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                                                                    EXHIBIT 10.7


                              EMPLOYMENT AGREEMENT

         This Employment Agreement (this "AGREEMENT") is made and entered
effective as of April 2, 2001 (the "EFFECTIVE DATE") by and between U S
INDUSTRIAL SERVICES, INC., a Delaware corporation (the "COMPANY"), and FRANK J.
FRADELLA, an individual resident of the State of Texas (the "EXECUTIVE").

                                   WITNESSETH

         WHEREAS, the Executive has certain skills, experience, and abilities
that may be valuable to the success of the Company's operations and to the
Company's future profitability;

         WHEREAS, the Company desires to employ and retain the services of the
Executive as a full-time employee in the position of President and Chief
Executive Officer, and the Executive desires to work for and be employed by the
Company in such position; and

         WHEREAS, the Company and the Executive desire to set forth the terms
and conditions pursuant to which the Executive will be employed by the Company.

         NOW, THEREFORE, in consideration of the foregoing premises and of the
mutual covenants and undertakings contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Agreement hereby agree as follows:

Article 1:  TERM AND EMPLOYMENT

         1.01 Employment; Employment Period. The Company hereby employs the
Executive, and the Executive hereby accepts employment by the Company, upon the
terms and conditions set forth in this Agreement. The Executive shall render to
the Company the services described in Section 1.03 hereof from the Effective
Date until the earlier of the expiration of the Term (defined in Section 1.02
hereof) or the termination, in accordance with Section 4.01 hereof, of the
Employment Relationship (defined in Section 4.01 hereof) (the "EMPLOYMENT
PERIOD").

         1.02 Term. The term of this Agreement shall commence on the Effective
Date and shall end on the third anniversary of the Effective Date (the period of
time between the commencement and the end of this Agreement is referred to
herein as the "TERM").

         1.03 Duties and Services. The Executive will be employed as the
President and Chief Executive Officer of the Company in Houston, Texas, and will
have such duties and perform such services as are commensurate with such
position and those assigned or delegated to the Executive by the Board of
Directors of the Company (the "BOARD"). The Executive will devote all of his
business time, attention, skill, and energy exclusively to the business of the
Company, will use his best efforts to promote the success of the Company's
business and the business of any of its Affiliates (as defined herein), and will
cooperate fully with the Board in the advancement of the best interests of the
Company and its Affiliates.


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Article 2:  COMPENSATION

         2.01 Basic Compensation. During the Employment Period, and as otherwise
specified in Section 4.03 hereof, the Company shall pay to the Executive the
following compensation and provide the following benefits:

                  (a) Salary. The Executive shall be paid an annual base salary
of $200,000 (such amount, as it may be increased from time to time, is
hereinafter referred to as "SALARY"). The Salary will be payable in equal
periodic installments according to the Company's customary payroll practices,
but not less frequently than monthly. The Salary shall be reviewed at least
annually by the Board and may be increased by the Board in its sole discretion.
The Company shall withhold from each installment all applicable federal, state,
and local income and other payroll taxes.

                  (b) Stock Options. The Executive shall be eligible to receive
grants of stock options or restricted stock purchase rights pursuant to the
Company's 2001 Stock Plan, as amended, or other equity incentive plan, in
amounts (if any) and on terms and conditions to be determined by the Board. The
Board has granted the Executive restricted stock purchase rights for 500,000
shares of Common Stock as of the date hereof, by entering into a Restricted
Stock Purchase Agreement with the Executive in the form attached hereto as
Exhibit A.

                  (c) Registration Rights. In order to induce the Executive to
enter into this Agreement, and in recognition of the Executive's confidence in
the Employer demonstrated by the Executive's substantial stock ownership, the
Employer and the Executive have entered into a Registration Rights Agreement as
of the date hereof, in the form attached hereto as Exhibit B.

                  (d) Disability Insurance. Subject to the Executive's
qualification under normal disability insurance underwriting standards as of the
date hereof and at any policy renewal date, the Company shall provide, at the
Company's expense, a disability insurance policy that will pay the Executive,
pursuant to the terms of such policy, an annual disability benefit of $200,000
until the Executive reaches the age of 65.

                  (e) Fringe Benefits and Perquisites. The Executive shall be
entitled to participate in or receive benefits under any plan or arrangement
made available by the Company to its senior executive officers, including, but
not limited to, any hospitalization, medical, dental, or pension plan, subject
to and on a basis consistent with the terms, conditions, and overall
administration of such plans and arrangements.

                  (f) Automobile Allowance. The Executive shall be paid a car
allowance of $1,000 per month. This amount shall be paid on the first day of
each month, and the Company shall also reimburse the Executive for all actual
expenses associated with operating and maintaining the Executive's vehicle. The
Executive shall submit receipts or other evidence of such expenditures, and



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the Company shall pay these amounts to the Executive within 30 days of receipt
of such documentation.

                  (g) Payment and Reimbursement of Expenses. The Company shall
pay or reimburse the Executive for all reasonable travel and other expenses
incurred by the Executive in performing his obligations under this Agreement in
accordance with the policies and procedures of the Company for its senior
executive officers, provided that the Executive properly accounts therefor in
accordance with the regular policies of the Company.

                  (h) Vacations. In accordance with the regular policies of the
Company, the Executive shall be entitled to the number of paid vacation days in
each calendar year determined by the Company from time to time for its senior
executive officers, but not less than four weeks in any calendar year (prorated
in any calendar year in which the Executive is employed hereunder for less than
the entire year in accordance with the number of days in such calendar year
during which the Executive is so employed).

         2.02 Annual Bonus. The Company may pay the Executive an annual bonus
(the "ANNUAL BONUS") upon the Company's achievement of certain annual
earnings-per-share targets or other criteria established by the board from time
to time. The Company shall pay each Annual Bonus, if payable, no later than 90
days following the end of the appropriate fiscal year.

Article 3:  FACILITIES AND EXPENSES

         The Executive will use the office space, equipment, supplies, and such
other facilities, property, and personnel currently provided by the Company for
the performance of the Executive's his duties under this Agreement. The Company
shall provide sufficient professional and support staff to meet the needs of its
business as it is currently conducted and as it may grow. In the event the
Company changes locations, the Company will provide the Executive with office
space, equipment, supplies, and such other facilities and personnel as the
Company deems reasonably necessary or appropriate for the performance of the
Executive's duties under this Agreement; provided, however, that such office
space, equipment, supplies, and such other facilities and personnel shall be at
least comparable to the quality of those furnished by the Company for the use of
the Executive immediately prior to such move. The Company will reimburse the
Executive for reasonable expenses incurred by the Executive in the performance
of his duties and in accordance with the Company's employment policies in effect
from time to time.

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Article 4:  TERMINATION OF EMPLOYMENT AND AGREEMENT

         4.01 Events of Termination. The employment relationship between the
Company and the Executive that is created by this Agreement (the "EMPLOYMENT
RELATIONSHIP") shall terminate:

                  a. in the event of the death of the Executive, immediately;

                  b. in the event of the Disability of the Executive (as defined
in Article 9 hereof), immediately upon the delivery of a Notice of Employment
Termination (as defined in this Article 9 hereof) to the Executive by the
Company;

                  c. in the event of the occurrence of an event constituting
Cause (as defined in Article 9 hereof), immediately upon the delivery of a
Notice of Employment Termination to the Executive by the Company or on such
later date as the Notice of Employment Termination shall specify;

                  d. in the event the Company desires to terminate the
Employment Relationship without Cause, on a date following the delivery of a
Notice of Employment Termination (specifying such date) to the Executive by the
Company, but not earlier than the 30th day after the delivery of the Notice of
Employment Termination;

                  e. in the event of the occurrence of an event constituting
Good Reason (as defined in Article 9 hereof), immediately upon delivery of a
Notice of Employment Termination by the Executive to the Company; or

                  f. in the event the Executive desires to terminate the
Employment Relationship without Good Reason, on a date following the delivery of
a Notice of Employment Termination (specifying such date) to the Company by the
Executive, but not earlier than the 30th day after the delivery of the Notice of
Employment Termination.

                  g. in the event of the occurrence of a Change in Control (as
defined in Article 9 hereof), immediately upon the delivery of a Notice of
Employment Termination to the Company by the Executive.

         4.02 Effect of Termination of Employment. Upon the termination of the
Employment Relationship in accordance with Section 4.01 hereof, the Executive's
status as an employee of the Company, and all the rights, privileges, and
authority consistent therewith, shall immediately terminate except as otherwise
set forth herein. Notwithstanding such termination, this Agreement shall not
terminate but shall continue in accordance with its terms until the expiration
of the Term or termination in accordance with Section 4.04 hereof.

         4.03 Compensation Upon Termination of Employment.

         a. Termination for Disability. In the event the Company terminates the
Employment



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Relationship as a result of the Executive's Disability, the Company's payment
obligations hereunder shall expire and terminate as of the Date of Termination;
provided, however, that the Company shall be obligated to pay the Executive all
payment obligations accrued and owed to the Executive through the Date of
Termination and shall continue to pay any and all additional payments necessary
to provide the Executive with continuing disability insurance benefits in
accordance with and as provided by Section 2.01(d) hereof.

         b. Termination Upon Death. If the Employment Relationship terminates as
a result of the death of the Executive, the Company's payment obligations
hereunder (including, without limitation, under Sections 2.01(a) and 2.02) shall
expire as of the last day of the month in which the Executive's death occurs;
provided, however, that (i) the Company shall pay to the Executive's estate, as
soon as practicable, any payment obligations accrued hereunder through the date
of the Executive's death; and (ii) for the balance of the Term, the Executive's
wife and children shall be entitled to continue participation in the Company's
group hospitalization, medical, and dental plans (if any), with the full amount
of any premium to be borne by the Company.

         c. Termination for Cause or without Good Reason. In the event the
Company terminates the Employment Relationship for Cause, or in the event the
Executive terminates the Employment Relationship without Good Reason, the
Company shall have no payment or other obligation to Executive whatsoever as of
the Date of Termination or such later specified date, as the case may be;
provided, however, that the Company shall pay the Executive any payment
obligations accrued hereunder through the Date of Termination, or such later
specified date, as the case may be, or that are otherwise required to be made
under the terms of any employee benefit programs in which the Executive is
participating.

         d. Termination Without Cause. In the event the Company terminates the
Employment Relationship without Cause, the Company shall pay to the Executive,
as severance pay in a lump sum, no later than the 30th day following the Date of
Termination, the following amounts:

                  (i)   any payment of Salary (at the rate in effect as of the
Date of Termination) or any Annual Bonus which has accrued, but has not been
paid, through the Date of Termination;

                  (ii)  an Annual Bonus for the fiscal year in which the Date of
Termination occurs, as pro-rated through the Date of Termination. If the amount
of such Annual Bonus cannot be determined by the Board without a review of
financial data unknown to the Board at the Date of Termination, the amount
determined by the Board to be the Annual Bonus for the prior fiscal year shall
be deemed to be the amount of the Annual Bonus for the fiscal year in which the
Date of Termination occurs; and

                  (iii) an amount equal to the product of (A) the sum of the
Salary at the rate in effect as of the Date of Termination, plus the average
Annual Bonus paid to the Executive during the preceding two (2) years (or such
shorter period for which any Annual Bonus has been paid), multiplied by (B) the
number three (3).

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         The Company shall also continue to provide the Executive with the
employee benefits set forth in Section 2.01 (d), (e), and (f) for the duration
of the Term.

         e. Termination Upon a Change in Control. If the Executive terminates
the Employment Relationship due to a Change in Control, the Company shall pay to
the Executive as severance pay and as liquidated damages (because actual damages
are difficult to ascertain), in a lump sum, in cash, within 30 days after
termination, an amount equal to the amounts described and the cash value of the
employee benefits described in Section 4.03(d) hereof. In addition, if the
Executive is liable for any excise tax (the "BASIC EXCISE TAX") because of
Section 4999 of the Internal Revenue Code of 1986, as amended (the "CODE"), or
any successor or similar provision, with respect to any payments or benefits
received or to be received from the Company or its Affiliates, or any successor
to the Company or its Affiliates, whether provided under this Agreement or
otherwise, the Company shall pay the Executive an amount (the "SPECIAL
REIMBURSEMENT") which, after payment by the Executive (or on the Executive's
behalf) of any federal, state, and local taxes applicable thereto, including,
without limitation, any further excise tax under such Section 4999 of the Code,
on, with respect to or resulting from the Special Reimbursement, equals the net
amount of the Basic Excise Tax. The Company's independent auditors shall make
the determination of the amount of the payment described in this Section
4.03(e).

         f. Employee Benefits. Unless the Company terminates the Employment
Relationship for Cause, or the Executive terminates the Employment Relationship
without Good Reason, the Company shall maintain in full force and effect, for
the continued benefit of the Executive and, if applicable, his wife and
children, the employee benefits set forth in Section 2.01(d), and any
hospitalization, medical, and dental coverage included in 2.01(e) hereof, that
he was entitled to receive immediately prior to the Date of Termination (subject
to the general terms and conditions of the plans and programs under which he
receives such benefits) for the balance of the Term or for the period provided
for under the terms and conditions of such plans and programs, whichever is
longer, with the full amount of any applicable premiums to be borne by the
Company.

         4.04 Termination and Expiration of Agreement. Although the Employment
Relationship may be terminated, this Agreement shall not terminate prior to the
expiration of the Term except upon the prior written consent of both the Company
and the Executive. Upon the expiration or termination of the Term, all rights
and obligations of the parties hereto shall cease and expire, subject to any
provisions to the contrary in Articles 5 and 6.

Article 5:  NON-DISCLOSURE COVENANT

         5.01 Confidential Information Defined. For purposes of this Article 5,
the phrase "CONFIDENTIAL INFORMATION" means any and all of the following: trade
secrets concerning the business and affairs of the Company or its Affiliates,
product specifications, data, know-how, formulae, compositions, processes,
designs, sketches, photographs, graphs, drawings, samples, inventions and ideas,
past, current, and planned research and development, current and planned


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distribution methods and processes, customer lists, current and anticipated
customer requirements, price lists, market studies, business plans, computer
software and programs (including object code, machine code, and source code),
computer software and database technologies, systems, structures, and
architecture (and related formulae, compositions, processes, improvements,
devices, know-how, inventions, discoveries, concepts, ideas, designs, and
methods); information concerning the business and affairs of the Company or its
Affiliates (which includes historical financial statements, financial
projections and budgets, historical and projected sales, capital spending
budgets and plans, the names and backgrounds of key personnel, personnel
training techniques and materials, however documented); and notes, analysis,
compilations, studies, summaries, and other material prepared by or for the
Company or its Affiliates containing or based, in whole or in part, on any
information included in the foregoing. Notwithstanding the foregoing,
Confidential Information shall not include any information that the Executive
demonstrates was or became generally available to the public other than as a
result of a disclosure of such information by the Executive or any other person
under a duty to keep such information confidential.

         5.02 Acknowledgment by the Executive. The Executive acknowledges that
(a) during the Employment Period and as part of his employment, the Executive
will be afforded access to Confidential Information that the Company has devoted
substantial time, effort, and resources to develop and compile; (b) public
disclosure of such Confidential Information would have an adverse effect on the
Company and its business; (c) the Company would not disclose such information to
the Executive, nor employ or continue to employ the Executive without the
agreements and covenants set forth in this Article 5; (d) the Company is
employing the Executive because of his expertise and skill in the Company's
business, and thus, would be at a substantial competitive disadvantage if it
fails to acquire exclusive ownership of any and all Executive Inventions
(defined below); and (e) the provisions of this Article 5 are reasonable and
necessary to prevent the improper use or disclosure of Confidential Information
and to enable the Company to acquire sole and exclusive ownership of the
Executive Inventions.

         5.03 Maintaining Confidential Information. In consideration of the
compensation and benefits to be paid or provided to the Executive by the Company
under this Agreement and the acknowledgments set forth above, the Executive,
during the Employment Period and at all times thereafter, agrees and covenants
as follows:

         (a) Company Information. The Executive will hold in strictest
confidence the Confidential Information and will not disclose it to any Person
(defined below) except with the specific prior written consent of the Company or
as may be required by court order, law, government agencies with which the
Company deals in the ordinary course of its business, or except as otherwise
expressly permitted by the terms of this Agreement. Any trade secrets of the
Company will be entitled to all of the protections and benefits afforded under
applicable laws. If any information that the Company deems to be a trade secret
is ruled by a court of competent jurisdiction not to be a trade secret, such
information will, nevertheless, be considered Confidential Information for
purposes of this Agreement. The Executive hereby waives any requirement that the
Company submit proof of the economic value of any trade secret or post a bond or
other security. The Executive will not



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remove from the Company's premises or record (regardless of the media) any
Confidential Information of the Company or its Affiliates, except to the extent
such removal or recording is necessary for the performance of the Executive's
duties. The Executive acknowledges and agrees that all Confidential Information,
and physical embodiments thereof, whether or not developed by the Executive, are
the exclusive property of the Company or its Affiliates, as the case may be.

                  (b) Third Party Information. The Executive recognizes that the
Company and its Affiliates has received and in the future will receive from
third parties their confidential or proprietary information subject to a duty on
their parts to maintain the confidentiality of such information and to use it
only for certain limited purposes. The Executive agrees that he owes the
Company, its Affiliates, and such third parties, during the Employment Period
and thereafter, a duty to hold all such confidential or proprietary information
in the strictest confidence and not to disclose it to any Person (except as
necessary in carrying out his duties for the Company consistent with the
Company's agreement with such third party) or to use it for the benefit of
anyone other than for the Company or such third party (consistent with the
Company's agreement with such third party) without the express written
authorization of the Company or its Affiliate, as the case may be.

                  (c) Returning Company Documents. The Executive agrees that, at
the time of the termination of his employment with the Company, he will deliver
to the Company (and will not keep in his possession or deliver to any other
Person) any and all devices, records, data, notes, reports, proposals, lists,
correspondence, specifications, drawings, blueprints, sketches, materials,
equipment, other documents or property, or reproductions of any of the
aforementioned items belonging to the Company or any of its Affiliates, and
their respective successors or assigns, regardless of whether such items are
represented in tangible, electronic, digital, magnetic or any other media. In
the event of the termination of his employment, the Executive agrees to sign and
deliver the "TERMINATION CERTIFICATION" attached hereto as Exhibit C.

         5.04 Disputes or Controversies. The Executive recognizes that should a
dispute or controversy arising from or relating to this Agreement be submitted
for adjudication to any court, arbitration panel, or other third party, the
preservation of the secrecy of Confidential Information may be jeopardized. All
pleadings, documents, testimony, and records relating to any such adjudication
will be maintained in secrecy and will be available for inspection by the
Company, the Executive, and their respective attorneys and experts, who will
agree, in advance and in writing, to receive and maintain all such information
in secrecy, except as may be limited by them in writing.

         5.05 Executive Inventions. The Executive will promptly disclose in
writing to the Company as set forth below complete information concerning each
and every invention, discovery, improvement, device, design, apparatus,
practice, process, method, product, computer program or database, whether or not
patentable or copyrightable, made, developed, perfected, devised, conceived,
produced, created or first reduced to practice by the Executive, during the term
of the Executive's employment with the Company, during working hours with the
Company or using the Company's property, facilities or resources or which relate
either directly or indirectly to the services, programs, software, products or
other applications of the Company developed or being developed



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by the Company which are known to the Executive ("EXECUTIVE INVENTIONS"). The
Executive acknowledges that any and all of said Executive Inventions are the
property of the Company and hereby assigns and agrees to assign to the Company
any and all of my right, title and interest in and to any and all of such
Executive Inventions. The Executive will execute any documents requested by the
Company (which shall be prepared at the Company's expense), including but not
limited to patent and copyright applications and registrations, and will perform
any and all further acts deemed necessary or desirable by the Company in order
to confirm, exploit, or enforce the rights herein granted and assigned by the
Executive to the Company. The provisions of this Section 5.05 shall not apply to
any Executive Invention meeting each of the following conditions: (i) such
Executive Invention was developed entirely on the Executive's own time, (ii)
such Executive Invention was made without the use of any Company equipment,
supplies, facility or Confidential Information, (iii) such Executive Invention
does not relate to any service, program, software, product or other application
of the Company in place or planned during the term of the Executive's employment
or to any research or development efforts of the Company during such term which
are known to the Executive, and (iv) such Executive Invention does not result
from any work or service performed by the Executive on behalf of, or for the
Company. The Executive will promptly disclose all Executive Inventions to the
Board and perform all actions reasonably requested by the Board to establish and
confirm ownership thereof by the Company. Executive Inventions shall not include
the inventions, discoveries, improvements, devices, designs, apparatus,
practices, processes, methods, products, computer programs or databases, listed
on Exhibit D attached hereto.

Article 6:  NON-COMPETITION AND NON-INTERFERENCE

         6.01 Covenants Regarding Competitive Protection. The Company and the
Executive hereby mutually agree that the nature of the Company's business and
the Executive's employment hereunder are based on the Company's goodwill, public
perception, and customer relations. Therefore, in consideration of the
acknowledgments set forth in Section 5.02 herein and the compensation and
benefits to be paid to the Executive pursuant to this Agreement, in particular
the termination pay provided for in Section 4.03 of this Agreement, the
Executive hereby agrees and covenants to each and all of the following:

                  (a) Noncompete. During the Employment Period and the
Post-Employment Period (defined below), the Executive will not, directly or
indirectly, in any capacity whatsoever, individually or on behalf of any other
person or entity, engage or invest in, own, manage, operate, finance, control,
or participate in the ownership, management, operation, financing, or control
of, be employed by, associated with, or in any manner connected with, lend the
Executive's name or any similar name to, lend the Executive's credit to or
render services or advice to, any business engaged or about to become engaged in
the Business (defined below) of the Company, or any of its Affiliates, in the
Market Area. For purposes of this Agreement, the "BUSINESS" of the Company, or
its Affiliates, includes all those businesses, products, and services that are
presently or hereafter marketed by the Company, or its Affiliates, or that are
in the development stage on the Date of Termination (as defined herein); and any
other business in which the Company, or any of its Affiliates, are engaged on
the Date of Termination.



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                  (b) Solicitation of Customers. During the Employment Period
and the Post-Employment Period, the Executive hereby covenants and agrees that
he will not, either directly or through an Affiliate, solicit any Person that is
a Current Customer (defined below) of the Company or its Affiliates for purposes
of selling products or services to such Person that are in competition with the
products and services offered or sold by the Company or its Affiliates.

                  (c) Solicitation of Employees. During the Employment Period
and the Post-Employment Period, the Executive hereby agrees not to employ,
either directly or through an Affiliate, any current employee of the Company or
its Affiliates or any individual who was an employee of the Company or its
Affiliates during the 12 months immediately preceding the Date of Termination,
and agrees not to solicit, or contact in any manner that could reasonably be
construed as a solicitation, either directly or through an Affiliate, any
employee of the Company or its Affiliates for the purpose of encouraging such
employee to leave or terminate his or her employment with the Company or its
Affiliates.

                  (d) Solicitation of Vendors. During the Employment Period and
the Post-Employment Period, the Executive hereby agrees not to solicit, either
directly or through an Affiliate, a current vendor or supplier of the Company or
its Affiliates for purposes of encouraging such vendor or supplier to cease or
diminish providing products or services to the Company or its Affiliates, or to
change adversely the terms under which such vendor or supplier provides such
products or services to the Company or its Affiliates.

                  (e) Interference. During the Employment Period and the
Post-Employment Period, the Executive hereby agrees not to interfere with the
Company's relationship with any person who at the relevant time is an employee,
contractor, supplier, or customer of the Company or its Affiliates.

                  (f) Post-Employment Period. For purposes of this Section 6.01,
the term "POST-EMPLOYMENT PERIOD" means the one-year period beginning on the
Date of Termination.

                  (g) Market Area. For purposes of this Section 6.01, the term
"MARKET AREA" means the United States of America.

         6.02 Scope. The Executive acknowledges and agrees that the Company is
engaged in or intends to be engaged in business throughout the United States and
that the marketplace for the Company's businesses, products and services is
nationwide, and thus the geographic area, length and scope of the restrictions
contained in Section 6.01 are reasonable and necessary to protect the legitimate
business interests of the Company. The length of the agreements contained in
Sections 6.01 shall be extended for the amount of any time of any violation
thereof and the time, if greater, necessary to enforce such provisions or obtain
any relief or damages for such violation through the court system or
arbitration. The Company may, at any time on written notice approved by its
Board, reduce the geographic area, length or scope of any restrictions contained
in Section 6.01 and,



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thereafter, the Executive shall comply with the restriction as so reduced,
subject to subsequent reductions. If any covenant in Section 6.01 of this
Agreement is held to be unreasonable, arbitrary, or against public policy, such
covenant will be considered to be divisible with respect to scope, time, and
geographic area, and such lesser scope, time, or geographic area, or all of
them, as an arbitrator or a court of competent jurisdiction may determine to be
reasonable, not arbitrary, and not against public policy, will be effective,
binding, and enforceable against the Executive. In the event of termination of
the Executive's employment with the Company for any reason, the Executive
consents to the Company communicating with my new Company, any entity in the
Business or through or in connection with which the Executive is restricted
hereunder or other party about the restrictions and obligations imposed on the
Executive under this Agreement.

Article 7:  INDEMNIFICATION

         7.1 Claims Arising from the Executive's Position with the Company. In
addition to any separate agreements between the Executive and the Company
relating to indemnification, the Company will indemnify and hold harmless the
Executive, to the fullest extent permitted by applicable law, in respect of any
liability, damage, cost or expense (including reasonable counsel fees) incurred
in connection with the defense of any claim, action, suit or proceeding, or
threatened claim action suit or proceed, to which he is a party, by reason of
his being or having been an officer or director of the Company or any subsidiary
or Affiliate of the Company, or his serving or having served at the request of
the Company as a director, officer, employee or agent of another corporation or
of a partnership, joint venture, trust, business organization, enterprise or
other entity, including service with respect to employee benefit plans. Without
limiting the generality of the foregoing, the Company will pay the expenses
(including reasonable counsel fees) of defending any such claim, action, suit or
proceeding in advance of its final disposition.

         7.02 Contests of this Agreement. The Company agrees to pay promptly, to
the full extent permitted by law, all legal fees and expenses which the
Executive may reasonably incur as a result of any contest in which the Executive
shall be the prevailing party by the Company, the Executive or others of the
validity or enforceability of, or liability under any provision of this
Agreement or any guarantee of performance thereof (including as a result of any
contest by the Executive about the amount of any payment pursuant to this
Agreement), plus in each case interest on any delayed payment at the applicable
Federal rate provided for in Section 7872(f)(2)(A) of the Code.

         7.03 Liability Insurance. During the Employment Period, the Company
agrees to continue on the Executive's behalf, directors and officers insurance
or any other indemnity policy presently carried on behalf of the Executive, and
further agrees to supplement any such existing policy to cover all actions taken
by the Executive in connection with his employment by the Company.

Article 8:  GENERAL PROVISIONS

         8.01 Injunctive Relief and Additional Remedy. The Executive
acknowledges that the injury that would be suffered by the Company as a result
of a breach of the provisions of Articles 5 and 6



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hereof might be irreparable and that an award of monetary damages to the Company
for such a breach would be an inadequate remedy. Consequently, the Company will
have the right, in addition to any other rights it may have, to obtain
injunctive relief to restrain any breach or threatened breach or otherwise to
specifically enforce the provisions of Articles 5 and 6 hereof.

         8.02 Covenants of Articles 5 and 6 are Essential and Independent
Covenants. The covenants by the Executive in Articles 5 and 6 are essential
elements of this Agreement, and without the Executive's agreement to comply with
such covenants, the Company would not have entered into this Agreement or
employed or continued the employment of the Executive. The Company and the
Executive have independently consulted their respective counsel and have been
advised in all respects concerning the reasonableness and propriety of such
covenants, with specific regard to the nature of the business conducted by the
Company. If the Executive's employment hereunder expires or is terminated, this
Agreement will continue in full force and effect as is necessary or appropriate
to enforce the covenants and agreements of the Executive in Articles 5 and 6.

         8.03 Representations and Warranties by the Executive. The Executive
represents and warrants to the Company that (a) the Executive has never taken
any action of the types set forth in Section 6.01 and (b) the execution and
delivery by the Executive of this Agreement does not, and the performance by the
Executive of the Executive's obligations hereunder will not, with or without the
giving of notice or the passage of time, or both: (i) violate any judgment,
writ, injunction, or order of any court, arbitrator, or governmental agency
applicable to the Executive; or (ii) conflict with, result in the breach of any
provisions of or the termination of, or constitute a default under, any
agreement to which the Executive is a party or by which the Executive is or may
be bound.

         8.04 Obligations Contingent on Performance. The obligations of the
Company hereunder, including its obligation to pay the compensation provided for
herein, are contingent upon the Executive's performance of the Executive's
obligations hereunder.

         8.05 Binding Effect; Delegation of Duties Prohibited. This Agreement
shall inure to the benefit of, and shall be binding upon, the parties hereto and
their respective successors, assigns, heirs, and legal representatives,
including any entity with which the Company may merge or consolidate or to which
all or substantially all of its assets may be transferred. The covenants of the
Executive under this Agreement, being personal, may not be delegated.

         8.06 Notices. All notices, consents, waivers, and other communications
under this Agreement must be in writing and will be deemed to have been duly
delivered when (a) delivered by hand (with written confirmation of receipt), (b)
sent by facsimile (with written confirmation of receipt), provided that a copy
is mailed by registered mail, return receipt requested, or (c) when received by
the addressee, if sent by a nationally recognized overnight delivery service
(receipt requested) or, (d) mailed by registered or certified mail, postage
prepaid and return receipt requested, in each case to the appropriate addresses
and facsimile numbers set forth below (or to such other addresses and facsimile
numbers as a party may designate by notice to the other parties):



                                       12
<PAGE>   13

         If to Company:       U S Industrial Services, Inc.
                              11850 Jones Road
                              Houston, TX 77070

         With a copy to:      Fish & Richardson P.C.
                              5000 Bank One Center
                              1717 Main Street
                              Dallas, Texas 75201
                              Attn: J. Paul Caver, Esq.

         If to the Executive: Frank J. Fradella
                              18 miles South on Highway 83
                              Y.O. Ranchlands
                              Mountain Home, TX ______


         8.07 Entire Agreement; Amendments. This Agreement contains the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings, oral or written, between the
parties hereto with respect to the subject matter hereof. This Agreement may not
be amended orally; but only by an agreement in writing signed by the parties
hereto.

         8.08 GOVERNING LAW; VENUE. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS WITHOUT GIVING
EFFECT TO THE CONFLICT OF LAWS RULES OR CHOICE OF LAWS RULES THEREOF. VENUE FOR
ANY ACTION BROUGHT HEREUNDER SHALL BE EXCLUSIVELY IN HARRIS COUNTY, TEXAS.

         8.09 Headings; Construction. The headings in this Agreement are
provided for convenience only and will not affect its construction or
interpretation. All references to "Article," "Articles," "Section," or
"Sections" refer to the corresponding Article, Articles, Section, or Sections of
this Agreement unless otherwise specified. All words used in this Agreement will
be construed to be of such gender or number, as the circumstances require.

         8.10 Severability. If any provision of this Agreement is held invalid
or unenforceable by an arbitrator or any court of competent jurisdiction, the
other provisions of this Agreement will remain in full force and effect. Any
provision of this Agreement held invalid or unenforceable only in part or degree
will remain in full force and effect to the extent not held invalid or
unenforceable.

         8.11 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.

         8.12 Survival of Obligations. The obligations of the Company and the
Executive under this



                                       13
<PAGE>   14

Agreement which by their nature may require either partial or total performance
after the expiration of the Term shall survive such expiration.

         8.13 Withholding and Set Off. All payments and benefits made or
provided under this Agreement shall be subject to withholding as required under
applicable law. The Company is further authorized to withhold and setoff against
any such payments and benefits any amounts that the Executive may come to owe
the Company, whether as a result of any breach of this Agreement or otherwise.
The Company may also withhold any such payments or benefits in the event of any
breach of this Agreement or investigation thereof pending resolution of such
matter.

         8.14 Arbitration. Any controversy or claim arising out of or relating
to this Agreement, or violation of this Agreement, shall be settled by
arbitration in accordance with the Rules of the American Arbitration
Association, and judgment rendered by the arbitrator may be entered in any court
having jurisdiction thereover. The arbitration shall be conducted in the city of
the Company's principal Executive office at the time such arbitration is
initiated, unless otherwise agreed by the parties thereto. The arbitrator shall
be deemed to possess the power to issue mandatory orders and restraining orders
in connection with such arbitration; provided, however, that nothing in this
Section 8.14 shall be construed as to deny the Company the right and power to
seek and obtain injunctive relief in a court of competent jurisdiction for any
breach or threatened breach of the Company's agreements contained in this
Agreement.

Article 9:  CERTAIN DEFINITIONS

         For purposes of this Agreement, the following terms shall have the
meanings indicated below:

         "AFFILIATE" shall mean, as to any Person, any Person controlled by,
controlling, or under common control with such Person, and, in the case of a
Person who is an individual, a member of the family of such individual
consisting of a spouse, sibling, in-law, lineal descendant, or ancestor
(including by adoption), and the spouses of any such individuals. For purposes
of this definition, "control" (including the terms "controlling", "controlled
by" and "under common control with") of a Person means the possession, directly
or indirectly, alone or in concert with others, of the power to direct or cause
the direction of the management and policies of such Person, whether through the
ownership of securities, by contract or otherwise, and no Person shall be deemed
in control of another solely by virtue of being a director, officer or holder of
voting securities of any entity. A Person shall be presumed to control any
partnership of which such Person is a general partner.

          "CAUSE" shall mean: (a) the Executive's material and persistent
failure to perform his duties and services in accordance with this Agreement
(unless such failure is due to the Executive's Disability) or the Executive's
material violation of this Agreement or any material inaccuracy of any
representation or warranty of the Executive contained herein unless, for any
such failure, violation, or inaccuracy which is capable of being cured, the
Executive cures such failure, violation, or inaccuracy within 10 days of the
Company providing written notice to the Executive of such failure, violation, or
inaccuracy; (b) the appropriation (or attempted appropriation) of a material
business



                                       14
<PAGE>   15

opportunity of the Company, including attempting to secure or securing any
personal profit in connection with any transaction entered into on behalf of the
Company other than as provided in this Agreement; (c) theft, fraud, or
embezzlement of property of the Company or any of its Affiliates; (d) commission
of an act of fraud upon, or bad faith or willful misconduct toward, the Company
or any of its Affiliates; (e) conduct constituting gross negligence or
recklessness, as determined by the Company in its sole discretion, that is
materially injurious to the Company, a customer of the Company, or any of its
Affiliates; or (f) the conviction of, the indictment for (or its procedural
equivalent), or the entering of a guilty plea or plea of no contest with respect
to, a felony, the equivalent thereof, or any other crime with respect to which
imprisonment is a possible punishment.

         "CHANGE IN CONTROL" shall mean any of the following:

         (a) any consolidation or merger of the Company in which the Company is
not the continuing or surviving corporation or pursuant to which shares of the
Company's common stock would be converted into cash, securities or other
property, other than a merger of the Company in which the holders of the
Company's common stock immediately prior to the merger have a majority or more
of the same proportionate ownership of common stock of the surviving corporation
immediately after the merger;

         (b) any sale, lease, exchange, or other transfer (in one transaction or
in a series of related transactions) of all or substantially all of the assets
of the Company, except any mortgage or hypothecation of the Company's assets;

         (c) any approval by the stockholders of the Company of any plan or
proposal for the liquidation or dissolution of the Company;

         (d) Following the first annual meeting of stockholders called for the
purpose of electing directors following the Effective Date (the "Commencement
Date") the cessation of control (by virtue of their not constituting a majority
of directors) of the Board by the individuals (the "CONTINUING DIRECTORS") who
(i) on the Commencement Date were directors or (ii) become directors after the
Commencement Date and whose election or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds of the directors then
in office who were Continuing Directors or whose election or nomination for
election was previously so approved); or

         (e) the acquisition of beneficial ownership (within the meaning of Rule
13d-3 under the Securities Exchange Act of 1934, as amended) of an aggregate of
15% of the voting power of the Company's outstanding voting securities by any
person or group (as such term is used in Rule 13d-5 under such Act) who
beneficially owned less than 10% of the voting power of the Company's
outstanding voting securities on the Execution Date, or the acquisition of
beneficial ownership of an additional 5% of the voting power of the Company's
outstanding voting securities by any person or group who beneficially owned at
least 10% of the voting power of the Company's outstanding voting securities on
the Execution Date; provided, however, notwithstanding the foregoing, that an
acquisition shall not constitute a Change in Control hereunder if the acquirer
is (i) the Executive, (ii) a trustee or other fiduciary holding securities under
an employee benefit plan of the Company and acting in such capacity, (iii) a
corporation owned, directly or indirectly, by the stockholders of the



                                       15
<PAGE>   16

Company in substantially the same proportions as their ownership of voting
securities of the Company or (iv) any other person whose acquisition of shares
of voting securities is approved in advance by a majority of the Continuing
Directors;

         (f) subject to applicable law, the filing of (including the filing of
an involuntary petition in bankruptcy) or conversion to a Chapter 7 bankruptcy.

         "CURRENT CUSTOMER" shall mean any Person who is currently utilizing any
product or service sold or provided by the Company or any of its Affiliates; any
Person who utilized any such product or service within the previous 12 months;
and any Person with whom the Company or any of its Affiliates is currently
conducting negotiations concerning the utilization of such products or services.

         "DATE OF TERMINATION" shall mean the date on which Notice of Employment
Termination is delivered under this Agreement or the termination date set forth
therein, as the case may be.

          "DISABILITY" shall mean a condition under which (a) for physical or
mental reasons, the Executive is unable to render and perform substantially and
continuously the Executive's duties and services under this Agreement for 12
consecutive weeks, or 16 weeks during any 12-month period, or (b) the prognosis
or recommendations of the Examining Doctor (defined below) are such that the
Executive would be unable to render and perform substantially and continuously
the Executive's duties and services under this Agreement for 12 consecutive
weeks, or 16 weeks during any 12-month period. Upon the request of either party
by notice to the other, the Disability of the Executive will be determined by a
medical doctor (the "EXAMINING DOCTOR") who shall be selected as follows: the
Company and the Executive shall each select a medical doctor, and those two
medical doctors will select a third medical doctor who will be the Examining
Doctor. The determination of the Examining Doctor will be binding on both
parties.

         "GOOD REASON" means any of the following:

                  (a) the Company's material breach of this Agreement and the
Company's failure to remedy such breach within 10 days following the delivery of
written notice of such breach by the Executive to the Company; or

                  (b) the assignment by the Company to the Executive, without
the prior written consent of the Executive, of responsibilities or duties that
are substantially different from the duties and services set forth in Section
1.03 of this Agreement.

         "NOTICE OF EMPLOYMENT TERMINATION" shall mean a written notice
(communicated in accordance with Section 8.06 hereof) that shall indicate the
specific termination provision in this Agreement relied upon and shall set forth
in reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated.

         "PERSON" shall have the meaning given in Section 3(a)(9) of the
Securities Exchange Act of



                                       16
<PAGE>   17

1934, as amended, as modified and used in Sections 13(d)(3) and 14(d)(2) of such
act.


         IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.

                              COMPANY:

                              U S INDUSTRIAL SERVICES, INC.


                              By:
                                  ----------------------------------------------
                              Name: Kathleen L. Harris
                                    --------------------------------------------
                              Title: Chief Financial Officer
                                     -------------------------------------------


                              EXECUTIVE:


                              --------------------------------------------------
                              Frank J. Fradella





                                       17
<PAGE>   18



                                    EXHIBIT A

                       RESTRICTED STOCK PURCHASE AGREEMENT





                                       18
<PAGE>   19



                                    EXHIBIT B

                          REGISTRATION RIGHTS AGREEMENT



                                       19
<PAGE>   20



                                    EXHIBIT C

                            TERMINATION CERTIFICATION

         This is to certify that the undersigned has complied with all the terms
of the Employment Agreement (the "EMPLOYMENT AGREEMENT") signed by the
undersigned with U S Industrial Services, Inc. (the "COMPANY"), including as to
Executive Inventions (as defined in the Employment Agreement). It is further
certified that the undersigned does not possess, nor has the undersigned failed
to return to the Executive any Confidential Information (as defined in the
Employment Agreement). It is further certified that the undersigned has
destroyed all tangible copies and have erased any electronic, digital, or
magnetic representations or manifestations of the foregoing. The undersigned
further agrees that, in compliance with the Employment Agreement, the
undersigned will preserve as confidential all Confidential Information and
information of third parties as provided in the Employment Agreement.


Date:
     ---------------------------


                                     ------------------------------------------
                                     Frank J. Fradella





                                       21
<PAGE>   21




                                    EXHIBIT D

                              EXECUTIVE INVENTIONS

                                     [NONE]


                                       22