         resolve the dispute. To the extent possible, any arbitration will be
         administered by the AAA solely with respect to the appointment of the
         arbitrator, and in all other respects the arbitrator will be
         administered by the appointed arbitrator.

                  (b) Written notice of arbitration must be given within one
         year after the notifying party has actual knowledge of accrual of the
         claim on which the notice is based. If the claiming party fails to give
         notice of arbitration within that time, the claim shall be deemed to be
         waived and shall be barred from either arbitration or litigation.

                  (c) Such arbitration shall be conducted by one independent and
         impartial arbitrator to be selected by mutual agreement of the parties,
         if possible. If the parties fail to reach agreement regarding
         appointment of an arbitrator within thirty (30) days following receipt
         by one party of the other party's notice of arbitration, the arbitrator
         shall be selected from a list or lists of proposed arbitrators
         submitted by AAA. Unless the parties agree otherwise, the arbitrator
         shall be a licensed attorney with at least ten years of experience in
         the practice of law. The selection process shall be that which is set
         forth in the AAA commercial arbitration rules then prevailing, except
         that (A) the number of preemptory strikes shall not be limited and (B),
         if the parties fail to select an arbitrator from one or more lists, AAA
         shall not initially have the power to make an appointment but shall
         continue to submit additional lists until an arbitrator has been
         selected, but if no such arbitrator is selected within one hundred
         twenty (120) days after the receipt of the first notice of arbitration,
         the AAA shall have the power to make an appointment and shall promptly
         do so. Initially, however, promptly following its receipt of a request
         to submit a list of proposed

                                       10
<PAGE>
         arbitrators, AAA shall convene the parties in person or by telephone
         and attempt to facilitate their selection of an arbitrator by
         agreement. If the arbitrator should die, withdraw or otherwise become
         incapable of serving, a replacement shall be selected and appointed in
         a like manner.

                  (d) The arbitrator shall render an opinion setting forth
         findings of fact and conclusions of law with the reasons therefor
         stated. A transcript of the evidence adduced at the hearing shall be
         made and shall, upon request, be made available to either party. The
         fees and expenses of the arbitrator shall be shared equally by the
         parties and advanced by them from time to time as required; provided
         that at the conclusion of the arbitration, the arbitrator may award
         costs and expenses (including the costs of the arbitration previously
         advanced and the fees and expenses of attorneys, accountants and other
         experts). No pre-arbitration discovery shall be permitted, except that
         the arbitrator shall have the power in his or her sole discretion, on
         application by either party, to order the production of documents in
         accordance with the commercial arbitration rules, and to order
         pre-arbitration examination of the witnesses and documents that the
         other party intends to introduce in its case-in-chief at the
         arbitration hearing. The arbitrator shall render his or her opinion
         and/or award within ninety (90) days of the conclusion of the
         arbitration hearing. The arbitrator shall not be empowered to award to
         either party any punitive damages in connection with any dispute
         between them arising out of or relating in any way to this Agreement or
         the other agreements contemplated hereby or the transactions arising
         hereunder or thereunder, and each party hereby irrevocably waives any
         right to recover such damages. The arbitration hearings and award shall
         be maintained in confidence.

Notwithstanding anything to the contrary provided in this Section 6.1 and
without prejudice to the above procedures, either party may apply to any court
of competent jurisdiction for temporary injunctive or other provisional judicial
relief if such action is necessary to avoid irreparable damage or to preserve
the status quo until such time as the arbitrator is selected and available to
hear such party's request for temporary relief. The award rendered by the
arbitrator shall be final and not subject to judicial review and judgment
thereon may be entered in any court of competent jurisdiction.

7. EMPLOYEE MATTERS.

         7.1 Hiring.

                  (a) The Buyer shall hire (subject to each employee's
         agreement), effective as of the Closing Date, all of the employees of
         the Company on the day immediately prior to the Closing Date, active or
         inactive (such employees being hereafter referred to as the
         "TRANSFERRED EMPLOYEES") at a comparable job and at a rate of pay not
         less than each such Transferred Employee's pay as of the Closing Date.
         Upon request of the Buyer, the Company shall provide the Buyer
         reasonable access to data (including computer data) regarding the ages,
         dates of hire, compensation and job description of the Transferred
         Employees.

                  (b) The Buyer shall assume and be responsible for any
         severance costs associated with the termination of the Transferred
         Employees' employment with the

                                       11
<PAGE>
         Company. The Buyer shall discharge all liabilities and claims based on
         occurrences or conditions first occurring or commencing on or after the
         Closing Date with respect to Transferred Employees arising out of their
         employment with the Buyer after the Closing Date, including, but not
         limited to, any claims arising out of any employee benefit plan,
         policy, program or arrangement maintained at any time by the Buyer (a
         "BUYER PLAN" or collectively, the "BUYER PLANS"), except Buyer shall
         not assume any liabilities with respect to the WARN Act or COBRA
         benefits for any terminations occurring prior to the Closing Date
         (unless provided otherwise by law or pursuant to applicable
         regulations) nor shall the Company or the Parent be liable under the
         WARN Act, COBRA, or state unemployment claims law for any Transferred
         Employee terminated by Buyer after the Closing.

                  (c) At Closing, the Buyer shall establish and make available a
         group medical plan for the Transferred Employees and their dependents
         that is substantially similar to the group medical plan available to
         the Transferred Employees immediately prior to Closing. The Buyer shall
         credit the Transferred Employees with all service of the Transferred
         Employees recognized under the employee benefit plans, policies,
         programs, or arrangements maintained by the Parent or the Company (the
         "PARENT PLANS") as service with the Buyer for purposes of eligibility
         to participate, vesting and levels of benefits available, under all
         Buyer Plans. The Buyer shall waive any coverage waiting period,
         pre-existing condition and actively-at-work requirements under the
         Buyer Plans for the Transferred Employees and shall provide that any
         expenses incurred before the Closing Date by a Transferred Employee
         (and his or her dependents) during the calendar year of the Closing
         shall be taken into account for purposes of satisfying the applicable
         deductible, coinsurance and maximum out-of-pocket provisions, and
         applicable annual and/or lifetime maximum benefit limitations of the
         Buyer Plans. For the first year after the Closing Date, Buyer Plans
         shall not require contributions by Transferred Employees at a rate that
         exceeds the rate in effect for other similarly situated employees of
         the Buyer. Any reports or other information provided to Buyer by the
         Company or the Parent in connection with Buyer performing his
         obligations under this Section 7.1(c) shall be at the sole expense of
         the Buyer.

         7.2 Benefits. Except as provided in Section 7.1(b), the Buyer shall be
responsible for the payment of all amounts of wages, bonuses and other
remuneration (including discretionary benefits and bonuses) payable to the
Transferred Employees of the Company accrued with respect to periods on or prior
to the Closing (except for any employment taxes actually withheld by the
Company) together with amounts payable to such employees in connection with
events occurring on or prior to the Closing. In addition, the Buyer shall be
responsible for:

                  (a) all vacation pay and pay for other compensated absences
         earned or accrued by the Transferred Employees as of the close of
         business on the Closing Date to the appropriate employee, including any
         related payroll burden (FICA and other pension or other employee
         benefit plan contributions and employment taxes) with respect thereto
         to the appropriate Governmental Entity or other person, to the extent
         such pay has been accrued on the books of the Company at such close of
         business, based upon the remuneration of such employees normally used
         in computing such pay for other compensated absences; and

                                       12
<PAGE>
                  (b) amounts accrued under the Integrated Electrical Services,
         Inc. 401(k) Retirement Savings Plan (the "PARENT 401(K) PLAN") for the
         Transferred Employees as of the Closing Date but not yet transferred to
         the trustee of the Parent 401(k) Plan, including without limitation,
         the accrued match, accrued payroll deductions representing elective
         deferrals, loan repayments and accrued profit sharing contribution, if
         any.

         7.3 Parent 401(k) Plan. The Company, the Parent and the Buyer agree
that, as soon as practicable after Closing, but in any event within 90 days of
the Closing Date, the account balances in the Parent 401(k) Plan of the
Transferred Employees shall be transferred to a qualified 401(k) retirement
savings plan established by the Buyer (the "BUYER'S 401(K) PLAN") in accordance
with Section 414(l) of the Internal Revenue Code of 1986, as amended (the
"CODE"), and the regulations promulgated thereunder. In connection with such
transfer, the following provisions shall apply:

                  (a) The account balances of the Transferred Employees
         transferred to the Buyer's 401(k) Plan shall be subject to the
         provisions of the Buyer's 401(k) Plan effective as of the date of
         transfer; provided, however that the Buyer's 401(k) Plan shall continue
         any benefits under the Parent 401(k) Plan as required under Section
         411(d)(6) of the Code; and

                  (b) The outstanding loan of any Transferred Employee shall not
         be in default as a result of the Transferred Employee's termination of
         employment with the Parent or the Company, but such loan shall be
         transferred to the Buyer's 401(k) Plan in accordance with (a) above.

The Buyer shall provide acceptable evidence to the Parent that the Buyer's
401(k) Plan meets the requirements of Section 401(a) of the Code prior to the
date of such transfer. The Buyer, the Parent and the Company agree to take
whatever action, including but not limited to plan amendments and resolutions,
to effectuate the transfer of the Transferred Employee's account balances
according to this section from the Parent 401(k) Plan to the Buyer's 401(k)
Plan.

Notwithstanding the foregoing, nothing in this Section 7 shall be deemed or
construed to give rise to any rights, claims, benefits, or causes of action to
any Transferred Employee or third party whatsoever (including any Governmental
Entity).

8. MISCELLANEOUS.

         8.1 Notices. All notices and communications required or permitted
hereunder shall be in writing and may be given by (a) depositing the same in the
United States mail, addressed to the party to be notified, postage prepaid and
registered or certified with return receipt requested, (b) by delivering the
same in person to an officer or agent of such party, or (c) overnight delivery
service. Such notice shall be deemed received on the date (i) on which it is
actually received if sent by overnight delivery service or hand delivery, or
(ii) on the third business day following the date on which it is mailed. For
purposes of notice, the addresses of the parties hereto shall be:

                                       13
<PAGE>
                  If to the Parent or the Company:

                           Integrated Electrical Services, Inc.
                           1800 West Loop South, Suite 500
                           Houston, Texas 77027
                           Attention:  Chief Financial Officer

                  With a copy to:

                           Integrated Electrical Services, Inc.
                           1800 West Loop South, Suite 500
                           Houston, Texas 77027
                           Attention:  Chief Legal Officer

                  If to the Buyer or Indemnitor:

                           J. Dee Dennis, Jr.
                           4500 Bogan NE
                           Albuquerque, NM  87109

                  With a copy to:

                           Gregory Huffaker
                           Huffaker & Moffett LLC
                           P. O. Box 1868
                           Santa Fe, NM  87504

or such other address as any party hereto shall specify pursuant to this Section
8.1 from time to time.

         8.2 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument. At the Closing, any Party
may rely on the facsimile signature of any other Party.

         8.3 Governing Law. The validity and effect of this Agreement shall be
governed by and construed and enforced in accordance with the laws of the State
of Texas, without regard to its conflicts of laws rules.

         8.4 Successors and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of the parties hereto and their respective permitted
heirs, successors and assigns. Neither the Company, the Parent nor the Buyer may
assign, delegate or otherwise transfer any of their rights or obligations under
this Agreement without the written consent by each other party hereto.

         8.5 Partial Invalidity and Severability. All rights and restrictions
contained herein may be exercised and shall be applicable and binding only to
the extent that they do not violate any applicable laws and are intended to be
limited to the extent necessary to render this Agreement legal, valid and
enforceable. If any term of this Agreement, or part thereof, not essential to
the commercial purpose of this Agreement shall be held to be illegal, invalid or
unenforceable by a forum of competent jurisdiction, it is the intention of the
parties that the remaining terms hereof, or part thereof, shall constitute their
agreement with respect to the subject matter hereof, and all such remaining
terms, or parts thereof, shall remain in full force and effect. To the extent
legally

                                       14
<PAGE>
permissible, any illegal, invalid or unenforceable provision of this Agreement
shall be replaced by a valid provision which will implement the commercial
purpose of the illegal, invalid or unenforceable provision.

         8.6 Waiver. Any term or condition of this Agreement may be waived at
any time by the party which is entitled to the benefit thereof, but only if such
waiver is evidenced by a writing signed by such party. No failure on the part of
any party hereto to exercise, and no delay in exercising, any right, power or
remedy created hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any right, power or remedy by either party preclude any
other or further exercise thereof or the exercise of any other right, power or
remedy. No waiver by either party hereto of any breach of or default in any term
or condition of this Agreement shall constitute a waiver of or assent to any
succeeding breach of or default in the same or any other term or condition
hereof.

         8.7 Headings. The headings of particular provisions of this Agreement
are inserted for convenience only and shall not be construed as a part of this
Agreement or serve as a limitation or expansion on the scope of any term or
provision of this Agreement.

         8.8 Entire Agreement; Amendments. This Agreement supersedes all prior
discussions and agreements between the parties with respect to the subject
matter hereof (including without limitation any letters of intent executed by
the parties), and this Agreement contains the sole and entire agreement between
the parties with respect to the matters covered hereby. This Agreement shall not
be altered or amended except by an instrument in writing signed by or on behalf
of the party against whom enforcement is sought.

         8.9 Disclosure of Agreement Terms. Neither Buyer nor the Indemnitor
shall disclose the terms and conditions of this Agreement to any person or
entity without the prior written consent of an executive officer of the Parent
or as required by applicable law or an order from a court or administrative body
of competent jurisdiction (but only to the extent so required and only after
giving reasonable prior notice to the Company and the Parent and cooperating
with the Company and the Parent in any efforts to legally oppose such
disclosure). The foregoing notwithstanding, the Buyer and the Indemnitor shall
be permitted to make such disclosures to their accountants, lawyers, financial
institutions, lending sources, senior employees and related parties as may be
appropriate, provided that such parties are bound by the foregoing nondisclosure
provisions.

         8.10 Number and Gender. Where the context requires, the use of the
singular form herein shall include the plural, the use of the plural shall
include the singular, and the use of any gender shall include any and all
genders.

                  [Remainder of page intentionally left blank]

                                       15
<PAGE>
         IN WITNESS WHEREOF, this Agreement has been executed effective as of
the date set forth above.

                                    PARENT:

                                    INTEGRATED ELECTRICAL SERVICES, INC.

                                    By:    /s/ Herbert R. Allen
                                        ---------------------------------------
                                          Herbert R. Allen
                                          Chief Executive Officer

                                    COMPANY:

                                    DKD ELECTRIC CO., INC.

                                    By:   /s/ Curt L. Warnock
                                        ---------------------------------------
                                         Curt L. Warnock
                                         Vice President

                                    BUYER:

                                    DKD ELECTRIC LLC

                                    By:    /s/ J. Dee Dennis, Jr.
                                        ---------------------------------------
                                           J. Dee Dennis, Jr., Member

                                    INDEMNITOR:

                                          /s/ J. Dee Dennis, Jr.
                                        ---------------------------------------
                                           J. DEE DENNIS, JR.

                                       16
<PAGE>
                                    EXHIBIT A

                BILL OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT

         This BILL OF SALE, ASSIGNMENT AND ASSUMPTION AGREEMENT ("BILL OF SALE")
is entered into as of the ___ day of ___________ 2005, by and among INTEGRATED
ELECTRICAL SERVICES, INC., a Delaware corporation (the "PARENT"), DKD ELECTRIC
CO., INC., a New Mexico corporation (the "COMPANY") and DKD ELECTRIC LLC, a New
Mexico limited liability company (the "BUYER").

                                    RECITALS

         WHEREAS, pursuant to the terms of that certain Asset Purchase Agreement
(the "PURCHASE AGREEMENT") dated as of even date herewith by and among the
Buyer, the Parent, the Company, and J. Dee Dennis, Jr., individual, the Company
and the Parent agreed to convey the Assets to the Buyer and the Buyer agreed to
assume the Assumed Liabilities. In order to evidence such conveyance and
assumption, the parties desire to enter into this Bill of Sale.

         WHEREAS, all capitalized terms used herein but not defined herein shall
have the meanings ascribed to them in the Purchase Agreement.

                                   ASSIGNMENT

         NOW, THEREFORE, for and in consideration of the mutual covenants,
agreements, and benefits contained herein, the sum of TEN DOLLARS ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and the Parent do hereby BARGAIN, GRANT, SELL,
CONVEY, TRANSFER, DELIVER and ASSIGN unto Buyer all the Assets.

         The Assets are hereby conveyed free and clear of all encumbrances other
than the Permitted Encumbrances.

         TO HAVE AND TO HOLD the Assets unto the Buyer and its successors and
assigns forever; and the Company and the Parent do hereby bind themselves and
their successors and assigns to WARRANT AND FOREVER DEFEND title to the Assets
in accordance with the terms and provisions of the Purchase Agreement.

         The Buyer, upon execution below, accepts this Bill of Sale, and to the
extent provided for in the Purchase Agreement, hereby assumes the Assumed
Liabilities, but no others.

         This assignment shall be binding upon and shall inure to the benefit of
the parties hereto and their respective permitted successors and assigns.
<PAGE>
         This Bill of Sale may be executed in any number of counterparts, and
each counterpart shall for all purposes be deemed to be an original.

         This Bill of Sale is subject to all terms and conditions contained in
the Purchase Agreement and nothing herein shall be deemed to alter, amend, or
supersede the Purchase Agreement, the terms of which shall in all respects be
controlling.

                  [Remainder of page intentionally left blank]
<PAGE>
         IN WITNESS WHEREOF, the parties hereto have executed this Bill of Sale
effective as of the date set forth above.

                                     PARENT:

                                     INTEGRATED ELECTRICAL SERVICES, INC.

                                     By:
                                            ------------------------------
                                     Name:
                                            ------------------------------
                                     Title:
                                            ------------------------------

                                     COMPANY:

                                     DKD ELECTRIC CO., INC.

                                     By:
                                            ------------------------------
                                     Name:
                                            ------------------------------
                                     Title:
                                            ------------------------------

                                     BUYER:

                                     DKD ELECTRIC LLC

                                     By:
                                            ------------------------------
                                     Name:
                                            ------------------------------
                                     Title:
                                            ------------------------------
<PAGE>
                                    EXHIBIT B

                     FORM OF GENERAL AGREEMENT OF INDEMNITY

                            CHUBB GROUP OF INSURANCE COMPANIES

(CHUBB LOGO) 15 Mountain View Road, P.O. Box 1615, Warren, New Jersey 07061-1615
--------------------------------------------------------------------------------

                         GENERAL AGREEMENT OF INDEMNITY

      WHEREAS, the undersigned (hereinafter individually and collectively called
"Indemnitor") desires FEDERAL INSURANCE COMPANY or any of its subsidiary or
affiliated insurers (hereinafter called "Company") to execute bonds including
undertakings and other like obligations (hereinafter referred to as bond or
bonds) on its behalf and also desires the execution of bonds on behalf of
individuals, partnerships, corporations, limited liability companies or any
other similarly unincorporated associations of members (hereinafter called
"Affiliates").

      WHEREAS, from time to time the Indemnitor may be a participant in joint
ventures with others, and bonds will be required on behalf of the Indemnitor
along with the other participants in such joint ventures.

      WHEREAS, Indemnitor is the successor-in-interest to DKD ELECTRIC CO.,
INC., A NEW MEXICO CORPORATION (along with any other affiliate or related entity
whose assets have been or will be assigned to Indemnitor hereinafter
individually and collectively called "Seller") as the assignee of all bonded
contract obligations, which Indemnitor has expressly assumed without reservation

      NOW, THEREFORE, in consideration of the Company executing said bond or
bonds, and the undersigned Indemnitor hereby requests the execution thereof, and
in consideration of the consent of Company to the assignment and assumption of
the bonded obligations formerly undertaken by the Seller, as well as the sum of
One Dollar paid to the Indemnitor by said Company, the receipt whereof is hereby
acknowledged, the Indemnitor, being benefited by the execution and delivery of
said bond or bonds, including, without limitation all Bonds previously issued
prior to the date of this Agreement for the Seller, the bonded obligations of
which have been expressly assumed without reservation by Indemnitor(s) and as to
which Indemnitor(s) have agreed, and do hereby agree, to assume full
responsibility for work in place as well as the prompt and proper performance
and completion of all such bonded obligations, including, without limitation
those bonded obligations listed on Exhibit A attached hereto, hereby agrees that
it will at all times jointly and severally indemnify and save harmless said
Company from and against any and all loss, cost, damage or expense, including
court costs and attorneys' fees, which it shall at any time incur by reason of
its execution and/or delivery of said bond or bonds or its payment
<PAGE>
of any claim or liability thereunder and will place the said Company in funds to
meet all its liability under said bond or bonds promptly on request and before
it may be required to make any payment thereunder and that the voucher or other
evidence of payment by said Company of any such loss, cost, damage, expense,
claim, or liability shall be prima facie evidence of the fact and amount of the
Indemnitor's liability to said Company under this Agreement.

      IT IS UNDERSTOOD AND AGREED that with respect to any bonds on behalf of
the Indemnitor participating in a joint venture that if specific application is
filed with the Company for such bonds the liability of the Indemnitor to the
Company with respect to such joint venture bonds shall be limited to the amount
expressly set forth in said application.

      IT IS UNDERSTOOD AND AGREED that all of the terms, provisions, and
conditions of this Agreement shall be extended to and for the benefit not only
of the Company either as a direct writing company or as a co-surety or reinsurer
but also for the benefit of any surety or insurance company or companies with
which the Company may participate as a co-surety or reinsurer and also for the
benefit of any other company which may execute any bond or bonds at the request
of the Company on behalf of the Indemnitor.

      IT IS UNDERSTOOD AND AGREED that this Agreement is in addition to all
other rights and agreements which Company may have or be a party to in
connection with Bonds previously issued for the benefit of Seller and that the
assumption of responsibility therefor by Indemnitors as herein provided shall
not constitute a waiver or release by Company of any rights Company may have to
seek and recover indemnity from third parties having liability in connection
with the issuance of such Bonds including, but not limited to, the obligations
and liabilities of Integrated Electrical Services, Inc., Delco Electric, Inc. or
their affiliates.

      IT IS UNDERSTOOD AND AGREED that, notwithstanding anything herein to the
contrary, Indemnitor's agreements, covenants, and all obligations under this
General Agreement of Indemnity is limited to (1) the obligations assumed by
Indemnitor (the "Assumed Obligations") under the Asset Purchase Agreement (the
"APA") by and among Integrated Electrical Services, Inc. ("IES"), DKD Electric
Co., Inc., DKD Electric LLC and J. Dee Dennis, Jr. and (2) Company's obligations
under the bonds listed on Exhibit A attached hereto. Furthermore, Indemnitor has
acknowledged and agreed that Indemnitor's obligation to perform or otherwise
discharge the Assumed Obligations is secured by certain assets acquired by
Indemnitor under the APA (the "Collateral"), said Collateral acquired subject to
that certain Underwriting, Continuing Indemnity, and Security Agreement dated as
of January 14, 2005, executed by and among Company, IES, and certain IES
affiliates, including DKD Electric Co., Inc.

         IT IS UNDERSTOOD AND AGREED that Indemnitor will replace Bond No.
81889153, Bond No. 81967757, Bond No. 81889053, Bond No. 81934447, Bond No.
81955945, and Bond No. 81876813 identified on Exhibit A (the "Cancelable Bonds")
no later than ninety (90) days from the execution of this Agreement, and hereby
acknowledges and consents that the Cancelable Bonds will be canceled upon the
earlier of (i) the date of issuance of replacement bonds or (ii) the date upon
which Federal issues notice of cancellation in compliance with the terms the
Cancelable Bond(s) to be cancelled thereby. Indemnitor's obligation under this
<PAGE>
Agreement with respect to any bond or bonds canceled or replaced as contemplated
herein will remain with respect to such liability accruing under said bond or
bonds.

      IT IS FURTHER UNDERSTOOD AND AGREED that the Indemnitor, its heirs,
successors and assigns are jointly and severally bound by the foregoing
conditions of this Agreement.

         IN WITNESS WHEREOF the Indemnitor has signed this instrument this, the
_____________ day of _______________, 2005.

WITNESS:                                DKD ELECTRIC LLC,
                                        a New Mexico limited liability company

_________________________________       By: ___________________________________

                                        Its: __________________________________

WITNESS:                                J. DEE DENNIS, JR.

_________________________________       _______________________________________
<PAGE>
                   ACKNOWLEDGMENT OF LIMITED LIABILITY COMPANY

STATE OF _____________________
COUNTY OF ___________________

         On this ________ day of ______________________, 2005, before me
personally came ________________________ to me known, who, being by me duly
sworn, did depose and say that he/she resides in the State of _______________;
and that he/she is the __________________ of DKD ELECTRIC LLC, the limited
liability company described in and which executed the foregoing instrument; that
he/she executed the foregoing instrument by order and authority of the partners
(limited and general) and/or members of said DKD ELECTRIC LLC; and that he/she
signed his/her name thereto by like order and authority.

(SEAL)                                                 _________________________
                                                              NOTARY PUBLIC

My commission expires:

_________________________________

                            INDIVIDUAL ACKNOWLEDGMENT

STATE OF _____________________
COUNTY OF ___________________

         On this ________ day of ______________________, 2005, before me
personally came J. DEE DENNIS, JR., to me known, who, being by me duly sworn,
did depose and say that he resides in the State of New Mexico; and that he
executed the foregoing instrument for the purposes therein contained.

(SEAL)                                                  _______________________
                                                              NOTARY PUBLIC

My commission expires:

_________________________________
<PAGE>
                       CHUBB GROUP OF INSURANCE COMPANIES

(CHUBB LOGO) 15 Mountain View Road, P.O. Box 1615, Warren, New Jersey 07061-1615
--------------------------------------------------------------------------------

                         GENERAL AGREEMENT OF INDEMNITY

      WHEREAS, the undersigned (hereinafter individually and collectively called
"Indemnitor") desires FEDERAL INSURANCE COMPANY or any of its subsidiary or
affiliated insurers (hereinafter called "Company") to execute bonds including
undertakings and other like obligations (hereinafter referred to as bond or
bonds) on its behalf and also desires the execution of bonds on behalf of
individuals, partnerships, corporations, limited liability companies or any
other similarly unincorporated associations of members (hereinafter called
"Affiliates").

      WHEREAS, from time to time the Indemnitor may be a participant in joint
ventures with others, and bonds will be required on behalf of the Indemnitor
along with the other participants in such joint ventures.

      WHEREAS, Indemnitor is the successor-in-interest to DKD ELECTRIC CO.,
INC., A NEW MEXICO CORPORATION (along with any other affiliate or related entity
whose assets have been or will be assigned to Indemnitor hereinafter
individually and collectively called "Seller") as the assignee of all bonded
contract obligations, which Indemnitor has expressly assumed without reservation

      NOW, THEREFORE, in consideration of the Company executing said bond or
bonds, and the undersigned Indemnitor hereby requests the execution thereof, and
in consideration of the consent of Company to the assignment and assumption of
the bonded obligations formerly undertaken by the Seller, as well as the sum of
One Dollar paid to the Indemnitor by said Company, the receipt whereof is hereby
acknowledged, the Indemnitor, being benefited by the execution and delivery of
said bond or bonds, including, without limitation all Bonds previously issued
prior to the date of this Agreement for the Seller, the bonded obligations of
which have been expressly assumed without reservation by Indemnitor(s) and as to
which Indemnitor(s) have agreed, and do hereby agree, to assume full
responsibility for work in place as well as the prompt and proper performance
and completion of all such bonded obligations, including, without limitation
those bonded obligations listed on Exhibit A attached hereto, hereby agrees that
it will at all times jointly and severally indemnify and save harmless said
Company from and against any and all loss, cost, damage or expense, including
court costs and attorneys' fees, which it shall at any time incur by reason of
its execution and/or delivery of said bond or bonds or its payment of any claim
or liability thereunder and will place the said Company in funds to meet all its
liability under said bond or bonds promptly on request and before it may be
required to make any payment thereunder and that the voucher or other evidence
of payment by said Company of any such loss, cost, damage, expense, claim, or
liability shall be prima facie evidence of the fact and amount of the
Indemnitor's liability to said Company under this Agreement.
<PAGE>
      IT IS UNDERSTOOD AND AGREED that with respect to any bonds on behalf of
the Indemnitor participating in a joint venture that if specific application is
filed with the Company for such bonds the liability of the Indemnitor to the
Company with respect to such joint venture bonds shall be limited to the amount
expressly set forth in said application.

      IT IS UNDERSTOOD AND AGREED that all of the terms, provisions, and
conditions of this Agreement shall be extended to and for the benefit not only
of the Company either as a direct writing company or as a co-surety or reinsurer
but also for the benefit of any surety or insurance company or companies with
which the Company may participate as a co-surety or reinsurer and also for the
benefit of any other company which may execute any bond or bonds at the request
of the Company on behalf of the Indemnitor.

      IT IS UNDERSTOOD AND AGREED that this Agreement is in addition to all
other rights and agreements which Company may have or be a party to in
connection with Bonds previously issued for the benefit of Seller and that the
assumption of responsibility therefor by Indemnitors as herein provided shall
not constitute a waiver or release by Company of any rights Company may have to
seek and recover indemnity from third parties having liability in connection
with the issuance of such Bonds including, but not limited to, the obligations
and liabilities of Integrated Electrical Services, Inc., Delco Electric, Inc. or
their affiliates.

      IT IS UNDERSTOOD AND AGREED that, notwithstanding anything herein to the
contrary, Indemnitor's agreements, covenants, and all obligations under this
General Agreement of Indemnity is limited to (1) the obligations assumed by
Indemnitor (the "Assumed Obligations") under the Asset Purchase Agreement (the
"APA") by and among Integrated Electrical Services, Inc. ("IES"), DKD Electric
Co., Inc., DKD Electric LLC and J. Dee Dennis, Jr. and (2) Company's obligations
under the bonds listed on Exhibit A attached hereto. Furthermore, Indemnitor has
acknowledged and agreed that Indemnitor's obligation to perform or otherwise
discharge the Assumed Obligations is secured by certain assets acquired by
Indemnitor under the APA (the "Collateral"), said Collateral acquired subject to
that certain Underwriting, Continuing Indemnity, and Security Agreement dated as
of January 14, 2005, executed by and among Company, IES, and certain IES
affiliates, including DKD Electric Co., Inc.

         IT IS UNDERSTOOD AND AGREED that Indemnitor will replace Bond No.
81889153, Bond No. 81967757, Bond No. 81889053, Bond No. 81934447, Bond No.
81955945, and Bond No. 81876813 identified on Exhibit A (the "Cancelable Bonds")
no later than ninety (90) days from the execution of this Agreement, and hereby
acknowledges and consents that the Cancelable Bonds will be canceled upon the
earlier of (i) the date of issuance of replacement bonds or (ii) the date upon
which Federal issues notice of cancellation in compliance with the terms the
Cancelable Bond(s) to be cancelled thereby. Indemnitor's obligation under this
Agreement with respect to any bond or bonds canceled or replaced as contemplated
herein will remain with respect to such liability accruing under said bond or
bonds.
<PAGE>
         IT IS FURTHER UNDERSTOOD AND AGREED that the Indemnitor, its heirs,
successors and assigns are jointly and severally bound by the foregoing
conditions of this Agreement.

         IN WITNESS WHEREOF the Indemnitor has signed this instrument this, the
_____________ day of _______________, 2005.

WITNESS:                            DKD ELECTRIC LLC,
                                    a New Mexico limited liability company

_______________________________     By: ___________________________________

                                    Its: __________________________________

WITNESS:                            J. DEE DENNIS, JR.

_______________________________     _______________________________________
<PAGE>
                   ACKNOWLEDGMENT OF LIMITED LIABILITY COMPANY

STATE OF _____________________
COUNTY OF ___________________

         On this ________ day of ______________________, 2005, before me
personally came ________________________ to me known, who, being by me duly
sworn, did depose and say that he/she resides in the State of _______________;
and that he/she is the __________________ of DKD ELECTRIC LLC, the limited
liability company described in and which executed the foregoing instrument; that
he/she executed the foregoing instrument by order and authority of the partners
(limited and general) and/or members of said DKD ELECTRIC LLC; and that he/she
signed his/her name thereto by like order and authority.

(SEAL)                                                  ______________________
                                                              NOTARY PUBLIC

My commission expires:

_________________________________

                            INDIVIDUAL ACKNOWLEDGMENT

STATE OF _____________________
COUNTY OF ___________________

         On this ________ day of ______________________, 2005, before me
personally came J. DEE DENNIS, JR., to me known, who, being by me duly sworn,
did depose and say that he resides in the State of New Mexico; and that he
executed the foregoing instrument for the purposes therein contained.

(SEAL)                                                  ______________________
                                                              NOTARY PUBLIC

My commission expires:

_________________________________

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