Exhibit 10.2

FIRST AMENDMENT TO TERM NOTE

 

THIS FIRST AMENDMENT TO TERM NOTE (this "Amendment") is entered into as of March
1, 2019 (the "Effective Date"), by and between K&R, LLC, a Kentucky limited
liability company ("Lender"), and INDUSTRIAL SERVICES OF AMERICA, INC., a
Florida corporation ("Borrower").

RECITALS

A          On February 29, 2016, Borrower executed and delivered to Lender a
Term Note in the original principal amount of $620,328.00 (the "Note").
Capitalized terms used herein, but not otherwise defined, shall have the
meanings given to such terms in the Note.

B          Lender and Borrower desire to modify the terms of the Note pursuant
to the terms and conditions of this Amendment.

STATEMENT OF AGREEMENT

NOW, THEREFORE, in consideration of the mutual covenants and conditions herein
contained, the parties hereby agree as follows:

1.          Amendments to the Note. The Note is hereby amended as follows:

1.1      The legend set forth at the top of the Note is hereby amended and
restated in its entirety and replaced with the following:

ANYTHING HEREIN TO THE CONTRARY NOTWITHSTANDING, THE EXERCISE OF ANY RIGHT OR
REMEDY WITH RESPECT HERETO, THE PAYMENT OBLIGATIONS HEREUNDER AND CERTAIN OF THE
RIGHTS OF THE HOLDER HEREOF ARE SUBJECT TO THE PROVISIONS OF THE INTERCREDITOR
AND SUBORDINATION AGREEMENT DATED AS OF MARCH 1, 2019 (AS AMENDED, RESTATED,
SUPPLEMENTED, OR OTHERWISE MODIFIED FROM TIME TO TIME, THE "INTERCREDITOR
AGREEMENT"), BY AND AMONG BANK OF AMERICA, N.A., AS SENIOR LENDER, K&R, LLC AS
SUBORDINATED LENDER, AND INDUSTRIAL SERVICES OF AMERICA, INC. AND CERTAIN OF ITS
SUBSIDIARIES, AS DEBTORS. IN THE EVENT OF ANY CONFLICT BETWEEN THE TERMS OF THE
INTERCREDITOR AGREEMENT AND THIS TERM NOTE, THE TERMS OF THE INTERCREDITOR
AGREEMENT SHALL GOVERN AND CONTROL.

1.2      Section 1 of the Note is hereby amended and restated in its entirety
and replaced with the following:

1.     Rate of Interest.   The outstanding principal balance of this Note will
bear interest at a rate per annum of seven and 00/100 percent (7.00%). In no
event will the rate of interest hereunder exceed the highest rate permitted by
applicable law.

 1.3      Section 2 of the Note is hereby amended and restated in its entirety
and replaced with the following:

2.     Payments and Application of Payments.  Beginning on April 30, 2017, and
on the last day of each month thereafter until December 31, 2022 (the “Maturity
Date”), accrued interest will be due and payable monthly. On the Maturity Date,
the entire outstanding principal balance hereunder and all accrued and unpaid
interest will be due and payable. If Borrower shall sell the real property
located at 7110 Grade Lane, Louisville, Kentucky, prior to the Maturity Date,
the entire outstanding principal balance hereunder and all accrued and unpaid
interest will be due and payable as of the date of such sale.

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 1.4     The Note is hereby amended by the insertion of a new Section 5.10 in
its proper numerical order, such section to contain, in its entirety, the
following:

Borrower agrees that it will not permit a Change of Control (as defined below)
to occur during the term of this Note. In the event a Change of Control occurs,
Lender may, in its sole discretion, declare the outstanding principal balance
under this Note, together with all accrued interest thereon, to be immediately
due and payable in full, within five business days of written notice to
Borrower.

For purposes of this Note, "Change of Control" shall mean (a) any person or
entity acquires, directly or indirectly, 51% or more of the aggregate
outstanding equity interests in Borrower or (b) the sale or transfer of all or
substantially all assets of Borrower.

2.          Prepayment. On or before the Effective Date, and as a condition to
the effectiveness of this Amendment, Borrower shall make a prepayment of the
outstanding principal balance owing under the Note in the amount of $500,000.00.
Lender and Borrower hereby acknowledge and agree that, following the payment set
forth in this Section, the remaining principal amount outstanding under the Note
shall be $120,328.00 from and after the EffectiveDate.

3.          Miscellaneous.

 3.1            Section Headings. Section headings in this Amendment are for
convenience only and shall not be read as to define, limit or modify any of the
terms hereof.

 3.2            Entire Agreement. Except as amended by this Amendment, the Note
remains in full force and effect. The Note, as amended by this Amendment,
constitutes the entire agreement and understanding between the parties hereto
relating to the subject matter hereof and all prior agreements, proposals,
negotiations, understandings and correspondence between the parties in this
regard, whether written or oral, are merged herewith.

 3.3             Counterparts; Electronic Signatures. This Amendment may be
executed in multiple counterparts, and by the parties hereto on separate
counterparts, each of which shall be deemed to be an original, and all of which
together shall constitute but one agreement. Delivery of an executed counterpart
of a signature page to this Amendment by facsimile, portable document format or
other electronic means shall be effective as delivery of a manually executed
counterpart to this Amendment.

3.4               Allonge. A copy of this Amendment may be attached to the Note
as an allonge.

[Signature Page Follows]

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IN WITNESS WHEREOF, the parties have executed this Amendment as of the
Effective Date.

 

LENDER:

 

K&R, LLC,

a Kentucky limited liability company 

By: Kletter Holding, LLC,

a Delaware limited liability company, its Sole Member

By:  /s/ Orson Oliver                            

Orson Oliver, President

 

SIGNATURE  PAGE TO

FIRST AMENDMENT TO TERM NOTE

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BORROWER:

 

INDUSTRIAL SERVICES OF AMERICA, INC.

By:  /s/ Todd L. Phillips                        

Todd L. Phillips, Chief Executive Officer, President and Chief Financial
Officer 

 

Signature Page to First Amendment to Term Note (K&R, LLC)

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