EXHIBIT 10.2


December 8, 1999

Dr. Panos Michalopoulos
715 Fairfield Circle
Minnetonka, MN 55305

Dear Dr. Michalopoulos:

Image Sensing Systems, Inc., (the "Company") is pleased to offer you the
opportunity to act as a consultant to the Company, subject to the following
terms and conditions:

                        1.          Duties. You agree to act as a
                                    Technical/Scientific Advisor ("Advisor") and
                                    to devote the time and effort necessary to
                                    perform the acts and duties required of an
                                    Advisor as needed and approved by the
                                    President/CEO of the Company.

                        2.          Term. The term of this letter agreement
                                    shall commence on January 1, 2000 and
                                    continue through December 31, 2000 provided,
                                    however, that either party may terminate
                                    this letter agreement at any time by giving
                                    45 days notice.

                        3.          Compensation. The Company shall pay to you
                                    $125.00 per hour of service to the Company.
                                    You shall provide the Company with
                                    reasonably detailed documentation setting
                                    forth the number of hours of service
                                    provided by you following the completion of
                                    each month, and the Company shall make
                                    payment to you within ten business days of
                                    its receipt thereof.

                        4.          Expenses. The Company shall pay you
                                    reasonable travel expenses related to
                                    discharging the duties as an Advisor that
                                    have been pre-approved by the President/CEO
                                    of the Company. These expenses must be
                                    submitted with documentation monthly along
                                    with your billable hours as stated in item 3
                                    above. Payment will be made within ten
                                    business days of its receipt thereof.

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                        5.          Status. You shall be an independent
                                    contractor to the Company and nothing
                                    contained in this letter agreement shall be
                                    deemed to create an employer-employee,
                                    agency or other partnership relationship
                                    between you and the Company.

                        6.          Confidentiality. You agree to keep
                                    confidential all proprietary and nonpublic
                                    information relating to the Company obtained
                                    by you in the course of performing your
                                    duties under this letter agreement.


                        7.          Covenant Not to Compete. You agree that from
                                    and after the date of this agreement and for
                                    a period of one (1) years after the
                                    termination of this agreement by either
                                    party, you will not in any manner directly
                                    or indirectly compete with the Company in
                                    the field of image processing any where in
                                    the United States, Canada, countries in the
                                    European Common Market Community, or the
                                    Orient.

                        8.          Trade Secrets. You shall not at any time or
                                    in any manner, either directly or
                                    indirectly, divulge, discharge or
                                    communicate to any person, firm or
                                    corporation in any manner whatsoever any
                                    information concerning any matters affecting
                                    or relating to the business of the Company.

                        9.          The parties agree that this agreement
                                    supercedes and replaces any and all other
                                    agreements between you and the Company and
                                    may only be modified by the mutual written
                                    agreement of the parties hereto and with the
                                    consent of the Company's Board of Directors.

                        10.         Not withstanding other provisions hereof,
                                    certain of the payments contemplated
                                    hereunder may be subject to withholding
                                    taxes, or other statutory payments. To the
                                    extent Company is required to make such
                                    payments to your account they will be deemed
                                    to have been made directly to you to satisfy
                                    the obligation of the Company.

                        11.         You agree that, from the date hereof, you
                                    will make no binding commitments on behalf
                                    of the Company, without the advice and
                                    consent of the President/CEO of the Company.

                        12.         It is acknowledged and agreed by the parties
                                    hereto that the obligations to make payments
                                    to you hereunder are the only obligations of
                                    the Company and the Company will incur no
                                    additional obligations to you other than as
                                    a Board Member of the Company.

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If the foregoing accurately reflects our agreement relating to the subject
matter contained herein, please so indicate by executing this letter in the
space provided below to be effective as of the date hereof.




________________________________________
Richard Braun
Chairman of the Compensation Committee
Date ____________________



________________________________________
Jim Murdakes
Member of the Compensation Committee
Date ____________________



________________________________________
C. "Dino" Xykis
Member of the Compensation Committee
Date ____________________



Agreed To:



________________________________________
Dr. Panos Michalopoulos
Date ____________________

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