8-K

                           SECURITY AND EXCHANGE COMMISSION
                              Washingtion, D. C.  20549
 

                                     FORM 8-K

                 PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
                                EXCHANGE ACT OF 1934

     Date of Report (Date of earliest event reported):  November 25, 1996


                        ADVANCED ENVIRONMENTAL SYSTEMS, INC.
              (Exact name of registrant as specified in its charter)

     New York                         0-19013                 84-1059226
(State or other                      Commission             I.R.S. Employer
 jurisdiction of incorporation)      File Number          Identification No.) 

730 17th Street, Ste. 712
Denver, Colorado                                           80202
(Address of principal executive offices)                 (Zip Code) 


                               (303) 571-5564
             (Registrant's telephone number, including area code)
     
      



                      ADVANCED ENVIRONMENTAL SYSTEMS, INC.

ITEM 5.  OTHER EVENTS

The Company has filed claims for federal and state tax refunds in the 
approximate amount of $458,000 and $13,700, respectively.  On November 25, 
1996, the Company obtained a loan from Carylyn K. Bell in the amount of 
$425,000 secured by the claims for the federal tax refunds.  The loan, which 
bears interest at the prime rate from time to time by Key Bank Denver plus 
2%, is due and payable on March 25, 1997; provided, however, that the
Company is required to apply the proceeds of the federal tax refunds to 
reduce its loan obligations.  The Company also agreed to pay Ms. Bell on the 
maturity of the loan a fee equal to 2.5% of the original principal amount of 
the loan and an additional 2% fee on any portion or all of the loan not 
repaid by January 25, 1997.  Ms. Bell is a significant shareholder of the 
Company and the wife of J. Daniel Bell, the President and a director of the
Company and a director of the Company's wholly-owned operating subsidiary,
International Catalyst, Inc.("INCAT"). In addition, Ms. Bell is a significant 
shareholder of Industrial Services Technologies, Inc. ("IST"), the majority 
shareholder of the Company, of which Mr. Bell also is a director.  Mark M. 
King, the brother of Ms. Bell, also is a director of IST and of INCAT.  IST 
provided an unsecured Guaranty of the loan.  The Company believes that the 
terms of the loan from Ms. Bell are commercially reasonable and at least as 
favorable as could have been obtained in an arm's length transaction.

The Company's Quarterly Reported on Form 10-Q for the Period ended 
September 30, 1996, described, among other things, the notification which 
INCAT had received from a financial institution that its line of credit 
would be terminated effective November 30, 1996. On November 27, 1996, 
INCAT and the financial institution entered into a Forbearance Agreement, 
pursuant to which the financial institution agreed to extend the line of
credit to December 31, 1996 and to refrain from exercising any of its rights 
or remedies under its loan agreement with INCAT due to its failure at 
September 30, 1996 to meet certain financial loan covenants.  The financial 
institution also agreed to continue to fund against accounts receivable from 
BASF in excess of the concentration limits in the loan agreement.  The 
Forbearance Agreement adjusted the interest rate payable by INCAT to the 
index rate charged from time to time by the financial institution plus 2% 
which, at November 27, 1996 is 10.25% per annum.

INCAT has received and is reviewing a preliminary non-binding proposal from 
another financial institution for an Accounts Receivable Revolving Purchase 
Facility  ("Revolver") under which the financial institution would purchase 
Accounts Receivables in aggregate outstanding amount of up to $2,500,000.  


ITEM 7.  FINANCIAL STATEMENTS AND EXHIBITS

       (c)  Exhibits

            (a)  Loan Agreement dated November 25, 1996 by and between
                 Advanced Environmental Systems, Inc. and Carylyn K. Bell.
            (b)  Promissory Note dated November 25, 1996 in the amount
                 of $425,000 from Advanced Environmental Systems, Inc.
                 to Carylyn K. Bell.
            (c)  Security Agreement dated November 25, 1996 by and between
                 Advanced Environmental Systems, Inc. and Carylyn K. Bell.
            (d)  Guaranty dated November 25, 1996 by Industrial Services
                 Technologies, Inc. and for the benefit of Carylyn K. Bell.

            




                                 SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934, the 
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.


                                   ADVANCED ENVIRONMENTAL SYSTEMS, INC.
                                               (Registrant)


Date:  December 11, 1996            By: /s/ Alfred O. Brehmer
                                       Alfred O. Brehmer, Secretary-Treasurer

EX-20

[ARTICLE]              5
[LEGEND]
This schedule contains the Loan Agreement dated November 25, 1996 by and
between Advanced Environmental Systems, Inc. and Carylyn K. Bell.



	LOAN AGREEMENT


	THIS LOAN AGREEMENT (the "Agreement") is made by and between 
Advanced Environmental Systems, Inc., and New York corporation ("Borrower"), 
and Carylyn K. Bell, an individual Colorado resident ("Lender").  Borrower and 
Lender are sometimes collectively referred to herein as the "Parties."  

	RECITALS

       A.  Borrower is a holding company which owns 100% of the issued 
outstanding shares of stock of Advanced Energy Corporation, a Delaware 
corporation ("AEC").  AEC is the owner of 100% of the issued outstanding 
shares of stock of International Catalyst, Inc., a Nevada corporation 
("INCAT").  Neither Borrower nor AEC has any operations or any assets other 
than the shares of stock which it holds of AEC and INCAT, respectively.  

       B.  Borrower files consolidated tax returns with AEC and INCAT and 
has filed claims for the refunds listed on Exhibit A attached hereto and made
a part hereof (the "Tax Refunds").  Borrower anticipates that the Tax Refunds
will be received within approximately 45 to 90 days of the filing of the 
claims for the Tax Refunds.  Due to the urgent needs for cash by INCAT, 
Borrower desires to obtain a loan secured by the Tax Refunds, the net 
proceeds of which will be made available by Borrower directly or indirectly 
to INCAT.  

       C.  Lender is a principal shareholder of Borrower and the wife of 
Borrower's President who also serves as one of Borrower's Directors, and, 
therefore, is familiar with the condition and prospects of Borrower, AEC and 
INCAT, and desires to assist them by making a loan secured by the Tax Refunds.

       D.  The Parties now desire to enter into this Agreement pursuant to 
which Borrower shall borrow from Lender and Lender shall lend to Borrower 
$425,000 secured by the Tax Refunds on the terms and conditions hereinafter 
set forth:

NOW, THEREFORE, in consideration of the Recitals and the agreements hereunder
set forth, the Parties agree as follows:

	AGREEMENT

       1.  Amount of Loan, Interest Rate.  Upon the Closing as hereinafter 
defined, Borrower shall borrow from Lender and Lender shall loan to Borrower 
$425,000 (the "Loan"), which Loan shall be evidenced by the Promissory Note 
(the "Note") of Borrower payable to Lender.  The form of Note to be delivered
to Lender by Borrower shall be generally in the form attached hereto and made
a part hereof as Exhibit B.  The outstanding balance of the Loan from time to
time shall bear interest at the Prime Rate charged from time to time by Key 
Bank Denver plus 2% (the "Interest Rate").  The principal and interest 
payable pursuant to the Loan shall be due and payable in full on March 25, 
1997; provided, however, that Borrower shall prepay to Lender within three 
business days of the receipt thereof, all amounts received by Borrower in 
respect of the Tax Refunds.  Lender shall apply any amounts so received first
to the principal of the Loan, then to the Fees as hereafter defined and 
interest then due and payable.  

       2.  Guaranty by IST.  The majority shareholder of the Borrower,
Industrial Services Technologies, Inc., a Colorado corporation ("IST"), shall
guarantee payment of the Loan.  The guaranty shall be generally in the form 
of guaranty (the "Guaranty") attached hereto and made a part hereof as 
Exhibit C. 

       3.  Fees. Borrowers shall pay to Lender on or before the earlier of 
(i) March 25, 1995, or (ii) the date on which the principal amount of the 
Loan is prepaid in full, the following fees (the "Fees"): (a) a fee equal to 
2.5% of the original principal amount of the Loan; and (b) in the event or 
any portion of the Loan shall have not been repaid by January 25, 1997, an 
additional fee equal to 2% of the then outstanding principal balance of the 
Loan.  

       4.  Collateral.  At the Closing, to secure all obligations (the 
"Obligations") of Borrower to Lender pursuant to this Agreement and all 
documents executed in connection therewith (collectively, the "Loan 
Documents"), Borrower shall grant Lender a first priority security interest 
in and to the claims for the Tax Refunds, the proceeds thereof and all books 
and records of Borrower relating thereto (the "Collateral"), which grant 
shall be evidenced by the execution and delivery of a security agreement in 
the form of the security agreement (the "Security Agreement") attached hereto
and part hereof as Exhibit D.  Borrower shall, at its sole cost and expense, 
file Uniform Commercial Code financing statements (the "Financing 
Statements") in favor of Lender with the Offices of the Secretaries of States
of New York and Colorado.

		     5.	Representations of Borrower.  Borrower represents to Lender as 
follows:

               a.  Borrower is a corporation duly incorporated, validly 
existing and in good standing under the laws of the State of New York.

               b.  The execution, delivery and performance by Borrower of 
this Agreement and all documents and instruments to be delivered pursuant 
hereto have been duly authorized by all necessary corporate action and do not
contravene the Borrower's Certificate of Incorporation or Bylaws.

               c.  The Tax Refunds are owned by Borrower free and clear of 
liens in favor of any other persons or entities and Borrower has full 
corporate power and authority to grant a first priority security interest in 
the Tax Refunds to Lender.

               d.  This Agreement constitutes the legal, valid and binding 
obligation of Borrower enforceable against it in accordance with its terms, 
subject to the effect of applicable bankruptcy, insolvency, reorganization 
or similar laws affecting creditors' rights generally and principles of 
equity.  

       6.  Representations of Lender.  Lender represents and warrants to 
Borrower as follows:

               a.  Lender, as a principal shareholder of Borrower, has a 
direct financial interest in Borrower and, therefore, desires to make the 
Loan.  

               b.  Lender acknowledges that she has had a full opportunity to 
inspect, review and otherwise familiarize herself completely with respect to 
the financial condition and prospects of Borrower and IST andto familiarize 
herself completely with respect to the Tax Refunds.  

               c.  All representations and warranties in the form of 
Subscription Agreement attached hereto and made part hereof as Exhibit E are 
true and correct as the date hereof and shall be true and correct as of the 
date of the Closing and are hereby incorporated in this Loan Agreement by 
reference.  

        7.  Closing.  The Closing shall take place at the offices of IST, 
Suite 2300, 370 Seventeenth Street, Denver, Colorado  80202 on November 25, 
1996 at 10 A.M. or at such other time and place as is mutually agreeable to 
the Parties.   At the Closing, the following documents shall be delivered by 
Borrower to Lender:

                a.  Secretary-Treasurer's Certificate of Borrower regarding 
Directors' resolutions of Borrower approving the Loan.

             			b.	The Note.

             			c.	The Security Agreement.

                d.  Officer's Certificate of Guarantor regarding Directors' 
resolutions of Guarantor approving the Guaranty.

             			e.	The Guaranty.

                f.  The Financing Statements with evidence of the filing of 
the Financing Statements or the delivery of the Financing Statements to a 
third party service such as CT Corporation System with instructions for 
filing.

		At the Closing, Lender shall deliver to Borrower the following:

			a.	The Subscription Agreement.
 
   b.  The $425,000 principal amount of the Loan to be delivered by wire 
transfer to the account of AES or such third party as AES directs in 
accordance with the following wire transfer instructions, which delivery of 
funds, Borrower acknowledges as being made on its behalf and for which 
Borrower hereby acknowledges receipt notwithstanding the delivery of the 
funds at its direction to a third party:


				                                                                   
				                                                                    
				                                                                    	

       8.  Notices.  Any notice required or permitted to be given under this 
Agreement will be given in writing to the Parties at their respective address
as set forth below:

			a.	Advanced Environmental Systems, Inc.
				730 17th Street, Ste. 712
				Denver, Colorado  80202
				Attention: Alfred O. Brehmer, Secretary-Treasurer

			b.	Carylyn K. Bell
				2750 East Cedar Avenue
				Denver, Colorado  80209

Notices may be sent by personal delivery or by certified mail, return receipt 
requested, postage prepaid.  Notices delivered by personal delivery shall be 
effective when delivered if delivered on a business day, otherwise on the 
first business day following delivery and if sent by certified mail, on the 
earlier of actual receipt or the third business day following the day sent. 
Either Party may change its or her address by notice given to the other in 
accordance with this section.

       9.  Entire Agreement.  This Agreement and the other Loan Documents 
constitute the entire agreement and understanding between the Parties with 
respect to the subject matter and supersedes all prior understandings, 
proposals and communications on the subject matter.

       10.  Governing Law.  This Agreement will be governed and construed in 
accordance with the laws of the State of Colorado.  Each Party irrevocably 
consents to the personal jurisdiction and placement of venue in the state and
federal courts located within the City and County of Denver for the purposes 
of enforcing this Agreement, and agrees that such courts will exclusively 
constitute the permitted forums for resolving disputes under or in connection
with this Agreement.

11.  Severability.  If any provision of this Agreement or portion of any 
such provision is held invalid or unenforceable as written by a court of 
competent jurisdiction, such provisions or portion thereof affected by such 
holding will be modified, to the extent possible, by reducing its scope or 
duration so that it is enforceable to the maximum extent permissible.  If 
said modification is not possible, the affected provision or portion thereof 
will be stricken, and all remaining provision of this Agreement will continue
in full force and effect.

		     12.	Miscellaneous.  

               a.  No Party will assign this Agreement or any portion thereof
to any third party without the prior written consent of the other, which 
either Party may withhold in its sole discretion.

               b.  The warranties, representations and covenants of the 
Parties contained in or made pursuant to this Agreement shall survive the 
execution and delivery of this Agreement and the Closing.

               c.  Except as otherwise provided herein, the terms and 
conditions of this Agreement shall inure to the benefit of and be binding 
upon the respective successors and assigns of the Parties.  Nothing in this 
Agreement, express or implied, is intended to confer upon any party other 
than the Parties hereto or their respective successors and assigns any 
rights, remedies, obligations, or liabilities under or by reason of this 
Agreement, except as expressly provided in this Agreement.

              d.  This Agreement may be executed in counterparts, each of 
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.

              e.  Irrespective of whether the Closing is effected, each Party 
shall be responsible for its respective costs and expenses incurred with 
respect to the negotiation, execution, delivery and performance of this 
Agreement.  Each Party represents to the other that it or she has relied its 
or her own advisors and legal counsel in connection with the negotiation, 
execution, delivery and performance of this Agreement.  

	DATED THIS to be effective as of the 25th day of November, 1996.						
               				ADVANCED ENVIRONMENTAL SYSTEMS, INC., 
                          a New York corporation

                                            
By: /s/ Carylyn K. Bell
CARYLYN K. BELL, individually				Authorized Officer
		


	EXHIBIT A


	Advanced Environmental Systems, Inc.	
	Federal Form 1139 Corporation Application for Tentative
		Refund							       		$272,822.00

	Advanced Environmental Systems, Inc.
	Federal Income tax returns for the year ended 
		March 31, 1996			 					185,993.00

		Total									       	$458,815.00

EX-20

[ARTICLE]       5
[LEGEND]
This schedule contains the Promissory Note dated November 25, 1996 in the 
amount of $425,000 from Advanced Environmental Systems, Inc. to Carylyn 
K. Bell.


THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS 
AMENDED (THE "1933 ACT"), OR UNDER THE PROVISIONS OF ANY APPLICABLE STATE 
SECURITIES LAWS, BUT HAS BEEN ACQUIRED BY THE REGISTERED HOLDER HEREOF FOR 
PURPOSES OF INVESTMENT IN RELIANCE ON EXEMPTIONS UNDER THE 1933 ACT, AND 
UNDER APPLICABLE STATE SECURITIES LAWS.  NEITHER THIS NOTE NOR ANY INTEREST 
THEREIN MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR ASSIGNED EXCEPT IN A 
TRANSACTION WHICH IS EXEMPT UNDER PROVISIONS OF THE 1933 ACT AND ANY 
APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EFFECTIVE REGISTRATION 
STATEMENT; AND IN THE CASE OF AN EXEMPTION, ONLY IF THE COMPANY HAS RECEIVED 
AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH TRANSACTION 
DOES NOT REQUIRE REGISTRATION OF THIS NOTE.

	PROMISSORY NOTE

U.S.$425,000 	NOVEMBER 25, 1996

	FOR VALUE RECEIVED, Advanced Environmental Systems, Inc., 
a New York  corporation ("Maker"), having an address at 730 17th Street, 
Suite 712, Denver, Colorado 80202, promises to pay to Carylyn K. Bell (the 
"Payee") the principal sum of $425,000, together with (a) simple interest on 
the principal balance of this Promissory Note (the "Note") outstanding from 
time to time at the rate per annum equal to the Prime Rate charged from time 
to time by Key Bank Denver plus 2% and (b) a fee equal to 2.5% of the 
original principal amount and an additional fee of 2% of the principal 
amount, if any, outstanding at January 25, 1997 (collectively, the "Fees").  
The principal of this Note, the Fees and interest on the unpaid principal 
balance of this Note outstanding from time to time shall be due and payable 
on March 25, 1997; provided, however, that Maker shall pay to Payee within 
three business days of its receipt thereof, any portion or all of the Tax 
Refunds received by it to be applied first to the principal and then to the 
Fees and interest then due and payable hereunder.  

This Note is made pursuant to the provisions of a Loan Agreement dated of 
even date herewith by and between Maker and Payee, as it may be amended from 
time to time (the "Loan Agreement"), and is secured by the Collateral and a 
Guaranty.  Capitalized terms not otherwise defined herein shall have the 
meanings ascribed to them in the Loan Agreement.  This Note is not negotiable.

Except as expressly provided to the contrary in the Loan Agreement, Maker 
waives presentment, demand, dishonor, protest, notice of protest, diligence 
and any other notice or action otherwise required to be given or taken under 
the law in connection with the delivery, acceptance, performance,default, 
enforcement or collection of this Note, and expressly agrees that this Note, 
or any payment hereunder, may be extended, modified or subordinated (by 
forbearance or otherwise) from time to time, without in any way affecting 
the liability of Maker.

The occurrence of any of the following events shall constitute an "Event of 
Default" under this Note:

    (a)  The failure by Maker to pay, within five days of the due date 
therefor, any of the principal, the Fees or accrued interest due under this 
Note; or

   (b)  If Maker (i) makes a general assignment for the benefit of creditors,
(ii) is adjudicated a bankrupt,(iii) files a voluntary petition in 
bankruptcy, (iv)takes advantage, as against its creditors, of any bankruptcy 
law, (v) has a petition or proceeding filed against it under any provision of
any bankruptcy or insolvency law, which petition or proceeding is not 
dismissed within sixty days after the date of the commencement thereof, (vi) 
has a receiver, liquidator, trustee, custodian, conservator, sequestrator or 
other such person appointed by any court to take charge of its affairs or 
assets or business and such appointment is not vacated or discharged within 
sixty days thereof, (vii) any liquidation, dissolution or winding up of the 
business of Maker, (viii) any sale (whether voluntary or involuntary, or 
whether in one transaction or a series of transactions) of all or 
substantially all of the assets of Maker, or (ix) takes any action in 
furtherance of any of the foregoing (collectively, an "Insolvency Proceeding").

   (c)  If an event of default which is not cured within any applicable cure 
period occurs pursuant to the Security Agreement.

	If any Event of Default shall occur:

   (a)  The entire unpaid principal balance of the Note, together with any 
Fees and accrued interest thereon, shall be immediately due and payable (the 
"Acceleration"); 

  (b)  Payee shall have the right to commence collection proceedings against 
Maker and/or proceed under the Collateral; and

  (c)  From and after Acceleration, interest shall accrue at a default rate 
of interest equal to 18% per annum. 

If any payment under this Note falls due on a Saturday, Sunday or public 
holiday, the payment shall be payable on the next business day.

Maker may prepay all or part of the outstanding principal of this Note at 
any time or times after the date hereof without penalty or premium of any 
kind.

Any notice or other communication given hereunder shall be given as provided 
in the Loan Agreement.  

This Note and its validity, construction and performance shall be governed in
all respects by the laws of the State of Colorado.  

This Note may not be amended or changed orally, but only by an agreement in 
writing executed by the parties hereto. 

Maker shall pay all reasonable costs and fees, including attorneys' fees, of 
Payee in enforcing this Note.

IN WITNESS WHEREOF, Maker has caused this Note to be duly executed by an 
authorized officer as of the date written above.

					ADVANCED ENVIRONMENTAL SYSTEMS, INC.


						By:	/s/ Gary L. Schmitt
							Authorized Officer

ACCEPTED AND AGREED TO:

/s/Carylyn K. Bell                                                
Carylyn K. Bell

EX-20

[ARTICLE]      5
[LEGEND]
This schedule contains the Security Agreement dated November 25, 1996 by and 
between Advanced Environmental Systems, Inc. and Carylyn K. Bell.



	SECURITY AGREEMENT

	THIS SECURITY AGREEMENT made as of this 25th day of November, 1996 
by and between Advanced Environmental Systems, Inc. ("Borrower") and 
Carylyn K. Bell ("Lender").

	RECITALS

     A.  Pursuant to that certain Loan Agreement of even date herewith (the 
"Loan Agreement") executed by and between Borrower and Lender, Lender agreed 
to make a Loan (this and all other capitalized terms not otherwise defined in
this Security Agreement and defined in the Loan Agreement shall have the 
meanings ascribed to them in the Loan Agreement) to Borrower of $425,000, 
subject to the terms and conditions set forth in the Loan Agreement.

     B.  One of the conditions precedent to the consummation of the 
transactions contemplated by the Loan Agreement is the execution by Borrower 
of this Security Agreement.

NOW, THEREFORE, in consideration of the Recitals and for other good and 
valuable consideration, the receipt and sufficiency of which hereby is 
acknowledged, Borrower and Lender agree as follows:

    1.  Collateral.  As used herein, "Collateral" shall mean the claims for 
the Tax Refunds and all proceeds thereof and all books and records of 
Borrower relating thereto, whether now owned or hereafter acquired by 
Borrower.

     2.  Grant of Security Interest.  To secure payment and performance of 
the Obligations, Borrower hereby pledges and grants to Lender a security 
interest in the Collateral, which pledge and security interest Borrower 
acknowledges are coupled with an interest.

     3.  Representations and Warranties.  Borrower hereby represents and 
warrants to Lender that:

            a.  Borrower is the legal and beneficial owner of such Collateral;

            b.  This Security Agreement creates a valid first priority 
security interest in the Collateral in favor of Lender;

            c.  None of the Collateral is subject to any security interest of
any kind whatsoever, except for the security interest in such Collateral 
granted to Lender hereby; and

            d.  Until the termination of this Agreement,Borrower:

                   (1)  will not create or permit to exist any security 
interest uponor with respect to such Collateral, except for the security 
interest thereon granted to Lender by this Security Agreement; and

                   (2)  will not sell, transfer, convey, assign, or otherwise
divest its interests in such Collateral, or any part thereof, to any other 
person.

	    4.	Default and Remedies.

            4.1  The breach by Borrower of any of its representations and 
warranties set forth in Section 3 of this Agreement or the occurrence and 
continuation of an Event of Default together with an Acceleration under the 
Note shall constitute an Event of Default hereunder.

            4.2  If an Event of Default shall occur and be continuing 
hereunder, Lender shall have all rights of a secured party under the Uniform 
Commercial Code as in effect in Colorado from time to time.
	
Following an Event of Default, subject to applicable law, Borrower hereby 
irrevocably constitutes and appoints Lender its attorney-in-fact with full 
power of substitution and acknowledges that the constitution and appointment 
of such attorney-in-fact is coupled with an interest and is irrevocable.

      5.  Termination of Security Agreement.  This Security Agreement shall 
terminate upon the payment and performance in full of the Obligations.

     	6.	Miscellaneous.

           6.1  Subject to the terms of the Loan Agreement, Borrower further 
agrees that if an Event of Default hereunder has occurred and is continuing, 
Lender may exercise its rights and remedies hereunder.  The obligations of 
Borrower under this Security Agreement shall be absolute and unconditional 
and shall remain in full force and effect without regard to, and shall not be
released or discharged or in any way affected, by:

                 6.1.1  Any amendment or modification of or supplement to any
of the Loan Documents;

                 6.1.2  The granting of any postponements or extensions for 
time of payment or other indulgences to Borrower or any other person, or the 
settlement or adjustment of any claim or the release or discharge or 
substitution of any person primarily or secondarily liable with respect to 
any of the Obligations;

                 6.1.3  The institution of any bankruptcy, insolvency, debt 
agreement, readjustment, composition, receivership or liquidation proceedings
by or against Borrower or Guarantor; or

                6.1.4  Any other circumstance which otherwise might 
constitute a defense to, or a discharge of Borrower with respect to the 
Obligations.

           6.2  Each and every right, remedy and power granted to Lender 
hereunder shall be cumulative and in addition to any other right, remedy or 
power specifically granted herein or now or hereafter existing in equity, at 
law, by virtue of statute or otherwise and may be exercised by Lender, from 
time to time, concurrently or independently and as often and in such order as
Lender may deem expedient. Any failure or delay on the part of Lender in 
exercising any such right, remedy or power, or abandonment or discontinuance 
of steps to enforce the same, shall not operate as a waiver thereof or affect
Lender's right thereafter to exercise the same, and any single or partial 
exercise of any such right, remedy or power shall not preclude any other 
right, remedy or power, and no such failure, delay, abandonment or single or 
partial exercise of Lender's rights hereunder shall be deemed to establish a 
custom or course of dealing or performance between the parties hereto.

          6.3  Any modification or waiver of any provision of this Security 
Agreement, or any consent to any departure by Borrower therefrom, shall not 
be effective in any event unless the same is in writing and signed by Lender,
and then such modification, waiver or consent shall be effective only in the 
specific instance and for the specific purpose given.  Any notice to or 
demand on Borrower in any event not specifically required of Lender hereunder
shall not entitle Borrower to any other or further notice or demand in the 
same, similar or other circumstances unless specifically required hereunder.

         6.4  Borrower agrees that at any time, and from time to time, after 
the execution and delivery of this Security Agreement, upon the request of 
Lender and at its own expense, it promptly will execute and deliver such 
further documents and do such further acts and things as Lender may 
reasonably request in order to effect fully the purposes of this Security 
Agreement and to subject to the security interest created hereby any property
intended by the provisions hereof to be covered hereby.

         6.5  Borrower agrees that it will warrant, preserve, maintain and 
defend, at the expense of Borrower, the right, title and interest of Lender 
in and to the Collateral and all right, title and interest represented 
thereby against all claims, charges and demands of all persons, other than 
such claims, charges and demands which arise out of acts of Lender or are 
permitted pursuant to the Loan Agreement.

        6.6  All notices and communications under this Loan Agreement shall 
be in writing and shall be delivered in accordance with the Loan Agreement.

        6.7  In the event that any provision of this Security Agreement is 
deemed to be invalid by reason of the operation of any law, or by reason of 
the interpretation placed thereon by an court or other governmental body, 
this Security Agreement shall be construed as not containing such provision 
and the invalidity of such provision shall not affect the validity of any 
other provision hereof, and any and all other provisions hereof which 
otherwise are lawful and valid shall remain in full force and effect.

        6.8  This Security Agreement shall inure to the benefit of and shall 
be binding upon the successors and assigns of the Parties.

        6.9  The validity, construction and performance of this Security 
Agreement shall be governed in all respects by the laws of the State of 
Colorado.

        6.10  Time for the performance of Borrower's obligations under this 
Security Agreement is of the essence of this Security Agreement.

        6.11  This Security Agreement may be signed, including by facsimile 
signatures, in counterparts which, together, shall constitute one and the 
same original.

IN WITNESS WHEREOF, Borrower and Lender have caused this Security 
Agreement to be executed as of the date first written above.

						BORROWER:

				ADVANCED ENVIRONMENTAL SYSTEMS, INC.


						By:	/s/ Gary L. Schmitt
							Authorized Officer
		
						LENDER:

						
						/s/ Carylyn K. Bell
						Carylyn K. Bell, individually

EX-20

[ARTICLE]                  5
[LEGEND]
This schedule contains the Guaranty dated November 25, 1996 by Industrial 
Services Technologies, Inc. and for the benefit of Carylyn K. Bell.


	GUARANTY

THIS GUARANTY is made effective as of the 25th day of November, 1996 
by Industrial Services Technologies, Inc., a Colorado corporation (the 
"Guarantor"), having its principal place of business and mailing address at 
370 17th Street, Suite 2300, Denver, Colorado  80202 to and for the benefit 
of Carylyn K. Bell, a Colorado resident ("Lender") having an address at 2750 
East Cedar Avenue, Denver, Colorado 80209.  

	RECITALS

     A.  Lender has contemporaneously herewith entered into a Loan Agreement 
(the "Loan Agreement") with Advanced Environmental Systems, Inc., a New York 
corporation ("Borrower"), pursuant to which Lender has agreed, among other 
things, to make a secured loan to Borrower in the original principal amount 
of $425,000 (the "Loan") on the terms and conditions set forth in the Loan 
Agreement.

     B.  It is a condition to the consummation of the transactions 
contemplated in the Loan Agreement that Guarantor execute and deliver this 
Guaranty to Lender.

     C.  Guarantor, as a principal stockholder of Borrower, will be directly 
benefitted by the Loan and desires to execute and deliver this Guaranty to 
Lender.

NOW, THEREFORE, in consideration of the Recitals and other good and valuable 
consideration, the receipt and sufficiency of which is hereby acknowledged, 
Guarantor hereby covenants and agrees as follows:

    1.  Guarantor hereby unconditionally and irrevocably guarantees the 
payment in full of any and all obligations of Borrower to Lender now or 
hereafter arising pursuant to the Loan Agreement (collectively, the 
"Obligations").  Guarantor hereby acknowledges that the Guaranty is a 
guarantee of payment and not of collection and that Lender shall not be 
required, as a condition precedent to making a demand upon the Guarantor or 
to bringing an action against the Guarantor under this Guaranty, to make a 
demand upon, or institute any action or proceeding, at law or in equity 
against Borrower or anyone else, or to exhaust its remedies against Borrower 
or anyone else, or against any collateral security.  All remedies afforded to 
Lender by reason of this Guaranty are separate and cumulative remedies and 
Guarantor agrees and acknowledges that none of such remedies, whether 
exercised by Lender or not, shall be deemed to be exclusive of any other 
remedies available to Lender and shall not limit or prejudice any other 
remedy which Lender may have against any party, including the Guarantor.  

     2.  Guarantor shall remain liable on this Guaranty notwithstanding any 
change or changes in the terms, covenants or agreements of the Loan 
Agreement, or any amendment thereto, hereafter made or granted, or any delay 
on the part of Lender in exercising her rights hereunder or thereunder, it 
being the intention hereof that the Guarantor shall remain liable until the 
full amount of the Obligations secured hereunder and any sums which may due 
thereon, shall have been fully paid, notwithstanding any act or omission 
which might otherwise operate as a legal or equitable discharge of the 
Guarantor.

		  3.	Guarantor hereby waives:

       			a.	Notice of acceptance of this Guaranty;

          b.  Presentment and demand for payment of the obligations or any 
portion thereof;

          c.  Protest and notice of dishonor or default to the Guarantor or 
to any other person or party with respect to the Obligations or any portion 
thereof;

       			d.	All other notices to which the Guarantor might otherwise be 
entitled;

       			e.	Any demand for payment or performance of this Guaranty; and

          f.  All guaranty and suretyship defenses or other defenses in the 
nature thereof.
		
     4.  This Guaranty shall inure to the benefit of, and be enforceable by 
Lender and her successors or assigns, and shall be binding upon and 
enforceable against the Guarantor and its successors or assigns.

     5.  Guarantor agrees that in the event this Guaranty is placed in the 
hands of an attorney for enforcement, Guarantor will reimburse Lender for all
reasonable expenses incurred, including reasonable attorneys' fees, in the 
enforcement hereof.

     6.  This Guaranty cannot be modified or amended except in writing duly 
executed by Guarantor and Lender and shall be construed according to Colorado
law.  

     7.  If any provision of this Guaranty is deemed to be invalid by reason 
of the operation of any law or by reason by the interpretation placed thereon
by any court, this Guaranty shall be construed as not containing such 
provision and the invalidity of such provision shall not affect the validity 
of any other provision hereof and any and all provisions hereof which 
otherwise are lawful and valid shall remain in full force and effect.

IN WITNESS WHEREOF, the undersigned has caused this Guaranty to be executed 
as of the date and year first above written.

					INDUSTRIAL SERVICES TECHNOLOGIES, INC., a Colorado corporation


						By: /s/ Gary L. Schmitt
							Gary L. Schmitt, President