**Exhibit 10.4**

 

**BB&T                                                                                    Branch Banking & Trust Co.**

                                                                                                                                                           

 

                                                                                                         **Funds Management Group**

                                                                                                         Mailcode:  011-16-17-10

                                                                                                         200 West Second Street

                                                                                                         Winston-Salem, NC  27101

 

 

October20, 2008

 

 

Industrial Servicesof America, Inc.

Attention: Mr. AlanSchroering

Fax: (502)515-1700    Phone: (502) 214-3710

From:   R. KevinRandal, Vice President

Branch Banking & Trust Company (BB&T)

200 West Second Street, 17th Floor

Winston-Salem, NC 27101

Telephone: (336) 733-2853

Fax #: (336) 733-2883

 

Re:Confirmation of USD 2,897,114.77 amortizing swap commencing October 15, 2008 

 

Dear Mr.Schroering:

 

Thepurpose of this letter agreement is to confirm the terms and conditions of theTransaction entered into between Branch Banking and Trust Company ("BB&T") andIndustrial Services of America, Inc. ("Counterparty") on the Trade Datespecified below (the "Swap Transaction"). This letter agreement constitutes a"Confirmation" under the ISDA Agreement defined below.

 

Thedefinitions and provisions contained in the 2006 ISDA Definitions as publishedby the International Swaps and Derivatives Association, Inc. ("ISDA") areincorporated into this Confirmation.  In the event of any inconsistency betweenthose definitions and provisions and this Confirmation, this Confirmation willgovern.

 

| 1.
This confirmation supplements, forms part of, and is			subject to, the ISDA Master Agreement dated as of December 22, 2006			(as amended and supplemented, the "Agreement"), between us.  All			provisions contained in the Agreement govern this Confirmation			except as expressly modified below. Pursuant to ISDA guidelines, the			mutual agreement of terms commenced the transaction being			confirmed.  This facsimile transmission serves as additional			evidence of a binding supplement to the Agreement.  We request that			you sign this Confirmation and return it to us by facsimile.
 
 
 
2.
The terms of the particular Swap Transaction to which			this Confirmation relates are as follows:
 
 
 
 
Notional Amount:
(i) USD 2,897,114.77 for the initial Calculation			Period, and thereafter (ii) the amounts as detailed in the Schedule			of Notional Amounts attached hereto.
 
 
 
 
Trade Date:
October 15, 2008
 
 
 
 
Effective Date:
October 15, 2008
 
 
 
 
Termination Date:
May 7, 2013, subject to adjustment in accordance with			the Modified Following Business Day Convention.
 
 
 
Fixed Amounts:
 
 
 
 
 
Fixed Rate Payer:
Counterparty
 
 
 
 
Fixed Rate Payer Payment Dates:
The 7th calendar day of each month during			the Term of this Transaction, commencing November 7, 2008 and ending			on the Termination Date, subject to adjustment in accordance with			the Modified Following Business Day Convention.
 
 
 
 
Fixed Rate:
5.65000 percent per annum
 
 
 
 
Fixed Rate Day Count Fraction
Actual / 360
 
 
 
Floating Amounts:
 
 
 
 
 
Floating Rate Payer:
BB&T
 
 
 
 
Floating Rate Payer Payment 			Dates:
The 7th calendar day of each month during			the Term of this Transaction, commencing November 7, 2008 and ending			on the Termination Date, subject to adjustment in accordance with			the Modified Following Business Day Convention.
 
 
 
 
Floating Rate for initial 			Calculation Period:
5.6275% including spread
 
 
 
 
Floating Rate Option:
USD-LIBOR-BBA to include spread			For purposes of this Confirmation, the definitions of (i) 'USD-LIBOR-BBA'			and (ii) 'USD-LIBOR Reference Banks' in Section 7.1 (ab)(xxii) and			Section 7.1 (ab)(xxv), respectively, of the Definitions are hereby			amended by deleting all references in such definitions to 'two			London Banking Days' and inserting '0 London Business Days' in lieu			thereof.
 
 
 
 
Designated Maturity:
Monthly
 
 
 
 
Spread:
162.5 basis points
 
 
 
 
Floating Rate Day Count 			Fraction:
Actual / 360
 
 
 
 
Business Days:
New York, London
 
 
 
 
Business Day Convention:
Modified Following
 
 
 
 
Reset Dates:
The 1st calendar day of each month,			subject to adjustment in accordance with the Preceding Business Day			Convention.
 
 
 
 
Compounding:
Inapplicable
 
 
 
 
Calculation Agent:
BB&T, unless otherwise specified in Agreement
 
 
 
3.
Account Details:
 
 
 
 
 
Payments to BB&T:
Fed Funds to BB&T-ABA NO. 053101121			Acct. No. 9116001188867			Attn: Funds Management Derivative Operations
 
 
 
 
Payments to Counterparty:
Please provide to expedite payment			                                                                                             						                                                                                             						                                                                                             			
 
 
 
4.
Offices:
 
 
 
 
 
Office of BB&T:
Winston-Salem, NC
 
 
 
 
Office of Counterparty:
Louisville, KY
 
 
 
 
Non-Reliance:
Each party represents to the other party that it is			acting for its own account, and has made its own independent			decisions to enter into this Transaction and as to whether this			Transaction is appropriate or proper for it based on its own			judgment and upon advice from such advisors as it has deemed			necessary.  It is not relying on any communication (written or oral)			of the other party as investment advice or as a recommendation to			enter into this Transaction, it being understood that information			and explanations related to the terms and conditions of this			Transaction shall not be considered investment advice or a			recommendation to enter into this Transaction.  No communication			(written or oral) received from the other party shall be deemed to			be an assurance or guarantee as to the expected results of this			Transaction.
 

 

 

 

 

 

 

Pleaseconfirm your agreement to be bound by the terms stated herein by executing thecopy of this Confirmation enclosed for that purpose and returning it to uswithin 5 business days, signed by a vice president or above who is authorizedto sign financial instrument contracts on behalf of the Counterparty to:

BB&T Funds Management Attn: R. Kevin Randal Fax#: (336) 733-2883

 

ThisConfirmation shall be conclusively deemed accurate and complete by Counterpartyif not executed and returned to us within the timeframe established above.

 

			 
Yours sincerely,
			 
Branch Banking & Trust Company
			 
			 
			 
By:
/s/ R. Kevin Randall
			 
			 
			 
			 
Name:
R. Kevin Randall
			 
			 
			 
			 
Title:
Vice President
			 
			 
			 
Confirm as of the			Date first above written; 			Industrial Services of America, Inc.
			 
			 
			 
			 
			 
By:
/s/ Harry Kletter
			 
By:
			 
			 
			 
			 
			 
			 
Name:
Harry Kletter
			 
Name
			 
			 
			 
			 
			 
			 
Title:
CEO
			 
Title:
			 
 

Trade ID: 16582NC

Confirmation of USD 2,897,114.77 amortizing swap commencingOctober 15, 2008Termination Date May 7, 2013
 
 

 

**Industrial Services of America, Inc.**

** **

Schedule of Notional Amounts(In accordance with the Modified Following Business Day Convention)

 

**From and 			Including**
**To but 			Excluding**
**Notional 			Amount**
Effective Date
11/7/2008
2,897,114.77
11/7/2008
12/7/2008
2,877,441.23
12/7/2008
1/7/2009
2,857,767.69
1/7/2009
2/7/2009
2,838,094.15
2/7/2009
3/7/2009
2,818,420.61
3/7/2009
4/7/2009
2,798,747.07
4/7/2009
5/7/2009
2,779,073.53
5/7/2009
6/7/2009
2,759,399.99
6/7/2009
7/7/2009
2,739,726.45
7/7/2009
8/7/2009
2,720,052.91
8/7/2009
9/7/2009
2,700,379.37
9/7/2009
10/7/2009
2,680,705.83
10/7/2009
11/7/2009
2,661,032.29
11/7/2009
12/7/2009
2,640,197.22
12/7/2009
1/7/2010
2,619,362.15
1/7/2010
2/7/2010
2,598,527.08
2/7/2010
3/7/2010
2,577,692.01
3/7/2010
4/7/2010
2,556,856.94
4/7/2010
5/7/2010
2,536,021.87
5/7/2010
6/7/2010
2,515,186.80
6/7/2010
7/7/2010
2,494,351.73
7/7/2010
8/7/2010
2,473, 516.66
8/7/2010
9/7/2010
2,452,681.59
9/7/2010
10/7/2010
2,431,846.52
10/7/2010
11/7/2010
2,411,011.45
11/7/2010
12/7/2010
2,388,946.28
12/7/2010
1/7/2011
2,366,881.11
1/7/2011
2/7/2011
2,344,815.94
2/7/2011
3/7/2011
2,322,750.77
3/7/2011
4/7/2011
2,300,685.60
4/7/2011
5/7/2011
2,278,620.43
5/7/2011
6/7/2011
2,256,555.26
6/7/2011
7/7/2011
2,234,490.09
7/7/2011
8/7/2011
2,212,424.92
8/7/2011
9/7/2011
2,190,359.75
9/7/2011
10/7/2011
2,168,294.58
10/7/2011
11/7/2011
2,146,229.41
11/7/2011
12/7/2011
2,122,861.52
12/7/2011
1/7/2012
2,099,493.63
1/7/2012
2/7/2012
2,076,125.74
2/7/2012
3/7/2012
2,052,757.85
3/7/2012
4/7/2012
2,029,389.96
4/7/2012
5/7/2012
2,006,022.07
5/7/2012
6/7/2012
1,982,654.18
6/7/2012
7/7/2012
1,959,286.29
7/7/2012
8/7/2012
1,935,918.40
8/7/2012
9/7/2012
1,912,550.51
9/7/2012
10/7/2012
1,889,182.62
10/7/2012
11/7/2012
1,865,814.73
11/7/2012
12/7/2012
1,841,067.20
12/7/2012
1/7/2013
1,816,319.67
1/7/2013
2/7/2013
1,791,572.14
2/7/2013
3/7/2013
1,766,824.61
3/7/2013
4/7/2013
1,742,077.08
4/7/2013
Termination Date
1,717,329.55
 

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