Document:

Exhibit 10.4

REAFFIRMATION AND AMENDMENT OF GUARANTY AND

REAFFIRMATION OF SECURITY

          In
satisfaction of the condition set forth in the First Amendment to Credit
Agreement between Agent, LC Issuer, the Lenders and Borrowers (the “Amendment”),
the undersigned (“Guarantors”) hereby: (i) consent to the Amendment and
to the transactions contemplated therein, (ii) ratify and reaffirm their
Guaranty dated as of July 30, 2010 (the “Guaranty”), (iii) acknowledge
and agree that Guarantors are not released from their obligations under the
Guaranty by reason of the Amendment, the Amended and Restated Revolving Loan
Note or the transactions contemplated thereby and that the obligations of
Guarantors under the Guaranty extend to the Credit Agreement and the other Loan
Documents, as amended, or as amended and restated, in connection with the
Amendment, and (iv) confirm that the Amendment shall not in any manner (A)
constitute the refinancing, refunding, payment or extinguishment of the
indebtedness evidenced by the existing Loan Documents and secured by their
Security Agreement dated as of July 30, 2010 (the “Security Agreement”);
(B) be deemed to evidence a novation of the outstanding balance of the
indebtedness secured by the Security Agreement; or (C) affect, replace, impair,
or extinguish the creation, attachment, perfection or priority of the Liens on
the Loan Collateral granted pursuant to the Security Agreement or any other
Security Document evidencing, governing or creating a Lien on the Loan
Collateral. Guarantors further ratify and reaffirm any and all grants of Liens
to Agent on the Loan Collateral to secure Guarantors’ obligations owing under
the Guaranty, and Guarantors acknowledge and confirm that the grants of the
Liens to Agent on Guarantors’ Loan Collateral: (1) represent continuing Liens
on all such Loan Collateral, (2) secure all of the Guaranteed Obligations (as
defined in the Guaranty), and (3) represent valid, first and best Liens on all
such Loan Collateral, subject to the Permitted Liens. 

          The
undersigned agree that the first sentence of Section 16.9 of the
Guaranty is hereby amended in its entirety by substituting the following in its
stead:

	
  

 	
  

 	
  

 
	
  

 	
 The maximum
 aggregate liability of Guarantors under this Guaranty is $52,960,000.

 	
  

 

Except as amended hereby, all of the provisions of the Guaranty are
ratified and confirmed and remain in full force and effect.

          This
Reaffirmation and Amendment of Guaranty and Reaffirmation of Security shall not
be construed, by implication or otherwise, as imposing any requirement that
Agent notify or seek the consent of Guarantors relative to any past or future
extension of credit, or modification, extension or other action with respect
thereto, in order for any such extension of credit or modification, extension
or other action with respect thereto to be subject to the Guaranty or the
Security Agreement, it being expressly acknowledged and reaffirmed that
Guarantors have under the Guaranty and the Security Agreement consented, among
others things, to modifications, extensions and other actions with respect
thereto without any notice thereof or further consent 

thereto. All references in any of the Loan Documents to the Guaranty
will be deemed to be references to the Guaranty as amended by this Reaffirmation
and Amendment of Guaranty and Reaffirmation of Security. This Reaffirmation and
Amendment of Guaranty and Reaffirmation of Security may be signed by facsimile
signatures or other electronic delivery of an image file reflecting the
execution hereof, and if so signed, (i) may be relied on by each party and
Fifth Third Bank as if this Reaffirmation and Amendment of Guaranty and
Reaffirmation of Security were a manually signed original and (ii) will be
binding on each party for all purposes. All capitalized terms used in this
Reaffirmation and Amendment of Guaranty and Reaffirmation of Security and not
otherwise defined herein shall have the meanings ascribed thereto in the
Amendment.

[Signature Page Follows]

          IN WITNESS
WHEREOF, the undersigned have executed this Reaffirmation and
Amendment of Guaranty and Reaffirmation of Security as of the Effective Date.

	
  

 	
  

 	
  

 
	
  

 	
 ISA Indiana Real Estate, LLC

 	
  

 
	
  

 	
 ISA Logistics LLC

 	
  

 
	
  

 	
 ISA Real Estate, LLC

 	
  

 
	
  

 	
 7021 Grade Lane LLC

 	
  

 
	
  

 	
 7124 Grade Lane LLC

 	
  

 
	
  

 	
 7200 Grade Lane LLC

 	
  

 
	
  

 	
 Computerized
 Waste Systems, LLC

 	
  

 
	
  

 	
 ISA
 Recycling LLC

 	
  

 
	
  

 	
 Waste
 Equipment Sales & Service Co., LLC

 	
  

 
	
  

 	
  

 	
  

 
	
  

 	
 By:   Industrial
 Services of America, Inc., sole member

 	
  

 

	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
           /s/
 Alan Schroering

 
	
  

 	
  

 	

 

 
	
  

 	
  

 	
 Alan
 Schroering, Chief Financial Officer

 

Accepted as of the Effective Date.

FIFTH THIRD BANK, as Agent

	
  

 	
  

 	
  

 
	
 By:

 	
      /s/ Donald K. Mitchell

 	
  

 
	
  

 	

 

 	
  

 
	
  

 	
 Donald K.
 Mitchell, Vice PresidentExhibit 10.5

AMENDED AND RESTATED REVOLVING LOAN NOTE

	
  

 	
  

 
	
 $45,000,000

 	
 July 30, 2010

 
	
  

 	
 First Amendment and Restatement April 14, 2011

 
	
  

 	
 (“Effective Date”)

 

For value received, the undersigned,
INDUSTRIAL SERVICES OF AMERICA, INC., a Florida corporation (“ISA”), ISA
INDIANA, INC., an Indiana corporation (“ISA Indiana”), and each of the
other Persons that become a Borrower under the Credit Agreement after the
Effective Date (such Persons, together with ISA and ISA Indiana, are each a “Borrower”
and, collectively, “Borrowers”), hereby jointly and severally promise to
pay to the order of FIFTH THIRD BANK, an Ohio banking corporation (“Lender”),
the principal sum of FORTY-FIVE MILLION AND 00/100 DOLLARS ($45,000,000), or
such lesser amount as shall equal the aggregate unpaid and outstanding
principal amount of the Revolving Loans made by Lender to Borrowers under the
Credit Agreement dated as of July 30, 2010, as amended by the First Amendment
to Credit Agreement dated of even date herewith (as the same may be hereafter
amended, supplemented or restated from time to time, the “Credit Agreement”),
by and among Borrowers, the Persons party thereto as “Lenders” (including,
without limitation, Lender), and Fifth Third Bank, as Agent and LC Issuer, in
lawful money of the United States of America and in immediately available
funds, on the dates and in the principal amounts provided in the Credit
Agreement, and to pay interest on the unpaid principal amount of each such
Revolving Loan, in like money and funds, for the period commencing on the date
of this Amended and Restated Revolving Loan Note (this “Note”) until
such Indebtedness evidenced by this Note shall be paid in full, at the rates
per annum and on the dates and at the offices provided in the Credit Agreement.
The entire unpaid principal balance of this Note, together with all accrued but
unpaid interest, shall, if not sooner paid or required to be paid pursuant to
the Credit Agreement, be due and payable on July 31, 2013. 

This Note is one of the Revolving Loan Notes
referred to in the Credit Agreement and is entitled to the benefits and
security, and is subject to the terms and conditions, of the Credit Agreement,
including, without limitation, acceleration upon the terms provided therein and
in the other Loan Documents. All capitalized terms used herein which are
defined in the Credit Agreement and not otherwise defined herein shall have the
meanings given in the Credit Agreement.

The Credit Agreement provides for the acceleration of the maturity of
this Note upon the occurrence of certain events and for voluntary and mandatory
prepayments of Loans upon the terms and conditions specified therein. This Note
is subject to voluntary prepayment, in full or in part, in accordance with, and
subject to the terms of, the Credit Agreement.

If, at any time, the rate of interest contracted for, and computed in
the manner provided, in the Credit Agreement (“Applicable Rate”),
together with all fees and charges as provided for in the Credit Agreement or
in any other Loan Document (collectively, the “Charges”), which are 

treated as interest under applicable law, exceeds the maximum lawful
rate (the “Maximum Rate”) allowed under applicable law, it is agreed
that such contracting for, charging or receiving of such excess amount was an
accidental and bona fide error and the provisions of this paragraph will govern
and control. The rate of interest payable under the Credit Agreement and this
Note, together with all Charges, shall be limited to the Maximum Rate; provided,
however, that any subsequent reduction in the Daily LIBOR-Based Rate
or the LIBOR Tranche-Based Rate (or in the interest rate equal to the Prime
Rate plus the Applicable Prime Rate Margin in the event LIBOR Rate Loans are no
longer permitted or available under the Credit Agreement) shall not reduce the
Applicable Rate below the Maximum Rate until the total amount of interest
earned under the Credit Agreement and this Note, together with all Charges,
equals the total amount of interest which would have accrued at the Applicable
Rate if the Applicable Rate had at all times been in effect. If any payment
hereunder, for any reason, results in Borrowers having paid interest in excess
of that permitted by applicable law, then all excess amounts theretofore
collected by Lender shall be credited on the principal balance of the
Obligations (or, if all sums owing hereunder have been paid in full, refunded
to Borrowers), and the amounts thereafter collectible hereunder shall
immediately be deemed reduced, without the necessity of the execution of any
new document, so as to comply with applicable law and permit the recovery of
the fullest amount otherwise called for hereunder.

Borrowers hereby agree to pay all costs of
collection, including, without limitation, Attorneys’ Fees, if this Note is not
paid when due, whether or not legal proceedings are commenced.

All of the obligations of Borrowers hereunder
are joint, several and primary. No Borrower shall be, or be deemed to be, an
accommodation party with respect to this Note. 

Presentment or other demand for payment,
notice of dishonor and protest are expressly waived.

This Note is issued, not as a refinancing or refunding of or payment
toward, but as a continuation of, the Obligations of Borrowers to Lender
pursuant to that certain Revolving Loan Note dated as of July 30, 2010 in the
principal amount of $40,000,000 (the “Prior Note”), together with any
and all additional Revolving Loans incurred under this Note. Accordingly, this
Note shall not be construed as a novation or extinguishment of the Obligations
arising under the Prior Note, and its issuance shall not affect the priority of
any Lien granted in connection with the Prior Note. Interest accrued under the
Prior Note prior to the Effective Date remains accrued and unpaid under this
Note and does not constitute any part of the principal amount of the
Indebtedness evidenced hereby. All Revolving Loans created or existing under,
pursuant to, as a result of, or arising out of, the Prior Note shall, together
with any and all additional Revolving Loans incurred under this Note, continue
in existence under this Note, which Obligations Borrowers acknowledge,
reaffirm, and confirm to Lender. The Indebtedness evidenced by this Note will
continue to be secured by all of the collateral and other security granted to
Lender under the Prior Note and the other Loan Documents.

THIS NOTE HAS BEEN DELIVERED AND ACCEPTED AT AND SHALL BE DEEMED TO
HAVE BEEN MADE AT CINCINNATI, OHIO. THIS NOTE SHALL BE GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF OHIO (WITHOUT REFERENCE TO OHIO CONFLICTS OF LAW
PRINCIPLES).

AS A SPECIFICALLY BARGAINED INDUCEMENT FOR AGENT AND LENDERS TO ENTER
INTO THE CREDIT AGREEMENT AND EXTEND CREDIT TO BORROWERS, BORROWERS, AGENT AND
LENDERS AGREE THAT ANY ACTION, SUIT OR PROCEEDING IN RESPECT OF OR ARISING OUT
OF THIS NOTE, ITS VALIDITY OR PERFORMANCE, AND WITHOUT LIMITATION ON THE
ABILITY OF AGENT OR ANY LENDER, OR ITS RESPECTIVE SUCCESSORS AND ASSIGNS, TO
EXERCISE ALL RIGHTS AS TO THE LOAN COLLATERAL AND TO INITIATE AND PROSECUTE IN
ANY APPLICABLE JURISDICTION ACTIONS RELATED TO REPAYMENT OF THE OBLIGATIONS,
SHALL BE INITIATED AND PROSECUTED AS TO BORROWERS, AGENT AND LENDERS AND THEIR
SUCCESSORS AND ASSIGNS AT CINCINNATI, OHIO. AGENT, LENDERS AND BORROWERS EACH
CONSENT TO AND SUBMIT TO THE EXERCISE OF JURISDICTION OVER THEIR RESPECTIVE
PERSONS BY ANY COURT SITUATED AT CINCINNATI, OHIO HAVING JURISDICTION OVER THE
SUBJECT MATTER, AND EACH CONSENTS THAT ALL SERVICE OF PROCESS BE MADE BY
CERTIFIED MAIL DIRECTED TO BORROWERS, AGENT AND LENDERS AT THEIR RESPECTIVE
ADDRESSES SET FORTH IN SECTION 12.2 OF THE CREDIT AGREEMENT OR AS
OTHERWISE PROVIDED UNDER THE LAWS OF THE STATE OF OHIO. EACH BORROWER WAIVES
ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND ANY OBJECTION TO VENUE
OF ANY ACTION INSTITUTED HEREUNDER, AND CONSENTS TO THE GRANTING OF SUCH LEGAL
OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY THE COURT.

AS A SPECIFICALLY BARGAINED INDUCEMENT FOR
AGENT AND LENDERS TO ENTER INTO THE CREDIT AGREEMENT AND EXTEND CREDIT TO
BORROWERS, BORROWERS, AGENT AND LENDERS EACH WAIVE TRIAL BY JURY WITH RESPECT
TO ANY ACTION, CLAIM, SUIT OR PROCEEDING IN RESPECT OF OR ARISING OUT OF THIS
NOTE OR THE CONDUCT OF THE RELATIONSHIP AMONG AGENT, LENDERS AND BORROWERS.

[Signature Page Follows]

          In Witness
Whereof, Borrowers, intending to be legally bound, have caused this Note to be
executed and delivered by its duly authorized officer as of the Effective Date
and at the place set forth above.

	
  

 	
  

 	
  

 	
  

 
	
  

 	
 INDUSTRIAL
 SERVICES OF AMERICA, INC.

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Alan
 Schroering

 	
  

 
	
  

 	
  

 	

 

 	
  

 
	
  

 	
 Alan
 Schroering, Chief Financial Officer

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 ISA INDIANA,
 INC.

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/ Alan
 Schroering

 	
  

 
	
  

 	
  

 	

 

 	
  

 
	
  

 	
  

 	
 Alan
 Schroering, Chief Financial Officer

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