content="text/html; charset=iso-8859-1">

PROMISSORY NOTE

Principal
        $2,000,000.00
        Loan Date
        05-09-1997
        Maturity
        06-30-1998
        Loan No.
        Call
        Collateral
        Account
        Officer
        490
        InitialsReferences in the shaded area are for Lender's
        use only and do not limit the applicability of this
        document to any particular loan or item.




|Borrower: | Industrial
        Services of America, Inc.
        (TIN: 69-0712746)
        7100 Grade Lane
        Louisville, KY 40232 | Lender: | Bank
        of Louisville
        500 West Broadway
        Louisville, KY 40202
|--------- | --------------------------------------------------------------------------------------------------------------------------- | ------- | ---------------------------------------------------------------------------------
|          |                                                                                                                            
|          |                                                                                                                            
|          |                                                                                                                            

|Principal
        Amount: | $3,000,000.00 | Initial
        Rate: | 8.500% | Date of
        Agreement: | November 30,
        2000
|------------------------- | ------------- | --------------------- | ------ | -------------------------- | -------------------------

PROMISE TO PAY. Industrial Services of
America, Inc. ("Borrower") promises to pay to Bank of
Louisville and Trust Company ("Lender"), or order, in
lawful money of the United States of America, the principal
amount of Two Million & 00/100 Dollars ($2,000,000.00) or so
much as may be outstanding, together with interest on the unpaid
outstanding principal balance of each advance. Interest shall be
calculated from the date of each advance until repayment of each
advance.

PAYMENT. Borrower will pay this loan in
one payment of all outstanding principal plus all accrued unpaid
interest on June 30, 1998. In addition, Borrower will pay regular
monthly payments of accrued unpaid interest beginning May 30,
1997, and all subsequent interest payments are due on the same
day of each month after that. Interest on this Note is computed
on a 365/360 simple interest basis; that is, by applying the
ratio of the annual interest rate over a year of 360 days,
multiplied by the outstanding principal balance, multiplied by
the actual number of days the principal balance is outstanding.
Borrower will pay Lender at Lender's address shown above or at
such other place as Lender may designate in writing. Unless
otherwise agreed or required by applicable law, payments will be
applied first to accrued unpaid interest, then to principal, and
any remaining amount to any unpaid collection costs and late
charges.

VARIABLE INTEREST RATE. The interest
rate on this Note is subject to change from time to time based on
changes in an Index which is the prime rate which shall be deemed
to mean, at any time the interest rate per annum most recently
designated by the lender as its "prime rate" (the
"Index"). The Index is not necessarily the lowest rate
charged by Lender on its loans and is set by Lender in its sold
discretion. If the Index becomes unavailable during the term of
this loan, Lender may designate a substitute Index after
notifying Borrower. Lender will tell Borrower the current Index
rate upon Borrower's request. Borrower understands that Lender
may make loans based on other rates as well. The interest rate
change will not occur more often than each day. The rate of
interest shall be adjusted from time to time on the same day on
which the "prime rate" is changed by lender. The Index
currently is 8.500% per annum. The interest rate to be applied to
the unpaid principal balance of this Note will be at a rate equal
to the Index, resulting in an initial rate of 8.500% per annum.
NOTICE: Under no circumstances will the interest rate on this
Note be more than the maximum rate allowed by applicable law.

PREPAYMENT FEE. Borrower agrees that all
loan fees and other prepaid finance charges are earned fully as
of the date of the loan and will not be subject to refund upon
early payment (whether voluntary or as a result of default),
except as otherwise required by law. Except for the foregoing,
Borrower may pay without penalty all or a portion of the amount
owed earlier than it is due. Early payments will not, unless
agreed to by lender in writing, relieve Borrower of Borrower's
obligation to continue to make payments of accrued unpaid
interest. Rather, they will reduce the principal balance due.

LATE CHARGE. If a payment is late,
Borrower will be charged 5.000% of the regularly scheduled
payment.

DEFAULT. Borrower will be in default if
any of the following happens: (a) Borrower fails to make any
payment when due. (b) Borrower breaks any promise Borrower has
made to Lender, or Borrower fails to comply with or to perform
when due any other term, obligation, covenant, or condition
contained in this Note or any agreement related to this Note, or
in any other agreement or loan Borrower has with Lender. (c)
Borrower defaults under any loan, extension of credit, security
agreement, purchase or sales agreement, or any other agreement,
in favor of any other creditor or person that may materially
affect any of Borrower's property or Borrower's ability to repay
this Note or perform Borrower's obligations under this Note or
any of the Related Documents. (d) Any representation or statement
made or furnished to Lender by Borrower or on Borrower's behalf
is false or misleading in any material respect either now or at
the time made or furnished. (e) Borrower becomes insolvent, a
receiver is appointed for any part of Borrower's property,
Borrower makes an assignment for the benefit of creditors, or any
proceeding is commenced either by Borrower or against Borrower
under any bankruptcy or insolvency laws. (f) Any creditor tries
to take any of Borrower's property on or in which lender has a
lien or security interest. This includes a garnishment of any of
Borrower's accounts with Lender. (g) Any guarantor dies or any of
the other events described in this default section occurs with
respect to any guarantor of this Note. (h) A material adverse
change occurs in Borrower's financial condition, or Lender
believes the prospect of payment or performance of the
Indebtedness is impaired.

LENDER'S RIGHTS. Upon default, Lender
may declare the entire unpaid principal balance on this Note and
all accrued unpaid interest immediately due, without notice, and
then Borrower will pay that amount. Upon default, including
failure to pay upon final maturity, Lender, at its option, may
also, if permitted under applicable law, increase the variable
interest rate on this Note to 6.000 percentage points over the
Index. The interest rate will not exceed the maximum rate
permitted by applicable law. Lender may hire or pay someone else
to help collect this Note if Borrower does not pay. Borrower also
will pay Lender that amount. This includes, subject to any limits
under applicable law, Lender's reasonable attorneys' fees and
Lender's legal expenses whether or not there is a lawsuit,
including reasonable attorneys' fees and legal expenses for
bankruptcy proceedings (including efforts to modify or vacate any
automatic stay or injunction), appeals, and any anticipated
post-judgment collection services. If not prohibited by
applicable law, Borrower also will pay any court costs, in
addition to all other sums provided by law. This Note has been
delivered to Lender and accepted by Lender in the Commonwealth of
Kentucky. If there is a lawsuit, Borrower agrees upon lender's
request to submit to the jurisdiction of the courts of Jefferson
County, the Commonwealth of Kentucky. Lender and Borrower hereby
waive the right to any jury trial in any action, proceeding, or
counterclaim brought by either Lender or Borrower against the
other. This Note shall be governed by and construed in accordance
with the laws of the Commonwealth of Kentucky.

DISHONORED ITEM FEE. Borrower will pay a
fee to Lender of $20.00 if Borrower makes a payment on Borrower's
loan and the check or preauthorized charge with which Borrower
pays is later dishonored.

RIGHT OF SETOFF. Borrower grants to
Lender a contractual possessory security interest in, and hereby
assigns, conveys, delivers, pledges, and transfers to Lender all
Borrower's right, title and interest in and to, Borrower's
accounts with Lender (whether checking, savings, or some other
account), including without limitation all accounts held jointly
with someone else and all accounts Borrower may open in the
future, excluding however all IRA and Keogh accounts, and all
trust accounts for which the grant of a security interest would
be prohibited by law. Borrower authorizes Lender, to the extent
permitted by applicable law, to charge or setoff all sums owing
on this Note against any and all such accounts.

COLLATERAL. This Note is secured by
Security Agreement and UCC-1 Financing Statement on all
Inventory, Chattel Paper, Accounts, Equipment, General
Intangibles, and Fixtures.

LINE OF CREDIT. This Note evidences a
revolving line of credit. Advances under this Note may be
requested orally by Borrower or by an authorized person. All oral
requests shall be confirmed in writing on the date of the
request. All communications, instructions, or directions by
telephone or otherwise to Lender are to be directed to Lender's
office shown above. Borrower agrees to be liable for all sums
either: (a) advanced in accordance with the instructions of an
authorized person or (b) credited to any of Borrowers
accounts with Lender. The unpaid principal balance owing on this
Note at any time may be evidenced by endorsements on this Note or
by lenders internal records, including daily computer
print-outs. Lender will have no obligation to advance funds under
this Note if: (a) Borrower or any guarantor is in default under
the terms of this Note or any agreement that Borrower or any
guarantor has with Lender, including any agreement made in
connection with the signing of this Note; (b) Borrower or any
guarantor ceases doing business or is insolvent; (c) any
guarantor seeks, claims or otherwise attempts to limit, modify or
revoke such guarantors guarantee of this Note or any other
loan with Lender; or (d) Borrower has applied funds provided
pursuant to this Note for purposes other than those authorized by
Lender.

GENERAL PROVISIONS. Lender may delay or
forgo enforcing any of its rights or remedies under this Note
without losing them. Borrower and any other person who signs,
guarantees or endorses this Note, to the extent allowed by law,
waive presentment, demand for payment, protest and notice of
dishonor. Upon any change in the terms of this Note, and unless
otherwise expressly stated in writing, no party who signs this
Note, whether as maker, guarantor, accommodation maker or
endorser, shall be released from liability. All such parties
agree that Lender may renew or extend (repeatedly and for any
length of time) this loan, or release any party or guarantor or
collateral; or impair, fail to realize upon or perfect
Lenders security interest in the collateral; and take any
other action deemed necessary by lender without the consent of or
notice to anyone. All such parties also agree that Lender may
modify this loan without the consent of or notice to anyone other
than the party with whom the modification is made.

PRIOR TO SIGNING THIS NOTE, BORROWER READ
AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE
VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO THE TERMS
OF THIS NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS
NOTE.

BORROWER:

Industrial Services of America, Inc.



By: /s/ Timothy W.
Myers      Timothy W. Myers,
President