Exhibit 10.1

AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT 
JONES

This
Executive Employment Agreement (Agreement) is made as of the 1st day of July,
2010 (the Effective Date) by and between INDUSTRIAL SERVICES OF AMERICA,
INC., a Florida corporation located at 7100 Grade Lane, Building #1,
Louisville, Kentucky 40213 (the Company) and STEVE JONES, an individual
residing at 3011 Long Creek Way, Louisville, Kentucky 40245 (the Executive).


RECITALS


The
Company and Executive currently are parties to an Executive Employment
Agreement (the Original Agreement) dated as of June 1, 2009. Both parties
desire to modify the terms and conditions of the Original Agreement by entering
into this Agreement in replacement of the Original Agreement.


The
Company desires to continue to employ the Executive, and the Executive desires
to continue to be employed by the Company upon the terms and conditions set
forth in this Agreement.


NOW THEREFORE, in consideration of (a) the
Executives employment with the Company as its Chief Operating Officer, (b) the
compensation paid to the Executive and the benefits provided to the Executive
in connection with such employment including applicable coverage under the
Companys D&O policy, (c) the Executives use of the equipment, supplies,
facilities and other resources of the Company and (d) the opportunity provided
to Executive by the Company to acquire or use information relating to or based
upon the Companys business and to work and develop in the industry and lines
of business engaged in by the Company from time-to-time or for which the
Executive is hereby employed hereunder, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:


ARTICLE 1
INTERPRETATION OF THIS AGREEMENT

Article
1.1 Defined Terms. As used herein, capitalized terms when used in this
Agreement shall have the meanings set forth in Annex 1 attached hereto and made
a part hereof and as defined in this Agreement.


Article
1.2 Interpretation. The words herein, hereof, hereunder and other
words of similar import refer to this Agreement and not any particular section,
paragraph, subparagraph or clause contained in this Agreement. Wherever from
the context it appears appropriate, each term stated in either the singular or
plural shall include the singular and the plural, and pronouns stated in
masculine, feminine or neuter gender shall include the masculine, feminine and
the neuter.


ARTICLE 2
TERM OF EMPLOYMENT

ARTICLE
2.1 Duration. The Company agrees to employ the Executive, and the
Executive agrees to be so employed for an Initial Term (Initial Term)
commencing on the Effective Date of this Agreement, and ending on the
Termination Date (as defined below) or June 30, 2015 whichever shall first
occur. The Executives employment may be terminated earlier or renewed, as
herein provided, pursuant to this Article. At any time more than ninety (90)
days prior to the expiration of the Initial Term or any Renewal Term,
respectively, either the Company or Executive may give notice of nonrenewal and
this Agreement shall terminate at the end of such term. If a notice of
nonrenewal is not given, or the Agreement is not terminated a set forth in
Article 2.2, Executives employment under the terms of this Agreement shall be
extended for an additional one year period. (The one year period shall be
defined as commencing on July 1, 2015 and continuing for the next three hundred
sixty-five (365)/three hundred sixty-six (366) consecutive calendar days as
applicable.)


ARTICLE
2.2 Termination. The Executives employment may be terminated on any one
or more of the following dates: (a) the date specified in a Notice of
Termination given by the Executive in connection with his voluntary termination
(which shall not be less than thirty (30) days from the date such Notice of
Termination is given, unless a shorter period is subsequently requested by the
Company after receipt of such Notice of Termination); (b) the date specified in
a Notice of Termination given by the Board of Directors of the Company to the
Executive stating that the Executives employment is being Terminated for
Cause; (c) the date specified in a Notice of Termination given by the Board of
Directors to the Executive stating that the Executives employment with the
Company is terminated without cause; (d) the date of the Executives death; or
(e) the date specified in a


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Notice of Termination given
by the Company at a time after which the Executive has become Incapacitated in
connection with a termination of the Executives employment by reason of his
Incapacity. Except as provided in Article 2.4, all obligations of the Company
to Executive shall terminate as of the Termination Date.


ARTICLE
2.3 Salary and Benefits. During the Employment Period:


ARTICLE
2.3.1 The Company will pay the Executive a Base Salary at the rate of $3,846.15
per week (Base Salary), payable in installments consistent with the Companys
normal payroll schedule, subject to applicable withholding and other taxes and
other required deductions for welfare, fringe benefits and withholding and
those deductions requested by Executive.


ARTICLE
2.3.2 The Executive shall be entitled to a bonus based as a Level 1 employee
under the Management Incentive Plan (the MIP), dated July 1, 2010, for
calendar year 2010 provided he remains employed by the Company during the
entirety of calendar year 2010. Such bonus shall be payable in a single lump
sum payment as soon as practicable following December 31, 2010 subject to
applicable withholding and other taxes and other required deductions for
welfare, fringe benefits and withholding and those deductions requested by
Executive. Beginning in 2011 and for the remainder of the Initial Term,
Executive shall participate in the MIP or such similar incentive arrangement as
may be mutually agreeable to Company and Executive with the timing for payment
being as soon as practicable following December 31st of the
applicable year and maintenance of employment by Executive during the entirety
of the applicable year. See Exhibit A, attached hereto and incorporated
herein by reference, outlining the MIP.


ARTICLE
2.3.3 The Executive shall be entitled to receive a bonus as a Level 1 employee
based on satisfaction of the criteria under the Executive Incentive Plan (the
EIP) dated July 1, 2010 provided he remains employed by the Company during
the entirety of calendar year 2010. Such bonus shall be payable (i) in the form
of Company common stock in one delivery of a stock certificate, (ii) cash, or
(iii) cash and common stock, at the election of Executive in accordance with
the EIP, as soon as practicable following December 31, 2010 subject to
applicable withholding and other taxes and other required deductions for
welfare, fringe benefits and withholding and those deductions requested by
Executive. Beginning in 2011 and for the remainder of the Initial Term,
Executive shall participate in the EIP or such similar incentive arrangement as
may be mutually agreeable to Company and Executive with the timing for payment
being as soon as practicable following December 31st of the
applicable year and maintenance of employment by Executive during the entirety
of the applicable year. See Exhibit B, attached hereto and incorporated
herein by reference, outlining the EIP.


ARTICLE
2.3.6 The Executive will be entitled to participate in all medical and
hospitalization, group life insurance, retirement, and any and all other
welfare and fringe plan benefits as are from time to time provided by the
Company to its executive employees, subject to the provisions of such plans,
including, without limitation, eligibility criteria and contribution requirements,
as the same may be in effect from time to time. The Company will provide the
Executive with full medical coverage at no cost to the employee. The Company
shall provide Executive with a term life insurance policy with a death benefit
not to exceed $1,000,000.00, with the Executive to name his beneficiary(ies).


ARTICLE
2.3.7 The Executive will be entitled to a maximum of three (3) weeks paid
vacation during each calendar year (prorated for any partial year during the
term) commencing in 2010 to be taken at such times and intervals as shall be
determined by the Executive, and approved by the President of the Company,
which approval shall not be unreasonably withheld and provided in the
Presidents judgment that the timing of such vacation shall not interfere with
the Executives performance of his duties hereunder. Unused vacation shall not
be accrued or reimbursed to Executive.


ARTICLE
2.3.8 The Executive shall be entitled to reimbursement of reasonable business
expenses incurred by the Executive (subject to Executives submission of
appropriate substantiation in accordance with the rules in place for other
executives of the Company). In addition thereto, and not in substitution
thereof, the Company shall provide Executive with a monthly car payment
allowance (the amount of which shall not exceed $1,000.00 per month) which
shall be used by Executive to acquire an automobile selected by the Executive,
with the concurrence of the Company, for use by the Executive during his
employment by the Company. The Executive shall, at his own expense, provide for
comprehensive insurance coverage for the vehicle, naming Company as a named
insured. Executive shall provide proof of said coverage to Company, including
existence of minimum underlying limits and umbrella limits for bodily injury
coverage in the total amount of $1,500,000. Executive shall be responsible for
any damage due to neglect or misuse by Executive.


ARTICLE
2.3.9 The Company represents and the Executive acknowledges that he may receive
shares of the Company common stock under the EIP or elsewhere under this
Agreement, which shall be deemed restricted stock, subject to a six (6) month
holding period and further subject to the provisions of Rule 144 under the
Securities Act of 1933, as amended.


Executive
agrees that this Agreement and the rights, interests and benefits under it
shall not be assigned, transferred, pledged, or hypothecated in any way by
Executive or any other person claiming under Executive by virtue hereof. Such
rights, interest or benefits shall not be subject to execution, attachment, or
similar process. Any attempted assignment, transfer, pledge, or hypothecation,
or other disposition of the shares granted pursuant to this


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Agreement or of such rights,
interest, and benefits contrary to the preceding provision, or the levy or any
attachment or similar process thereupon, shall be null and void and without any
legal effect.


The
Executive represents and warrants that any shares he receives pursuant to the
EIP or elsewhere under the terms of this Agreement he will be receiving for
investment and not with a view to distribution thereof and understands and
acknowledges that in the absence of an effective Registration Statement as to
the shares he receives any Stock Certificate(s) representing the shares shall
bear the following legend:


| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | 
| | The Shares represented by
this certificate have not been registered or qualified for sale under the
Securities Act of 1933, as amended (the Act, or any state securities or
blue sky laws, and may not be sold, transferred or otherwise disposed of
except pursuant to an exemption from registration or qualification there
under. The Company may require, as a condition to the transfer of this
certificate, an opinion of counsel satisfactory to the Company to the effect
that such transfer will not be in violation of the Act or any such laws. | 

ARTICLE
2.4 Severance Pay.


ARTICLE
2.4.1 (a) If the Executives employment ends as the result of a Termination
Without Cause, the Executive shall be entitled to receive his Base Salary and
Welfare Plan Benefits (as defined below) through the Initial Term or Renewal
Term, as applicable;


(b)
If the Executives employment ends as the result of Executives Incapacity,
Executive shall be entitled to receive either available workers compensation
benefits or insured benefits as provided by the Companys disability policy;


(c)
If the Executives employment ends as the result of the death of Executive,
Executive shall be entitled to receive his Base Salary and Welfare Plan
Benefits through the date of death;


(d)
If the Executives employment ends as the result of Voluntary Termination,
Executive shall be entitled to receive his Base Salary and Welfare Plan
Benefits through the Termination Date; or


(e)
If the Executives employment ends as the result of Termination for Cause, Executive
shall be entitled to receive his Base Salary and Welfare Plan Benefits through
the Termination Date.


ARTICLE
2.4.2 In those instances where the Company owes Executive payments after the
Termination Date, the payments to be made by the Company to the Executive under
this Article 2.4 shall be made in installments, and on the payment dates,
during the Severance Period (as defined below) on which Base Salary would have
otherwise been paid had the Executives employment not been terminated. Upon
the making of the last of such payments, the Company will have no further
Severance Payment obligation to the Executive. All payments shall be subject to
applicable withholding and other taxes.


ARTICLE
2.4.3 For so long as the Company is required to make the severance payments
described in this Article 2.4 (the Severance Period) and subject to the
provisions of Article 2.4.4 below, the Company will, in addition to such
payment, provide or arrange to provide the Executive with its regular subsidy
payments toward benefits substantially similar to those which the Executive was
receiving or entitled to receive under the Companys life, accident, dental and
group health insurance plans, 401K, FSA or any similar health or welfare plans
in which the Executive was participating immediately prior to the Termination
Date (Welfare Plan Benefits) at a cost to the Company which is not greater
than the cost the Company paid immediately prior to the Termination Date;
provided, that to the extent any such coverage is prohibited, whether by
contract, any judicial or legislative authority or otherwise, the Company shall
in its sole discretion make alternative arrangements to provide the Executive
with Welfare Plan Benefits or provide the Executive with a payment in an amount
equal to the amount that the Company was contributing toward the purchase of
the Welfare Plan Benefits for Executive immediately prior to the Termination
Date. Benefits or payments otherwise receivable by the Executive pursuant to
the preceding sentence shall be reduced to the extent Company determines
comparable benefits are available from another employer. Executive shall have
the duty to fully and promptly advise Company of any available benefits
offered, whether accepted or not, no later than three (3) business days after
any such benefits are offered.


ARTICLE 3
PROPERTY AND BUSINESS OF THE COMPANY

ARTICLE
3.1 Nondisclosure. During the Employment Period and during the periods
described in the last sentence of this Article 3.1, the Executive (a) will
receive and hold all Company information in trust and in strict confidence, (b)
will not disclose and will use commercially reasonable efforts to protect
Company information from disclosure, (c) will not, directly or indirectly, use or
assist others to use any Confidential Information (as hereinafter defined), and
(d) will not, directly or indirectly, use, disseminate or otherwise disclose
any Company information or Confidential Information to any third party, except
in the case of each of (a) through (d) above, as required by the Executives
duties in the course of his employment by the Company or as required by
applicable law. The provisions of this Article 3.1 shall survive the
Termination Date.

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ARTICLE
3.2 Books and Records. All books, records, reports, writings, notes,
inventions, notebooks, computer programs, sketches, drawings, blueprints,
prototypes, formulas, patents, photographs, negatives, models, equipment,
chemicals, reproductions, proposals, flow sheets, supply contracts, customer
lists and other documents and/or things relating to the business of the
Company, its affiliates or any of their respective subsidiaries (including but
not limited to any of the same embodying or relating to any actual Confidential
Information or trade secrets), whether prepared by the Executive or otherwise
coming into the Executives possession, shall be the exclusive property of the
Company, its affiliates or such possession shall be the exclusive property of
the Company, its affiliates or such subsidiary, as the case may be (all of
which is defined herein as Confidential Information), and shall not be
copied, duplicated, replicated, transformed, modified or removed from the
premises of the Company except pursuant to the prior written authorization of
the Company on the Termination Date or on the Companys written request at any
time.


ARTICLE
3.3 Inventions and Patents. The Executive agrees that all inventions,
innovations or improvements related to the Companys or any of its respective
subsidiaries method of conducting its business (including new contributions,
improvements, ideas and discoveries, whether patentable or not) conceived or
made by him during the Employment Period with the Company belong to the Company
and the Executive hereby assigns all of such inventions, innovations and
improvements, contributions, ideas and discoveries to the Company. The
Executive will promptly disclose such inventions, innovations and improvements,
contributions, ideas and discoveries to the Board and perform all actions
reasonably requested by the Board to establish and confirm such ownership in
the Company.


ARTICLE
3.4 Non-Competition. During the Employment Period (which shall be deemed
to include the Severance Period, if any, for purposes of this Article 3) and
for a period of twelve (12) months from and after the later of the last payment
made during the Severance Period or the Termination Date (collectively, the
Non-Competition Period), the Executive will not directly or indirectly, (i)
engage in any business which is the same or substantially the same as any
business of the Company (the Restricted Business) as of the date of the
Executives termination, or (ii) have any interest in any other business
venture, whether as a debt or equity holder, employee, officer, director,
member, manager, partner, agent, security holder, consultant or otherwise, that
directly or indirectly is engaged in the Restricted Business, within one
hundred (100) direct miles of any geographic area in which the Company, its
affiliates or any of their respective subsidiaries, engage in the Companys
business operations as of the Termination Date. Nothing in this Article 3.4
shall be deemed to prevent the Executive from acquiring and owning solely as a
passive investment, equity securities (including options to purchase equity
securities) in an aggregate of less than three percent (3%) in the aggregate of
the equity securities of any class of any issuer that are registered under
Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended, and
are listed or admitted for trading on any United States national securities
exchange or are quoted on the National Association of Securities Dealer
Automated Quotations System or any similar system of automated dissemination of
quotations of securities prices in common use, or so long as the Executive is
not a member of any control group (within the meaning of the rules and
regulation of the United States Securities and Exchange Commission) of any such
issuer.


ARTICLE
3.5 Non-Solicitation of Employees. During the Non-Competition Period,
the Executive shall not, directly or indirectly, (a) solicit for employment or
employ (or attempt to solicit for employment or employ), for the Executive or on
behalf of any other Person (other than the Company or any of its respective
subsidiaries) provided that nothing shall prevent the Executive from making a
general solicitation not targeted at the Companys or any of its respective
subsidiaries employees, any employee of the Company, its affiliates or any of
their respective subsidiaries, or any person who was such an employee during a
one year (1) period preceding or succeeding the Termination Date, or (b)
otherwise encourage any such employee to leave his or her employment with the
Company, its affiliates or any of their respective subsidiaries.


ARTICLE
3.6 Non-Solicitations of Others. During the Non-Competition Period, the
Executive shall not, directly or indirectly, (a) solicit, call on, or transact
or engage in the Restricted Business with (or attempt to do any of the
foregoing with respect to) any customer, distributor, vendor, supplier or agent
with whom the Company, its affiliates or any of their respective subsidiaries
shall have dealt, or that the Company, its affiliates or any of their
respective subsidiaries shall have actively sought to deal, at any time during
a one year (1) period preceding or succeeding Executives Termination Date for
or on behalf of the Executive or any other person (other than the Company, its
affiliates or any of their respective subsidiaries) in connection with a
Restricted Business or (b) encourage any such customer, distributor, vendor,
supplier or agent to cease, in whole or in part, its business relationship with
the Company, its affiliates or any of their respective subsidiaries.


ARTICLE
3.7 Covenants Reasonable. The Executive acknowledges and agrees that the
covenants provided for in this Article 3 are reasonable and necessary in terms
of scope, duration, area, business and all other matters to protect the
Companys and its respective subsidiaries legitimate business interests, which
include, among others, protecting (a) valuable confidential business
information, (b) substantial relationships with customers throughout the
Restricted Area and (c) goodwill with customers, employees, distributors,
suppliers and vendors associated with respective businesses.


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ARTICLE
3.8 Construction; Enforceability. To the extent that any provision
contained in this Article 3 may later be adjudicated by a court to be too broad
to be enforced with respect to such provisions scope, duration, area, line of
business or any other matter, such area, line of business or other matter, as
the case may be, shall automatically be amended to satisfy the terms of any
court order so as to be valid and enforceable to the maximum extent compatible
with the applicable laws of such jurisdiction and this Article 3 as drafted,
however, such amendment is only to apply with respect to the operation of such
provision in the applicable jurisdiction in which such adjudication is made.

ARTICLE 4
MISCELLANEOUS

ARTICLE
4.1 Notices. Any notice, request, demand, claim or other communication
hereunder that is required to be made in writing shall be deemed duly given on
the fifth (5th) business day after if it is sent by registered or
certified mail, return receipt requested, postage prepaid, or, on the next
business day after it is sent by a reputable overnight courier such as Federal
Express, and addressed to the intended recipient as set forth below:


|                     |                                                          
|-------------------- | ---------------------------------------------------------
|If to the Executive: | To the Executives last
known address as set forth in the
|                     | Companys payroll records.                               
|                     |                                                          
|If to the Company:   | Industrial Services of
America, Inc.                     
|                     | 7100 Grade Lane                                          
|                     | Louisville, KY 40213                                     
|                     | Attention: Chief Financial
Officer                       

Either
party hereto may send any notice, request demand, claim or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery messenger service, telecopy, telex,
ordinary mail or electronic mail), but no such notice, request, demand, claim
or other communications shall be deemed to have been duly given unless and
until it actually is received by the intended recipient; provided, that such
communication is also sent by registered or certified mail or by reputable
overnight courier within five business days of the original communication.
Either party hereto may change the address to which notices, requests, demand,
claims, and other communications hereunder are to be delivered by giving the
other party notice in the manner herein set forth.


ARTICLE
4.2 Severability. Whenever possible, each provision of this Agreement
will be interpreted in such manner so as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or such application in any other jurisdiction, but this
Agreement will be reformed, construed and enforced in such jurisdiction as if
such invalid, illegal or unenforceable provision had never been contained herein;
provided, that if any of the provisions of Article 3 are held to be invalid,
illegal or unenforceable, then such provision shall be deemed amended in the
manner and to the extent provided for in Article 3.8 above.


ARTICLE
4.3 Complete Agreement. This Agreement and all exhibits and annexes
attached hereto embody the complete agreement and understanding among the
parties relating to the subject matter hereof and supersedes and preempts any
prior understanding, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any
way.


ARTICLE
4.4 Counterparts. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement. Any telecopied signature shall
be deemed a manually executed and delivered original.


ARTICLE
4.5 Successors and Assigns. This Agreement may not be assigned by either
the Company or the Executive, except that the Company may assign the Agreement
to a Person who purchases all or substantially all of the assets of the
Company, by merger or asset purchase or lease agreement. Subject to the
preceding sentence, this Agreement is intended to bind and inure to the benefit
of and be enforceable by the Executive and the Company and their respective
successors and assigns (and, in the case of the Executive, heirs and personal
representatives), except that Executive may not assign any of his rights or delegate
any of his obligations hereunder.


ARTICLE
4.6 Equitable Remedies. The Executive acknowledges and agrees that the
Company would not have an adequate remedy at law in the event any of the
provisions of Article 3 set forth above are not performed in accordance with
their specific terms, or are breached or are threatened to be breached.
Accordingly, the Executive agrees that the Company shall be entitled, in
addition to any other rights and remedies which may be available to it, to an
injunction or injunctions to prevent breaches of Article 3 above and to enforce
specifically the terms and provisions thereof in any action instituted in any
court of competent jurisdiction, and without any requirement to post a bond or
other security. In the event Company is required to seek and is granted
injunctive relief against Executive for any breach of Article 3, Company shall
be entitled to an award of reasonable attorney fees and costs, including all
those fees and costs incurred in any appeals.


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ARTICLE
4.7 Choice of Law: Jurisdiction and Venue. This Agreement shall be
governed and construed in accordance with the law of the Commonwealth of
Kentucky without regard to conflicts of laws principles thereof and all
questions concerning the validity and construction hereof shall be determined
in accordance with the law of said state.


ARTICLE
4.8 Dispute Resolution.


Article
4.8.1 In consideration of the compensation and benefits paid to Executive by
the Company, the receipt and sufficiency of which is hereby acknowledged, and
for other good and valuable consideration, Executive agrees that all legal
claims or disputes arising out of or related to Executives employment and/or
termination with the Company must be submitted to binding arbitration and that
binding arbitration will be the sole and exclusive final remedy for resolving
any such claim or dispute. Executive also agrees that any arbitration between
the Company and Executive is of an individual claim and that any claim subject to
arbitration will not be arbitrated on a class-wide basis. Executive agrees that
the American Arbitration Association in accordance with its National Rules for
the resolution of Employment Disputes shall administer any arbitration between
the Company and Executive and judgment on the award rendered by the Arbitrator
may be entered in any court having jurisdiction thereof. Such arbitration shall
take place in the City of Louisville, in the Commonwealth of Kentucky. The
Company and the Executive shall share equally in the administrative fees for
arbitration such as filing fees, hearing fees, and hearing room rental fees.
Each of the Company and the Executive shall be responsible for its and his
legal fees and expenses, respectively.


Legally
protected rights covered by this Article 4.8, regarding Dispute Resolution, are
all legal claims arising out of or relating to employment with the Company,
including: claims for wages or other compensation; claims for breach of any
contract, covenant or warranty (expressed or implied); tort claims (including,
but not limited to, claims for physical, mental or psychological injury, but
excluding statutory workers compensation claims); claims for wrongful
termination; sexual harassment; discrimination (including, but not limited to,
claims based upon race, sex, religion, national origin, age, medical condition
or disability whether under federal, state or local law); claims for benefits
or claims for damages or other remedies under any employee benefit program
sponsored by the Company (after exhausting administrative remedies under the
terms of such plans); whistleblower claims under any federal, state, or other
governmental law, statute, regulation or ordinance; and claims for retaliation
under any law, statute, regulation or ordinance, including retaliation under
any worker compensation law or regulation; and claims arising out of or
relating to any employment contract (including this Agreement), employment
applications, the Companys personnel manuals or policy statements, or any
other employment agreements.


Executive
understands and agrees that by entering into this Agreement, Executive
anticipates gaining the benefits of a speedy, impartial dispute resolution
procedure.


4.8.2
Executive understands and agrees that the Company is engaged in transactions
involving interstate commerce and the Executives employment involves such
commerce. Executive agrees that the Federal Arbitration Act shall govern the
interpretation, enforcement, and proceeding under this Agreement. Any decision
of the arbitrator shall be enforceable in any federal or state court of
competent jurisdiction located in the County of Jefferson, Commonwealth of
Kentucky and each party irrevocably submits to the personal and exclusive jurisdiction
of such court.


4.8.3
Executive understands and agrees that the provisions of the Agreement are
severable and, should any provision be held unenforceable, all others will
remain valid, binding and fully enforceable. Executive agrees that the
arbitrator, and not any federal, state, or local court or agency shall have the
exclusive authority to resolve any dispute relating to the interpretation,
arbitrability, applicability, enforceability or reformation of this Agreement,
including, but not limited to, any claim that all or any part of this Agreement
is void or voidable. If a court should determine that arbitration under this
Agreement is not the exclusive, final, and binding method for the Company and
the Executive to resolve disputes and/or that the decision and award of the
arbitrator is not final and binding as to some or all of the Executives
claims, the Executive must submit his claim to arbitration and pursue the
arbitration to conclusion before filing or pursuing any legal, equitable, or
other legal proceeding for any eligible claim in a court of competent
jurisdiction.


4.8.4
This Agreement to arbitrate shall survive the termination of Executives
employment. It can only be revoked or modified by mutual consent evidenced by a
writing signed by both parties that specifically state their intent to revoke
or modify this Agreement.


ARTICLE
4.9 Amendment and Waivers. No provisions of this Agreement may be
amended or waived without the prior written consent of the parties hereto. The
waiver by either party to this Agreement of a breach of any provision of this
Agreement shall not be construed to operate as a waiver of any other breach of
the same or any other term or provision or as a waiver of any contemporaneous
breach of any other term or provision or as a continuing waiver of the same or
any other term or provision.


ARTICLE
4.10 Business Days. Whenever the terms of this Agreement call for the
performance of a specific act on a specified date, which date falls on a
Saturday, Sunday or legal holiday, the date for the performance


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of such act shall be
postponed to the next succeeding regular business day following such Saturday,
Sunday or legal holiday.


ARTICLE
4.11 No Third Party Beneficiary. Except for the parties to this
Agreement and their respective successors and assigns, heirs and personal
representatives nothing expressed or implied in this Agreement is intended, or
will be construed, to confer upon or give any person other than the parties hereto
and their respective successors and assigns any rights or remedies under or by
reason of this Agreement.


[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

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IN
WITNESS WHEREOF, the parties have executed this Agreement on the day and year
first above written.

|                |  |                                      |                  
|--------------- |  | ------------------------------------ | -----------------
|EXECUTIVE       |  | INDUSTRIAL SERVICES OF AMERICA, INC.
|                |  |                                      |                  
|/s/
Steve Jones |  | By:                                  | /s/ Harry
Kletter
|                |  |                                      |                  
|Steve Jones     |  |                                      |                  

| |  |        |                        
| |  | ------ | -----------------------
| |  | Title: | Chief Executive
Officer

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ANNEX 1

1. Agreement:


Shall
mean the Amended and Restated Executive Employment Agreement executed by
Industrial Services of America, Inc. and Steve Jones effective July 1, 2010, as
it may be amended from time to time, hiring Steve Jones as Vice President of
Operations  ISA Alloys.


2. Company:


Industrial
Services of America, Inc., a Florida corporation, with its principal place of
business located at 7100 Grade Lane, Louisville Kentucky.


3. Effective Date:


July
1, 2010


4. Employment Period:


July
1, 2010, until June 30, 2015, unless otherwise terminated pursuant to the terms
and conditions of the Agreement.


5. Executive:


Steve
Jones.


6. Initial Term:


July
1, 2010, until June 30, 2015, unless otherwise terminated pursuant to the terms
and conditions of the Agreement.


7. Incapacitation,
Incapacitated, Incapacity:


Shall
mean that a qualified physician attending the Executive shall have determined
and provided written evidence of such determination to the Company that said
Executive is unable to attend to his personal affairs or the business affairs
of the Company on a day-to-day basis or a Court of Competent jurisdiction
determines the Executive is unable to fulfill his duties to the Company under
the Agreement.


8. Notice of Termination:


A
written notice from Executive (in the case of Voluntary Termination) or Company
(in the case of Termination due to Incapacity) to the other party designating
the basis for termination of Executive, the Termination Date as provided and
addressed in conformity with Articles 2.2 and 4.1 of the Agreement.


9. Renewal Term:


All
automatic renewals of the terms and conditions of the Agreement, commencing on
July 1, 2015, and ending June 30, 2016, and continuing each July 1 through June
30 thereafter until terminated by either party in conformity with the
Agreement.


10. Termination Date:


The
date of termination designated in any Notice of Termination.


11. Termination for Cause:


Shall
mean the termination of the Executive for:


a.
Failing or refusing to follow the legal instructions or resolutions of the
Board of Directors of the Company;


b. Failing or refusing to follow the legal
instructions of the Chief Executive Officer or President of the Company;


c.
Absenteeism from the Company in violation of the terms and conditions of the
Agreement;


d.
Violation of any term or condition of this Agreement;


e.
Violation of any securities law (federal or state) during the term of this
Agreement;


f.
Any breach of Executives duty of loyalty or fulfilling duty to the Company;


g.
Failure of the Executive to act in accordance with the terms of the Company
handbook in all material respects; or


h. Commission of any felony of misdemeanor
involving moral turpitude.


12. Termination Without
Cause:


The Companys issuances of a
Notice of Termination of the Executive for any reason other than any of those
bases for termination set forth in paragraph 11, entitled Termination for
Cause.


13. Voluntary Termination:


The Executives issuance of a Notice of
Termination to the Company for any reason.


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EXHIBIT A
OUTLINE OF MANAGEMENT INCENTIVE PLAN

|             |   |  |   |            |  |         |          |   |          |         | 
|------------ | - |  | - | ---------- |  | ------- | -------- | - | -------- | ------- | 
|Net Assets   |   |  | $ | 29,000,000 |  |         |         
|             |   |  |   |            |  |        
|             |   |  |   |            |  | Level 1 |         
|Salary       |   |  |   |            |  |         |          |   | $200,000 |        
|             |   |  |   |            |  |         |         
|             |   |  |   |            |  |         | CO BASED |  
|             |   |  |   |            |  |         |         
|BONUS        |   |  |   |            |  |         |          |   | 100%     |        
|TARGET
BONUS |   |  |   |            |  |         |          |   | $200,000 |        
|Profit       |   |  |   |            |  |         |          |   |          |         | 
|Target       |   |  |   |            |  |         |          |   |          |         | 
|1            | % |  | $ | 290,000    |  |         | 0.0      | % | $        | 0       | 
|2            | % |  | $ | 580,000    |  |         | 1.316    | % | $        | 2,632   | 
|3            | % |  | $ | 870,000    |  |         | 2.63     | % | $        | 5,264   | 
|4            | % |  | $ | 1,160,000  |  |         | 3.95     | % | $        | 7,896   | 
|5            | % |  | $ | 1,450,000  |  |         | 5.26     | % | $        | 10,528  | 
|6            | % |  | $ | 1,740,000  |  |         | 6.58     | % | $        | 13,160  | 
|7            | % |  | $ | 2,030,000  |  |         | 7.90     | % | $        | 15,792  | 
|8            | % |  | $ | 2,320,000  |  |         | 9.21     | % | $        | 18,424  | 
|9            | % |  | $ | 2,610,000  |  |         | 10.53    | % | $        | 21,056  | 
|10           | % |  | $ | 2,900,000  |  |         | 11.84    | % | $        | 23,688  | 
|11           | % |  | $ | 3,190,000  |  |         | 13.16    | % | $        | 26,320  | 
|12           | % |  | $ | 3,480,000  |  |         | 14.48    | % | $        | 28,952  | 
|13           | % |  | $ | 3,770,000  |  |         | 15.79    | % | $        | 31,584  | 
|14           | % |  | $ | 4,060,000  |  |         | 17.11    | % | $        | 34,216  | 
|15           | % |  | $ | 4,350,000  |  |         | 18.42    | % | $        | 36,848  | 
|16           | % |  | $ | 4,640,000  |  |         | 19.74    | % | $        | 39,480  | 
|17           | % |  | $ | 4,930,000  |  |         | 21.06    | % | $        | 42,112  | 
|18           | % |  | $ | 5,220,000  |  |         | 22.37    | % | $        | 44,744  | 
|19           | % |  | $ | 5,510,000  |  |         | 23.69    | % | $        | 47,376  | 
|20           | % |  | $ | 5,800,000  |  |         | 25.00    | % | $        | 50,008  | 
|21           | % |  | $ | 6,090,000  |  |         | 31       | % | $        | 62,508  | 
|22           | % |  | $ | 6,380,000  |  |         | 37       | % | $        | 74,000  | 
|23           | % |  | $ | 6,670,000  |  |         | 43       | % | $        | 86,000  | 
|24           | % |  | $ | 6,960,000  |  |         | 50       | % | $        | 100,000 | 
|25           | % |  | $ | 7,250,000  |  |         | 56       | % | $        | 112,000 | 
|26           | % |  | $ | 7,540,000  |  |         | 62       | % | $        | 124,000 | 
|27           | % |  | $ | 7,830,000  |  |         | 68       | % | $        | 136,000 | 
|28           | % |  | $ | 8,120,000  |  |         | 75       | % | $        | 150,000 | 

---



|                                             |   |  |   |            |  |  |     |   |   |         | 
|-------------------------------------------- | - |  | - | ---------- |  |  | --- | - | - | ------- | 
|29                                           | % |  | $ | 8,410,000  |  |  | 83  | % | $ | 166,000 | 
|30                                           | % |  | $ | 8,700,000  |  |  | 89  | % | $ | 178,000 | 
|31                                           | % |  | $ | 8,990,000  |  |  | 95  | % | $ | 190,000 | 
|32                                           | % |  | $ | 9,280,000  |  |  | 100 | % | $ | 200,000 | 
|33                                           | % |  | $ | 9,570,000  |  |  | 106 | % | $ | 212,000 | 
|34                                           | % |  | $ | 9,860,000  |  |  | 112 | % | $ | 224,000 | 
|35                                           | % |  | $ | 10,150,000 |  |  | 118 | % | $ | 236,000 | 
|36                                           | % |  | $ | 10,440,000 |  |  | 125 | % | $ | 250,000 | 
|37                                           | % |  | $ | 10,730,000 |  |  | 131 | % | $ | 262,000 | 
|38                                           | % |  | $ | 11,020,000 |  |  | 137 | % | $ | 274,000 | 
|39                                           | % |  | $ | 11,310,000 |  |  | 143 | % | $ | 286,000 | 
|40                                           | % |  | $ | 11,600,000 |  |  | 150 | % | $ | 300,000 | 
|41                                           | % |  | $ | 11,890,000 |  |  | 156 | % | $ | 312,000 | 
|42                                           | % |  | $ | 12,180,000 |  |  | 162 | % | $ | 324,000 | 
|43                                           | % |  | $ | 12,470,000 |  |  | 168 | % | $ | 336,000 | 
|44                                           | % |  | $ | 12,760,000 |  |  | 175 | % | $ | 350,000 | 
|45                                           | % |  | $ | 13,050,000 |  |  | 181 | % | $ | 362,000 | 
|46                                           | % |  | $ | 13,340,000 |  |  | 187 | % | $ | 374,000 | 
|47                                           | % |  | $ | 13,630,000 |  |  | 193 | % | $ | 386,000 | 
|48                                           | % |  | $ | 13,920,000 |  |  | 200 | % | $ | 400,000 | 
|49                                           | % |  | $ | 14,210,000 |  |  | 206 | % | $ | 412,500 | 
|50                                           | % |  | $ | 14,500,000 |  |  | 213 | % | $ | 425,000 | 
|each 1% RONA equals 6.5% increase in bonus % |   |  |   |           
|                                             |   |  | $ | 14,790,000 |  |  | 219 | % | $ | 438,000 | 

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EXHIBIT B
OUTLINE OF EXECUTIVE INCENTIVE PLAN

|                       |   |   |            |   |                                        |   |                                        |         |                                        |     |                                        |   |                                        |  |     |   |   |         |  |     |   |   |         |  |     |   |   |        
|---------------------- | - | - | ---------- | - | -------------------------------------- | - | -------------------------------------- | ------- | -------------------------------------- | --- | -------------------------------------- | - | -------------------------------------- |  | --- | - | - | ------- |  | --- | - | - | ------- |  | --- | - | - | -------
|LTIP
BONUS CALCULATION
|                       |   |   |            |   |                                        |   |                                        |         |                                        |     |                                        |   |                                        |  |     |   |   |         |  |     |   |   |         |  |     |   |   |        
|                       |   |   |            |   | 2010-12
PLANExecutive GroupTarget 100% |   | 2011-13
PLANExecutive GroupTarget 100% |         | 2012-14
PLANExecutive GroupTarget 100% |     | 2013-15
PLANExecutive GroupTarget 100% |   | 2014-16
PLANExecutive GroupTarget 100%
|                      
|RONA                   |   |   |            |   |                                        |   | $                                      | 200,000 |                                        |     |                                        | $ | 200,000                                |  |     |   | $ | 200,000 |  |     |   | $ | 200,000 |  |     |   | $ | 200,000
|Net Assets             |   | $ | 29,000,000 |   |                                        |   |                                        |         |                                        |     |                                        |   |                                        |  |     |   |   |         |  |     |   |   |         |  |     |   |   |        
|Target                 |   |   | 32         | % |                                        |   |                                        |         |                                        |     |                                        |   |                                        |  |     |   |   |         |  |     |   |   |         |  |     |   |   |        
|                       |   |   |            |   |                                        |   |                                        |         |                                        |     |                                        |   |                                        |  |     |   |   |         |  |     |   |   |         |  |     |   |   |        
|YR1                    |   | $ | 9,280,000  |   |                                        |   |                                        |         |                                        |     |                                        |   |                                        |  |     |   |   |         |  |     |   |   |         |  |     |   |   |        
|YR2                    |   | $ | 9,280,000  |   |                                        |   |                                        |         |                                        |     |                                        |   |                                        |  |     |   |   |         |  |     |   |   |         |  |     |   |   |        
|YR3                    |   | $ | 9,280,000  |   |                                        |   |                                        |         |                                        |     |                                        |   |                                        |  |     |   |   |         |  |     |   |   |         |  |     |   |   |        
|                       |   | $ | 27,840,000 |   |                                        |   |                                        |         |                                        |     |                                        |   |                                        |  |     |   |   |         |  |     |   |   |         |  |     |   |   |        
|                       |   |   |            |   |                                        |   |                                        |         |                                        |     |                                        |   |                                        |  |     |   |   |         |  |     |   |   |         |  |     |   |   |        
|                       |   |   |            |   |                                        |   |                                        |         |                                        |     |                                        |   |                                        |  |     |   |   |         |  | 175 | % | $ | 350,000 |  |     |   |   |        
|100                    | % | $ | 27,840,000 |   | 93                                     | % | $                                      | 185,345 |                                        |     |                                        |   |                                        |  |     |   |   |         |  |     |   |   |         |  | 200 | % | $ | 400,000
|125                    | % | $ | 34,800,000 |   |                                        |   |                                        |         |                                        | 103 | %                                      | $ | 205,460                                |  |     |   |   |         |  |     |   |   |         |  |     |   |   |        
|150                    | % | $ | 41,760,000 |   |                                        |   |                                        |         |                                        |     |                                        |   |                                        |  | 100 | % | $ | 200,000 |  |     |   |   |         |  |     |   |   |        
|175                    | % | $ | 48,720,000 |   |                                        |   |                                        |         |                                        |     |                                        |   |                                        |  |     |   |   |         |  |     |   |   |         |  |     |   |   |        
|200                    | % | $ | 55,680,000 |   |                                        |   |                                        |         |                                        |     |                                        |   |                                        |  |     |   |   |         |  |     |   |   |         |  |     |   |   |        

|                                                         |  |   |            |  |    |   |   |            |  |     |   |   |            |  |     |   |   |            |  |     |   |   |            |  |     |   |   |           
|-------------------------------------------------------- |  | - | ---------- |  | -- | - | - | ---------- |  | --- | - | - | ---------- |  | --- | - | - | ---------- |  | --- | - | - | ---------- |  | --- | - | - | ----------
|3
YEAR OPERATING INCOME - used to CALCULATE LTIP BONUS %
|ACTUAL OPERATING INCOME                                 
|2010                                                     |  | $ | 7,000,000  |  |    |   |   |            |  |     |   |   |            |  |     |   |   |            |  |     |   |   |            |  |     |   |   |           
|2011                                                     |  | $ | 9,000,000  |  |    |   |   |            |  |     |   |   |            |  |     |   |   |            |  |     |   |   |            |  |     |   |   |           
|2012                                                     |  | $ | 9,800,000  |  |    |   |   |            |  |     |   |   |            |  |     |   |   |            |  |     |   |   |            |  |     |   |   |           
|                                                         |  |   |            |  | 93 | % | $ | 25,800,000 |  |     |   |   |            |  |     |   |   |            |  |     |   |   |            |  |     |   |   |           
|2013                                                     |  | $ | 9,800,000  |  |    |   |   |            |  | 103 | % | $ | 28,600,000 |  |     |   |   |            |  |     |   |   |            |  |     |   |   |           
|2014                                                     |  | $ | 8,240,000  |  |    |   |   |            |  |     |   |   |            |  | 100 | % | $ | 27,840,000 |  |     |   |   |            |  |     |   |   |           
|2015                                                     |  | $ | 30,680,000 |  |    |   |   |            |  |     |   |   |            |  |     |   |   |            |  | 175 | % | $ | 48,720,000 |  |     |   |   |           
|2015                                                     |  | $ | 16,760,000 |  |    |   |   |            |  |     |   |   |            |  |     |   |   |            |  |     |   |   |            |  | 200 | % | $ | 55,680,000

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