PLAN OF MERGER

         This Plan of Merger  dated  November  __,  1998 (the  "Plan")  was duly
adopted  and  approved  by  the  board  of  directors  and  recommended  to  the
shareholders  of each of the  constituent  corporations  identified in Article I
below,  pursuant to the corporate  laws of each such  constituent  corporation's
state of incorporation.

                                 RECITALS

         WHEREAS,  the respective boards of directors of each of the constituent
corporations identified in Article I below (the "Constituent Corporations") deem
it  advisable  and in the  best  interest  of  each  such  corporation  and  its
respective  shareholders for each Constituent  Corporation to be merged with and
into ISG Resources,  Inc., a Utah corporation ("ISG  Resources"),  in the manner
contemplated herein.

         WHEREAS,  the  respective  boards  of  directors  of  each  Constituent
Corporation  have adopted  resolutions  approving this Plan and have recommended
that this Plan and the merger  contemplated by this Plan be approved and adopted
by the shareholders of the respective Constituent Corporations.

                                     PLAN

         NOW,  THEREFORE,  in  consideration  of the premises and the agreements
contained herein, the Constituent Corporations agree as follows:

                                    ARTICLE I

         The  name  of  each  Constituent  Corporation  to the  merger  and  its
respective state of incorporation is set forth below:


 ========================================== ================================
     Name of Constituent Corporation            State of Incorporation
 ------------------------------------------ --------------------------------
 ISG Resources, Inc.                        Utah
 ------------------------------------------ --------------------------------
 JTM Industries, Inc.                       Texas
 ------------------------------------------ --------------------------------
 KBK Enterprises, Inc.                      Pennsylvania
 ------------------------------------------ --------------------------------
 Pozzolanic Resources, Inc.                 Washington
 ------------------------------------------ --------------------------------
 St. Helens Investments, Inc.               Washington
  ----------------------------------------- --------------------------------
 Pozzolanic Northwest, Inc.                 Washington
 ------------------------------------------ --------------------------------
 Pozzolanic Northwest Bulk Carriers, Inc.   Washington
 ------------------------------------------ --------------------------------
 Power Plant Aggregates of Iowa, Inc.       Iowa
 ------------------------------------------ --------------------------------
 Midwest Fly Ash & Materials, Inc.          Iowa
 ------------------------------------------ --------------------------------
 Livestock Waste Management, Inc.           Iowa
 ------------------------------------------ --------------------------------
 Michigan Ash Sales Company                 Michigan
 ------------------------------------------ --------------------------------
 U.S. Stabilization, Inc.                   Michigan
 ------------------------------------------ --------------------------------
 FLO FIL Co., Inc.                          Michigan
 ------------------------------------------ --------------------------------
 Fly Ash Products, Inc.                     Arkansas
 ========================================== ================================

                                   ARTICLE II

         The  designation  and  number of  outstanding  shares of each class and
series of stock for each  Constituent  Corporation is set forth in the following
table. Each class and series identified voted on the Plan separately as a class.

========================== ================================== ==================
                                                                Number of Shares
       Corporation              Designation of Shares             Outstanding

-------------------------- ---------------------------------- ------------------
ISG Resources, Inc.        Common Stock                                      100
-------------------------- ---------------------------------- ------------------
JTM Industries, Inc.       Common Stock                                      100
-------------------------- ---------------------------------- ------------------
KBK Enterprises, Inc.      Common Stock                                      450
-------------------------- ---------------------------------- ------------------
Pozzolanic Resources, Inc. Class A Common Stock                              200
                           Special Dividend Class C. Stock                 2,900
                           Special Dividend Class D Stock                  5,800
-------------------------- ---------------------------------- ------------------
St. Helens Investments,    Class A Voting Common Stock                       100
Inc.                       Class B Nonvoting Common Stock                  3,000
                           Special Dividend Class C Stock                775,000
-------------------------- ---------------------------------- ------------------
Pozzolanic Northwest, Inc. Voting Common Stock                               200
                           Nonvoting Common Stock                            300
                           Preferred Capital A Stock                       2,900
                           Preferred Capital B Stock                       5,800
-------------------------- ---------------------------------- ------------------
Pozzolanic Northwest Bulk  Class A Voting Common Stock                       500
Carriers, Inc.             Class B Regular Dividend Stock                 60,000
-------------------------- ---------------------------------- ------------------
Power Plant Aggregates of  Common Stock                                      230
Iowa, Inc.
-------------------------- ---------------------------------- ------------------
Midwest Fly Ash &          Common Stock                                      100
Materials, Inc.
-------------------------- ---------------------------------- ------------------
Livestock Waste            Common Stock                                        1
Management, Inc.
-------------------------- ---------------------------------- ------------------
Michigan Ash Sales Company Common Stock                                    1,000
-------------------------- ---------------------------------- ------------------
U.S. Stabilization, Inc.   Common Stock                                    1,000
-------------------------- ---------------------------------- ------------------
FLO FIL Co,. Inc.          Common Stock                                    1,000
-------------------------- ---------------------------------- ------------------
Fly Ash Products, Inc.     Common Stock                                      900
========================== ================================== ==================

                                   ARTICLE III

         The Constituent  Corporations shall be merged into a single corporation
by merging into and with ISG Resources,  the surviving corporation,  which shall
survive the merger,  pursuant to the  provisions  of the Utah  Revised  Business
Corporation  Act.  Upon such merger the  separate  corporate  existence  of each
Constituent  Corporation  other than ISG Resources shall cease and ISG Resources
shall  become the owner  without  transfer,  of all rights and  property  of the
Constituent  Corporations,  and ISG  Resources  shall become  subject to all the
debts and liabilities of the  Constituent  Corporations in the same manner as if
it had incurred them.

                                   ARTICLE IV

         The name of the surviving corporation shall be "ISG Resources, Inc." On
the effective date of the merger, which shall be January 1, 1999 (the "Effective
Date"),  the  Articles of  Incorporation  of ISG  Resources  as in effect on the
Effective  Date,  shall become the Articles of  Incorporation  of the  surviving
corporation.  On the Effective Date, the By-laws of ISG Resources,  as in effect
on the Effective Date, shall become the By-laws of the surviving corporation.

                                    ARTICLE V

         Each of the  Constituent  Corporations,  including ISG Resources,  is a
direct or indirect wholly owned subsidiary of Industrial Services Group, Inc., a
Delaware  corporation   ("Industrial   Services"),   and  the  merger  is  being
consummated  as a  part  of  a  reorganization  plan  for  Industrial  Services.
Industrial  Services  has waived any right to  receive  shares of the  surviving
corporation in  substitution  or exchange for shares of each of the  Constituent
Corporations owned directly or indirectly by Industrial  Services.  Accordingly,
the surviving  corporation  shall not issue its common stock in  substitution or
exchange  for any shares of common  stock of any  Constituent  Corporation.  The
shares of each Constituent  Corporation,  except for the shares of ISG Resources
that were owned by Industrial  Services prior to the merger,  shall be cancelled
on the Effective Date.

                                   ARTICLE VI

         This  Plan  shall  be  submitted  to the  shareholders  of  each of the
Constituent  Corporations  for their  approval  in the  manner  provided  by the
applicable  laws  of the  state  of  incorporation  for  each  such  Constituent
Corporation. After approval by the shareholders of each Constituent Corporation,
Articles  of  Merger,  together  with a copy of this  Plan,  shall  be  filed as
required by the  applicable  laws of the state of  incorporation  of each of the
Constituent Corporations.

                                   ARTICLE VII

         The  merger  may be  abandoned  at any time  (before or after this Plan
shall have been approved by the  shareholders of the  Constituent  Corporations)
prior  to the  Effective  Date  by any  Constituent  Corporation  in the  manner
determined by such corporation's board of directors.

                                  ARTICLE VIII

         The articles of  incorporation of the corporation that is the surviving
corporation  in the merger are  attached  to this Plan of Merger and made a part
hereof.

         IN WITNESS  WHEREOF,  the undersigned  corporations  have executed this
Agreement and Plan of Merger as of the date specified above.

ISG RESOURCES, INC.,                     KBK ENTERPRISES, INC.,
a Utah corporation                       a Pennsylvania corporation


By:                                      By:
   -------------------------------          -----------------------------
         R Steve Creamer                          R Steve Creamer
         Chief Executive Officer                  Chief Executive Officer


JTM INDUSTRIES, INC.,                    POZZOLANIC RESOURCES, INC.,
a Texas corporation                      a Washington corporation


By:                                      By:
   --------------------------------          -----------------------------
         R Steve Creamer                          R Steve Creamer
         Chief Executive Officer                  Chief Executive Officer


ST. HELENS INVESTMENTS, INC.,            MIDWEST FLYASH & MATERIALS,
a Washington corporation                 INC.,
                                         an Iowa corporation

By:
   ------------------------------        By:
         R Steve Creamer                    -----------------------------
         Chief Executive Officer                  R Steve Creamer
                                                  Chief Executive Officer

POZZOLANIC NORTHWEST, INC.,              LIVESTOCK WASTE MANAGEMENT,
a Washington corporation                 INC.,
                                         an Iowa corporation

By:
   -------------------------------       By:
         R Steve Creamer                    -----------------------------
         Chief Executive Officer                  R Steve Creamer
                                                  Chief Executive Officer

POZZOLANIC NORTHWEST BULK                MICHIGAN ASH SALES COMPANY
CARRIERS, INC.,                          a Michigan corporation
a Washington corporation

                                         By:
By:                                          ----------------------------
   -------------------------------------          R Steve Creamer
         R Steve Creamer                          Chief Executive Officer
         Chief Executive Officer


POZZOLANIC INT'L FISK, INC.,             U.S. STABILIZATION, INC.,
a Washington corporation                 a Michigan corporation


By:                                      By:
   ----------------------------------       -----------------------------
         R Steve Creamer                          R Steve Creamer
         Chief Executive Officer                  Chief Executive Officer


POWER PLANT AGGREGATES OF                FLO FIL CO., INC.,
IOWA, INC.,                              a Michigan corporation
an Iowa corporation

                                         By:
By:                                          -----------------------------
   ------------------------------------           R Steve Creamer
         R Steve Creamer                          Chief Executive Officer
         Chief Executive Officer

FLY ASH PRODUCTS, INC.,
an Arkansas corporation

By:
    ----------------------------
         R Steve Creamer
         Chief Executive Officer