**EXHIBIT	10.35**

**BB&T**

**LOAN	AGREEMENT**

This Loan Agreement (the "Agreement") is made this 22nd	day of December, 2006 by and between BRANCH BANKING AND TRUST COMPANY, a	North Carolina banking corporation, and BB&T BANKCARD CORPORATION, a Georgia	corporation (collectively, "Bank"), and:

Industrial Services of America, Inc., a Florida	corporation ("Borrower"), having its chief executive office at Louisville,	Kentucky.

The Borrower has applied to Bank for and the Bank has	agreed to make, subject to the terms of this Agreement, the following loan(s)	(hereinafter referred to, singularly or collectively, if more than one, as	"Loan"):

**Line of Credit** ("Line of Credit") in the maximum	principal amount not to exceed $10,000.000 at any one time outstanding for	the purpose of funding temporary fluctuations in inventory and accounts, as	well as factoring receivables from North American Stainless LP that are	generated by Venture Metals, LLC or pursuant to other factoring agreements	entered into by Borrower, which shall be evidenced by the Borrower's	Promissory Note dated on or after the date hereof which shall mature	November ___, 2009, when the entire unpaid principal balance then	outstanding plus accrued interest thereon shall be paid in full.  Prior to	maturity or the occurrence of any Event of Default hereunder and subject to	any Borrowing Base limitations, as applicable, the Borrower may borrow,	repay, and reborrow under the Line of Credit through maturity.  The Line of	Credit shall bear interest at the rate set forth in any such Note evidencing	all or any portion of the Line of Credit, the terms of which are	incorporated herein by reference.

**Other Credit Relationship** ("Other Credit	Relationship") in the principal amount not to exceed $2,500,000 pursuant to	the terms and conditions of the BB&T Bankcard Corporation Commercial Card	Plan Agreement for the purpose described in that agreement dated December 8,	2003, as the same has been amended from time to time, by and between	Borrower and BB&T Bankcard Corporation

Additional terms, conditions and covenants of this	Agreement are described in Schedule DD, or other schedule attached hereto,	the terms of which are incorporated herein by reference.  The promissory	notes evidencing the Line of Credit and/or the Other Credit Relationship are	referred to herein as the "Note(s)" and shall include all extensions,	renewals, modifications and substitutions thereof.  The Line of Credit	and/or the Other Credit Relationship shall be secured by the some or all of	the collateral described in the security documents described below.

**Section 1 Conditions Precedent**

The Bank shall not be obligated to make any	disbursement of Loan proceeds until all of the following conditions have	been satisfied by proper evidence, execution, and/or delivery to the Bank of	the following items in addition to this Agreement, all in form and substance	satisfactory to the Bank and the Bank's counsel in their sole discretion:

**USA Patriot Act	Verification Information:**  Information or documentation, including but	not limited to the legal name, address, tax identification number, driver's	license, and date of birth (if the Borrower is an individual) of the	Borrower sufficient for the Bank to verify the identity of the Borrower in	accordance with the USA Patriot Act.

**Note(s):** The	Note(s) evidencing the Loans(s) duly executed by the Borrower.

**Security Agreement(s):**  Security Agreement(s) in which Borrower and	any other owner (a "Debtor") of personal property collateral shall grant to	Bank a first priority security interest in the personal property specified	therein.  (If Bank has or will have a security interest in any collateral	which is inferior to the security interest of another creditor, Borrower	must fully disclose to Bank any and all prior security interests, and Bank	must specifically approve any such security interest which will continue	during the Loan.)

**Assignment of Factoring Agreement: **An assignment of all rights of	Borrower under that certain factoring agreement dated August 28, 2006, by	and between Borrower and Venture Metals, LLC (the "Factoring Agreement").

**UCC Financing Statements:**  Acknowledged copies of UCC Financing	Statements duly filed in Borrower's or other owner's state of incorporation,	organization or residence, and in all jurisdictions necessary, or in the	opinion of the Bank desirable, to perfect the security interests granted in	the Security Agreement(s), and certified copies of Information Requests	identifying all previous financing statements on record for the Borrower or	other owner, as appropriate from all jurisdictions indicating that no	security interest has previously been granted in any of the collateral	described in the Security Agreement(s), unless prior approval has been given	by the Bank.

**Authorization and Certificate:**  An Authorization and Certificate	executed by each Debtor under which such Debtor authorizes Bank to file a	UCC Financing Statement describing collateral owned by such Debtor.

**Corporate Resolution:**  A Corporate Resolution duly adopted by the	Board of Directors of the Borrower authorizing the execution, delivery, and	performance of the Loan Documents on or in a form provided by or acceptable	to Bank.

**Articles of Incorporation:**  A copy of the Articles of Incorporation	and all other charter documents of the Borrower, all filed with and	certified by the Secretary of State of the State of the Borrower's	incorporation.

**By-Laws:** A copy of the By-Laws of the Borrower, certified by the	Secretary of the Borrower as to their completeness and accuracy.

**Certificate of Incumbency:**  A certificate of the Secretary of the	Borrower certifying the names and true signatures of the officers of the	Borrower authorized to sign the Loan Documents.

**Certificate of Existence:**  A certification of the Secretary of State	(or other government authority) of the State of the Borrower's Incorporation	or Organization as to the existence or good standing of the Borrower and its	charter documents on file.

**Opinion of Counsel:**  An opinion of counsel for the Borrower	satisfactory to the Bank and the Bank's counsel.

** **

**Additional Documents:**  Receipt by the Bank of	other approvals, opinions, or documents as the Bank may reasonably request.

**Section 2 Representations and Warranties**

The Borrower and Guarantor(s) represent and warrant to	Bank that:

	2.01.       **Financial Statements.**  The balance sheet of the Borrower	and its subsidiaries, if any, and the related Statements of Income and	Retained Earnings of the Borrower and its subsidiaries, the accompanying	footnotes together with the accountant's opinion thereon, and all other	financial information previously furnished to the Bank, are true and correct	and fairly reflect the financial condition of the Borrower and its	subsidiaries as of the dates thereof, including all contingent liabilities	of every type, and the financial condition of the Borrower and its	subsidiaries as stated therein has not changed materially and adversely	since the date thereof.  Each Guarantor further represents and warrants that	all financial statements provided by such Guarantor to Bank concerning such	Guarantor's financial condition are true and correct and fairly represent	such Guarantor's financial condition as of the dates thereof.

	2.02.       **Name, Capacity and Standing.**  The Borrower's exact legal	name is correctly stated in the initial paragraph of the Agreement.  If the	Borrower and/or any Guarantor is a corporation, general partnership, limited	partnership, limited liability partnership, or limited liability company,	each warrants and represents that it is duly organized and validly existing	under the laws of its respective state of incorporation or organization;	that it and/or its subsidiaries, if any, are duly qualified and in good	standing in every other state in which the nature of their business shall	require such qualification, and are each duly authorized by their board of	directors, general partners or member/manager(s), respectively, to enter	into and perform the obligations under the Loan Documents.

	2.03.  **No Violation of Other Agreements.**  The execution of the Loan	Documents, and the performance by the Borrower, by any and all pledgors	(whether the Borrower or other owners of collateral property securing	payment of the Loan (hereinafter sometimes referred to as the "Pledgor")) or	by the Guarantor(s) thereunder will not violate any provision, as	applicable, of its articles of incorporation, by-laws, articles of	organization, operating agreement, agreement of partnership, limited	partnership or limited liability partnership, or, of any law, other	agreement, indenture, note, or other instrument binding upon the Borrower,	Pledgor or Guarantor(s), or give cause for the acceleration of any of the	respective obligations of the Borrower or Guarantor(s).

	2.04.  **Authority.**  All authority from and approval by any federal,	state, or local governmental, body, commission or agency necessary to the	making, validity, or enforceability of this Agreement and the other Loan	Documents has been obtained.

	2.05.  **Asset Ownership.**  The Borrower and each Guarantor have good	and marketable title to all of the properties and assets reflected on the	balance sheets and financial statements furnished to the Bank, and all such	properties and assets are free and clear of mortgages, deeds of trust,	pledges, liens, and all other encumbrances except as otherwise disclosed by	such financial statements.   In addition, each other owner of collateral has	good and marketable title to such collateral, free and clear of any liens,	security interests and encumbrances, except as otherwise disclosed to Bank.

	2.06.  **Discharge of Liens and Taxes.**  The Borrower and its	subsidiaries, if any, and each Guarantor have filed, paid, and/or discharged	all taxes or other claims which may become a lien on any of their respective	properties or assets, excepting to the extent that such items are being	appropriately contested in good faith and for which an adequate reserve (in	an amount acceptable to Bank) for the payment thereof is being maintained.

	2.07.  **Regulation U.**  None of the Loan proceeds shall be used	directly or indirectly for the purpose of purchasing or carrying any margin	stock in violation of the provisions of Regulation U of the Board of	Governors of the Federal Reserve System.

	2.08.  **ERISA.**  Each employee benefit plan, as defined by the Employee	Retirement Income Security Act of 1974.  as amended ("ERISA"), maintained by	the Borrower or by any subsidiary of the Borrower or Guarantor(s) meets, as	of the date hereof, the minimum funding standards of Section 302 of ERISA,	all applicable requirements of ERISA and of the Internal Revenue Code of	1936, as amended, and no "Reportable Event" nor "Prohibited Transaction" (as	defined by ERISA) has occurred with respect to any such plan.

	2.09.  **Litigation.**  There is no claim, action, suit or proceeding	pending, threatened or reasonably anticipated before any court, commission,	administrative agency, whether State or Federal, or arbitration which will	materially adversely affect the financial condition, operations, properties,	or business of the Borrower or its subsidiaries, if any, or the	Guarantor(s), or the ability of the Borrower or the Guarantor(s) to perform	their obligations under the Loan Documents.

	2.10.  **Other Agreements.**  The representations and warranties made by	Borrower to Bank in the other Loan Documents are true and correct in all	respects on the date hereof.

	2.11.  **Binding and Enforceable.**  The Loan Documents, when executed,	shall constitute valid and binding obligations of the Borrower and	Guarantors respectively, the execution of such Loan Documents has been duly	authorized by the parties thereto, and are enforceable in accordance with	their terns, except as may be limited by bankruptcy, insolvency, moratorium,	or similar laws affecting creditors' rights generally.

	2.12.  **Commercial Purpose.**  The Loan(s) are not "consumer	transactions", as defined in the Kentucky Uniform Commercial Code, and none	of the collateral was or will be purchased or held primarily for personal,	family or household purposes.

	2.13.  **Venture Metals, LLC.**  Neither the Borrower nor any of its	officers or directors has any ownership interest in Venture Metals, LLC, or	any affiliate of Venture Metals, LLC.

 

**Section 3 Affirmative Covenants**

The Borrower covenants	and agrees that from the date hereof and until payment in full of all	indebtedness and performance of all obligations owed under the Loan	Documents, Borrower shall:

	3.01.  **Maintain Existence and Current Legal Form of Business.** (a)	Maintain its existence and good standing in the state of its incorporation	or organization, (b) maintain its current legal form of business indicated	above, (c) as applicable, qualify and remain qualified as a foreign	corporation, general partnership, limited partnership, limited liability	partnership or limited liability company in each jurisdiction in which such	qualification is required; (d) maintain its current management and	ownership; and (e) in the event of its merger with any other entity, be the	surviving entity.

	3.02.  **Maintain Records.**  Keep adequate records and books of account,	in which complete entries will be made in accordance with GAAP consistently	applied, reflecting all financial transactions of the Borrower.

	3.03.  b  Maintain, keep, and preserve all of its properties (tangible and	intangible) including the collateral necessary or useful in the conduct of	its business in good working order and condition, ordinary wear and tear	excepted.

	3.04.  **Conduct of Business.**  Continue to engage in an efficient,	prudent and economical manner in a business of the same general type as now	conducted.

	3.05. ** Maintain Insurance.**  Maintain insurance with financially sound	and reputable insurance companies or associations in such amounts and	covering such risks as are usually carried by companies engaged in the same	or a similar business, and business interruption insurance if required by	Bank, which insurance may provide for reasonable deductible(s).  The Bank	shall be named as loss payee (Long Form) on all policies which apply to the	Bank's collateral, and the Borrower shall deliver certificates of insurance	at closing evidencing same.  All such insurance policies shall provide, and	the certificates shall state, that no policy will be terminated without 20	days prior written notice to Bank.

	3.06.  **Comply With Laws.**  Comply in all respects with all applicable	laws, rules, regulations, and orders including, without limitation, paying	before the delinquency of all taxes, assessments, and governmental charges	imposed upon it or upon its property, and all Environmental Laws.

	3.07.  **Right of Inspection.**  Permit the officers and authorized	agents of the Bank at any reasonable time or times in the Bank's sole	discretion, to examine and make copies of the records and books of account	of, to visit the properties of the Borrower, and to discuss such matters	with any officers, directors, managers, members or partners, limited or	general of the Borrower, and the Borrower's independent accountant as the	Bank deems necessary and proper.

	3.08.  **Reporting Requirements.**  Furnish to the Bank:

**Quarterly Financial Statements:** As soon as available and not more	than twenty (20) days after the end of each quarter, balance sheets,	statements of income, cash flow, and retained earnings for the period ended	and a statement of changes in the financial position, all in reasonable	detail, and all prepared in accordance with GAAP consistently applied and	certified as true and correct by an officer, general partner or manager (or	member(s)) of the Borrower, as appropriate.

**Annual Financial Statements:** As soon as available and not more than	one hundred twenty (120) days after the end of each fiscal year, balance	sheets, statements of income, and retained earnings for the period ended and	a statement of changes in the financial position, all in reasonable detail,	and all prepared in accordance with GAAP consistently applied.  The	financial statements must be of the following quality or better: Audited.

**Loan Base Report:** On or before the fifteenth (l5th) day of each	month, a Loan Base Report in a form acceptable to Bank signed by the	President, chief financial officer, general partner or manager (or	member(s)) of the Borrower, as appropriate.

**Notice of Litigation:** Promptly after the receipt by the Borrower, or	by any Guarantor of which Borrower has knowledge, of notice or complaint of	any action, suit, and proceeding before any court or administrative agency	of any type which, if determined adversely, could have a material adverse	effect on the financial condition, properties, or operations of the Borrower	or Guarantor; as appropriate.  

**Tax Returns:** As soon as available each year, complete copies	(including all schedules) of all state and federal tax returns filed by	Borrower.

**Notice of Default:** Promptly upon discovery or knowledge thereof,	notice of the existence of any event of default under this Agreement or any	other Loan Documents.

**USA Patriot Act Verification Information:** Information or	documentation, including but not limited to the legal name, address, tax	identification number, driver's license, and date of birth (if the Borrower	is an individual) of the Borrower sufficient for the Bank to verify the	identity of the Borrower in accordance with the USA Patriot Act.  Borrower	shall notify Bank promptly of any change in such information.

**Other Information:** Such other information as the Bank may from time	to time reasonably request including, but not limited to, the following	information: (a) annual corporate income tax returns (including all	schedules) for K&R, LLC and K&R Resources, LLC: and (b) copies of all	financial reports and other information to which Borrower may be entitled to	receive under the Factoring Agreement.  Borrower shall be responsible for	obtaining the necessary consents from Venture Metals, LLC and North American	Stainless LP authorizing Borrower to disclose such financial reports and	other information to Bank.

	3.09.  **Deposit Accounts.**  Maintain substantially all of its demand	deposit/operating accounts with the Bank.

	3.10.  **Affirmative Covenants from other Loan Documents.**  All	affirmative covenants contained in any Deed of Trust, Security Agreement,	Assignment of Leases and Rents, or other security document executed by the	Borrower which are described in paragraph 2 hereof are hereby incorporated	by reference herein.

	3.11 Borrower shall promptly provide Bank with written notice of the	termination of the Factoring Agreement or of any default by either party	under the Factoring Agreement.

	3.12 Borrower shall provide Bank with copies of any modifications or	amendments to the Factoring Agreement.

	3.13 When and as required by Bank, Borrower shall provide Bank with such	other information, data, reports, covenants, representations and warranties	as may be required by the Bank relative to the Factoring Agreement, Venture	Metals, LLC and North American Stainless LP.

3.14 Borrower agrees to	indemnify and hold harmless Bank from and against any and all claims, costs,	damages, liabilities and expenses which may be incurred by or asserted	against Bank in connection with any proceeding arising out of or related to	this Line of Credit or the Other Credit Relationship.

**Section 4 Guarantor(s)	Covenants**

N/A

**Section 5 Financial Covenants**

The Borrower covenants	and agrees that from the date hereof until payment in full of all	indebtedness and the performance of all obligations under the Loan	Documents, the Borrower shall at all times maintain the following financial	covenants and ratios all in accordance with GAAP unless otherwise specified:

**Minimum Tangible Net Worth**.  A minimum tangible net worth of not less	than $6,000,000.00 as of December 31, 2005, and increasing annually by 50%	of all net income, plus 100% of all new equity, minus $0 for net losses. 	 Tangible Net Worth is defined as net worth, plus obligations contractually	subordinated to debts owed to Bank, minus goodwill, contract rights, and	assets representing claims on stockholders or affiliated entities.

**EBITDA Ratio.**  Ratio	of EBITDA to the preceding twelve months interest expense plus the projected	maturities of long-term debt for the next succeeding twelve months on a	rolling basis, **Debt/Tangible Net Worth.**  Maximum of 4.00:1.00, to be	measured annually.

**Section 6 Negative Covenants**

The Borrower covenants	and agrees that from the date hereof and until payment in full of all	indebtedness and performance of all obligations under the Loan Documents,	the Borrower shall not, without the prior written consent of the Bank:

	6.01.  **Liens.**  Create, incur, assume, or suffer to exist any lien	upon or with respect to any of Borrower's properties, or the properties of	any Pledgor securing payment of the Loan, now owned or hereafter acquired,	except:

	(a) Liens and security interests in favor of the Bank;

	(b) Liens for taxes not yet due and payable or otherwise being contested in	good faith and for which appropriate reserves are maintained:

	(c) Other liens imposed by law not yet due and payable, or otherwise being	contested in good faith and for which appropriate reserves are maintained;

	(d) Liens securing obligations to any creditor other than Bank not to exceed	$1,000,000 per year;

	(e) purchase money security interests on any property hereafter acquired,	provided that such lien shall attach only to the property acquired; 

	6.02.  **Debt.** Create, incur, assume, or suffer to exist any debt,	except:

	(a) Debt to the Bank;

	(b) Debt outstanding on the date hereof and shown on the most recent	financial statements submitted to the Bank;

	(c) Accounts payable to trade creditors incurred in the ordinary course of	business;

	(d) Debt secured by purchase money security interests as outlined above in	Section 6.01 (c);

	(e) Additional debt not to exceed $1,000,000.00 per year.

	6.03.  **Capital Expenditures.**  Expenditures for fixed assets in any	fiscal year shall not exceed in the aggregate the sum of $Amount.

	6.04.  **Change of Legal Form of Business; Purchase of Assets.**  Change	Borrower's name or the legal form of Borrower's business as shown above,	whether by merger, consolidation, conversion or otherwise, and Borrower	shall not purchase all or substantially all of the assets or business of any	Person.

	6.05.  **Leases.**  Create, incur, assume, or suffer to exist any leases,	except:

	(a) Leases outstanding on the date hereof and showing on the most recent	financial statement submitted to the Bank;

	(b) Operating Leases for machinery and equipment which do not in the	aggregate require payments in excess of $Amount in any fiscal year of the	Borrower.

	6.06. **Dividends or Distributions; Acquisition of Capital Stock or Other	Ownership Interests.**  Declare or pay any dividends or distributions of	any kind, or purchase or redeem, retire, or otherwise acquire any of	Borrower's capital stock or other ownership interests, now or hereafter	outstanding, in excess of $Amount in any fiscal year of the Borrower.

	6.07. **Salaries.**  Salaries and any other cash compensation to	owners/officers/partners/managers shall be limited as follows: Describe	Salary Limitations.

	6.08. **Guaranties.**  Assume, guarantee, endorse, or otherwise be or	become directly or contingently liable for obligations of any Person, except	guaranties by endorsement of negotiable instruments for deposit or	collection or similar transactions in the ordinary course of business.

	6.09. **Loans.**  Loans to directors, officers, partners, members,	shareholders, subsidiaries and affiliates shall be limited as follows:	Limited to $500,000 in the aggregate per year.  All such loans to directors,	officers, partners, members, shareholders, subsidiaries and affiliates shall	be subordinated to the Loan pursuant to Subordination Agreements in form and	substance satisfactory to Bank.

	6.10. **Disposition of Assets.**  Sell, lease, or otherwise dispose of	any of its assets or properties except in the ordinary and usual course of	its business.

	6.11. **Transfer of Ownership.**  If Borrower is a corporation, (a)	issue, transfer or sell any new class of stock, or (b) issue, transfer or	sell, in the aggregate, from its treasury stock and/or currently authorized	but unissued shares of any class of stock, more than 10% of the total number	of all such issued and outstanding shares as of the date of this Agreement. 	If Borrower is a general partnership, limited partnership, limited liability	partnership or limited liability company, issue, transfer or sell any	interest in Borrower.

6.12. **Negative Covenants	from other Loan Documents.**  All negative covenants contained in any Deed	of Trust, Security Agreement, Assignment of Leases or Rents, or other	security document executed by the Borrower which ate described in paragraph	2 hereof are hereby incorporated by reference herein.

**Section 7 Hazardous Materials and Compliance with	Environmental Laws.**

	7.01.  **Investigation.**  Borrower hereby certifies that it has	exercised due diligence to ascertain whether its real property is or has	been affected by the presence of asbestos, oil, petroleum or other	hydrocarbons, area formaldehyde, PCBs, hazardous or nuclear waste, toxic	chemicals and substances, or other hazardous materials (collectively,	"Hazardous Materials"), as defined in applicable Environmental Laws. 	Borrower represents and warrants that there are no such Hazardous Materials	contaminating its real property, nor have any such materials been released	on or stored on or improperly disposed of on its real property during its	ownership, occupancy or operation thereof.  Borrower hereby agrees that,	except in strict compliance with applicable Environmental Laws, it shall not	knowingly permit any release, storage or contamination as long as any	indebtedness or obligations to Bank under the Loan Documents remains unpaid	or unfulfilled.  In addition, Borrower does not have or use any underground	storage tanks on any of its real property which are not registered with the	appropriate Federal and/or State agencies and which are not properly	equipped and maintained in accordance with all Environmental Laws.  If	requested by Bank, Borrower shall provide Bank with all necessary and	reasonable assistance required for purposes of determining the existence of	Hazardous Materials on Borrower's real property.  

7.02.  **Compliance.** 	Borrower agrees to comply with all applicable Environmental Laws. 	including, without limitation, all those relating to Hazardous Materials. 	Borrower further agrees to provide Bank, and all appropriate Federal and	State authorities, with immediate notice in writing of any release of	Hazardous Materials on any of its real property and to pursue diligently to	completion all appropriate and/or required remedial action in the event of	such release.

**Section 8 Events of Default.**

The following shall be	"Events of Default" by Borrower or any Guarantor.

	8.01.  The failure to make prompt payment of any installment of principal or	interest on any of the Note(s) when due or payable.

	8.02.  Should any representation or warranty made in the Loan Documents	prove to be false or misleading in any material respect.

	8.03 Should any report, certificate, financial statement, or other document	furnished prior to the execution of or pursuant to the terms of this	Agreement prove to be false or misleading in any material respect.

	8.04.  Should the Borrower or any Guarantor default on the performance of	any other obligation of indebtedness when due or in the performance of any	obligation incurred in connection with money borrowed.

	8.05.  Should the Borrower, any Guarantor or any Pledgor breach any	covenant, condition, or agreement made under any of the Loan Documents.

	8.06.  Should a custodian be appointed for or take possession of any or all	of the assets of the Borrower or any Guarantor, or should the Borrower or	any Guarantor either voluntarily or involuntarily become subject to any	insolvency proceeding, including becoming a debtor under the United States	Bankruptcy Code, any proceeding to dissolve the Borrower or any Guarantor,	any proceeding to have a receiver appointed, or should the Borrower or any	Guarantor make an assignment for the benefit of creditors, or should there	be an attachment, execution, or other judicial seizure of all or any portion	of the Borrower's or any Guarantors assets, including an action or	proceeding to seize any funds on deposit with the Bank, and such seizure is	not discharged within 30 days.

	8.07.  Should final judgment for the payment of money be rendered against	the Borrower or any Guarantor which is not covered by insurance and shall	remain undischarged for a period of 30 days unless such judgment or	execution thereon be effectively stayed.  

	8.08.  Upon the death of, or termination of existence of, or dissolution of,	any Borrower, Pledgor or Guarantor.

	8.09.  Should the Bank in good faith deem itself, its liens and security	interests, if any, or any debt thereunder unsafe or insecure, or should the	Bank believe in good faith that the prospect of payment of any debt or other	performance by the Borrower or any Guarantor is impaired.

8.10.  Should any lien or	security interest granted to Bank to secure payment of the Note(s)	terminate, fail for any reason to have the priority agreed to by Bank on the	date granted, or become unperfected or invalid for any reason.

**Section 9 Remedies Upon Default**

Upon the occurrence of	any of the above listed Events of Default the Bank may at any time	thereafter, at its option, take any or all of the following actions, at the	same or at different times:

	9.01.  Declare the balance(s) of the Note(s) to be immediately due and	payable, both as to principal and interest, without presentment demand,	protest, or notice of any kind, all of which are hereby expressly waived by	Borrower and each Guarantor, and such balance(s) shall accrue interest at	the Default Rate as provided herein until paid in full;

	9.02.  Require the Borrower or Guarantor(s) to pledge additional collateral	to the Bank from the Borrower's or any Guarantor's assets and properties,	the acceptability and sufficiency of such collateral to be determined in the	Bank's solo discretion;

	9.03.  Take immediate possession of and foreclose upon any or all collateral	which may be granted to the Bank as security for the indebtedness and	obligations of Borrower or any Guarantor under the Loan Documents;

	9.04.  Exercise any and all other rights and remedies available to the Bank	under the terms of the Loan Documents and applicable law, including the	Kentucky Uniform Commercial Code;

9.05.  Any obligation of	the Bank to advance funds to the Borrower or any other Person under the	terms of under the Note(s) and all other obligations, if any, of the Bank	under the Loan Documents shall immediately cease and terminate unless and	until Bank shall reinstate such obligation in writing.

**Section 10 Miscellaneous Provisions**

	10.01. ** Definitions.**

	   **"Availability"** shall mean the lesser of (i) $10,000,000.00 or (ii)	the Collateral Loan Value shown on the Loan Base Report furnished by	Borrower to Bank on or before the fifteenth (15th) day of each month as long	as this Agreement shall remain in force.  The percentages of acceptable	collateral, as defined by Bank, which will be used to determine the	Collateral Loan Value, shall be the following (unless otherwise set forth in	Schedule DD and/or DD-IFA hereto): Eligible Inventory - 35%; Eligible	Accounts - 80%: Eligible Factored Accounts - 80%; Net Book Value of Eligible	Equipment (less the principal balance of any outstanding loans secured by	the Eligible Equipment) - 100%.  The aggregate Line of Credit advances	against Eligible Equipment shall not exceed at any time $5,000,000.00.

	   **"Default Rate"** shall mean a rate of interest equal to Bank's Prime	Rate plus five percent (5%) per annum (not to exceed the legal maximum rate)	from and after the date of an Event of Default hereunder which shall apply,	in the Bank's sole discretion, to all sums owing, including principal and	interest, on such date.

	   **"Environmental Laws"** shall mean all federal and state laws and	regulations which affect or may affect the Borrower's real property,	including without limitation the Comprehensive Environmental Response. 	Compensation, and Liability Act (42 U.S.C.  Sections 9601 et seq.), the	Resource Conservation and Recovery Act (42 U.S.C. Sections 6901 et seq.),	the Federal Water Pollution Control Act (33 U.S.C.  Sections 1251 et seq.),	the Clean Air Act (42 U.S.C.  Section 7401 et seq.), the Toxic Substances	Control Act (15 U.S.C. Section 2601 et seq.), all such applicable	environmental laws and regulations of the State of Kentucky, as such laws	and regulations may be amended from time to time.

	   **"Loan Documents"** shall mean this Agreement including any schedule	attached hereto, the Note(s), the Security Agreement(s), the Assignment of	Factoring Agreement, all UCC Financing Statements, and all other documents,	certificates, and instruments executed in connection therewith, and all	renewals, extensions, modifications, substitutions, and replacements thereto	and therefore.

	   **"Person"** shall mean an individual, partnership, corporation,	trust, unincorporated organization, limited liability company, limited	liability partnership, association, joint venture, or a government agency or	political subdivision thereof.

	   **"GAAP"** shall mean generally accepted accounting principles as	established by the Financial Accounting Standards Board or the American	Institute of Certified Public Accountants, as amended and supplemented from	time to time.

	   **"Prime Rate"** shall mean the rate of interest per annum announced	by the Bank from time to time and adopted as its Prime Rate, which is one of	several rate indexes employed by the Bank when extending credit, and may not	necessarily be the Bank's lowest lending rate.

	10.02.  **Non-Impairment.**  If any one or more provisions contained in	the Loan Documents shall be held invalid.  illegal, or unenforceable in any	respect, the validity, legality, and enforceability of the remaining	provisions contained therein shall not in any way be affected or impaired	thereby and shall otherwise remain in full force and effect.

	10.03.  **Applicable Law.**  The Loan Documents shall be construed in	accordance with and governed by the laws of the Commonwealth of Kentucky.

	10.04.  **Waiver.**  Neither the failure or any delay on the part of the	Bank in exercising any right, power or privilege granted in the Loan	Documents shall operate as a waiver thereof, nor shall any single or partial	exercise thereof preclude any other or further exercise of any other right,	power, or privilege which may be provided by law.

	10.05.  **Modification.**  No modification, amendment, or waiver of any	provision of any of the Loan Documents shall be effective unless in writing	and signed by the Borrower and Bank.

	10.06.  **Payment Amount Adjustment.**  In the event that any Loan(s)	referenced herein has a variable (floating) interest rate and the interest	rate increases, Bank, at its sole discretion, may at any time adjust the	Borrower's payment amount(s) to prevent the amount of interest accrued in a	given period to exceed the periodic payment amount or to cause the (Loans)	to be repaid within the same period of time as originally agreed upon.

	10.07 **Stamps and Fees.**  The Borrower shall pay all federal or state	stamps, taxes, or other fees or charges, if any are payable or are	determined to be payable by reason of the execution, delivery, or issuance	of the Loan Documents or any security granted to the Bank; and the Borrower	and Guarantor agree to indemnify and hold harmless the Bank against any and	all liability in respect thereof.

	10.08. ** Attorneys' Fees.**  In the event the Borrower or any Pledgor or	Guarantor shall default in any of its obligations hereunder and the Bank	believes it necessary to employ an attorney to assist in the enforcement or	collection of the indebtedness of the Borrower to the Bank, to enforce the	terms and provisions of the Loan Documents, to modify the Loan Documents, or	in the event the Bank voluntarily or otherwise should become a party to any	suit or legal proceeding (including a proceeding conducted wider the	Bankruptcy Code), the Borrower and Guarantors agree to pay the reasonable	attorneys' fees of the Bank and all related costs of collection or	enforcement that maybe incurred by the Bank.  The Borrower and Guarantor	shall be liable for such attorneys' fees and costs whether or not any suit	or proceeding is actually commenced 

	10.09.  **Bank Making Required Payments.**  In the event Borrower shall	fail to maintain insurance, pay taxes or assessments, costs and expenses	which Borrower is, under any of the terms hereof or of any Loan Documents,	required to pay, or fail to keep any of the properties and assets	constituting collateral free from new security interests, liens, or	encumbrances, except as permitted herein, Bank may at its election make	expenditures for any or all such purposes and the amounts expended together	with interest thereon at the Default Rate, shall become immediately due and	payable to Bank, and shall have benefit of and be secured by the collateral;	provided, however, the Bank shall be under no duty or obligation to make any	such payments or expenditures.

	10.10.  **Right of Offset.**  Any indebtedness owing from Bank to	Borrower may be set off and applied by Bank on any indebtedness or liability	of Borrower to Bank, at any time and from time to time after maturity,	whether by acceleration or otherwise; and without demand or notice to	Borrower.  Bank may sell participations in or make assignments of any Loan	made under this Agreement, and Borrower agrees that any such participant or	assignee shall have the same right of setoff as is granted to the Bank	herein.

	10.11.  **UCC Authorization.**  Borrower authorizes Bank to file such UCC	Financing Statements describing the collateral in any location deemed	necessary and appropriate by Bank.

	10.12.  **Modification and Renewal Fees.**  Bank may, at its option,	charge any fees for modification, renewal, extension, or amendment of any	temps of the Note(s) not prohibited by Kentucky law, and as otherwise	permitted by law if Borrower is located in another state.

	10.13.  **Conflicting Provisions.**  If provisions of this Agreement	shall conflict with any terms or provisions of any of the Note(s) or	Security Agreement(s), the provisions of such Note(s) or Security	Agreement(s), as appropriate, shall take priority over any provisions in	this Agreement.  

	10.14.  **Notices.**  Any notice permitted or required by the provisions	of this Agreement shall be deemed to have been given when delivered in	writing to the City Executive or any Vice President of the Bank at its	offices in Louisville, Kentucky, and to the President of the Borrower at its	offices in Louisville, Kentucky, when sent by certified mail and return	receipt requested.

	10.15.  **Consent to Jurisdiction.** Borrower hereby irrevocably agrees	that any legal action or proceeding arising out of or relating to this	Agreement may be instituted in any Kentucky state court or federal court	sitting in the state of Kentucky, or in such other appropriate court and	venue as Bank may choose in its sole discretion.  Borrower consents to the	jurisdiction of such courts and waives any objection relating to the basis	for personal or in rem jurisdiction or to venue which Borrower may now or	hereafter have in any such legal action or proceedings.  

	10.16.  **WAIVER OF JURY TRIAL.  UNLESS EXPRESSLY PROHIBITED BY APPLICABLE	LAW, THE UNDERSIGNED HEREBY WAIVE THE RIGHT TO TRIAL BY JURY OF ANY MATTERS	OR CLAIMS ARISING OUT OF THIS AGREEMENT OR ANY OF THE LOAN DOCUMENTS	EXECUTED IN CONNECTION HEREWITH OR OUT OF THE CONDUCT OF THE RELATIONSHIP	BETWEEN THE UNDERSIGNED AND BANK.  THIS PROVISION IS A MATERIAL INDUCEMENT	FOR BANK TO MAKE THE LOAN AND ENTER INTO THIS AGREEMENT.  FURTHER, THE	UNDERSIGNED HEREBY CERTIFY THAT NO REPRESENTATIVE OR AGENT OF BANK, NOR	BANK'S COUNSEL, HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT BANK WOULD NOT	SEEK TO ENFORCE THIS WAIVER OR RIGHT TO JURY TRIAL PROVISION.  NO	REPRESENTATIVE OR AGENT OF BANK, NOR BANK'S COUNSEL, HAS THE AUTHORITY TO	WAIVE, CONDITION OR MODIFY THIS PROVISION.**

	10.17.  **Counterparts.**  This Agreement may be executed by one or more	parties on any number of separate counterparts and all of such counterparts	taken together shall be deemed to constitute one and the same instrument.

10.18.  **Entire	Agreement.**  The Loan Documents embody the entire agreement between	Borrower and Bank with respect to the Loans, and there are no oral or parol	agreements existing between Bank and Borrower with respect to the Loans	which are not expressly set forth in the Loan Documents.

(SIGNATURES	ON FOLLOWING PAGE)

 

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SIGNATUREPAGE

            IN WITNESS WHEREOF, the Bank Borrower andGuarantor(s) have caused this Agreement to be duly executed under seal all as ofthe date first above written.

Borrower is a Corporation:

 

WITNESS:                                                      IndustrialServices of America, Inc.

                                                                        Name ofCorporation

 

                                                                        By: /s/ Harry Kletter

 

                                                                       Title:  Chief Executive Officer

 

_______________________                         By:______________________________

 

                                                                       Title:____________________________

 

Additional Co-Borrowers or Guarantors:

WITNESS:

_________________________                      __________________________(SEAL)

_________________________                      __________________________(SEAL)

_________________________                      __________________________(SEAL)

_________________________                      __________________________(SEAL)

 

WITNESS:                                                      BRANCH BANKING ANDTRUST COMPANY

 

 

/s/ Joseph R. Gathright, Jr.                                By: /s/ Johnny L. Perry

 

                                                                        Title: Senior Vice President

 

WITNESS:                                                      BB&T BANKCARDCORPORATION

 

 

/s/ Joseph R. Gathright, Jr.                                By: /s/ Johnny L. Perry

 

                                                                        Title: Senior Vice President