Exhibit 10.1 


EMPLOYMENT
AGREEMENT


          This
EMPLOYMENT AGREEMENT, is made by and between Image Sensing Systems, Inc., and its subsidiaries and divisions (collectively, “ISS”),
and Chad A. Stelzig (“Stelzig”) as of the 27th day of June, 2016 (the “Effective Date”).


RECITALS:


          A.       ISS
and Stelzig entered into that certain Employment Agreement effective on or about June 27th, 2016 (the “Agreement”)
under which Stelzig will serve as ISS’ Interim President and Chief Executive Officer.


          B.       ISS
and Stelzig mutually agree to the terms set forth in this Agreement.


          NOW
THEREFORE, in consideration of the convents and conditions contained in this Agreement, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, ISS and Stelzig agree as follows:


AGREEMENT:


	 	1.	Employment; Definitions. 
	 	 	 	 	 
	 	(a)	Employment. Stelzig is an at-will employee, and his employment may be terminated by either Stelzig or ISS at any time, with or without cause. 
	 	 	 	 	 
	 	(b)	Definitions. For purposes of this Agreement, the following terms shall have the following meanings:
	 	 	 	 	 
	 	 	(i)	“Code” means the Internal Revenue Code of 1986, as amended, and the regulations, notices and other guidance of general applicability issued thereunder.
	 	 	 	 
	 	 	(ii)	“Fair Market Value” means the per share closing price of ISS’s common stock or any other securities into which ISS’s common stock has been converted that are subject to Options held by Stelzig as quoted on the NASDAQ Stock Market or any other exchange on which such common stock or other securities are principally traded or, if such common stock or securities are not traded on any exchange, the fair market value of such common stock or securities as determined in good faith by the Board of Directors of ISS or its successor.
	 	 	 	 
	 	 	(iii)	“Good Reason” means Stelzig has provided written notice to ISS within 90 days following the occurrence of any of the following events, provided the event results in a negative change to Stelzig, which notice describes the event in reasonable detail and the facts and circumstances claimed by Stelzig to constitute Good Reason, and ISS has not cured the event within 30 days after receiving such notice from Stelzig:
	 	 	 	 	 
	 	 	 	(A)	the assignment of Stelzig without Stelzig’s consent to a position with material responsibilities or duties of a lesser status or degree than the position of Chief Executive  Officer and/or Vice President of Engineering of ISS;
	 	 	 	 	 
	 	 	 	(B)	the relocation of Stelzig’s principal office for ISS business, without Stelzig’s consent, to a location more than 50 miles outside Stelzig’s work location as of the date of this Agreement;
	 	 	 	 	 
	 	 	 	(C)	a material reduction, in the aggregate, in base salary, variable pay opportunities or the employee benefits in which Stelzig is entitled to participate irrespective of any standard waiting periods with respect to the same, unless such material reduction is generally applicable to all employees of ISS with a similar ranking to Stelzig; or
	




     

     

    


	 	 	 	 	 
	 	 	 	(D)	a material breach or a material adverse modification of this Agreement by ISS without Stelzig’s consent.
	 	 	 	 	 
	 	 	 	Termination for “Good Reason” shall not include Stelzig’s death or a termination for any reason other than one of the events described in clauses (A) through (D) of this Section 1(b)(iv).
	 	 	 	 	 
	 	 	(iv)	“Termination Date” means the date upon which Stelzig’s “separation from service” with ISS within the meaning of Section 409A(a)(2)(A)(i) of the Code (with “ISS” for purposes of this paragraph to include any business entity that is treated as a single employer with ISS under the rules of Section 414(b) and (c) of the Code).


 


	 	 	(v)	“With Cause” means the occurrence of any of the following events:
	 	 	 	 	 
	 	 	 	(A)	the conviction of Stelzig of, or a plea of “guilty” or “no contest” by Stelzig to, a felony under the laws of the United States or any state thereof or the conviction of Stelzig of, or a plea of “guilty” or “no contest” by Stelzig to, any act involving moral turpitude;
	 	 	 	 	 
	 	 	 	(B)	Stelzig’s breach of fiduciary duty involving personal profit;
	 	 	 	 	 
	 	 	 	(C)	Stelzig’s willful and material misconduct in the performance of duties assigned to Stelzig as the Chief Operating Officer, Chief Financial Officer and Treasurer of ISS;
	 	 	 	 	 
	 	 	 	(D)	Stelzig’s consistent failure to perform the reasonable stated duties assigned to Stelzig under this Agreement; or
	 	 	 	 	 
	 	 	 	(E)	Illegal or unethical business practices by Stelzig, including but not limited to the commission of fraud, misappropriation or embezzlement in connection with ISS’s business.
	 	 	 	 	 
	          2.     Duties. Stelzig will devote his full professional time, attention and efforts to the business and affairs of ISS during his employment with ISS, and Stelzig agrees that, to the best of his ability and experience, and at all times, he will conscientiously perform the duties and obligations assigned to him.
	 	 	 	 	 
	          3.      Compensation.
	 	 	 	 	 
	 	
        (a)

         
	Salary. Stelzig’s base salary will be $225,000 per year for the year ending December 31, 2016, less all required withholdings and deductions, payable in accordance with ISS’s standard payroll procedures in effect from time to time. Stelzig’s performance will be evaluated by ISS’s Board of Directors from time to time in its discretion but no less often than annually. 
	 	 	 
	 	(b)	One Time Stock Grant. Stelzig will receive a one-time grant of 10,000 shares of restricted stock under the terms of ISS’s 2014 Stock Option and Incentive Plan, which will vest 6 months from the date of grant if Stelzig is then an employee of ISS. 
	 	 	 
	 	(c)	Bonuses. Stelzig’s bonus plan will be determined by ISS’s Board of Directors from time to time.
	 	 	 
	 	(d)	Employee Benefits. Stelzig will be entitled to insurance and other benefits in accordance with ISS’s standard and executive benefits in effect from time to time. These benefits include several elections that must be made by Stelzig.  Planbooks, Summary Plan Descriptions, and Plan Legal Documents containing formal descriptions of all available benefits have been or will be provided to Stelzig. ISS is entitled to change, modify, or discontinue such benefits at its sole discretion.
	 	 	 
	




     

     

    


	 	(e)	Vacation. Stelzig is entitled to vacation each year in accordance with ISS’s vacation policy in effect from time to time.
	 	 	 	 	 
	          4.       Reimbursement of Reasonable Travel and Business Expenses. ISS will, in accordance with its policies in effect from time to time, reimburse Stelzig for all reasonable business expenses incurred by Stelzig in connection with the performance of his duties under this Agreement, upon submission of the necessary documentation required pursuant to ISS’s standard policies and record keeping procedures. Stelzig also agrees that he will adhere to ISS’s travel policy, which is subject to amendment from time to time.
	 
	          5.       Confidentiality, Noncompetition and Invention Assignment. Stelzig will have reviewed and signed Appendix A to the Agreement.


 


	          6.       Severance upon Termination of Employment.
	 	 	 	 	 
	 	(a)	Voluntary Termination. Should Stelzig terminate his employment for any reason other than for Good Reason as provided in Section 1(b)(ii)(B) and Section 1(b)(iv) of this Agreement, (i) ISS shall pay Stelzig all earned and unpaid amounts due to him for salary through the termination date; (ii) Stelzig shall have 90 days after the date of the termination of his employment (or such shorter period as is provided in the Image Sensing Systems, Inc. 2005 Stock Incentive Plan, as amended (the “Plan”), or any successor or replacement plan of a similar nature, or an agreement governing the Option) to exercise all Options owned by Stelzig that are exercisable as of such termination date; and (iii) any other Options, Restricted Stock and Restricted Stock Units owned by Stelzig shall automatically terminate. Except as expressly provided herein, to the extent that there is any conflict between the provisions of this Section 6(a) and the provisions of the Plan or any agreement governing Options, Restricted Stock and Restricted Stock Units owned by Stelzig, the provisions of this Section 6(a) shall govern. For purposes of this Agreement, the terms “Option,” “Restricted Stock” and “Restricted Stock Units” shall have the meaning set forth in the Plan or any successor or replacement plan of a similar nature.
	 	 	 
	 	(b)	Termination by ISS “With Cause.” Should ISS terminate Stelzig’s employment With Cause, Stelzig shall not be entitled to any severance, and all of the Options, Restricted Stock and Restricted Stock Units owned by Stelzig shall automatically terminate; provided, however, that Stelzig shall have ten (10) days to cure any alleged breach, failure, or misconduct under Section 1(b)(vi)(D) of this Agreement, if such alleged breach, failure or misconduct is curable, after ISS provides Stelzig written notice of the actions or omissions constituting such breach, failure, or misconduct. Except as expressly provided herein, to the extent that there is any conflict between the provisions of this Section 6(b) and the provisions of the Plan or any agreement governing Options, Restricted Stock and Restricted Stock Units owned by Stelzig, the provisions of this Section 6(b) shall govern.
	 	 	 
	 	(c)	Termination by ISS “Without Cause.” Should ISS terminate
    Stelzig’s employment for any reason other than (1) With Cause, or (2) because of Stelzig’s inability to
    perform his duties because of death or disability, upon entry into a release agreement provided by ISS (the “Release
    Agreement”), (i) Stelzig shall be entitled to 6 months of salary continuation, without eligibility for bonus; and (ii)
    he shall have 90 days after the date of the termination of his employment (or such shorter period as is provided in the Plan,
    or any successor or replacement plan of a similar nature, or an agreement governing the Option) to exercise all Options owned
    by Stelzig that are exercisable as of such termination date. Any other Options, Restricted Stock and Restricted Stock Units
    owned by Stelzig shall automatically terminate upon termination of Stelzig’s employment under this Section 6(c). ISS
    and Stelzig have the ability, however, at any time, to terminate this Agreement by mutual written agreement, with or without
    the severance benefit. Except as expressly provided herein, to the extent that there is any conflict between the provisions
    of this Section 6(c) and the provisions of the Plan or any agreement governing Options, Restricted Stock and Restricted Stock
    Units owned by Stelzig, the provisions of this Section 6(c) shall govern.
	 	 	 	 
	 	 	Stelzig’s re-appointment back to ISS’s Vice President of Engineering
    from Interim Chief Executive Officer without a reduction to his existing salary and severance agreement would not constitute
    a severance triggering action	 
	 	 	 	 
	




     

     

    


	 	 	 	 	 
	 	(e)	Post-Termination Obligations and Conditions. In the event of the termination of Stelzig’s employment with ISS, the sole obligation of ISS to Stelzig will be ISS’s obligation to make any payments it is required to make to Stelzig as provided in this Agreement, and ISS will have no other obligation to Stelzig or to Stelzig’s beneficiary(ies) or estate.
	 	 	 	 
	 	 	(i)	Notwithstanding the provisions of Section 6(c) and Section 6(d) of this Agreement, ISS will not be obligated to make any payments to Stelzig under Section 6(c) or Section 6(d) unless: (A) Stelzig has signed the Release Agreement; (B) any and all applicable rescission periods provided by law for releases of claims shall have expired and Stelzig shall have signed and not rescinded the release of claims; and (C) Stelzig is in strict compliance with the terms of this Agreement as of the date(s) of such payments.


 


	 	 	(ii)	Immediately upon the termination of Stelzig’s employment with ISS for any reason, Stelzig will resign all positions then held as an officer or manager of ISS and of affiliated entities of ISS.
	 	 	 	 
	 	(f)	Withholding Taxes. ISS shall be entitled to deduct from all payments or benefits provided for under this Agreement any federal, state or local income and employment-related taxes required by law to be withheld with respect to such payments or benefits.
	 	 	 	 
	 	(g)	Compliance with Code Section 409A. 
	 	 	 
	 	 	(i)	The parties to this Agreement intend that the payments described in Section 6(c) and Section 6(d) of this Agreement shall be excluded from deferred compensation as a “short-term deferral” under Treas. Reg. §1.409A-1(b)(4). The parties to this Agreement intend that the continuation of any health and dental benefits under this Agreement shall be excluded from deferred compensation pursuant to the medical benefits exception for separation pay plans under Treas. Reg. §1.409A-1(b)(9)(v)(B). 
	 	 	 	 
	 	 	(ii)	The parties to this Agreement intend that the continuation of any life and disability insurance benefits under this Agreement shall be excluded from deferred compensation as separation pay due to an involuntary separation from service under Treas. Reg. §1.409A-1(b)(9)(iii), and the amounts payable for any such continuation of life and disability insurance coverage shall not exceed two times the lesser of (x) Stelzig’s annualized compensation based on the annual rate of pay for services to ISS for the calendar year prior to the calendar year in which the Change in Control Termination occurs (adjusted for any increase during the year that was expected to continue indefinitely if Stelzig had not separated from service) or (y) the compensation limit under Section 401(a)(17) of the Code for the year in which the Change in Control Termination occurs. 
	 	 	 	 
	 	 	(iii)	Notwithstanding the foregoing, if any of the payments described in Section 6(c) and Section 6(d) of this Agreement are subject to the requirements of Code Section 409A, and ISS determines that Stelzig is a “specified employee” as defined in Code Section 409A as of Stelzig’s Termination Date, such payments shall not be paid or commence earlier than the date that is six months after the Termination Date, but shall be paid or commence during the calendar year following the year in which the Termination Date occurs and within 30 days of the earliest possible date permitted under Code Section 409A. 


 



     

     

    




	 	 	 	 
	 	7.	Miscellaneous.
	 	 	 	 
	 	(a)	Notices. Any and all notices permitted or required to be given under this Agreement must be in writing. Notices will be deemed given (1) when personally received or when sent by facsimile transmission (to the receiving party’s facsimile number), (2) on the first business day after having been sent by commercial overnight courier with written verification of receipt, or (3) on the third business day after having been sent by registered or certified mail from a location on the United States mainland, return receipt requested, postage prepaid, whichever occurs first, at the address set forth below or at any new address, notice of which will have been given in accordance with this Paragraph:


 


	 	If to ISS:	Andrew T. Berger
	 	 	500 Spruce Tree
    Centre
	 	 	1600 University
    Ave. West
	 	 	St. Paul, MN
    55104
	 	 	(or other address
    as is notified in writing from time to time by ISS to Stelzig by return receipt requested, postage prepaid post)
	 	 	 
	 	If to Stelzig:	Chad A. Stelzig
	 	 	8312 Foxberry
    Drive
	 	 	Savage, MN 55378
	 	 	(or other address
    as is notified in writing from time to time by Stelzig to ISS by return receipt requested, postage prepaid post)


 


	 	(b)	Amendments. This Agreement may not be changed or modified in whole or in part except by a writing signed by ISS and Stelzig. Notwithstanding anything in this Agreement to the contrary, ISS and Stelzig agree that ISS has the right to amend this Agreement without Stelzig’s consent to the extent necessary or desirable to comply with Code Section 409A, provided that no such amendment may reduce the amount of any benefits payable to Stelzig without Stelzig’s consent.
	 	 	 
	 	(c)	Governing Law. This Agreement will be governed by and interpreted according to the laws of the State of Minnesota without regard to its conflicts law. 
	 	 	 
	 	(d)	No Waiver. The failure of either party to this Agreement to insist on strict compliance with any of the terms of this Agreement in any instance or instances will not be deemed to be a waiver of any term of this Agreement or of that party’s right to require strict compliance with the terms of this Agreement in any other instance.
	 	 	 
	 	(e)	Severability. Stelzig and ISS recognize that the limitations contained in this Agreement are reasonably and properly required for the adequate protection of the interests of ISS. If for any reason a court of competent jurisdiction or binding arbitration proceeding finds any provision of this Agreement, or the application of any part of this Agreement, to be unenforceable, the remaining provisions of this Agreement will be interpreted so as best to reasonably effect the intent of the parties to this Agreement. The parties to this Agreement further agree that the court or arbitrator shall replace any such invalid or unenforceable provisions with valid and enforceable provisions designed to achieve, to the extent possible, the business purposes and intent of such unenforceable provisions.
	 	 	 
	 	(f)	Entire Agreement. This Agreement constitutes the entire understanding and agreement of the parties hereto with respect to the subject matter of this Agreement and supersedes all prior and contemporaneous agreements or understandings, inducements or conditions, express or implied, written or oral, including, without limitation, between the parties to this Agreement with respect to the subject matter of this Agreement. 
	 	 	 
	 	(g)	Term of Agreement. This Agreement shall commence on the Effective Date and shall continue in effect until the date on which Stelzig’s employment with ISS terminates for any reason whatsoever; provided, that any rights and obligations accruing upon or prior to the termination or expiration of this Agreement shall survive to the extent necessary to enforce such rights and obligations.


 



     

     

    




	 	(h)	Successors and Assigns. This Agreement shall inure to the benefit of and shall be enforceable by Stelzig, his heirs and the personal representative(s) of his estate, and it shall be binding upon and inure to the benefit of ISS and its successors and assigns. ISS will require the transferee of any sale of all or substantially all of the business and assets of ISS or the survivor of any merger, consolidation or other transaction expressly to agree to honor this Agreement in the same manner and to the same extent that ISS would be required to perform this Agreement if no such event had taken place. The failure of ISS to obtain such agreement before the effective date of such event shall be a material breach of this Agreement by ISS within the meaning of Section 1(b)(iv)(D) of this Agreement. 
	 	 	 
	 	(i)	Captions. The headings or captions set forth in this Agreement are for convenience only and shall not affect the meaning or interpretation of this Agreement.
	 	 	 
	 	(j)	Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.


         


IN
WITNESS WHEREOF, Stelzig and ISS have caused this Agreement to be duly executed and delivered as of the Effective Date.


	 	 	 	 	 
	Image
    Sensing Systems, Inc.	 	 	 
	 	 	 	 	 
	By: 	/s/
    Andrew T. Berger	 	/s/
    Chad A. Stelzig	 
	 	Andrew T. Berger	 	Chad A. Stelzig	 
	Its: 	Executive Chairman	 	 	 


 




     

     

    


 


APPENDIX A

TO THE EMPLOYMENT AGREEMENT BETWEEN

IMAGE SENSING SYSTEMS, INC., AND CHAD A. STELZIG


CONFIDENTIALITY, NONCOMPETITION AND

INVENTION ASSIGNMENT AGREEMENT


          This
CONFIDENTIALITY, NONCOMPETITION, AND INVENTION ASSIGNMENT AGREEMENT (“Agreement”) between Image Sensing Systems, Inc.
(“ISS”), and Chad A. Stelzig (“Employee”) is signed and dated AS OF June 27, 2016.


          As
an express condition of Employee’s employment with ISS, for his receipt of ISS benefits, and other valuable consideration,
and in exchange for other premises and mutual promises contained in this Agreement, ISS and Employee agree as follows:


       1.          Confidential
and Proprietary Information.


                    (a)          Employee
understands and agrees that, during the course of his employment with ISS, he will receive proprietary, confidential, and trade
secret information – all of which has special value to and constitutes a unique asset of ISS (collectively referred to in
this Agreement as “Confidential & Proprietary Information”). Employee agrees that he will not disclose such Confidential
& Proprietary Information during the period of his employment or after the termination of his employment for any reason whatsoever
and that he will not use or share the same with any person, firm, or corporation without first obtaining ISS’s written consent.


                    (b)          For
these purposes, “Confidential and Proprietary Information” includes, but is not limited to, confidential information
relating to ISS’s business, products and services, customers, or vendors; trade secrets, data, specifications, developments,
inventions, patents, patent materials, copyrightable subject matter and ideas, processes, know-how, designs, computer systems,
and research activity; marketing and sales strategies, marketing and product plans, information, pricing strategies, and techniques;
long and short term business plans; existing and prospective client, vendor, and employee lists, contacts, and information; financial
and personnel information; any information and/or applications relating to ISS’s internal information systems; and any other
information concerning the business of ISS which is not disclosed to the general public or known in the industry, except for disclosure
necessary in the course of Employee’s duties or with the express written consent of ISS. All Confidential and Proprietary
Information, including all copies, notes regarding, correspondence and/or electronic communications regarding, and replications
of such Confidential and Proprietary Information will remain the sole property of ISS and must be returned to ISS immediately upon
termination of Employee’s employment.


                    (c)          Employee
acknowledges that ISS’s Confidential and Proprietary Information constitutes a unique and valuable asset of ISS and represents
a substantial investment of time and expense by ISS, and that any disclosure or use of such knowledge or information other than
for the sole benefit of ISS would be wrongful and would cause irreparable harm to ISS.


                    (d)          The
foregoing obligations of confidentiality do not apply to any knowledge or information that is now published or which subsequently
becomes generally publicly known in the form in which it was obtained from ISS, other than as a direct or indirect result of the
breach of this Agreement by Employee.


       2.          Return
of Company Property. Upon termination of employment with ISS for whatever reason, or at any other time at the request of ISS,
Employee will deliver to a designated Company representative all records, documents, hardware, software, and all other Company
property and all copies of such Company property in Employee’s possession. Employee acknowledges and agrees that all such
materials are the sole property of ISS and that he will certify in writing to ISS at the time of delivery that he has complied
with this obligation.






     

     

    

 


       3.          Noncompetition
Covenant. ISS and Employee agree that, due to Employee’s position with ISS, Employee will have access to ISS’s
Confidential and Proprietary Information and has developed and will continue to develop certain goodwill and relationships on behalf
of ISS. Employee acknowledges that ISS will only release its Confidential and Proprietary Information, and will only permit Employee
to continue to generate this goodwill and these relationships, upon the receipt of assurances that Employee will not use the information,
goodwill, or relationships to ISS’s disadvantage and, accordingly, agrees to the following provisions:


                    (a)          Agreement
Not to Compete. During the term of his employment with ISS, and for a period of twelve (12) months after the termination
of such employment for any reason, Employee will not, directly or indirectly, serve as an employee, agent, consultant, director,
stockholder or owner, or render services to any Conflicting Organization. Employee also will not direct any other individual or
business enterprise to engage in such competition with ISS. For the purposes of this Agreement, “Conflicting Organization”
means companies and other organizations engaged in or which have plans to engage in software-based computer enabled detection products
and solutions for the intelligent transportation industry and adjacent security and law enforcement markets.


                    (b)          Nonsolicitation
of Customers or Suppliers. During the term of his employment with ISS, and for a period of twelve (12) months after
the termination of such employment for any reason, Employee agrees that he will not, directly or indirectly, divert, solicit, approach,
contact, call upon, accept business from, or sell or render services to any client/customer or prospective client/customer of ISS
who was solicited or serviced directly by Employee at any time during the twelve (12) months prior to his termination from employment,
or where he supervised, directly or indirectly, in whole or in part, the solicitation or service activities related to such clients
or prospects during the same twelve-month period. Employee also will not, directly or indirectly, aid or assist any other person,
firm, or corporation in doing what he himself cannot do under the terms of this Agreement. Employee will not in any way interfere
or attempt to interfere with ISS’s relationships with any of its actual or potential customers, suppliers, or subcontractors.


                    (c)          Nonsolicitation
of Employees. Employee recognizes that ISS’s work force constitutes an important and vital aspect of its business. During
the term of his employment with ISS, and for a period of twelve (12) months after the termination of such employment for
any reason, Employee will not, directly or indirectly, hire, solicit, employ, or attempt to employ, any employee or director of
ISS, or otherwise directly or indirectly interfere with or disrupt relationships, contractual or otherwise, between ISS and any
of its employees, directors, or consultants.


                    (d)          Acknowledgment.
Employee agrees that the restrictions and agreements contained in this Agreement (and particularly in this Paragraph 3) are reasonable
and necessary to protect the legitimate interests of ISS, and that any violation of this Agreement will cause substantial and irreparable
harm to ISS that would not be quantifiable and for which no adequate remedy would exist at law. Employee further acknowledges that
he has had the opportunity to request that legal counsel review this Agreement and, having exhausted such right, agrees to the
terms herein without reservation. Accordingly, Employee authorizes the issuance of injunctive relief by any court of appropriate
jurisdiction, without the requirement of posting bond, for any violation of this Agreement, and agrees that ISS shall be entitled
to the recovery of reasonable attorneys’ fees incurred in the enforcement of this Agreement.


       4.          Assignment
of Inventions. Employee agrees to promptly disclose to ISS inventions, ideas, processes, writings, designs, developments and
improvements, whether or not protectable under the applicable patent, trademark or copyright statutes, which Employee makes, conceives,
reduces to practice, or learns during his/her employment by ISS, either alone or jointly with others, relating to any business
in which ISS is or may be concerned (“Inventions”). Such disclosures will be made by Employee to ISS in a written report,
setting forth in detail the structures, procedures and methodology employed and the results achieved.


                    (a)          To
the extent that any Invention qualifies as “work made for hire” as defined in 17 U.S.C. § 101 (1976), as amended,
such Invention will be the exclusive property of ISS. Moreover, Employee agrees to treat every work or idea created or acquired
by or on behalf of Employee for ISS as a “work made for hire.” It is the intent of both Employee and ISS that ISS have
unrestricted ownership in all of such works and to any derivative works thereof, without further compensation of any kind to Employee
or to those with whom Employee may work.






     

     

    

 


                    (b)          Consistent
with and to the extent permitted by law, Employee hereby assigns and agrees to assign to ISS all rights in and to these Inventions,
including, but not limited to, applications for United States and foreign patents and resulting patents and to further cooperate
with ISS in maintaining, obtaining, and protecting such proprietary rights. Employee shall execute all applications, assignments
and other papers necessary to enable ISS to obtain full protection and title to such matter and inventions, and Employee hereby
waives any claim of moral right that Employee may have in or in connection with any such work.


                    (c)          Employee
further acknowledges that he received notice from ISS that his obligation to assign rights in and to any Inventions does not apply
to an Invention for which no equipment, supplies, facility or trade secret information of ISS was used and which was developed
entirely on Employee’s own time, and (1) which does not relate (A) directly to the business of ISS or (B) to ISS’s
actual or demonstrably anticipated research or development, or (2) which does not result from any work performed by Employee for
ISS.


                    (d)          Employee
has attached a complete list of all existing patentable or non-patentable inventions, original works of authorship, derivative
works, trade secrets, trademarks, copyrights, service marks, discoveries, patents, technology, algorithms, computer software, application
programming interfaces, protocols, formulas, compositions, ideas, designs, processes, techniques, know-how, data, and all improvements
thereto to which Employee claims ownership as of the date of this Agreement and which Employee desires to clarify are not subject
to this Agreement (“Excluded Inventions”). If no such list is attached to this Agreement, Employee represents that
he has no such Excluded Inventions at the time of signing this Agreement.


                    (e)          Employee
further agrees that prior to separation from employment with ISS for any reason, he will disclose to ISS, in a written report,
all Inventions, the rights to which he has agreed to assign to ISS under (a) and (b) above, and which he has not previously disclosed.


                    (f)          In
the event of any dispute concerning whether an Invention made or conceived by Employee is the property of ISS, such Invention will
be presumed to be the property of ISS, and Employee will bear the burden of establishing otherwise in any arbitration, litigation,
or similar proceeding.


       5.          Injunctive
Relief. Because the Confidential and Proprietary Information described above and the products derived therefrom are unique,
peculiar and of great value to ISS, ISS shall be entitled to injunctive relief to restrain Employee from violating or threatening
to violate any provisions contained herein. The parties also agree that, because of the unique nature of their relationship and
the information and products to which Employee has been exposed through this relationship, ISS shall be entitled to an injunction
to be issued by any Court of competent jurisdiction enjoining and restraining Employee from committing any violation of this Agreement,
and Employee hereby consents to the issuance of such injunction. Proceedings may be initiated against Employee or Employee’s
legal representatives or assigns. ISS shall be entitled to its reasonable costs and attorneys’ fees incurred in enforcing
this provision.


       6.          Miscellaneous.


                    (a)          At-will
Employment. Nothing in this Agreement creates any rights of employment. Employee is, and remains, an “at-will”
employee.


                    (b)          Severability.
It is further agreed and understood by the parties that if any part, term or provision of this Agreement should be unenforceable,
invalid, or illegal under any applicable law or rule, the offending term or provision will be struck and the remaining provisions
of the Agreement will not be affected or impaired thereby.


                    (c)          Assignability.
The terms, conditions, and covenants of this Agreement shall be assignable to the successors and assigns of ISS.


                    (d)          Waiver.
Failure of ISS at any time to enforce any provision of this Agreement shall not be interpreted as a waiver of any provision of
ISS’s rights under this Agreement.






     

     

    

 


                    (e)          Entire
Agreement. This Agreement contains the entire understanding between the parties hereto with respect to the subject matter hereof
and supersedes any prior understandings, agreements or representations, written or oral, relating to such subject matter.


                    (f)          Modification,
Amendment, Waiver or Termination. No provision of this Agreement may be modified, amended, waived or terminated except by an
instrument in writing signed by the parties to this Agreement. No delay or waiver, express or implied, by ISS of any right or any
breach by Employee shall constitute a waiver of any other right or breach by Employee.


                    (g)          Governing
Law. This Agreement will be governed by and interpreted according to the substantive laws of the State of Minnesota without
regard to such state’s conflicts law.


          IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date memorialized in the first paragraph.


	 	 	 	 	 
	 	 	 	Image
    Sensing Systems, Inc.
	 	 	 	 
	By:	 /s/
    Chad A. Stelzig	 	By:  	/s/
    Andrew T. Berger
	 	 	 	Its:	 Executive
    Chairman