Document:

GOVERNANCE AND COOPERATION AGREEMENT

        This Governance and Cooperation Agreement (this "Agreement") is made
and entered into as of May 20, 2008, by and among Unisys Corporation, a
Delaware corporation (the "Company"), and MMI Investments, L.P., a Delaware
limited partnership ("MMI"), MCM Capital Management, LLC, a Delaware limited
liability company, Clay B. Lifflander and Charles B. McQuade (such entities and
natural persons, collectively, the "MMI Group" and each, individually, a
"member" of the MMI Group) which presently are or may be deemed to be members
of a "group" with respect to the beneficial ownership of the common stock of
the Company, par value $.01 per share (the "Common Stock"), pursuant to Rule
13d-5 promulgated by the Securities and Exchange Commission (the "SEC") under
the Securities Exchange Act of 1934, as amended (the "Exchange Act").

                                  RECITALS:

        WHEREAS, the Company and the MMI Group have engaged in various
discussions and communications concerning the Company's business, financial
performance and strategic plans; and

        WHEREAS, the Company and the members of the MMI Group have determined
(i) that the interests of the Company and its stockholders would be best served
at this time by, among other things, providing for the appointment of certain
individuals to the Company's board of directors (the "Board") and (ii) to come
to an agreement with respect to certain matters related to the 2008 annual
meeting of stockholders of the Company (including any adjournment or
postponement thereof, the "2008 Annual Meeting") and certain other matters, as
provided in this Agreement.

        NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants and agreements contained herein, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound hereby, agree
as follows:

1. BOARD MATTERS; BOARD APPOINTMENTS; 2008 ANNUAL MEETING; COMMITTEE
APPOINTMENTS.

               (a) The Company agrees to appoint Clay B. Lifflander
("Lifflander") and Charles B. McQuade ("McQuade" and, together with Lifflander,
the "MMI Nominees") to serve as directors of the Board immediately following
execution of this Agreement.  Lifflander will be appointed to the class of
directors to serve until the 2008 Annual Meeting and thereafter, if elected, for
a term of three years expiring at the Company's 2011 annual meeting of
stockholders, and McQuade will be appointed to the class of directors to serve
for a term expiring at the Company's 2010 annual meeting of stockholders. The
term of each MMI Nominee is referred to herein, as applicable, as the "MMI
Nominee Term".  At the 2008 Annual Meeting, the Board agrees to nominate
Lifflander for reelection as a director, recommend that the Company's
shareholders vote to elect Lifflander as a director, will recommend that the
Company's shareholders vote all proxies in favor of his election and will
otherwise use reasonable best efforts to cause the election of Lifflander in
the same manner as any other director nominees of the Board.  The Company will
file a definitive proxy statement with the SEC which includes such information
regarding Lifflander as is required by federal securities laws in connection
with his nomination by the Company.

               (b) Upon the appointment of the MMI Nominees to the Board, the
size of the Board shall be increased to thirteen (13) directors.  Following the
2008 Annual Meeting, the size of the Board shall not be increased in excess of
thirteen (13) directors at any time while Lifflander is on the Board.

               (c) If Lifflander is not elected to the Board at the 2008 Annual
Meeting, (i) the MMI Group shall thereafter be entitled to select a replacement
nominee whom, subject to a determination by the Board's Nominating & Governance
Committee that such individual is qualified, which may not be unreasonably
withheld, the Company or the Board will promptly appoint to the Board to serve
until the Company's 2009 annual meeting of stockholders (the "2009 Annual
Meeting"); and (ii) the Company will nominate any such replacement nominee for
election to the Board at the 2009 Annual Meeting to serve in place of
Lifflander for a term which will expire at the Company's 2011 annual meeting of
stockholders.  Any replacement director appointed pursuant to this Section 1(c)
shall also be referred to as an "MMI Nominee" and the term for which such MMI
Nominee is appointed pursuant to this Section 1(c) shall be referred to as the
such MMI Nominee's "MMI Nominee Term."

               (d) If at any time during the period from the date of this
Agreement until the end of the applicable MMI Nominee Term: (i) there shall
occur a vacancy in the Board seat previously occupied by Lifflander by reason
of his resignation, removal, death or incapacity, then the Company shall take
all necessary action to promptly fill such vacancy with a person proposed by
the MMI Group, subject to a determination by the independent members of the
Board's Nominating and Governance Committee that such individual is qualified,
which may not be unreasonably withheld; provided that the MMI Group may choose
not to fill such vacancy; or (ii) there shall occur a vacancy in the Board seat
previously occupied by McQuade by reason of his resignation, removal, death or
incapacity, then the Company shall take all necessary action to promptly fill
such vacancy with a person proposed by the MMI Group, subject to a
determination by the independent members of the Board's Nominating and
Governance Committee that such individual is qualified; provided that if the
independent members of the Board's Nominating and Governance Committee
determine that such individual is not qualified, the MMI Group shall propose
three other individuals to fill such vacancy that MMI believes are qualified
and the Company shall appoint one of such three individuals to serve as a
replacement director.  Any replacement director appointed pursuant to this
Section 1(d) shall be appointed for the applicable MMI Nominee Term of the MMI
Nominee replaced and shall also be referred to as an "MMI Nominee."

               (e) The 2008 Annual Meeting shall be held on July 24, 2008, or
within 30 days thereafter. The 2009 Annual Meeting shall be held no later than
June 1, 2009.

               (f) Immediately following the 2008 Annual Meeting, the Board
will appoint McQuade to the Board's Compensation Committee and Finance Committee
and Lifflander to the Board's Finance Committee and Nominating and Governance
Committee, and the Board will appoint an MMI Nominee to each committee of the
Board created after the date of this Agreement, as and when requested by the
MMI Group.  In addition, in the event the powers of the Board's Audit Committee
are expanded after the date of this Agreement in any material respect, the
Board will appoint an MMI Nominee to the Audit Committee, as and when requested
by the MMI Group

               (g) As used in this Agreement, the terms "Affiliate" and
"Associate" shall have the respective meanings set forth in Rule 12b-2
promulgated by the SEC under the Exchange Act; the terms "beneficial owner" and
"beneficial ownership" shall have the respective meanings as set forth in Rule
13d-3 promulgated by the SEC under the Exchange Act; and the terms "person" or
"persons" shall mean any individual, corporation (including not-for-profit),
general or limited partnership, limited liability company, joint venture,
estate, trust, association, organization or other entity of any kind or nature.

               (h) At any meeting of the Company's stockholders taking place
while Lifflander (or any replacement of Lifflander appointed pursuant to
Section 1(d) hereof) is on the Board, MMI shall, and shall cause each of its
Associates and Affiliates to, be present for quorum purposes and to vote all
shares of Common Stock that such person is entitled to vote as of the record
date for such meeting of stockholders (a) in favor of each director nominated
or recommended by the Board for election at such meeting and (b) against any
shareholder nominations for director which are not approved and recommended by
the Board for election at such meeting.

2. STANDSTILL.  For a period commencing upon the date hereof and ending on the
later of (i) the date Lifflander (or any replacement of Lifflander appointed
pursuant to Section 1(d) hereof) shall cease to be a director of the Company
and (ii) September 15, 2008, no member of the MMI Group nor any of its
Affiliates, without the prior written consent of the Board, will, directly or
indirectly, do any of the following provided that this Section 2 shall not
limit any member of the MMI Group from non-public communications with the Board
and further shall not apply to actions taken by an MMI Nominee in his capacity
as a director while serving as a member of the Board:

               (a)  acquire, offer or agree to acquire (except by way of stock
dividends or other distributions or offerings made available to holders of
voting securities of the Company generally on a pro rata basis), directly or
indirectly, whether by purchase, tender or exchange offer, through the
acquisition of control of another person or entity, by joining a partnership,
limited partnership, syndicate or other "group" (within the meaning of Section
13(d)(3) of the Exchange Act), through swap or hedging transactions or
otherwise, any voting securities of the Company or any voting rights decoupled
from the underlying voting securities, if such acquisition, offer to acquire or
agreement to acquire would result in MMI (together with any other person or
entity, partnership, limited partnership, syndicate or other group) owning,
controlling or otherwise having any ownership or economic interest in more than
twenty percent (20%) of the outstanding shares of Common Stock;

               (b) sell, offer or agree to sell, directly or indirectly,
through swap or hedging transactions or otherwise, whether by purchase, tender
or exchange offer, through the acquisition of control of another person or
entity, by joining a partnership, limited partnership, syndicate or other
group, any voting securities of the Company or any voting rights decoupled from
the underlying voting securities held by MMI or its Affiliates or Associates to
any third party, if such sale, offer to sell or agreement to sell would result
in such third party, together with its Affiliates and Associates, having an
ownership or economic interest in more than ten percent (10%) of the
outstanding shares of Common Stock; provided that nothing in this Section 2(b)
shall restrict any member of the MMI Group from engaging in open market
transactions, transactions with broker dealers in the ordinary course of their
business or transactions with entities that are permitted to and do file
Statements on Schedule 13G with respect to the Common Stock so long as such
member of the MMI Group does not have any knowledge of any plan or intention on
the part of the buyer to control or seek to control, or otherwise actively
influence the Board or management of, the Company;

               (c) (i) engage, or in any way participate, directly or
indirectly, in any "solicitation" (as such term is defined in Rule 14a-1(l)
promulgated by the SEC under Exchange Act ) of proxies or consents, (ii) seek
to advise, encourage or influence any person or entity with respect to the
voting of any voting securities of the Company, (iii) initiate, propose or
otherwise "solicit" (as such term is defined in Rule 14a-1(l) promulgated by
the SEC under the Exchange Act) stockholders of the Company for the approval of
stockholder proposals or other business to be considered at a stockholders
meeting, or (iv) induce or attempt to induce any other person or entity to
initiate any such stockholder proposal; provided that nothing in this Section
2(c) shall limit the ability of the MMI Group to communicate to any third
party, including through the issuance of a public statement, how it intends to
vote the shares of Common Stock beneficially owned by it on any matter put to
the stockholders of the Company for their approval;

               (d) form, join or in any way participate in a partnership,
syndicate, or other group, including without limitation any "group" as defined
under Section 13(d)(3) of the Exchange Act, with respect to any voting
securities of the Company, other than the MMI Group or a group that includes
only some or all of the persons or entities identified as "Reporting Persons"
(or Affiliates thereof) in MMI's statement on Schedule 13D/A filed with the
SEC on February 20, 2008;

               (e) deposit any Company voting securities in any voting trust or
subject any Company voting securities to any arrangement or agreement with
respect to the voting thereof, except as expressly set forth in this Agreement;

               (f) seek, alone or in concert with others, (1) to call a meeting
of stockholders or solicit consents from stockholders or conduct a nonbinding
referendum of stockholders, (2) to obtain representation on the Board except as
expressly permitted in this Agreement, (3) to effect the removal of any member
of the Board, (4) to make a stockholder proposal at any meeting of the
stockholders of the Company, (5) to make a request for a list of the Company's
stockholders, or (6) to amend any provision of the Company's certificate of
incorporation or bylaws;

               (g) effect or seek to effect (including, without limitation, by
entering into any negotiations, agreements or understandings whether or not
legally enforceable with any person), offer or propose to effect, cause or
participate in, or in any way assist or facilitate any other person to effect
 or seek, offer or propose to effect or participate in, (i) any acquisition of
more than fifteen percent (15%) of any securities, or any material assets or
businesses, of the Company or any of its subsidiaries, (ii) any tender offer or
exchange offer, merger, acquisition, share exchange or other business
combination involving more than fifteen percent (15%) of any of the voting
securities or any of the material businesses or assets of the Company or any of
its subsidiaries, or (iii) any recapitalization, restructuring, liquidation,
dissolution or other extraordinary transaction with respect to the Company or
any of its subsidiaries or any material portion of its or their businesses
(each a "Transaction"); provided that nothing in this Section 2(g) shall
restrict any member of the MMI Group from engaging in discussions regarding any
proposed Transaction so long as the MMI Group notifies the Company of any bona
fide proposals relating to a potential Transaction.

               (h) otherwise act, alone or in concert with others, to control
or seek to control or influence or seek to influence the management, the Board
or policies of the Company, except as otherwise expressly permitted by this
Agreement;

               (i) unless required by law, make or issue, or cause to be made
or issued, any public disclosure, announcement or statement (including without
limitation the filing of any document or report with the SEC or any other
governmental agency or any disclosure to any journalist, member of the media or
securities analyst) (i) in support of any matter described in the foregoing
paragraphs of this Section 2, (ii) negatively commenting upon the Company,
including the Company's business, management or board of directors, or (iii)
inconsistent with, or otherwise contrary to, the provisions of this Agreement
or the statements in the joint press release issued pursuant to this Agreement;
or

               (j) enter into any negotiations, agreements or understandings
with any third party with respect to the foregoing, or advise, assist,
encourage or seek to persuade any third party to take any action with respect
to any of the foregoing, or otherwise take or cause any action inconsistent
with any of the foregoing.

3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.  The Company represents and
warrants to the MMI Group that (a) the Company has the corporate power and
authority to execute the Agreement and to bind it thereto, (b) this Agreement
has been duly and validly authorized, executed and delivered by the Company,
constitutes a valid and binding obligation and agreement of the Company, and is
enforceable against the Company in accordance with its terms, except as
enforcement thereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or similar laws generally
affecting the rights of creditors and subject to general equity principles, (c)
the execution, delivery and performance of this Agreement by the Company does
not and will not (i) violate or conflict with any law, rule, regulation, order,
judgment or decree applicable to it, or (ii) result in any breach or violation
of or constitute a default (or an event which with notice or lapse of time or
both could become a default) under or pursuant to, or result in the loss of a
material benefit under, or give any right of termination, amendment,
acceleration or cancellation of, any organizational document, agreement,
contract, commitment, understanding or arrangement to which the Company is a
party or by which it is bound, (d) no consent, approval, authorization, license
or clearance of, or filing or registration with, or notification to, any court,
legislative, executive or regulatory authority or agency is required in order
to permit the Company to perform its obligations under this Agreement, except
for such as have been obtained, and (e) there have been no changes to the
powers, responsibilities or membership of any committee of the Board and no new
committee of the Board has been created, in each case since the filing on April
29, 2008 of Amendment No. 1 to the Company's annual report on Form 10-K/A for
the fiscal year ended December 31, 2007 (except as previously disclosed in
writing to the MMI Group).

4. REPRESENTATIONS AND WARRANTIES OF THE MMI GROUP.  The MMI Group shall cause
its Affiliates to comply with the terms of this Agreement. Each member of the
MMI Group listed herein, on behalf of himself or itself, as applicable,
represents and warrants to the Company that (a) this Agreement has been duly
and validly authorized, executed and delivered by such member, and constitutes
a valid and binding obligation and agreement of such member, enforceable
against such member in accordance with its terms, except as enforcement thereof
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or similar laws generally affecting the
rights of creditors and subject to general equity principles, (b) each
signatory to this Agreement by any member of the MMI Group has the authority to
execute the Agreement on behalf of himself and the applicable member of the MMI
Group associated with that signatory's name, and to bind such member of the MMI
Group to the terms hereof, (c) no member of the MMI Group is party to any
agreement regarding the voting or disposition of shares of Common Stock, (d)
the execution, delivery and performance of this Agreement by each member of the
MMI Group does not and will not (i) violate or conflict with any law, rule,
regulation, order, judgment or decree applicable to it, or (ii) result in any
breach or violation of or constitute a default (or an event which with notice
or lapse of time or both could become a default) under or pursuant to, or
result in the loss of a material benefit under, or give any right of
termination, amendment, acceleration or cancellation of, any organizational
document, agreement, contract, commitment, understanding or arrangement to
which such member is a party or by which it is bound, (e) no consent, approval,
authorization, license or clearance of, or filing or registration with, or
notification to, any court, legislative, executive or regulatory authority or
agency is required in order to permit any member of the MMI Group to perform
such member's obligations under this Agreement, except for such as have been
obtained and (f) the number of shares of Common Stock beneficially owned by the
MMI Group as of the date of this Agreement is 32,322,000.

5. CONFIDENTIALITY.  The members of the MMI Group (each, a "Recipient") each
acknowledge the confidential and proprietary nature of the Confidential
Information (as defined below) and agree that the Confidential Information (a)
will be kept confidential by Recipient and Recipient's Representatives (as
defined below) and (b) will not be disclosed by Recipient (except to other
Recipients and their Affiliates and Associates and such person's
Representatives to the extent contemplated by this Agreement) or by Recipient's
Representatives to any person except with the specific prior written consent of
the Company or except as expressly otherwise permitted by this Agreement.  It
is understood that (i) Recipient may disclose Confidential Information only to
those of Recipient's Representatives who are informed by Recipient of the
confidential nature of the Confidential Information and the obligations of this
Agreement, (ii) Recipient shall be responsible for the breach of the provisions
of this Section 5 by Recipient's Representatives and (iii) the provisions of
this Section 5 shall not apply to any director of the Company in his or her
capacity as such.  As used in this Agreement, the term "Confidential
Information" means and includes any and all of the information concerning the
business and affairs of the Company that may hereafter be disclosed to
Recipient by the Company or by the directors, officers, employees, agents,
consultants, advisors or other representatives, including legal counsel,
accountants and financial advisors ("Representatives") of the Company; provided
that "Confidential Information" shall not include information that (a) was in
or enters the public domain or was or becomes generally available to the public
other than as a result of disclosure by Recipient or any Representative
thereof, (b) was independently acquired by Recipient or its Representatives
without violating any of the obligations of Recipient or its Representatives
under this Agreement, or under any other contractual, legal, fiduciary or
binding obligation of Recipient or its Representatives with or to the Company,
(c) was available, or becomes available, to Recipient or its Representatives on
a nonconfidential basis other than as a result of its disclosure to Recipient
by the Company or any Representative of the Company, but only if to the
knowledge of Recipient the source of such information (A) is not bound by a
confidentiality agreement with the Company or (B) is not otherwise prohibited
from transmitting the information to Recipient or Recipient's Representatives
by a contractual, legal, fiduciary or other binding obligation with or to the
Company, or (d) was independently developed by Recipient or its Representatives
without use of or reference to any Confidential Information.  The Company
acknowledges that, other than the MMI Nominees, no member of the MMI Group or
its Affiliates, Associates or Representatives thereof shall be deemed to be in
possession of Confidential Information solely by reason of receipt of such
Confidential Information by any MMI Nominee.  The members of the MMI Group
acknowledge that they, as well as their Representatives, are aware that the
United States securities laws prohibit any person who has material non-public
information about a company from purchasing or selling securities of such
company, or from communicating such information to any other person under
circumstances in which it is reasonably foreseeable that such person is likely
to purchase or sell such securities.

6. PRESS RELEASE AND PUBLIC ANNOUNCEMENTS.  Following the execution of this
Agreement, the Company shall issue the press release announcing the terms of
this Agreement, in the form attached hereto as Exhibit A (the "Press Release"),
and shall file a Current Report on Form 8-K with the SEC disclosing the terms
of this Agreement and attaching as exhibits this Agreement and the Press
Release. None of the parties hereto will make any other public statements
(including in any filing with the SEC or any other regulatory or governmental
agency, including any stock exchange) that are inconsistent with the statements
in the Press Release; provided, however, that nothing herein shall (a) limit
the ability of the Company to make any statement required by law or stock
exchange rule or the ability of the directors to make any statement required by
their fiduciary duties or (b) limit the ability of the MMI Group to (i) issue
any public statement, including any statement ursuant to Rule 14a-1(l)(2)(iv)
under the Exchange Act, regarding its opposition to any matters submitted for a
vote of stockholders or (ii) issue any public statement, including any
statement pursuant to Rule 14a-1(l)(2)(iv) under the Exchange Act, regarding
how it intends to vote and the reasons therefor with respect to any
extraordinary transaction of any kind or nature between the Company and any
third party or related party or (iii) in a manner consistent with this
Agreement, file an amendment or amendments to its Schedule 13D regarding the
Common Stock as required by law or to make other securities or tax filings as
required by law; provided further, however, that the foregoing proviso shall
not permit either party to make disparaging or negative personal remarks about
the other's officers or directors.

7. SPECIFIC PERFORMANCE.  Each of the members of the MMI Group, on the one
hand, and the Company, on the other hand, acknowledges and agrees that
irreparable injury to the other party hereto would occur in the event any of
the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached and that such injury would not be
adequately compensable in damages.  It is accordingly agreed that the members
of the MMI Group or any of them, on the one hand, and the Company, on the other
hand (the "Moving Party"), shall each be entitled to specific enforcement of,
and injunctive relief to prevent any violation of, the terms hereof, and the
other party hereto will not take action, directly or indirectly, in opposition
to the Moving Party seeking such relief on the grounds that any other remedy or
relief is available at law or in equity.

8. EXPENSES.  The Company shall reimburse the MMI Group for its reasonable,
documented out-of-pocket fees and expenses incurred (including legal expenses)
in connection with its Schedule 13D, matters related to the 2008 Annual Meeting
and the negotiation and execution of this Agreement, provided that such
reimbursement shall not exceed $125,000 in the aggregate.
9. SEVERABILITY.  If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated. It is hereby stipulated and
declared to be the intention of the parties that the parties would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such which may be hereafter declared invalid, void or
unenforceable. In addition, the parties agree to use their best efforts to
agree upon and substitute a valid and enforceable term, provision, covenant or
restriction for any of such that is held invalid, void or unenforceable by a
court of competent jurisdiction.

10. NOTICES.  Any notices, consents, determinations, waivers or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered:
(i) upon receipt, when delivered personally; (ii) upon receipt, when sent by
facsimile (provided confirmation of transmission is mechanically or
electronically generated and kept on file by the sending party); or (iii) one
(1) business day after deposit with a nationally recognized overnight delivery
service, in each case properly addressed to the party to receive the same. The
addresses and facsimile numbers for such communications shall be:

               If to the Company:
                       Unisys Corporation
                       Unisys Way
                       Blue Bell, Pennsylvania 19424
                       Attention: Nancy Straus Sundheim
                       Facsimile: (215) 986-0624

               With a copy to:

                       Wachtell, Lipton, Rosen & Katz
                       51 West 52nd Street
                       New York, NY  10019
                       Attention:  Andrew R. Brownstein and Trevor S. Norwitz
                       Facsimile:  (212) 403-2000

               If to the MMI Group or any member of the MMI Group:

               MMI Investments, L.P.
               1370 Avenue of the Americas
               New York, New York 10019
               Attention:  Alan L. Rivera
               Facsimile: 212-586-0340

               With a copy to:

                       Olshan Grundman Frome Rosenzweig & Wolosky LLP
                       Park Avenue Tower
                       65 East 55th Street
                       New York, New York 10022
                       Attention: Steven Wolosky
                       Facsimile: (212) 451-2222

11. APPLICABLE LAW.  This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware, without regard
to any conflict of laws provisions thereof.  Each of the parties hereto
irrevocably agrees that any legal action or proceeding with respect to this
Agreement and the rights and obligations arising hereunder, or for recognition
and enforcement of any judgment in respect of this Agreement and the rights and
obligations arising hereunder brought by the other party hereto or its
successors or assigns, shall be brought and determined exclusively in the
Delaware Court of Chancery and any state appellate court therefrom within the
State of Delaware (or, if the Delaware Court of Chancery declines to accept, or
determines that it does not have, jurisdiction over a particular matter, any
state or federal court within the State of Delaware). Each of the parties
hereto hereby irrevocably submits with regard to any such action or proceeding
for itself and in respect of its property, generally and unconditionally, to
the personal jurisdiction of the aforesaid courts and agrees that it will not
bring any action relating to this Agreement in any court other than the
aforesaid courts. Each of the parties hereto hereby irrevocably waives, and
agrees not to assert in any action or proceeding with respect to this
Agreement, (i) any claim that it is not personally subject to the jurisdiction
of the above-named courts for any reason, (ii) any claim that it or its
property is exempt or immune from jurisdiction of any such court or from any
legal process commenced in such courts (whether through service of notice,
attachment prior to judgment, attachment in aid of execution of judgment,
execution of judgment or otherwise) and (iii) to the fullest extent permitted
by applicable legal requirements, any claim that (A) the suit, action or
proceeding in such court is brought in an inconvenient forum, (B) the venue of
such suit, action or proceeding is improper or (C) this Agreement, or the
subject matter hereof, may not be enforced in or by such courts.

12. COUNTERPARTS.  This Agreement and any amendments hereto may be executed and
delivered in one or more counterparts, and by the different parties hereto in
separate counterparts, each of which when executed shall be deemed to be an
original, but all of which taken together shall constitute one and the same
agreement, and shall become effective when counterparts have been signed by
each party hereto and delivered to the other parties hereto, it being
understood that all parties need not sign the same counterpart. In the event
that any signature to this Agreement or any amendment hereto is delivered by
facsimile transmission or by e-mail delivery of a ".pdf" format data file, such
signature shall create a valid and binding obligation of the party executing
(or on whose behalf such signature is executed) with the same force and effect
as if such facsimile or ".pdf" signature page were an original thereof.

13. ENTIRE AGREEMENT; AMENDMENT AND WAIVER; SUCCESSORS AND ASSIGNS.  This
Agreement contains the entire understanding of the parties hereto with respect
to its subject matter.  There are no restrictions, agreements, promises,
representations, warranties, covenants or undertakings between the parties
other than those expressly set forth herein.  This Agreement may be amended
only by a written instrument duly executed by the parties hereto or their
respective successors or assigns.  No failure on the part of any party to
exercise, and no delay in exercising, any right, power or remedy hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
such right, power or remedy by such party preclude any other or further
exercise thereof or the exercise of any other right, power or remedy.  All
remedies hereunder are cumulative and are not exclusive of any other remedies
provided by law.  The terms and conditions of this Agreement shall be binding
upon, inure to the benefit of, and be enforceable by the parties hereto and
their respective successors, heirs, executors, legal representatives, and
permitted assigns. No party shall assign this Agreement or any rights or
obligations hereunder without, with respect to any member of the MMI Group, the
prior written consent of the Company, and with respect to the Company, the
prior written consent of the MMI Group.

      IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized signatories of the parties as of the date hereof.

                                              UNISYS CORPORATION

                                              By: /s/ Henry C. Duques
                                                  ------------------------
                                              Name:  Henry C. Duques
                                              Title: Chairman of the Board

                                              THE MMI GROUP:

                                              MMI INVESTMENTS, L.P.

                                              By:  MCM Capital Management, LLC
                                                   General Partner

                                              By: /s/ Clay B. Lifflander
                                                  ----------------------------
                                              Name:  Clay B. Lifflander
                                              Title: President

                                              MCM CAPITAL MANAGEMENT, LLC

                                              By: /s/ Clay B. Lifflander
                                                  ----------------------------
                                              Name:  Clay B. Lifflander
                                              Title: President

                                                  /s/ Clay B. Lifflander
                                                  ----------------------------
                                                     Clay B. Lifflander

                                                  /s/ Charles B. McQuade
                                                  ----------------------------
                                                     Charles B. McQuadeIndustrial Services of America, Inc. - Exhibit 10.1 to Form 8-K

Exhibit 10.1

 

BB&T

 

LOAN AGREEMENT

 

		
			958-0514992

	
			Account Number

 

This Loan Agreement (the
"Agreement") is made this 7th day of May, 2008 by and between BRANCH BANKING AND
TRUST COMPANY, a North Carolina banking corporation ("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"):

 

Term Loan: Loan in the
principal amount of $6,000,000 to enable the Borrower to purchase and install
equipment, including a shredder, sorting equipment and a crane, for use in the
Borrower's operations. The Loan shall be evidenced by the Borrower's Promissory
Note dated on or after the date hereof which shall mature November 7, 2013, when
the entire unpaid principal balance then outstanding plus accrued interest
thereon shall be , paid in full. The Loan shall bear interest at the rate set
forth in any such Note evidencing all or any portion of the Loan, the terms of
which are incorporated herein by reference.

 

Other Credit Relationship
("Other Credit Relationship"): in the principal amount of $3,000,000
pursuant to the terms and conditions of a loan agreement between Bank and
Borrower dated of even date herewith.

 

The promissory notes
evidencing the Loan 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 Loan 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.)

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 1986, 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.

2.1 1. 
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 terms, 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. 

 

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. 
Maintain Properties. 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.

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 tb
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 
Indemnification. 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 Loan or the Other Credit Relationship. 

3.12
Filings. Borrower represents and warrants that its standard practice, with
regard to equipment owned by Borrower and leased to its customers, is to provide
public notice of the ownership of the equipment and existence of said leases by
filing UCC Financing Statements for items of equipment so leased. Borrower
agrees to follow said practice for the term of this Agreement as to all its
equipment so leased, regardless of whether said equipment is collateral for the
Loan or any other indebtedness owing Bank by Borrower.

 

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, of not less than 1.25:1.00, to be measured annually.

Debt/Tangible Net Worth. Maximum of 4.00: 1.00, to be measured annually.

Limitation on Loans and Advances to Owners. Not to exceed $500,000 per
calendar year.

 

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 additional funded 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 secured only by the
asset purchased, not to exceed $1,000,000 per year.

6.03. 
Change of Legal Form of Business or Management; 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, or change its current
management, and Borrower shall not purchase all or substantially all of the
assets or business of any Person.

6.04. 
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 $N/A in any fiscal year of the Borrower.

6.05. 
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 $N/A in
any fiscal year of the Borrower.

6.06. 
Salaries. Salaries and any other cash compensation to
owners/officers/partners/managers shall be limited as follows: N/A.

6.07. 
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.

6.08. 
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.

6.09. 
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.

6.10. 
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.

6.11. 
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 are 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, urea 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
Guarantor's 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 sole
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.

      "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), 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 Loan(s) 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 under 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 may be 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 terms 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]

 

 

SIGNATURE PAGE

 

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

 

Borrower is a
Corporation:

 

		
			WITNESS:
	 	
			Industrial Services of America, Inc.

	
			 
	 	
			 

	
			/s/ Sharon Hardy
	
			By:
	
			/s/ Harry Kletter

	
			 
	 	
			Harry Kletter

	
			 
	
			Title:
	
			Chief Executive Officer and President

 

Additional
Co-Borrowers or Guarantors:

 

		
			WITNESS
	 	 	 
	 	 	
			

			

 	
			(SEAL)

	 	 	
			

			

 	
			(SEAL)

	 	 	
			

			

 	
			(SEAL)

	 	 	
			

			

 	
			(SEAL)

 

 

 

		
			WITNESS:
	 	
			BRANCH BANKING AND TRUST COMPANY

	 	 	 
	
			/s/ Sharon Hardy
	
			By:
	
			/s/ Johnny L. Perry

	 	 	
			Johnny L. Perry

	 	
			Title:
	
			Senior Vice President

	 	 	 
	
			WITNESS:
	
			 
	
			BB&T BANKCARD CORPORATION

	 	 	 
	 	
			By:
	
			 

	 	 	 
	 	
			Title:

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