**RESTRICTED STOCK PURCHASE AGREEMENT**

            This Restricted Stock PurchaseAgreement (this "**Agreement**") is made effective as of April 2, 2001, (the"**Effective Date**") by and between **U S Industrial Services, Inc.**, aDelaware corporation (the "**Company**"), and **Frank J.Fradella,** an individual residing in the State of Texas (the "**Purchaser**").

            Now, therefore, in consideration ofthe mutual covenants and representations herein set forth, the Company and thePurchaser agree as follows: 

            1.         Purchaseand Sale of Stock. The Purchaser has been granted the right to purchasecommon stock of the Company subject to the terms and conditions of theCompany's 2001 Stock Plan (the "**Plan**") and this Agreement. Subject tothe terms and conditions of this Agreement, the Company hereby agrees to sellto the Purchaser and the Purchaser agrees to purchase from the Company on theClosing Date (as herein defined), 500,000 shares of the Company's Common Stock,$.01 par value (the "**Stock**") at a price of $1.25 per share,for an aggregate purchase price of $625,000. The purchase price for the Stockshall be paid by cash, check, wire transfer, or promissory note of thePurchaser, secured by the Stock.  

            2.         Closing.  The purchase and sale of the Stock shalloccur at a closing to be held at such time and place (the "**Closing Date**")as designated by the Company, but not later than April 2, 2011. At the closing,the Purchaser shall deliver to the Company payment equal to the purchase priceof the Stock and the Company will issue the Stock registered in the name of thePurchaser.

            3.         PurchaseOption.  The Stock shall be subjectto the right and option of the Company to repurchase the Stock as set forth inthis section 3.

                        (a)        Termination of Employment.  In the event that the Purchaser shall cease tobe employed by the Company (including a parent or subsidiary of the Company),for any reason or no reason, including termination in the event of thePurchaser's death or disability (a "**Termination**"), a purchaseoption (the "**Purchase Option**") shall come into effect as setforth in this section 3(a).  Following aTermination, the Company shall have the right, as provided in section 3(b)hereof, to purchase from the Purchaser at the purchase price per share equal tothe per share price paid by the Purchaser as set forth in section 1 above (the"**Purchase Option Price**"), a portion of the Stock computed asfollows:

            (i)         Effective the date of this Agreementand in compliance with all of the terms and conditions hereof, 250,000 sharesof Stock held by the Purchaser shall be free of the Purchase Option;

           (ii)        The Purchase Option shall lapse on theremaining shares of stock as to one-fifth of such shares per year commencing onthe one-year anniversary of the Effective Date until all Stock is free of thePurchase Option.

 

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                        (b)        Notice of Intent to Purchase.  Within 45 days following a Termination, theCompany shall notify the Purchaser by written notice delivered or mailed asprovided in section 9(c), as to whether it wishes to purchase the Stockpursuant to exercise of the Purchase Option. If the Company (or its assignee) elects to purchase the Stock hereunder,it shall set a date for the closing of the transaction at a place specified bythe Company not later than 15 days from the date of such notice.  At such closing, the Company (or itsassignee) shall tender payment for the Stock and the certificates representingthe Stock so purchased shall be transferred to the Company and shall becanceled.  **The Purchaser herebyexpressly authorizes and directs the Secretary (or his or her designee) or thetransfer agent of the Company for and on behalf of the Purchaser as his or herlawful attorney-in-fact to complete, date, and deliver to the Company theattached Assignment Separate from Certificate and thereby to so transfer theStock as to which the Purchase Option has been exercised from the Purchaser tothe Company.**  The Option Price may bepayable, at the option of the Company, in cash, by check, or by cancellation ofindebtedness owed to the Company by the Purchaser, or any combination thereof.

                        (c)**        THE PURCHASER EXPRESSLY AGREES THATNOTHING IN THIS AGREEMENT SHALL AFFECT IN ANY MANNER WHATSOEVER THE RIGHT ORPOWER OF THE COMPANY, OR A PARENT OR SUBSIDIARY OF THE COMPANY, TO TERMINATETHE PURCHASER'S EMPLOYMENT IN ACCORDANCE WITH THE PURCHASER'S EMPLOYMENT AGREEMENT WITH THECOMPANY AND IF THERE IS NO SUCH EMPLOYMENT AGREEMENT, WITH OR WITHOUT CAUSE,AND THE COMPANY HEREBY EXPRESSLY RESERVES SUCH RIGHT AND POWER**.

                        (d)        The Company may, in its sole andunfettered discretion, assign its rights and delegate its duties under thisAgreement, including the Purchase Option.

            4.         StockSplits, Change in Control.  

                        (a)        If, from time to time during the term ofthis Agreement, there is any stock dividend or liquidating dividend of cashand/or property, stock split, or other change in the character or amount of anyof the outstanding securities of the Company, then, in such event, any and allnew, substituted or additional securities or other property to which thePurchaser is entitled by reason of his or her ownership of Stock shall beimmediately subject to this Agreement and be included in the word"Stock" for all purposes with the same force and effect as the sharesof Stock presently subject to this Agreement. While the total Purchase Option Price shall remain the same after eachsuch event, the Purchase Option Price per share of Stock upon execution of thePurchase Option shall be appropriately adjusted.

                        (b)        If, during the term of this Agreement,there is a Change in Control (as defined in the Plan) of the Company, and thePurchaser's employment with the surviving entity is terminated by the survivingentity or his or her job position or duties are adversely changedwithin six-months of the closing of such Change in Control, the Purchase Optionshall lapse as to any Stock still subject thereto on the date of suchtermination or adverse change in duties or position. Thereafter, no shares ofStock held by the Purchaser shall be subject to the Purchase Option.  

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            5.         **Restrictionon Transfer**.**  The Purchasershall not sell, transfer, pledge, hypothecate or otherwise dispose of anyshares of the Stock which remain subject to the Purchase Option and any suchattempted transfer in violation of this Section 5 shall be void**.

            6.         Legends.  All certificates representing any shares ofStock of the Company subject to the provisions of this Agreement shall haveendorsed thereon legends in substantially the following form:

**"THE SHARES REPRESENTED BY THIS CERTIFICATE ARESUBJECT TO CERTAIN RESTRICTIONS UPON TRANSFER AND RIGHTS OF REPURCHASE AS SETFORTH IN AN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER, A COPY OFWHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THE COMPANY."**

**"THESE SECURITIES HAVE NOT BEEN REGISTEREDUNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE SOLD, OFFERED FOR SALE,PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENTAS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF COUNSEL SATISFACTORY TOTHE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED."**

            7.         InvestmentIntent and Risk Factors.  Inpurchasing the Stock, the Purchaser acknowledges and represents that thePurchaser has had an opportunity to discuss the business prospects and businessplan of the Company with the officers and directors of the Company.  The Purchaser further acknowledges that theStock is highly speculative and involves a high degree of risk, and that theStock has not been registered under the Securities Act of 1933, as amended (the"**Act**"), and may not be sold or otherwise disposed of exceptpursuant to an effective Registration Statement filed under the Act or pursuantto an exemption from said Act.  ThePurchaser hereby acknowledges that the Company is under no obligation toregister the Stock under the Act on behalf of the Purchaser.  The Purchaser warrants and represents to theCompany that he or she is acquiring the Stock for investment and not with aview to or for sale in connection with any distribution of said Stock or withany present intention of distributing or selling said Stock and he or she doesnot presently have reason to anticipate any change in circumstances or anyparticular occasion or event which would cause him or her to sell saidStock.  **By execution of thisRestricted Stock Purchase Agreement, the Purchaser hereby expressly confirmsthe investment representations set forth in Exhibit A attached heretoand incorporated herein by this reference.**

 

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            8.         Deliveryof Certificate.  To ensure theavailability for delivery of the Purchaser's Stock upon exercise of thePurchase Option herein provided for, the Purchaser hereby delivers to anddeposits with the Secretary of the Company the Stock Assignment attached heretoas Exhibit B, duly endorsed (with date and number of shares left blank),together with the certificate or certificates evidencing the Stock. Uponwritten request of the Purchaser after each successive period from theEffective Date set forth in Section 3 of this Agreement, unless the PurchaseOption has been exercised, the Company will deliver to the Purchaser acertificate or certificates representing so many shares of the Stock as arenot then subject to the Purchase Option. Within 15 days from receipt of the Company's notice of intent to purchasefollowing a Termination and upon closing of the repurchase transaction asprovided in Section 3 of this Agreement, the Company will deliver to thePurchaser a certificate or certificates representing the aggregate number ofshares of Stock sold and issued pursuant to this Agreement and not purchased bythe Company or its assignees pursuant to exercise of the Purchase Option.  If the Company fails to timely deliver to thePurchaser its notice of intent to purchase following a Termination, then theCompany will deliver to the Purchaser the aforementioned certificate orcertificates within 60 days from the date of Termination.  

            9.         Miscellaneous.

                       (a)         Subject to the provisions hereof, thePurchaser shall, during the term of this Agreement, be entitled to exercise allrights and privileges of a shareholder of the Company with respect to theStock.

                       (b)        The parties agree to execute suchfurther instruments and to take such further action as may reasonably benecessary to carry out the intent of this Agreement.

                      (c)        Anynotice required or permitted hereunder shall be given in writing and shall bedeemed effectively given upon personal delivery or upon deposit in the UnitedStates Mail, by registered or certified mail with postage and fees prepaid,addressed to the Purchaser at his or her address shown on the Company'semployment records and to the Company at the address of its principal corporateoffices (Attention: President) or at such other address as such party maydesignate by ten days' advance written notice to the other party hereto. The Purchaserhereby represents that the address set forth below under his or her signatureis his or her residence address.

                      (d)        The Company may assign its rights anddelegate its duties under section 3 hereof. This Agreement shall inure to thebenefit of the successors and assigns of the Company and, subject to therestrictions on transfer herein set forth, be binding upon the Purchaser, hisor her heirs, executors, administrators, successors and assigns.

            10.       Representationre Exhibits.  The Purchaser herebyexpressly represents that the Purchaser has reviewed the attached Exhibits Aand B and agrees to be bound by the terms thereof.

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            IN WITNESS WHEREOF, the parties hereto have executedthis Agreement as of the day and year first above written.

| **U S INDUSTRIAL SERVICES, INC.**                      |   | **THEPURCHASER**              |   |
|--------------------------------------------------------|--------|-------------------------------|--------|
| aDelaware corporation                                  |   |                          |   |
|                                                   |   |                          |   |
|                                                   |   |                          |   |
|                                                   |   |                          |   |
|                                                   |   |                          |   |
| By:                                                    |   |                          |   |
| Name:  Frank J. Fradella                          |   | Name:  Frank J. Fradella |   |
| Title:     Chief Executive Officer |   |                          |   |
| ADDRESS:                                               |   | ADDRESS:                      |   |
|                                                   |   |                          |   |
|                                                   |   |                          |   |
|                                                   |   |                          |   |
|                                                   |   |                          |   |
|                                                   |   |                          |   |

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**EXHIBIT A**

**INVESTMENT REPRESENTATIONS**

            This Exhibit A is an exhibitto, and is incorporated into and made a part of, the attached Restricted StockPurchase Agreement, dated as of April 2, 2001 (the "**Restricted StockPurchase Agreement**"), by and between **U S Industrial Services, Inc.**and **Frank J. Fradella**. Capitalized terms used herein but not definedshall have the meanings ascribed to them in the Restricted Stock PurchaseAgreement. In connection with the proposed purchase of the Stock the Purchaserhereby agrees, represents and warrants as follows:

            1.         PurchaseEntirely for Own Account.

            The Purchaser represents andwarrants that the Purchaser is purchasing the Stock solely for the Purchaser'sown account for investment and not with a view to or for sale or distributionof the Stock or any portion thereof and not with any present intention ofselling, offering to sell or otherwise disposing of or distributing the Stockor any portion thereof in any transaction other than a transaction exempt fromregistration under the Securities Act of 1933, as amended (the "**Act**").The Purchaser also represents that the entire legal and beneficial interest ofthe Stock the Purchaser is purchasing is being purchased for, and will be heldfor the account of, the Purchaser only and neither in whole nor in part for anyother person.

            2.         Residence.

            The Purchaser represents andwarrants that the Purchaser's principal residence is within the state set forthbelow the Purchaser's signature on the Restricted Stock Purchase Agreement.

            3.         InformationConcerning Company.

            The Purchaser represents andwarrants that the Purchaser has heretofore discussed the Company and its plans,operations and financial condition with its officers and that the Purchaser hasheretofore received all such information as the Purchaser deems necessary andappropriate to enable the Purchaser to evaluate the financial risk inherent inmaking an investment in the Stock and the Purchaser further represents andwarrants that the Purchaser has received satisfactory and complete informationconcerning the business and financial condition of the Company in response toall inquiries in respect thereof.

            4.         EconomicRisk.

            The Purchaser represents andwarrants that the Purchaser realizes that the Purchaser's purchase of the Stockwill be a highly speculative investment and that the Purchaser is able, withoutimpairing the Purchaser's financial condition, to hold the Stock for anindefinite period of time and to suffer a complete loss on the Purchaser's investment.  

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            5.         RestrictedStock; Disposition Under Rule 144.

                        (a)        The Purchaser represents and warrantsthat the Company has hereby disclosed to the Purchaser in writing:

(i) the sale of the Stock which the Purchaser is purchasing has not beenregistered under the Act, and the Stock must be held indefinitely unlesssubsequently registered under the Act or unless an exemption from suchregistration is available;

(ii) the share certificate representing the Stock will be stamped with thelegends restricting transfer specified in the Restricted Stock PurchaseAgreement; and

(iii) the Company will make a notation in its records of the aforementionedrestrictions on transfer and legends.

                        (b)        The Purchaser represents and warrantsthat the Purchaser understands that the shares of Stock are restricted stockwithin the meaning of Rule 144 promulgated under the Act; that the exemptionfrom registration under Rule 144 will not be available in any event for atleast one year from the date of purchase and payment of the Stock by thePurchaser (and payment by a note is not deemed payment unless it is adequatelysecured by collateral other than any shares of the Stock purchased with suchnote), and even then will not be available unless (i) a public trading marketthen exists for the Common Stock of the Company, (ii) adequate information concerningthe Company is then available to the public, and (iii) other terms andconditions of Rule 144 are complied with; and that any sale of the Stock may bemade by the Purchaser only in limited amounts in accordance with such terms andconditions.

            6.         TaxDisclosure.

            The Purchaser represents andwarrants that the Purchaser has reviewed and understands the followinginformation regarding potential tax liability resulting from the purchase ofthe Stock.

            The common stock issued in thistransaction has been valued in good faith by the board of directors at leastits fair market value and is being sold to the Purchaser for such amount. TheCompany believes this valuation represents a fair attempt at reaching anaccurate appraisal of its worth. However, it is possible that with the benefitof hindsight, the Internal Revenue Service would successfully assert that thevalue of the common shares is substantially greater than so determined.

            If the Internal Revenue Service wereto succeed in a tax determination that the common stock received had valuegreater than that upon which the transaction was based, the additional valuewould constitute ordinary income to the Purchaser as of the date of its receiptby the Purchaser. The additional taxes (and interest) due would be payable bythe Purchaser, and there is no provision for the Company to reimburse thePurchaser for that tax liability. In certain cases, the Internal Revenue Servicecould have up to six years from the due date for filing the return (or theactual filing date of the return if filed thereafter) within which to assessthe Purchaser for the additional tax and interest which would then be due.

 

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            The Company would have the benefit,in any such transaction, if a determination was made prior to the three yearstatute of limitations period affecting the Company, of an increase in itsdeduction for compensation paid, which would offset its operating profits, or,if not profitable, would create net operating loss carry forward arising fromoperations in that year.

 

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**EXHIBIT B**

**ASSIGNMENT SEPARATE FROM CERTIFICATE**

 

            FOR VALUE RECEIVED and pursuant tothat certain Restricted Stock Purchase Agreement dated as of April 2, 2001, **FrankJ. Fradella** hereby sells, assigns and transfers unto _________________,(_________) shares of the Common Stock of **US Industrial Services, Inc.**,a Delaware corporation, standing in the undersigned's name on the books of saidcorporation represented by certificate No. ________ herewith, and do herebyirrevocably constitute and appoint the Secretary of the Company as attorney totransfer the said stock on the books of the said corporation with full power ofsubstitution in the premises.

Dated___________________

Signature___________________________________

 

 

 

 

 

 

 

 

 

 

**INSTRUCTION:**  **Pleasedo not fill in any blanks other than the signature line.**  The purpose of this assignment is to enablethe Company to cancel and retire the shares as set forth in the RestrictedStock Purchase Agreement without requiring additional signatures on the part ofthe Purchaser.

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**ELECTION UNDER SECTION 83(b)OF THE INTERNAL REVENUE CODE OF 1986**

            The undersigned taxpayer herebyelects, pursuant to the above-referenced Federal Tax Code, to include in hisgross income for the current taxable year, the amount of any compensationtaxable to him in connection with his receipt of the property described below:

            1.         Thename, address, taxpayer identification number and taxable year of theundersigned are as follows:

NAMEOFTAXPAYER:  ____________________________     SPOUSE:  _____________________

ADDRESS:    ___________________________

                       ___________________________                                                                            

TAXPAYERID NO.(SSN):___________________SPOUSE ID NO.:_____________________

TAXABLEYEAR:  Calendar Year 20__

            2.         Theproperty with respect to which the election is made is described as follows:

___________shares of Common Stock of U S Industrial Services, Inc.

            3.         Thedate on which the property was transferred is: ____________________, 20__

            4.         Theproperty is subject to the following restrictions:

Optionof issuer to repurchase a portion of the shares at the issuance price, suchoption lapsing over a five-year period.

           5.         Thefair market value at the time of transfer, determined without regard to anyrestriction other than a restriction which by its terms will never lapse, ofsuch property is: $______________

            6.         Theamount (if any) paid for such property: $_____________

            The undersigned has submitted a copyof this statement to the person for whom the services were performed inconnection with the undersigned's receipt of the above-described property. Thetransferee of such property is the person performing the services in connectionwith the transfer of said property.

            The undersigned understands that theforegoing election may not be revoked except with the consent of theCommissioner.

 

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|                                                          |                            |
|---------------------------------------------------------------|---------------------------------|
|                                                          | Taxpayer                        |
|                                                          | Dated:  ____________, 20_  |
| The undersigned spouse of taxpayer joins in this    election. |
|                                                          |                            |
|                                                          |                            |
|                                                          |                            |
|                                                          |                            |
|                                                          | Spouse of Taxpayer              |
|                                                          | Dated: _____________, 20_  |

 

 

 

 

 

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