Exhibit 10.3
PLEDGE AND SECURITY AGREEMENT
This PLEDGE AND SECURITY AGREEMENT, dated as of February 29, 2016 (as amended,
restated, supplemented or otherwise modified from time to time, this
“Agreement”), is between Industrial Services of America, Inc., a Florida
corporation (the “Pledgor”), and MidCap Business Credit LLC, a Texas limited
liability company (the “Lender”).
W I T N E S S E T H:
WHEREAS, pursuant to that certain Loan and Security Agreement (All Assets) dated
as of the date hereof by and among Pledgor, the other Borrowers (as defined in
the Loan Agreement referred to below), ISA Logistics LLC, a Kentucky limited
liability company (“ISA Logistics”), ISA Indiana, Inc., an Indiana corporation
(“ISA Indiana”), ISA Real Estate, LLC, a Kentucky limited liability company
(“ISA Real Estate”), ISA Indiana Real Estate, LLC, a Kentucky limited liability
company (“ISA IN Real Estate”), 7021 Grade Lane LLC, a Kentucky limited
liability company (“7021 Grade Lane”), 7124 Grade Lane LLC, a Kentucky limited
liability company (“7124 Grade Lane”), and 7200 Grade Lane LLC, a Kentucky
limited liability company (“7200 Grade Lane”; and together with ISA Logistics,
ISA Indiana, ISA Real Estate, ISA IN Real Estate, 7021 Grade Lane, 7124 Grade
Lane and any additional Person that at any time after the date hereof becomes a
guarantor, jointly, severally and collectively, “Guarantors” and each a
“Guarantor”), and Lender (as from time to time amended, restated, supplemented
or otherwise modified, the “Loan Agreement”), Lender has agreed to extend
certain loans and other financial accommodations (collectively, the “Loan”) to
Borrowers;
WHEREAS, Pledgor is the record and beneficial owner of the shares of stock or
membership interests listed in Part A of Schedule I hereto and the owner of the
promissory notes and instruments listed in Part B of Schedule I hereto; and
WHEREAS, in order to induce the Lender to make the Loan, Pledgor has agreed to
pledge the Pledged Collateral (defined below) to the Lender in accordance
herewith.
NOW, THEREFORE, in consideration of the premises and the covenants hereinafter
contained and to induce the Lender to make the Loan, and intending to be legally
bound, it is agreed as follows:
1.Definitions. Capitalized terms used and not otherwise defined herein shall
have the meanings given thereto in the Loan Agreement, and the following shall
have (unless otherwise provided elsewhere in this Agreement) the following
respective meanings (such meanings being equally applicable to both the singular
and plural form of the terms defined):
“Pledged Collateral” has the meaning assigned to such term in Section 2 hereof.
“Pledged Entity” means an issuer of Pledged Shares or Pledged Indebtedness.
“Pledged Indebtedness” means the Indebtedness evidenced by promissory notes and
instruments listed on Part B of Schedule I hereto.
“Pledged Shares” means those shares or membership interests listed on Part A of
Schedule I hereto.

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“Secured Obligations” has the meaning assigned to such term in Section 3 hereof.
2.    Pledge. Pledgor hereby pledges to the Lender a first priority security
interest in all of the following (collectively, the “Pledged Collateral”):
(a)    the Pledged Shares and the certificates representing the Pledged Shares,
if any, and all dividends, distributions, cash, instruments and other property
or proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Pledged Shares; and
(b)    any additional shares of stock or membership interests of a Pledged
Entity from time to time acquired by Pledgor in any manner (which shares or
membership interests shall be deemed to be part of the Pledged Shares), and the
certificates representing such additional shares, if any, and all dividends,
distributions, cash, instruments and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of such stock; and
(c)    the Pledged Indebtedness and the promissory notes or instruments
evidencing the Pledged Indebtedness, and all interest, cash, instruments and
other property and assets from time to time received, receivable or otherwise
distributed in respect of the Pledged Indebtedness; and
(d)    all additional indebtedness arising after the date hereof and owing to
Pledgor and evidenced by promissory notes or other instruments, together with
such promissory notes and instruments, and all interest, cash, instruments and
other property and assets from time to time received, receivable or otherwise
distributed in respect of that Pledged Indebtedness.
3.    Security for Obligations. This Agreement secures, and the Pledged
Collateral is security for, the prompt payment and performance in full when due,
whether at stated maturity, by acceleration or otherwise, of all Obligations of
any kind under or in connection with the Loan Agreement and the other Loan
Documents and all obligations of Pledgor now or hereafter existing under this
Agreement or any other Loan Document to which the Pledgor is a party including,
without limitation, all fees, costs and expenses whether in connection with
collection actions hereunder or thereunder or otherwise (collectively, the
“Secured Obligations”).
4.    Delivery of Pledged Collateral. All certificates and all promissory notes
and instruments evidencing the Pledged Collateral shall be delivered to and held
by or on behalf of the Lender pursuant hereto. All Pledged Shares shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to the Lender and all promissory notes or
other instruments evidencing the Pledged Indebtedness shall be endorsed by
Pledgor.
5.    Representations and Warranties. Pledgor represents and warrants to the
Lender that:
(a)    Pledgor is, and at the time of delivery of the Pledged Shares to the
Lender will be, the sole holder of record and the sole beneficial owner of such
Pledged Collateral pledged by Pledgor free and clear of any lien thereon or
affecting the title thereto, except for any lien created by this Agreement;
Pledgor is and at the time of delivery of the Pledged Indebtedness to the Lender
will be, the sole owner of such Pledged Collateral free and clear of any lien
thereon or affecting title thereto, except for any lien created by this
Agreement;

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(b)    All of the Pledged Shares have been duly authorized, validly issued and
are fully paid and non‑assessable; the Pledged Indebtedness has been duly
authorized, authenticated or issued and delivered by, and is the legal, valid
and binding obligations of, the Pledged Entities, and no such Pledged Entity is
in default thereunder;
(c)    Pledgor has the right and requisite authority to pledge, assign,
transfer, deliver, deposit and set over the Pledged Collateral pledged by
Pledgor to the Lender as provided herein;
(d)    None of the Pledged Shares or Pledged Indebtedness has been issued or
transferred in violation of the securities registration, securities disclosure
or similar laws of any jurisdiction to which such issuance or transfer may be
subject;
(e)    No agreement governing any of the Pledged Shares provides that such
Pledged Shares are securities governed by Article 8 of the Uniform Commercial
Code as in effect in any relevant jurisdiction;
(f)    All of the Pledged Shares are presently owned by Pledgor, and are
presently represented by the certificates listed on Part A of Schedule I hereto.
As of the date hereof, there are no existing options, warrants, calls or
commitments of any character whatsoever relating to the Pledged Shares;
(g)    No consent, approval, authorization or other order or other action by,
and no notice to or filing with, any governmental authority or any other Person
is required (i) 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 (ii) for the exercise by the Lender of the voting and 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 in connection
with such disposition by laws affecting the offering and sale of securities
generally;
(h)    The pledge, assignment and delivery of the Pledged Collateral pursuant to
this Agreement will create a valid first priority lien on and a first priority
perfected security interest in favor of the Lender in the Pledged Collateral and
the proceeds thereof, securing the payment of the Secured Obligations, subject
to no other lien;
(i)    This Agreement has been duly authorized, executed and delivered by
Pledgor and constitutes a legal, valid and binding obligation of Pledgor
enforceable against Pledgor in accordance with its terms; and
(j)    Except as disclosed on Part B of Schedule I, none of the Pledged
Indebtedness is subordinated in right of payment to other Indebtedness or
subject to the terms of an indenture.
The representations and warranties set forth in this Section 5 shall survive the
execution and delivery of this Agreement.
6.    Covenants. Until such time as all of the Obligations have been paid in
full in accordance with the terms of the Loan Agreement, Pledgor covenants and
agrees that:
(a)    Without the prior written consent of the Lender, Pledgor will not sell,
assign, transfer, pledge, or otherwise encumber any of its rights in or to the
Pledged Collateral, or any unpaid dividends, interest or other distributions or
payments with respect to the Pledged

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Collateral or grant a lien in the Pledged Collateral, unless otherwise expressly
permitted by the Loan Documents;
(b)    Pledgor will, at its expense, promptly execute, acknowledge and deliver
all such instruments and take all such actions as the Lender from time to time
may request in order to ensure to the Lender the benefits of the liens in and to
the Pledged Collateral intended to be created by this Agreement, and will
cooperate with the Lender, at Pledgor’s expense, in obtaining all necessary
approvals and making all necessary filings under federal, state, local or
foreign law in connection with such liens or any sale or transfer of the Pledged
Collateral;
(c)    Pledgor has and will defend the title to the Pledged Collateral and the
liens of the Lender in the Pledged Collateral against the claim of any person or
entity and will maintain and preserve such liens;
(d)    Pledgor will, upon obtaining ownership of any additional stock,
membership interests or promissory notes or instruments of a Pledged Entity or
stock, membership interests, promissory notes or instruments otherwise required
to be pledged to the Lender pursuant to any of the Loan Documents, which stock,
membership interests, notes or instruments are not already Pledged Collateral,
promptly (and in any event within five (5) Business Days) deliver to the Lender
a Pledge Amendment, duly executed by Pledgor, in substantially the form of
Schedule II hereto (a “Pledge Amendment”) in respect of any such additional
stock, membership interests, notes or instruments, pursuant to which Pledgor
shall pledge to the Lender all of such additional stock, membership interests,
notes and instruments. Pledgor hereby authorizes the Lender to attach each
Pledge Amendment to this Agreement and agrees that all Pledged Shares and
Pledged Indebtedness listed on any Pledge Amendment delivered to the Lender
shall for all purposes hereunder be considered Pledged Collateral; and
(e)    Without obtaining Lender’s prior written consent, not take any action
which would or could result in any portion of the Pledged Shares being governed
by Article 8 of the Uniform Commercial Code as in effect in any relevant
jurisdiction.
7.    Pledgor’s Rights. As long as no Event of Default shall have occurred and
until written notice shall be given to Pledgor in accordance with Section 8(a)
hereof:
(a)    Pledgor shall have the right, from time to time, to vote and give
consents with respect to the Pledged Collateral, or any part thereof for all
purposes not inconsistent with the provisions of this Agreement, the Loan
Agreement or any other Loan Document; provided, however, that no vote shall be
cast, and no consent shall be given or action taken, which would have the effect
of impairing the position or interest of the Lender in respect of the Pledged
Collateral or which would authorize, effect or consent to (unless and to the
extent expressly permitted by the Loan Agreement):
(i)    the dissolution or liquidation, in whole or in part, of a Pledged Entity;
(ii)    the consolidation or merger of a Pledged Entity with any other person or
entity;
(iii)    the sale, disposition or encumbrance of all or substantially all of the
assets of a Pledged Entity, except for liens in favor of the Lender;

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(iv)    any change in the authorized number of shares, the stated capital or the
authorized share capital of a Pledged Entity or the issuance of any additional
shares of its stock or membership interests; or
(v)    the alteration of the voting rights with respect to the stock or
membership interests of a Pledged Entity; and
(b)    (i)    Pledgor shall be entitled, from time to time, to collect and
receive for its own use all cash dividends and interest paid in respect of the
Pledged Shares and Pledged Indebtedness to the extent not in violation of the
Loan Agreement other than any and all: (A) dividends and interest paid or
payable other than in cash in respect of any Pledged Collateral, and instruments
and other property received, receivable or otherwise distributed in respect of,
or in exchange for, any Pledged Collateral; (B) dividends and other
distributions paid or payable in cash in respect of any Pledged Shares in
connection with a partial or total liquidation or dissolution or in connection
with a reduction of capital, capital surplus or paid-in capital of a Pledged
Entity; and (C) cash paid, payable or otherwise distributed, in respect of
principal of, or in redemption of, or in exchange for, any Pledged Collateral;
provided, however, that until actually paid all rights to such distributions
shall remain subject to the lien created by this Agreement; and
(ii)    all dividends and interest (other than such cash dividends and interest
as are permitted to be paid to Pledgor in accordance with clause (i) above) and
all other distributions in respect of any of the Pledged Shares or Pledged
Indebtedness, whenever paid or made, shall be delivered to the Lender to hold as
Pledged Collateral and shall, if received by Pledgor, be received in trust for
the benefit of the Lender, be segregated from the other property or funds of
Pledgor, and be forthwith delivered to the Lender as Pledged Collateral in the
same form as so received (with any necessary endorsement).
8.    Defaults and Remedies.
(a)    Upon the occurrence of an Event of Default, Lender (personally or through
an agent) is hereby authorized and empowered to transfer and register in its
name or in the name of its nominee the whole or any part of the Pledged
Collateral, to exchange certificates or instruments representing or evidencing
Pledged Collateral for certificates or instruments of smaller or larger
denominations, to exercise the voting and all other rights as a holder with
respect thereto, to collect and receive all cash dividends, interest, principal
and other distributions made thereon, to sell in one or more sales after ten
(10) days’ notice of the time and place of any public sale or of the time at
which a private sale is to take place (which notice Pledgor agrees is
commercially reasonable) the whole or any part of the Pledged Collateral and to
otherwise act with respect to the Pledged Collateral as though the Lender was
the outright owner thereof. Pledgor shall remain liable for any deficiency if
the proceeds of any sale or other disposition of the Pledged Collateral are
insufficient to pay in full the Secured Obligations. Pledgor hereby irrevocably
constitutes and appoints the Lender as the proxy and attorney‑in‑fact of
Pledgor, with full power of substitution to do so, and which appointment shall
remain in effect until the Secured Obligations are paid in full; provided,
however, (i) the Lender shall not act as such attorney-in-fact or take any
actions under such power or attorney unless an Event of Default has occurred,
and (ii) the Lender shall not have any duty to exercise any such right or to
preserve the same and shall not be liable for any failure to do so or for any
delay in doing so. Any sale shall be made at a public or private sale at the
Lender’s place of business, or at any place to be named

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in the notice of sale, either for cash or upon credit or for future delivery at
such price as the Lender may deem fair, and the Lender may be the purchaser of
the whole or any part of the Pledged Collateral so sold and hold the same
thereafter in its own right free from any claim of Pledgor or any right of
redemption (any such right being hereby waived or released). Each sale shall be
made to the highest bidder, but the Lender reserves the right to reject any and
all bids at such sale which, in its discretion, it shall deem inadequate.
Demands of performance, except as otherwise herein specifically provided for,
notices of sale, advertisements and the presence of property at sale are hereby
waived and any sale hereunder may be conducted by an auctioneer or any officer
or agent of the Lender.
(b)    If, at the original time or times appointed for the sale of the whole or
any part of the Pledged Collateral, the highest bid, if there be but one sale,
shall be inadequate to discharge in full all the Secured Obligations, or if the
Pledged Collateral be offered for sale in lots, if at any of such sales, the
highest bid for the lot offered for sale would indicate to the Lender, in its
discretion, that the proceeds of the sales of the whole of the Pledged
Collateral would be unlikely to be sufficient to discharge all the Secured
Obligations, the Lender may, on one or more occasions and in its discretion,
postpone any of said sales by public announcement at the time of sale or the
time of previous postponement of sale, and no other notice of such postponement
or postponements of sale need be given, any other notice being hereby waived;
provided, however, that any sale or sales made after such postponement shall be
after ten (10) days’ notice to Pledgor.
(c)    Pledgor agrees to the maximum extent permitted by applicable law that
following the occurrence of an Event of Default it will not at any time plead,
claim or take the benefit of any appraisal, valuation, stay, extension,
moratorium or redemption law now or hereafter in force in order to prevent or
delay the enforcement of this Agreement, or the absolute sale of the whole or
any part of the Pledged Collateral or the possession thereof by any purchaser at
any sale hereunder, and Pledgor waives the benefit of all such laws to the
extent it lawfully may do so. Pledgor agrees that it will not interfere with any
right, power and remedy of the Lender provided for in this Agreement or now or
hereafter existing at law or in equity or by statute or otherwise, or the
exercise or beginning of the exercise by the Lender of any one or more of such
rights, powers or remedies. No failure or delay on the part of the Lender to
exercise any such right, power or remedy and no notice or demand which may be
given to or made upon Pledgor by the Lender with respect to any such remedies
shall operate as a waiver thereof, or limit or impair the Lender’s right to take
any action or to exercise any power or remedy hereunder, without notice or
demand, or prejudice its rights as against Pledgor in any respect.
(d)    Pledgor further agrees that a breach of any of the covenants contained in
this Section 8 will cause irreparable injury to the Lender, that the Lender
shall have no adequate remedy at law in respect of such breach and, as a
consequence, agrees that each and every covenant contained in this Section 8
shall be specifically enforceable against Pledgor, and Pledgor hereby waives and
agrees not to assert any defenses against an action for specific performance of
such covenants except for a defense that no Event of Default has occurred under
the Loan Agreement.
9.    Waiver. No delay on the Lender’s part in exercising any power of sale,
lien, option or other right hereunder, and no notice or demand which may be
given to or made upon Pledgor by the Lender with respect to any power of sale,
lien, option or other right hereunder, shall constitute a waiver thereof, or
limit or impair the Lender’s right to take any action or to exercise any power
of sale, lien,

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option, or any other right hereunder, without notice or demand, or prejudice the
Lender’s rights as against Pledgor in any respect.
10.    Assignment. The Lender may assign, indorse or transfer any instrument
evidencing all or any part of the Secured Obligations as provided in, and in
accordance with, the Loan Agreement, and the holder of such instrument shall be
entitled to the benefits of this Agreement.
11.    Termination. Upon payment in full of the Secured Obligations, the Lender
shall deliver to Pledgor the Pledged Collateral and all instruments of
assignment executed in connection therewith, free and clear of the liens hereof
and, except as otherwise provided herein, all of Pledgor’s obligations hereunder
shall at such time terminate.
12.    Lien Absolute. All rights of the Lender hereunder, and all obligations of
Pledgor hereunder, shall be absolute and unconditional irrespective of:
(a)    any lack of validity or enforceability of the Loan Agreement, any other
Loan Document or any other agreement or instrument governing or evidencing any
Secured Obligations;
(b)    any change in the time, manner or place of payment of, or in any other
term of, all or any part of the Secured Obligations, or any other amendment or
waiver of or any consent to any departure from the Loan Agreement, any other
Loan Document or any other agreement or instrument governing or evidencing any
Secured Obligations;
(c)    any exchange, release or non‑perfection of any other Collateral, or any
release or amendment or waiver of or consent to departure from any guaranty, for
all or any of the Secured Obligations;
(d)    the insolvency of Pledgor or any guarantor; or
(e)    any other circumstance which might otherwise constitute a defense
available to, or a discharge of, Pledgor.
13.    Release. Pledgor consents and agrees that the Lender may at any time, or
from time to time, in its discretion:
(a)    renew, extend or change the time of payment, and/or the manner, place or
terms of payment of all or any part of the Secured Obligations; and
(b)    exchange, release and/or surrender all or any of the Pledged Collateral,
or any part thereof, by whomsoever deposited, which is now or may hereafter be
held by or on behalf of the Lender in connection with all or any of the Secured
Obligations; all in such manner and upon such terms as the Lender may deem
proper, and without notice to or further assent from Pledgor, it being hereby
agreed that Pledgor shall be and remain bound upon this Agreement, irrespective
of the value or condition of any of the Collateral, and notwithstanding any such
change, exchange, settlement, compromise, surrender, release, renewal or
extension, and notwithstanding also that the Secured Obligations may, at any
time, exceed the aggregate principal amount thereof set forth in the Loan
Agreement, or any other agreement governing any Secured Obligations. Pledgor
hereby waives notice of acceptance of this Agreement, and also presentment,
demand, protest and notice of dishonor of any and all of the Secured
Obligations, and promptness in

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commencing suit against any party hereto or liable hereon, and in giving any
notice to or of making any claim or demand hereunder upon Pledgor. No act or
omission of any kind on the Lender’s part shall in any event affect or impair
this Agreement.
14.    Reinstatement. This Agreement shall remain in full force and effect and
continue to be effective should any petition be filed by or against Pledgor or
any Pledged Entity for liquidation or reorganization, should Pledgor or any
Pledged Entity become insolvent or make an assignment for the benefit of
creditors or should a receiver or trustee be appointed for all or any
significant part of Pledgor’s or a Pledged Entity’s assets, and shall continue
to be effective or be reinstated, as the case may be, if at any time payment and
performance of the Secured Obligations, or any part thereof, is, pursuant to
applicable law, rescinded or reduced in amount, or must otherwise be restored or
returned by any obligee of the Secured Obligations, whether as a “voidable
preference”, “fraudulent conveyance”, or otherwise, all as though such payment
or performance had not been made. In the event that any payment, or any part
thereof, is rescinded, reduced, restored or returned, the Secured Obligations
shall be reinstated and deemed reduced only by such amount paid and not so
rescinded, reduced, restored or returned.
15.    Miscellaneous.
(a)    The Lender may execute any of its duties hereunder by or through agents
or employees and shall be entitled to advice of counsel concerning all matters
pertaining to its duties hereunder.
(b)    Pledgor agrees to promptly reimburse the Lender for actual out‑of‑pocket
expenses, including, without limitation, reasonable counsel fees, incurred by
the Lender in connection with the administration and enforcement of this
Agreement.
(c)    Neither the Lender, nor any of its respective officers, directors,
employees, agents or counsel shall be liable for any action lawfully taken or
omitted to be taken by it or them hereunder or in connection herewith, except
for its or their own gross negligence or willful misconduct as finally
determined by a court of competent jurisdiction.
(d)    THIS AGREEMENT SHALL BE BINDING UPON PLEDGOR AND ITS SUCCESSORS AND
ASSIGNS (INCLUDING A DEBTOR-IN-POSSESSION ON BEHALF OF PLEDGOR), AND SHALL INURE
TO THE BENEFIT OF, AND BE ENFORCEABLE BY, THE LENDER AND ITS SUCCESSORS AND
ASSIGNS.
16.    Severability. If for any reason any provision or provisions hereof are
determined to be invalid and contrary to any existing or future law, such
invalidity shall not impair the operation of or effect those portions of this
Agreement which are valid.
17.    Notices. Except as otherwise provided herein, whenever it is provided
herein that any notice, demand, request, consent, approval, declaration or other
communication shall or may be given to or served upon any of the parties by any
other party, or whenever any of the parties desires to give or serve upon any
other a communication with respect to this Agreement, each such notice, demand,
request, consent, approval, declaration or other communication shall be in
writing and shall be delivered as set forth in the Loan Agreement, at the
address for Lender as set forth in the Loan Agreement and at the address for
Pledgor as set forth on the signature page in the Loan Agreement, or as
otherwise in writing by Lender or Pledgor, as the case may be.

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18.    Section Titles. The section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.
19.    Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be effective upon delivery and, thereafter, shall be deemed
to be an original, and all of which shall be taken as one and the same
instrument with the same effect as if each party hereto had signed on the same
signature page. Any signature page of this Agreement may be detached from any
counterpart of this Agreement without impairing the legal effect of any
signature thereto and may be attached to another part of this Agreement
identical in form hereto and having attached to it one or more additional
signature pages. This Agreement may be transmitted by facsimile machine or by
electronic mail in portable document format (“pdf”) and signatures appearing on
faxed instruments and/or electronic mail instruments shall be treated as
original signatures. Any party delivering an executed counterpart of this
Agreement by facsimile or other electronic method of transmission also shall
deliver an original executed counterpart of this Agreement, but the failure to
deliver an original executed counterpart shall not affect the validity,
enforceability or binding effect hereof.
20.    GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF CONNECTICUT APPLICABLE TO CONTRACTS MADE
AND TO BE PERFORMED THEREIN WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.
FURTHER, THE LAW OF THE STATE OF CONNECTICUT SHALL APPLY TO ALL DISPUTES OR
CONTROVERSIES ARISING OUT OF OR CONNECTED TO OR WITH THIS AGREEMENT WITHOUT
REGARD TO CONFLICT OF LAW PRINCIPLES.
21.    CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL. ANY LEGAL ACTION, SUIT OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT SHALL BE BROUGHT EXCLUSIVELY IN THE
COURTS OF THE STATE OF CONNECTICUT IN THE COUNTY OF HARTFORD OR IN THE UNITED
STATES DISTRICT COURT FOR THE DISTRICT OF CONNECTICUT AND PLEDGOR HEREBY ACCEPTS
FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFOREMENTIONED COURTS. PLEDGOR HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY
OBJECTION, INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE
OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, OR BASED ON UPON 28 U.S.C. §
1404, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING AND ADJUDICATION OF ANY
SUCH ACTION, SUIT OR PROCEEDING IN ANY OF THE AFOREMENTIONED COURTS AND
AMENDMENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY THE COURT. PLEDGOR HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN
ANY ACTION, PROCEEDING OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR UNDER ANY AMENDMENT, WAIVER, AMENDMENT,
INSTRUMENT, DOCUMENT OR OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE
DELIVERED IN CONNECTION HEREWITH OR THEREWITH, OR ARISING FROM ANY FINANCING
RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR THE OTHER TRANSACTION DOCUMENTS, AND AGREES THAT ANY SUCH ACTION,
PROCEEDING OR COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
[SIGNATURES APPEAR ON THE FOLLOWING PAGES.]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first written above.
INDUSTRIAL SERVICES OF AMERICA, INC.,
a Florida corporation

By:    /s/ Sean Garber                
Name:     Sean Garber                
Title:     President                

[SIGNATURES CONTINUED ON THE FOLLOWING PAGE.]

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MIDCAP BUSINESS CREDIT LLC,
    a Texas limited liability company

By:    /s/ Steven A. Samson
Name:    Steven A. Samson
Title:    President

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ACKNOWLEDGEMENT AND CONSENT

The undersigned hereby acknowledges receipt of a copy of the Pledge and Security
Agreement dated as of February 29, 2016 (as amended, restated, supplemented or
otherwise modified from time to time, the “Pledge Agreement”), made by
Industrial Services of America, Inc. (“Pledgor”), for the benefit of MidCap
Business Credit LLC (the “Lender”). The undersigned agrees for the benefit of
the Lender as follows:
 
1.
The undersigned will be bound by the terms of the Pledge Agreement and will
comply with such terms insofar as such terms are applicable to the undersigned.

2.
The undersigned will notify the Lender promptly in writing of the occurrence of
any of the events described in Section 6(d) of the Pledge Agreement.

[SIGNATURES APPEAR ON THE FOLLOWING PAGE

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ISA INDIANA INC.,
an Indiana corporation
By:    /s/ Sean Garber                
Name:    Sean Garber                    
Title:    President                    

ISA LOGISTICS LLC,
a Kentucky limited liability company
By:    /s/ Sean Garber                
Name:    Sean Garber                    
Title:    President                    
    
ISA REAL ESTATE, LLC,
a Kentucky limited liability company
By:    /s/ Sean Garber                
Name:    Sean Garber                    
Title:    President                    

ISA INDIANA REAL ESTATE, LLC,
a Kentucky limited liability company
By:    /s/ Sean Garber                
Name:    Sean Garber                    
Title:    President                    

7021 GRADE LANE LLC,
a Kentucky limited liability company
By:    /s/ Sean Garber                
Name:    Sean Garber                    
Title:    President                    

7124 GRADE LANE LLC,
a Kentucky limited liability company
By:    /s/ Sean Garber                
Name:    Sean Garber                    
Title:    President                    

7200 GRADE LANE LLC,
a Kentucky limited liability company
By:    /s/ Sean Garber                
Name:    Sean Garber                    
Title:    President                    

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SCHEDULE I
PART A
PLEDGED SHARES
Pledged Entity
Class of Stock or Membership Interests
Certificate Number(s)
Number of Shares
Percentage of Outstanding Shares
ISA Indiana, Inc.
Capital Stock
1
1000
100.00%
ISA Logistics LLC
Membership Interest
N/A
N/A
100.00%
ISA Real Estate, LLC
Membership Interest
N/A
N/A
100.00%
ISA Indiana Real Estate, LLC
Membership Interest
N/A
N/A
100.00%
7021 Grade Lane LLC
Membership Interest
N/A
N/A
100.00%
7124 Grade Lane LLC
Membership Interest
N/A
N/A
100.00%
7200 Grade Lane LLC
Membership Interest
N/A
N/A
100.00%

PART B
PLEDGED INDEBTEDNESS
Pledged Entity
Initial Principal Amount
Issue Date
Maturity Date
Interest Rate
N/A
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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SCHEDULE II
PLEDGE AND SECURITY AMENDMENT
This Pledge Agreement Amendment, dated __________ __, ____ is delivered pursuant
to Section 6(d) of the Pledge Agreement referred to below. All defined terms
herein shall have the meanings ascribed thereto or incorporated by reference in
the Pledge Agreement. Pledgor hereby certifies that the representations and
warranties in Section 5 of the Pledge Agreement are and continue to be true and
correct, both as to the promissory notes, instruments, shares and membership
interests pledged prior to this Pledge Amendment and as to the promissory notes,
instruments, shares and membership interests pledged pursuant to this Pledge
Amendment. Pledgor further agrees that this Pledge Amendment may be attached to
that certain Pledge and Security Agreement, dated as of February 29, 2016,
between the undersigned, as Pledgor, and MidCap Business Credit LLC, as the
Lender, (as it may be amended, restated, modified or supplemented and in effect
from time to time, the “Pledge Agreement”) and that the Pledged Shares and
Pledged Indebtedness listed on this Pledge Amendment shall be and become a part
of the Pledged Collateral referred to in said Pledge Agreement and shall secure
all Secured Obligations referred to in said Pledge Agreement and Pledgor hereby
grants a first priority security interest to Lender in such Pledged Shares and
Pledged Indebtedness.
PLEDGED SHARES
Pledged Entity
Class of Stock or Membership Interests
Certificate Number(s)
Number of Shares
Percentage of Outstanding Shares
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

Pledged Entity
Initial Principal Amount
Issue Date
Maturity Date
Interest Rate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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INDUSTRIAL SERVICES OF AMERICA, INC.
By:    _______________________________________    
Name:    _______________________________________
Title:    _______________________________________

[SIGNATURES CONTINUED ON FOLLOWING PAGE]

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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]
MIDCAP BUSINESS CREDIT LLC

By:    _______________________________________
Name:    _______________________________________
Title:    _______________________________________

 

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