Exhibit 10.11

EXHIBIT E

FORM OF PLEDGE AGREEMENT

PLEDGE AGREEMENT

          THIS PLEDGE AGREEMENT (this “Agreement”), dated as of July 30, 2010
(the “Effective Date”) between INDUSTRIAL SERVICES OF AMERICA, INC., a Florida
corporation (“Pledgor”), whose principal place of business and mailing address
is 7100 Grade Lane, Louisville, Kentucky 40232, and FIFTH THIRD BANK, an Ohio
banking corporation, as Agent for the benefit of the Secured Creditors (as
defined below) (“Agent”), is as follows:

          DEFINITIONS.

          1.1 Defined Terms. Any capitalized term used but not defined herein
shall have the meaning ascribed thereto in the Credit Agreement dated as of the
date of this Agreement among Borrowers and the Secured Creditors (the “Credit
Agreement”). In addition to the other terms defined in this Agreement, whenever
the following capitalized terms are used, they shall be defined as follows:

                    “Borrowers” means each of Pledgor and ISA Indiana, Inc., an
Indiana corporation (“ISA Indiana”).

                     “Issuers” means each of the Persons identified as an
“Issuer” on Schedule I attached, and any other Person which becomes an Issuer
after the date hereof pursuant to Section 2.3, and any successors to any of the
foregoing, whether by merger or otherwise.

                     “Permitted Liens” means (i) any current taxes and
assessments not yet due and payable owing by Pledgor; (ii) the Liens in favor of
Agent; (iii) any Liens specified in subsections (a), (g) or (h) of Section 8.8
of the Credit Agreement so long as none of those Liens under Section 8.8 have
priority over the Liens in favor of Agent; and (iv) restrictions (A) applicable
to interests in corporations or limited liability companies, as applicable,
generally under the laws of the States of Indiana and Kentucky, as applicable to
an Issuer, and (B) under applicable securities laws.

                     “Pledged Interests” means all of the Equity Interests
(whether now owned or existing or hereafter arising or acquired, whether the
same constitutes “general intangibles”, “investment property”, or a “security”
under the Uniform Commercial Code, and whether such interest is certificated or
uncertificated) in each of the Issuers and all securities (as that term is
defined in the Uniform Commercial Code), if any, issued by each of the Issuers.

                     “Secured Creditors” means, collectively, Agent, the LC
Issuer and the Lenders.

          1.2 Other Definitional Provisions; Construction. Unless otherwise
specified in this Agreement, as used in this Agreement:

                     (i) As used in this Agreement, accounting terms relating to
Pledgor not defined in this Agreement or the Credit Agreement have the
respective meanings given to them in accordance with GAAP.

                     (ii) The definition of any document or instrument or
agreement includes all schedules, attachments and exhibits thereto and all
renewals, extensions, supplements, restatements and amendments thereof. All
Exhibits and Schedules attached to this Agreement are incorporated into, make
and form an integral part of, this Agreement for all purposes.

                     (iii) “Hereunder,” “herein,” “hereto,” “this Agreement” and
words of similar import refer to this entire document; “including” is used by
way of illustration and not by way of limitation, unless the context clearly
indicates the contrary; the singular includes the plural and conversely; and any
action required to be taken by Pledgor is to be taken promptly, unless the
context clearly indicates the contrary.

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                     (iv) All of the uncapitalized terms contained in this
Agreement which are now or hereafter defined under the UCC will, unless the
context indicates otherwise, have the meanings provided for in the UCC.

2. PLEDGE; DELIVERY.

          2.1 Security Interest. To secure the full, prompt and complete payment
and performance of the Obligations, as that term is defined in the Credit
Agreement, and all of the obligations and liabilities of Pledgor hereunder
(collectively, the “Obligations”), Pledgor hereby pledges to, grants to, and
creates in favor of Agent, for the benefit of the Secured Creditors, a first
priority Lien on, and continuing security interest in, the following Property,
whether now owned or existing or hereafter arising or acquired (the “Pledged
Collateral”):

                    all of the Pledged Interests;

                    the certificates or instruments, if any, representing the
Pledged Interests which may be delivered to Agent accompanied by indorsements
executed in blank;

                    all dividends and distributions (cash, stock, limited
liability company interests, other Capital Securities, or otherwise), cash,
instruments, rights to subscribe, purchase or sell and other rights and Property
from time to time received, receivable or otherwise distributed or distributable
in respect of or in exchange for any or all of the Pledged Interests;

                    all replacements, additions to and substitutions for any of
the foregoing, including, without limitation, claims against third parties;

                    all cash and non-cash proceeds, interest, profits and other
income of or on any of the foregoing described Property;

                    all supporting obligations; and

                    all books and records relating to any of the foregoing
described Property.

          2.2 Delivery of Pledged Collateral. Contemporaneously herewith,
Pledgor has delivered to Agent all of the certificates representing the Pledged
Collateral, to the extent certificated, together with separate stock, limited
liability company interests or other transfer forms duly indorsed, in blank, for
the transfer of the Pledged Collateral. If at any time prior to the termination
of this Agreement in accordance with Section 12, Pledgor obtains possession of
any other certificate, document or other evidence representing any of the
Pledged Collateral, Pledgor will immediately deliver such certificate, document
or other evidence to Agent. During such time as any such certificate, document
or other evidence representing any of the Pledged Collateral are in Pledgor’s
possession or control, Pledgor shall hold or control such certificate, document
or other evidence in trust for Secured Creditors’ benefit. All certificates,
documents or other evidence delivered to Agent shall be accompanied by separate
stock, limited liability company interests or other powers duly indorsed, in
blank, for transfer to the extent requested by Agent.

          2.3 Additional Subsidiaries. If any Subsidiary which (i) is
wholly-owned by Pledgor, or (ii) in which Pledgor does not own 100% of the
Pledged Interests but with respect to which Pledgor is not precluded from
pledging the Pledged Interests thereof, in addition to the Issuers described on
Schedule I, is formed or acquired after the date of this Agreement, for purposes
of this Agreement (subject to Section 2.4 with respect to Foreign Issuers): (a)
such Subsidiary shall be deemed an Issuer; (b) Pledgor shall deliver to Agent
all of the Section 2.2 documentation required for the Pledged Interests relating
to such new Issuer as required by this Agreement; (c) Schedule I shall be deemed
amended to reflect such Pledged Interests. Nothing in this Section 2.3 or
anything else contained in this Agreement shall be construed to constitute any
Secured Creditor’s consent to any Subsidiary that is not expressly permitted by
the provisions of the Credit Agreement or the other Loan Documents.

          2.4 Limitation Regarding Foreign Issuers. Notwithstanding anything to
the contrary in any Loan Document, as it respects the Equity Interests in any
foreign Subsidiary of Pledgor formed or acquired after the date of this
Agreement (each, a “Foreign Issuer”), such Lien shall be limited to 65% of the
Equity Interests in such Foreign

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Subsidiary; provided that if there occurs a change in the Internal Revenue Code
or the regulations promulgated thereunder that would no longer require Pledgor
to recognize income as a result of Pledgor’s pledge of 66 and 2/3 percent or
more of the total combined voting power of all classes of Equity Interests in
any Foreign Issuer entitled to vote (“Tax Law Change”), Pledgor will pledge
hereunder, on Agent’s demand, the greatest number of shares of such Foreign
Issuer not previously pledged hereunder to the extent that the Tax Law Change
would not require Pledgor to recognize income as a result of that pledge; it
being the intent of Pledgor and the Secured Creditors that Pledgor pledge the
maximum percentage of Equity Interests in each Foreign Issuer which, when taking
into account the Tax Law Change, would not require or be reasonably likely to
require Pledgor to recognize any income as a result of that pledge. So long as
no Event of Default has occurred and is continuing beyond any applicable grace
period (and which has not been waived in writing by, or cured to the written
satisfaction of, Agent in accordance with the Credit Agreement), Agent will not
require the preparation or registration of Pledgor’s pledge in favor of Agent
with respect to any Foreign Issuer in the jurisdiction of such Foreign Issuer’s
organization.

3. REPRESENTATIONS AND WARRANTIES. Pledgor hereby represents and warrants that:

                     (i) There is no stamp duty, tax, levy, impost, deduction,
charge, withholding or similar duty, tax or fee imposed on or by virtue of the
execution or delivery of this Agreement or any other document to be furnished
hereunder or in connection herewith;

                     (ii) The Pledged Interests have been duly authorized and
validly issued and are fully paid, and, in the case of capital stock, are
non-assessable, and, in the case of limited liability company interests, all
capital contributions have been made with respect to the membership interests
pursuant to the applicable operating agreement that are required to have been
made;

                     (iii) There are no restrictions upon the transfer of any of
the Pledged Collateral except for a Permitted Lien, and Pledgor has the
unqualified and unilateral right to transfer the Pledged Collateral without
obtaining the consent of any Person. The Pledged Interests are issued and
registered in the name of Pledgor;

                     (iv) Pledgor is the sole, legal and beneficial owner of the
entire right, title and interest in and to the Pledged Collateral free and clear
of any Lien, and there are no adverse claims with respect to any of the Pledged
Collateral, in each case other than Permitted Liens. Pledgor will defend Agent’s
title to the Pledged Collateral against the claims of all Persons except any
Permitted Liens;

                     (v) The pledge and delivery of the Pledged Collateral
pursuant to this Agreement create a valid and continuing Lien on, and subject to
Permitted Liens, first priority security interest in the Pledged Collateral,
securing the payment of the Obligations;

                     (vi) Except as provided in Section 5.2(c) of the Credit
Agreement, no authorization, approval or other action by, and no notice to or
filing with, any Governmental Authority is required either (a) for the pledge by
Pledgor of the Pledged Collateral pursuant to this Agreement or for the
execution, delivery or performance of this Agreement by Pledgor; or (b) for the
exercise by Agent of the voting or other rights provided for in this Agreement
or the remedies in respect of the Pledged Collateral pursuant to this Agreement
(except as may be required by laws affecting the offering and sale of securities
generally);

                     (vii) The Pledged Interests constitute 100% of the issued
and outstanding capital stock or other Capital Securities of Issuers;

                     (viii) There are no certificates evidencing the Pledged
Interests (other than as set forth on Schedule I) and no agreements in place to
opt in to Article 8 of the UCC to treat any of the Pledged Interests (with
respect to any Issuer that is a limited liability company) as securities under
Article 8 of the UCC; and

                     (ix) Pledgor is a Florida corporation with its chief
executive office and mailing address located at the address set forth in the
opening paragraph of this Agreement. Pledgor’s mailing address, as set forth in
the opening paragraph of this Agreement, lists the location of any and all of
the Pledged Collateral which is tangible except to the extent certificates or
instruments, if any, representing Pledged Interests are physically delivered to
Agent.

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4. PLEDGOR’S RESPONSIBILITIES.

                    Until the Obligations (other than contingent obligations for
indemnification or reimbursement for which Agent has not then given notice of a
claim thereof against Pledgor or Issuers) are fully paid, performed and
satisfied and this Agreement is terminated, Pledgor will:

 

 

 

          during normal business hours, upon at least two Business Days advance
notice (unless an Event of Default then exists) and at the expense of Borrowers,
make available to Agent any and all of Pledgor’s books, records, written
memoranda, correspondence, and other instruments or writings that evidence or
relate to the Pledged Collateral;

 

 

 

          notify Agent promptly in writing of any information which Pledgor has
received which could be expected, in Agent’s discretion exercised in good faith,
to materially and adversely affect the value of the Pledged Collateral or the
rights of Agent with respect thereto;

 

 

 

          not change its state of incorporation or form of organization without
the prior consent of Agent other than as expressly permitted by Section 8.3 of
the Credit Agreement; and

 

 

 

          pay all costs of filing any financing, continuation or termination
statements with respect to the Lien created hereby.

                    To protect, perfect, or enforce, from time to time, the
Secured Creditor’s rights or interests in the Pledged Collateral, Agent may, in
its discretion (but without any obligation to do so): (a) discharge any Liens at
any time levied or placed on the Pledged Collateral other than Permitted Liens
and (b) obtain in good faith any record from any service bureau and pay such
service bureau the cost thereof. All costs and expenses incurred by Agent in
exercising its discretion under this subparagraph (ii) will be part of the
Obligations secured by the Pledged Collateral.

                    Pledgor will cause each Issuer to register the pledge of the
Pledged Interests in favor of Agent, as registered pledgee, on the books and
records of such Issuer.

                    Pledgor will cause each Issuer not to issue any shares,
certificates or other Pledged Interests in addition to, or in exchange or
substitution for, the Pledged Interests to the extent such additional issuance,
exchange or substitution would result in an Event of Default, unless such
issuance, exchange or substitution is with the prior consent of Agent. Pledgor
will not opt in to Article 8 of the UCC to treat any of the Pledged Interests
(with respect to any Issuer that is a limited liability company) as securities
under Article 8 of the UCC.

                    Pledgor will, at its expense and from time to time, promptly
execute and deliver all further instruments, documents and agreements, and take
all further action that may be necessary or desirable, or that Agent may
request, in its discretion exercised in good faith, in order to (a) continue,
perfect and protect the Lien granted or purported to be granted hereby or (b)
enable the Secured Creditors to exercise and enforce their rights and remedies
hereunder with respect to any of the Pledged Collateral, or both. Without
prejudice to the generality of the foregoing, each such instrument or document
shall be in such form as Agent shall request, in its discretion exercised in
good faith, and may contain provisions such as are herein contained or
provisions to the like effect or such other provisions of whatsoever kind as
Agent, in its discretion exercised in good faith, shall consider requisite for
the improvement (on and subject to the terms hereof), perfection or enforcement
of the security constituted by, or pursuant to, this Agreement. If Agent has the
right to exercise its right to sell all or any of the Pledged Collateral
pursuant to Section 9, Pledgor will, upon the request of Agent, at Pledgor’s
expense, do or cause to be done all such acts and things as may be reasonably
necessary or desirable, or that Agent, in its discretion exercised in good
faith, may request, to make any sale of the Pledged Collateral or any part
thereof valid and binding and in compliance with applicable law.

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5. VOTING RIGHTS; DIVIDENDS.

          5.1 No Event of Default. So long as no Event of Default shall have
occurred and be continuing:

                     (i) Pledgor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Pledged Collateral or any
part thereof for any purpose not inconsistent with the terms of this Agreement,
the Credit Agreement or the other Loan Documents; provided, however, that
Pledgor shall not exercise (or refrain from exercising) any such right if such
action would result in an Event of Default.

                     (ii) Pledgor shall be entitled, subject to the terms of the
Credit Agreement, to receive and retain any and all dividends, distributions and
interest paid in respect of the Pledged Collateral; provided, however, that (a)
Pledgor acknowledges that there are no permitted distributions from any Issuer
under the Credit Agreement other than as expressly provided in Section 8.4 of
the Credit Agreement and (b) other than as expressly permitted to be made under
Section 8.4 of the Credit Agreement, any and all:

 

 

 

          (1) dividends, distributions and interest paid or payable other than
in cash in respect of, and instruments, rights and other Property received,
receivable or otherwise distributed in respect of, or in exchange for, any
Pledged Collateral; and

 

 

 

          (2) cash paid, payable or otherwise distributed in respect of
principal of, or in redemption of, or in exchange for, any Pledged Collateral

shall be delivered to Agent, or such nominee(s) of Agent as Agent shall direct,
to hold as Pledged Collateral and shall, if received by Pledgor, be received in
trust for the benefit of Agent, be segregated from the other Property or funds
of Pledgor, and be forthwith delivered to Agent, or such nominee(s) of Agent as
Agent shall direct, as Pledged Collateral in the same form as so received (with
any necessary indorsement(s)). Pledgor shall, upon request by Agent, in its
discretion exercised in good faith, promptly execute such instruments, documents
and agreements and do such acts as may be necessary or advisable to give effect
to the provisions of this Section 5.1(ii).

          5.2 Event of Default. Upon the occurrence and during the continuance
of an Event of Default beyond any applicable grace period (and which has not
been waived in writing by, or cured to the written satisfaction of, Agent in
accordance with the Credit Agreement):

                     (i) All rights of Pledgor to exercise the voting and other
consensual rights which it would otherwise be entitled to exercise pursuant to
Section 5.1(i) and to receive the dividends, distributions and interest payments
which it would otherwise be authorized to receive and retain pursuant to Section
5.1(ii) shall cease, at Agent’s election, and all such rights shall thereupon
become vested in Agent, or such nominee(s) of Agent as Agent shall direct during
such time, who shall thereupon have the sole right to exercise such voting and
other consensual rights and to receive and hold as Pledged Collateral such
dividends, distributions and interest payments; and

                     (ii) All dividends, distributions and interest payments
which are received by Pledgor contrary to the provisions of Section 5.2(i) shall
be received in trust for the benefit of Agent, shall be segregated from other
funds of Pledgor, and shall be forthwith paid over to Agent, or such nominee(s)
of Agent as Agent shall direct as Pledged Collateral in the same form as so
received (with any necessary indorsement(s)).

6. TRANSFERS AND OTHER LIENS. Until the termination of this Agreement in
accordance with Section 12, Pledgor will not, unless otherwise expressly
permitted by the Credit Agreement: (i) sell, transfer, or otherwise dispose of,
or grant any option or warrants, or rights to purchase with respect to, or
permit any Person to be registered as holder of, any of the Pledged Collateral;
(ii) create or permit to exist any Lien, charge or other encumbrance upon or
with respect to any of the Pledged Collateral, except for any Permitted Liens;
or (iii) do or cause to permit to be done anything which may in any way
depreciate, jeopardize or otherwise prejudice the value to Agent of the Pledged
Collateral.

7. POWER OF ATTORNEY. Until the termination of this Agreement in accordance with
Section 12, Pledgor irrevocably appoints the following, namely:

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                     (i) Agent; and

                     (ii) each and every Person to whom Agent shall from time to
time have delegated the exercise of the power of attorney conferred by this
Section 7;

jointly and severally to be its attorney or attorneys and in its name and
otherwise on its behalf, at all times upon the occurrence and during the
continuance of an Event of Default beyond any applicable grace period (and which
has not been waived in writing by, or cured to the written satisfaction of,
Agent in accordance with the Credit Agreement), to do all acts and things and to
sign, seal, execute, deliver, perfect and do all deeds, instruments, documents,
acts and things which may be required (or which Agent shall consider requisite)
for carrying out any obligation imposed on Pledgor by or pursuant to this
Agreement (including the obligations of Pledgor under Section 4), for carrying
any sale or other dealing by Agent into effect and generally for enabling Agent
to exercise the powers conferred on it by or pursuant to this Agreement or by
law. Agent shall have full power to delegate the power conferred on it by this
Section 7, but no such delegation shall preclude the subsequent exercise of such
power by Agent itself or preclude Agent from making a subsequent delegation
thereof to some other Person; any such delegation may be revoked by Agent at any
time.

8. AGENT’S DUTIES. The powers conferred on Agent hereunder are solely to protect
its interest in the Pledged Collateral and shall not impose any duty upon Agent
to exercise any such powers. Agent shall be deemed to have exercised reasonable
care in the custody and preservation of the Pledged Collateral in its possession
if the Pledged Collateral is accorded treatment substantially equal to that
which Agent accords its own Property, it being understood that Agent shall not
have responsibility for (i) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Pledged Collateral, whether Agent has or is deemed to have knowledge of such
matters, or (ii) taking any necessary steps to preserve rights against any
parties with respect to any Pledged Collateral.

9. REMEDIES UPON AN EVENT OF DEFAULT.

          9.1 Transfers by Agent. Upon the occurrence and during the continuance
of an Event of Default beyond any applicable grace period (and which has not
been waived in writing by, or cured to the written satisfaction of, Agent in
accordance with the Credit Agreement):

                     (i) At any time, Agent, at its option and without any
obligation to do so, may transfer to or register in its name, or the name of any
nominee(s) all or any part of the Pledged Collateral, and Agent may exercise in
respect of the Pledged Collateral, in addition to other rights and remedies
provided for herein or otherwise available to it, all the rights and remedies
under applicable law and of a secured party on default under the UCC; and Agent
may also, without notice except as specified below, sell the Pledged Collateral
or any part thereof in one or more parcels at public or private sale, at any
exchange, broker’s board or any of Agent’s offices or elsewhere, for cash, on
credit or for future delivery, and upon such other terms as Agent may deem
commercially reasonable. Agent shall be authorized at any such sale (if it deems
it advisable to do so) to restrict the prospective bidders or purchasers to
Persons who will represent and agree that they are purchasing the Pledged
Interests for their own account in compliance with Regulation D of the
Securities Act of 1933 or under applicable law or under any other applicable
exemption available under applicable law. Pledgor agrees that, to the extent
notice of sale shall be required by law, at least 10 days’ notice to Pledgor of
the time and place of any public sale or the time after which any private sale
is to be made shall constitute reasonable notification. Agent shall not be
obligated to make any sale of the Pledged Collateral regardless of notice of
sale having been given. Agent may adjourn any public or private sale from time
to time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place it was so adjourned; and

                     (ii) Any cash held by Agent as Pledged Collateral and all
cash proceeds received by Agent in respect of any sale of, collection from, or
other realization upon all or any part of the Pledged Collateral shall be
applied as received by Agent in the manner provided in the Credit Agreement. Any
surplus of such cash or cash proceeds held by Agent and remaining after payment
in full of all of the Obligations shall be paid over to Pledgor or to whomsoever
may be lawfully entitled to receive such surplus.

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          9.2 Commercially Reasonable Disposition. Without precluding any other
methods of sale, the sale of the Pledged Collateral, or any part thereof, shall
have been made in a commercially reasonable manner if conducted in conformity
with reasonable commercial practices of Agent or finance companies disposing of
similar Property.

          9.3 Securities Laws. Pledgor recognizes that federal and/or state
securities and other laws may limit the flexibility desired to achieve an
otherwise commercially reasonable disposition of the Pledged Collateral, and in
the event of potential conflict between such laws or regulations and what in
other circumstances might constitute commercial reasonableness, it is intended
that consideration for such laws and regulations will prevail over attempts to
achieve such commercial reasonableness. In connection with any sale or other
disposition of the Pledged Collateral, compliance by Agent with the written
advice of its counsel concerning the potential effect of any such law or
regulation shall not be cause for Pledgor, or any other Person, to claim that
such sale or other disposition was not commercially reasonable, it being the
intent of Pledgor that Agent not be obligated to risk contravening any such law
or regulation in order to effect what, but for such law or regulation, would be
a commercially reasonable disposition.

          9.4 Examples of Commercially Reasonable Disposition. By way of example
and not by way of limitation, with respect to any sale or other disposition of
the Pledged Collateral or any portion thereof: (i) such sale or disposition
shall be deemed to have been at a public sale if, in connection with such sale
or disposition, Agent obtains bids from at least two qualified purchasers; and
(ii) the net book value reflected on Pledgor’s most recent financial statements,
adjusted to the date of any such sale or other disposition, is deemed to be a
commercially reasonable price (but a price less than such net book value is not,
of itself, deemed to be commercially unreasonable).

          9.5 Pledgor Waivers. To the extent permitted by applicable law, and
except as otherwise expressly provided under this Agreement or otherwise,
Pledgor hereby waives all rights now or hereafter conferred by statute or
otherwise which may require Agent to give any notice, make any demand, or invoke
any legal process with respect to the sale or other disposition of the Pledged
Collateral or which may require Agent to sell or otherwise dispose of the
Pledged Collateral in mitigation of the Secured Creditors’ damages or which may
otherwise limit or modify any of the Secured Creditors’ remedies or rights under
this Agreement.

          9.6 No Duty Upon Agent. Agent shall be under no duty to sell or
otherwise realize upon the Pledged Collateral. At any time, Agent may release or
surrender all or any part of the Pledged Collateral to Pledgor.

10. INDEMNIFICATION; EXPENSES.

          10.1 Indemnification. Without limiting the provisions of Section 12.5
of the Credit Agreement or any other provision for indemnification in any other
Loan Document, Pledgor absolutely, irrevocably and unconditionally hereby agrees
to indemnify and hold harmless each Secured Creditor against any and all claims,
demands, suits, actions, causes of action, damages, losses, settlement payments,
obligations, costs, expenses and all other liabilities whatsoever, INCLUDING,
WITHOUT LIMITATION, AS A RESULT OF ANY SECURED CREDITOR’S OWN NEGLIGENCE
(collectively, “Indemnified Liabilities”) which shall at any time or times be
incurred or sustained by any Secured Creditor or by any of their respective
shareholders, directors, officers, employees, Subsidiaries, Affiliates or agents
on account or in relation to, or in any way in connection with, any of the
arrangements or transactions contemplated by, associated with, arising out of,
or ancillary to this Agreement or any of the other Loan Documents to which
Pledgor is a party or the Pledged Collateral, whether or not all or any of the
transactions contemplated by, associated with or ancillary to this Agreement or
any of such Loan Documents are ultimately consummated, provided that Pledgor
will not be obligated to indemnify an indemnified party in accordance with this
Section 10.1 to the extent such Indemnified Liabilities resulted from a breach
by such indemnified party of its express obligations under this Agreement or the
gross negligence or willful misconduct of such indemnified party. NOTICE IS
HEREBY GIVEN THAT THIS AGREEMENT CONTAINS INDEMNIFICATION PROVISIONS IN THIS
SECTION 10.1 THAT APPLY TO, AND PLEDGOR HEREBY ACKNOWLEDGES AND AGREES THAT THE
FOREGOING INDEMNITY SHALL BE APPLICABLE TO, ANY INDEMNIFIED LIABILITIES (AS
DEFINED IN THIS SECTION 10.1) THAT HAVE RESULTED FROM OR ARE ALLEGED TO HAVE
RESULTED FROM THE ACTIVE OR PASSIVE OR THE SOLE, JOINT OR CONCURRENT ORDINARY
NEGLIGENCE OF ANY SECURED CREDITOR OR ANY OTHER INDEMNIFIED PARTY UNDER THIS
SECTION 10.1. The indemnification provided for in this Section 10.1 is in
addition to, and not in limitation of, any other indemnification or insurance
provided by Pledgor to any Secured Creditor.

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          10.2 Expenses. Without limiting the provisions of Section 12.5 of the
Credit Agreement or any other provision for the payment of expenses in any other
Loan Document, Pledgor will upon demand pay to Agent the amount of any and all
out-of-pocket expenses, including reasonable Attorneys’ Fees, which the Secured
Creditors may incur in connection with any and all of the following (i) the
administration of this Agreement; (ii) the custody or preservation of, or the
sale of, collection from or other realization upon any of the Pledged
Collateral; (iii) the exercise or enforcement of any of the rights of the
Secured Creditors; or (iv) the failure by Pledgor to perform or observe any of
the provisions of this Agreement, all of which constitute part of the
Obligations and are secured by the Pledged Collateral.

11. NOTICE. Any notice, certificate, request, notification and other
communication required, permitted or contemplated hereunder must be in writing
and given in accordance with the Credit Agreement.

12. TERM. Subject to Section 13.6, this Agreement will terminate on the later to
occur of: (i) the full performance, payment and satisfaction of the Obligations
(and all Letter of Credit Obligations are expired or terminated, but exclusive
of any contingent obligations for indemnification for which Agent has not then
given notice of a claim thereof against Pledgor or any Borrower) and (ii) the
termination of all Commitments of each Lender under the Credit Agreement. Upon
such termination, Agent shall, at Pledgor and Issuers’ expense, promptly execute
and deliver to Pledgor and Issuers proper documentation to release the Liens on
the Pledged Collateral or similar instrument of re-conveyance prepared by Agent,
and Agent shall duly deliver to Pledgor and Issuers such Pledged Collateral as
has been released and is in the possession of Agent.

13. GENERAL.

          13.1 Severability. If any term of this Agreement is found invalid
under Ohio law or laws of mandatory application by a court of competent
jurisdiction, the invalid term will be considered excluded from this Agreement
and will not invalidate the remaining terms of this Agreement.

          13.2 GOVERNING LAW. THIS AGREEMENT HAS BEEN DELIVERED AND ACCEPTED AT
AND SHALL BE DEEMED TO HAVE BEEN MADE AT CINCINNATI, OHIO. THIS AGREEMENT SHALL
BE DEEMED TO BE A CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE
STATE OF OHIO (WITHOUT REGARD TO OHIO CONFLICTS OF LAW PRINCIPLES) EXCEPT TO THE
EXTENT OF THE APPLICATION OF OTHER LAWS OF MANDATORY APPLICATION.

          13.3 WAIVER OF JURISDICTION. AS A SPECIFICALLY BARGAINED INDUCEMENT
FOR THE SECURED CREDITORS TO EXTEND CREDIT TO BORROWERS, PLEDGOR AND THE SECURED
CREDITORS AGREE THAT ANY ACTION, SUIT OR PROCEEDING IN RESPECT OF OR ARISING OUT
OF THIS AGREEMENT, ITS VALIDITY OR PERFORMANCE, AND WITHOUT LIMITATION ON THE
ABILITY OF THE SECURED CREDITORS AND THEIR SUCCESSORS AND ASSIGNS TO EXERCISE
ALL RIGHTS AS TO THE PLEDGED COLLATERAL AND INITIATE AND PROSECUTE IN ANY
APPLICABLE JURISDICTION ACTIONS RELATED TO REPAYMENT OF THE OBLIGATIONS, SHALL
BE INITIATED AND PROSECUTED AS TO ALL PARTIES AND THEIR SUCCESSORS AND ASSIGNS
AT CINCINNATI, OHIO. EACH SECURED CREDITOR AND PLEDGOR CONSENT TO AND SUBMIT TO
THE EXERCISE OF JURISDICTION OVER THEIR RESPECTIVE PERSONS BY ANY COURT SITUATED
AT CINCINNATI, OHIO HAVING JURISDICTION OVER THE SUBJECT MATTER, WAIVE PERSONAL
SERVICE OF ANY AND ALL PROCESS UPON IT, AND CONSENT THAT ALL SUCH SERVICE OF
PROCESS MAY BE MADE BY CERTIFIED MAIL DIRECTED TO PLEDGOR AND THE SECURED
CREDITORS AT THEIR RESPECTIVE ADDRESSES AS SET FORTH IN THE CREDIT AGREEMENT OR
AS OTHERWISE PROVIDED UNDER THE LAWS OF THE STATE OF OHIO. PLEDGOR WAIVES ANY
OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE OF ANY
ACTION INSTITUTED HEREUNDER, AND CONSENTS TO THE GRANTING OF SUCH LEGAL OR
EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT.

          13.4 Survival and Continuation of Representations and Warranties. All
of Pledgor’s representations and warranties contained in, or incorporated by
reference in, this Agreement shall be true and correct in all material respects
when made (or such other date as may be specifically stated in such
representation and warranty) and shall, for all purposes of this Agreement, be
deemed to be repeated on and as of the date that each representation and

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warranty set forth in the Credit Agreement is required to be, or is deemed to
be, remade pursuant thereto, subject to any changes to such representations and
warranties that (a) are not prohibited hereby or by the Credit Agreement, (b) do
not constitute an Event of Default or a default under this Agreement, or (c)
have been consented to by Agent in writing.

          13.5 Agent’s Additional Rights Regarding Collateral. All of the
Obligations shall constitute one obligation secured by all of the Pledged
Collateral. In addition to the Secured Creditors’ other rights and remedies
under the Loan Documents, Agent may, in its discretion exercised in good faith,
following the occurrence and during the continuance of any Event of Default
(which has not been waived): (i) exchange, enforce, waive or release any of the
Pledged Collateral or portion thereof, (ii) apply the proceeds of the Pledged
Collateral against the Obligations and direct the order or manner of the
liquidation thereof (including any sale or other disposition) in accordance with
the Credit Agreement and the other Loan Documents, and (iii) settle, compromise,
collect or otherwise liquidate any such security in any manner without affecting
or impairing its rights to take any other further action with respect to any
security or any part thereof.

          13.6 Application of Payments; Revival of Obligations. Agent shall have
the continuing right to apply or reverse and reapply any payments to any portion
of the Obligations. To the extent Pledgor makes a payment or payments to any
Secured Creditor or any Secured Creditor receives any payment or proceeds of the
Pledged Collateral or any other security for Pledgor’s benefit, which payment(s)
or proceeds or any part thereof are subsequently voided, invalidated, declared
to be fraudulent or preferential, set aside or required to be repaid to a
trustee, receiver or any other party under any bankruptcy act, state or federal
law, common law or equitable cause, then, to the extent of such payment(s) or
proceeds received, the Obligations or part thereof intended to be satisfied
shall be revived and shall continue in full force and effect, as if such
payment(s) or proceeds had not been received by the affected Secured Creditor.

          13.7 Additional Waivers by Pledgor. Pledgor waives presentment and
protest of any instrument and notice thereof, and, except as expressly provided
in the Loan Documents, demand, notice of default and all other notices to which
Pledgor might otherwise be entitled. Pledgor shall also assert no claim against
any Secured Creditor under any theory of liability for consequential, special,
indirect or punitive damages.

          13.8 Equitable Relief. Pledgor recognizes that, in the event Pledgor
fails to perform, observe or discharge any of its obligations or liabilities
under this Agreement, any remedy of law may prove to be inadequate relief to the
Secured Creditors; therefore, Pledgor agrees that the Secured Creditors, if the
Secured Creditors so request, shall be entitled to temporary and permanent
injunctive relief in any such case without the necessity of proving actual
damages.

          13.9 Cumulative Remedies. The remedies provided in this Agreement and
the other Loan Documents are cumulative and not exclusive of any remedies
provided by law. Exercise of one or more remedy(ies) by Agent does not require
that all or any other remedy(ies) be exercised and does not preclude later
exercise of the same remedy.

          13.10 No Deemed Waiver. Failure by Agent to exercise any right, remedy
or option under this Agreement or in any Loan Documents or delay by Agent in
exercising the same shall not operate as a waiver by Agent of its right to
exercise any such right, remedy or option.

          13.11 Entire Agreement; Amendments; Counterparts; Fax Signatures. This
Agreement and the other Loan Documents set forth the entire agreement of the
parties with respect to subject matter of this Agreement and supersedes all
previous understandings, written or oral, in respect thereof. Any request from
time to time by Pledgor for the Secured Creditors’ amendment, modification or
waiver of any provision in this Agreement must be in writing. The terms of this
Agreement may be amended, waived or modified only by an instrument in writing
duly executed by Pledgor and Agent (with the consent of the Lenders as specified
in Section 12.4 of the Credit Agreement). The Secured Creditors will have no
obligation to provide any amendment, modification or waiver of or under this
Agreement requested by Pledgor, and the Secured Creditors may, for any reason in
their discretion exercised in good faith, elect to withhold consent to the
requested amendment, modification or waiver. Any such amendment, waiver or
modification shall be binding upon the Secured Creditors, each holder of
Obligations, and Pledgor. Two or more duplicate originals of this Agreement may
be signed by the parties, each of which shall be an original but all of which
together shall constitute one and the same instrument. Any documents delivered
by, or on

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behalf of, the parties by fax transmission or electronic delivery of an image
file reflecting the execution hereof, and, if so signed, (i) may be relied on by
the parties as if the document were a manually signed original and (ii) will be
binding on the parties for all purposes of this Agreement and any other Loan
Documents.

          13.12 Recourse to Directors or Officers. The obligations of the
Secured Creditors under this Agreement are solely the corporate obligations of
the Secured Creditors. No recourse shall be had for any obligation or claim
arising out of or based upon this Agreement against any stockholder, employee,
officer, or director of any of the Secured Creditors.

          13.13 Assignment. Agent shall have the right to assign this Agreement
and the other Loan Documents. Pledgor may not assign, transfer or otherwise
dispose of any of its rights or obligations hereunder, by operation of law or
otherwise, and any such assignment, transfer or other disposition without
Agent’s written consent (with the consent of the Lenders as specified in Section
12.4 of the Credit Agreement) shall be void. All of the rights, privileges,
remedies and options given to any Secured Creditor under this Agreement shall
inure to the benefit of the successors and assigns of the applicable Secured
Creditor, and all the terms, conditions, covenants, provisions and warranties
herein shall inure to the benefit of and bind the permitted successors and
assigns of Pledgor and each Secured Creditor, respectively.

          13.14 Headings. Section headings in this Agreement are included for
convenience of reference only and shall not relate to the interpretation or
construction of this Agreement.

          13.15 Conflict. If there is any conflict, ambiguity, or inconsistency,
in Agent’s judgment, between the terms of this Agreement and any of the other
Loan Documents, then the applicable terms and provisions, in Agent’s judgment,
providing the Secured Creditors with greater rights, remedies, powers,
privileges, or benefits will control. Without limiting the generality of the
foregoing, the description of the Pledged Collateral in this Agreement does not
in any way limit the description of, or Agent’s Lien on, the “Collateral” as
defined in the Borrower Security Agreement, or Agent’s remedies respecting such
“Collateral.”

          13.16 WAIVER OF JURY TRIAL. AS A SPECIFICALLY BARGAINED INDUCEMENT FOR
THE SECURED CREDITORS TO EXTEND CREDIT TO BORROWERS, EACH SECURED CREDITOR AND
PLEDGOR WAIVE TRIAL BY JURY WITH RESPECT TO ANY ACTION, CLAIM, SUIT OR
PROCEEDING IN RESPECT OF OR ARISING OUT OF THIS AGREEMENT OR THE CONDUCT OF THE
RELATIONSHIP BETWEEN THE SECURED CREDITORS AND PLEDGOR.

          13.17 Agent. (i) As between the Lenders, the LC Issuer and Agent, (a)
Agent will hold all items of the Pledged Collateral at any time received under
this Agreement in accordance with the terms of this Agreement and the Credit
Agreement and (b) by accepting the benefits of this Agreement, each Lender and
the LC Issuer acknowledges and agrees that (1) the obligations of Agent as
holder of the Pledged Collateral and any interests therein and with respect to
any disposition of any of the Pledged Collateral or any interests therein are
only those obligations expressly set forth in this Agreement and the Credit
Agreement and (2) this Agreement may be enforced only by the action of Agent and
that no other Secured Creditor shall have any right individually to seek to
enforce or to enforce this Agreement, it being understood and agreed that such
rights and remedies may be exercised by Agent, for the benefit of the Secured
Creditors, upon the terms of this Agreement and the Credit Agreement. (ii) As
between Pledgor and Agent, Agent shall be conclusively presumed to be acting as
agent for the Lenders and the LC Issuer with full and valid authority to so act
or refrain from acting.

          13.18 Continuing Rights. Until the termination of this Agreement in
accordance with Section 12, this Agreement creates a continuing Lien on the
Pledged Collateral and will (i) be binding on Pledgor, its successors and
assigns and (ii) inure, together with the rights and remedies of Agent under
this Agreement, to the benefit of each Secured Creditor and each Secured
Creditor’s successors, transferees and assigns.

[Signature Page Follows]

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          IN WITNESS WHEREOF, Pledgor, intending to be legally bound, has caused
this Agreement to be duly executed and delivered by its officer thereunto duly
authorized as of the Effective Date.

 

 

 

 

 

 

INDUSTRIAL SERVICES OF AMERICA, INC.

 

 

 

 

 

 

By:

 

 

 

 

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Harry Kletter, Chief Executive Officer

 

 

 

 

Accepted at Cincinnati, Ohio,

 

 

as of the Effective Date.

 

 

 

 

 

FIFTH THIRD BANK, as Agent

 

 

 

 

 

By:

 

 

 

 

--------------------------------------------------------------------------------

 

 

 

Anne B. Kelly, Vice President

 

 

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Schedule I

 

 

 

ISSUER NAME:

CLASS/NUMBER

CERT. NO.

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

 

 

 

ISA Indiana, Inc.

1,000

1

 

 

 

ISA Indiana Real Estate, LLC

None

None

 

 

 

ISA Logistics LLC

None

None

 

 

 

ISA Real Estate, LLC

None

None

 

 

 

7021 Grade Lane LLC

None

None

 

 

 

7124 Grade Lane LLC

None

None

 

 

 

7200 Grade Lane LLC

None

None

 

 

 

Computerized Waste Systems, LLC

None

None

 

 

 

ISA Recycling LLC

None

None

 

 

 

Waste Equipment Sales & Service Co., LLC None

None

None

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CONSENT AND AGREEMENT TO PLEDGE AGREEMENT

          The undersigned, intending to be legally bound, have executed and
delivered this Consent and Agreement to Pledge Agreement (this “Consent”).
Without limiting any provision of any Loan Document, the undersigned
specifically: (i) consents to the execution, delivery, and performance of the
foregoing Pledge Agreement and (ii) agrees that if Agent exercises its rights to
cause a transfer of the Pledged Collateral to Agent or to cause a sale or other
disposition of the Pledged Collateral following the occurrence and during the
continuance of an Event of Default which has not been waived by the Secured
Creditors, the undersigned, in each case following the occurrence and during the
continuance of an Event of Default which has not been waived by the Secured
Creditors, (a) consents, without any further act or instrument, to such exercise
of such right or remedy by Agent and (b) will, as requested by Agent, take any
other and further action necessary or desirable in Agent’s discretion exercised
in good faith to effect any sale or other disposition of the Pledged Collateral
effected by Agent.

          Capitalized terms used but not defined herein will have the meanings
given to them in the Credit Agreement (as defined in the foregoing Pledge
Agreement). This Consent may be signed by facsimile signatures or other
electronic delivery of an image file reflecting the execution hereof, and if so
signed, (i) may be relied on by the parties as if the document were a manually
signed original and (ii) will be binding on the parties for all purposes.

 

 

 

 

 

 

ISA INDIANA, INC.

 

 

 

 

 

 

By:

 

 

 

 

--------------------------------------------------------------------------------

 

 

 

Harry Kletter, Chief Executive Officer

 

 

 

 

 

 

ISA Indiana Real Estate, LLC

 

 

ISA Logistics LLC

 

 

ISA Real Estate, LLC

 

 

7021 Grade Lane LLC

 

 

7124 Grade Lane LLC

 

 

7200 Grade Lane LLC

 

 

Computerized Waste Systems, LLC

 

 

ISA Recycling LLC

 

 

Waste Equipment Sales & Service Co., LLC

 

 

 

 

 

By:

Industrial Services of America, Inc., sole member

 

 

 

 

 

 

By:

 

 

 

 

--------------------------------------------------------------------------------

 

 

 

Harry Kletter, Chief Executive Officer

 

 

 

 

Accepted at Cincinnati, Ohio

 

 

as of the Effective Date.

 

 

 

 

 

FIFTH THIRD BANK, as Agent

 

 

 

 

 

 

By:

 

 

 

 

--------------------------------------------------------------------------------

 

 

 

Anne B. Kelly, Vice President

 

 

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