Document:

Insignia Systems 10-Q dated March 31, 2005

EXHIBIT 10.1  

CHANGE IN CONTROL
SEVERANCE AGREEMENT 

        AGREEMENT
made as of this 5th day of May, 2003 by and between Insignia Systems, Inc., a
Minnesota corporation (the “Company”), and Justin Shireman (the
“Executive”). 

        WHEREAS,
the Company, as a publicly held corporation, recognizes the possibility of a change in
control of the Company, and that such possibility and the uncertainty and questions which
it may raise could result in Executive leaving the Company or in distraction of Executive
in the performance of Executive’s duties to the detriment of the Company and its
shareholders; and 

        WHEREAS,
it is in the best interests of the Company and its shareholders to encourage the
availability of Executive’s services to parties who may in the future acquire control
of the Company and to provide an incentive for Executive to remain with the Company during
any period of uncertainty leading up to a change in control; 

        WHEREAS,
based on the foregoing, the Company wishes to provide that, in the event of a change in
control of the Company, Executive will receive certain benefits if Executive’s
employment by the Company ceases for certain reasons within a specified period following
the change in control; 

        NOW,
THEREFORE, in consideration of the foregoing and the provisions of this Agreement, the
parties hereto agree as follows: 

	  	1.  	  	General
Provisions. This Company shall pay Executive a lump sum severance payment if Executive ceases to be employed by the Company
within two years following a Change in Control (as defined below) for certain reasons specified in this Agreement. Nothing in this
Agreement alters the “at will” nature of Executive’s employment by the Company. This means that either before or
after a Change in Control, either the Company or the Executive may terminate Executive’s employment by the Company, either
with or without cause, for any reason or no reason. This Agreement relates only to whether Executive shall be entitled to certain
severance payments following cessation of employment. No right to severance payments shall arise under this Agreement unless and
until there occurs a Change in Control. 

	  	2.  	  	Definition
of Change in Control. For purposes of this Agreement, a “Change in Control” shall be considered to occur if any of
the following occurs after the date of this Agreement: 

	  	  	(a)  	  	the
closing of the sale of all or substantially all of the assets of the
               Company;  

	  	  	(b)  	  	the
closing of a merger, consolidation or corporate reorganization of the Company which results in the stockholders of the Company
immediately prior to such event owning less than 50% of the combined voting power of the Company’s capital stock immediately
following such event; 

	  	  	(c)  	  	the
acquisition by any person (or persons who would be considered a group under the federal securities laws) who as of the date of
this Agreement own less than 25% of the voting power of the Company’s outstanding voting securities, of beneficial ownership
of securities representing 40% or more of the combined voting power or the Company’s then outstanding securities; or

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	  	  	(d)  	  	the
election to the Company’s board of directors of persons who constitute
               a majority of the board of directors and who were not nominated for
election by                the board of directors as part of a management slate.  

	  	3.  	  	Amount
of Severance Payment. If a Change in Control occurs after the date of this Agreement and Executive subsequently ceases to be
employed by the Company prior to the second anniversary of the Change in Control, then the Company shall pay Executive a lump sum
severance payment equal to nine (9) months of Executive’s gross base salary which was in effect immediately prior to the
Change in Control. The Company shall be entitled to deduct from the lump sum severance payment any amounts which the Company is
required by law to withhold from such a payment, and the net amount shall be paid to Executive not later than the ten days after
employment ceases. 

	  	4.  	  	Circumstances
in Which Severance Shall Not Be Paid. Notwithstanding the provisions of Section 3 above, the Company shall not be obligated to
make any lump sum severance payment under this Agreement if, following a Change in Control, Executive ceased to be employed by the
Company due to: 

	  	  	(a)  	  	Executive’s
death or Retirement (as defined below);  

	  	  	(b)  	  	termination
of Executive by the Company for Cause (as defined below); or  

	  	  	(c)  	  	resignation
by Executive for any reason other than a Good Reason (as defined below).  

For purposes of this Section 4, the
following defined terms have the meanings indicated: 

	  	 	  	“Retirement”means
retirement at or after the date the Executive has attained age 65;  

	  	 	  	“Cause”means
termination by the Company of Executive’s employment due to:  

	  	  	  	(1)  	  	 conviction
of a felony;  

	  	  	  	(2)  	  	 the
willful and continued failure of Executive to perform his essential duties; or  

	  	  	  	(3)  	  	 gross
misconduct which is materially injurious to the Company;  

provided, however, that the
matters referred to in clause (2) or (3) shall not be deemed to constitute
“Cause” unless the Company has first given Executive written notice specifying
the conduct by Executive that constitutes such failure or gross misconduct and Executive
has failed to remedy the same to the reasonable satisfaction of the Company’s Board
of Directors. 

	  	 	  	“Good
Reason” shall mean any of the following, unless Executive gives his or her prior
written consent:  

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	  	  	  	(1)  	  	the
assignment to Executive of any duties inconsistent with Executive’s
                    status or position with the Company, or a substantial reduction in
the nature or                     status of Executive’s responsibilities from those
in effect immediately                     prior to the Change in Control;  

	  	  	  	(2)  	  	a
reduction by the Company in Executive’s annual base salary in effect
                    immediately prior to the Change in Control;  

	  	  	  	(3)  	  	the
relocation of the Company’s principal executive offices to a location more than fifty miles from Minneapolis, Minnesota or
the Company requiring Executive to be based anywhere other than the Company’s principal executive offices, except for
required travel on the Company’s business to an extent substantially consistent with Executive’s prior business travel
obligations; 

	  	  	  	(4)  	  	                  the
failure by the Company to continue to provide Executive with benefits at least as favorable to those enjoyed by Executive under
any of the Company’s pension, life insurance, medical, health and accident, disability, deferred compensation, incentive
awards, incentive stock options, or savings plans in which Executive was participating at the time of the Change in Control, the
taking of any action by the Company which would directly or indirectly materially reduce any of such benefits or deprive Executive
of any material fringe benefit enjoyed at the time of the Change in Control, or the failure by the Company to provide Executive
with the number of paid vacation days to which Executive is entitled at the time of the Change in Control, provided, however, that
the Company may amend any such plan or programs as long as such amendments do not reduce any benefits to which Executive would be
entitled upon termination; or 

	  	  	  	(5)  	  	                   any
termination of Executive’s employment which is not made pursuant to a
                    Notice of Termination satisfying the requirements in Section 5 below.  

	  	5.  	  	Notice
of Termination. Any termination of Executive’s employment by the Company or by Executive shall be communicated by written
Notice of Termination to the other party hereto in accordance with the notice provisions of Section 6. For purposes of this
Agreement, a “Notice of Termination” shall mean a notice which indicates the specific facts and circumstances claimed to
provide the basis for termination. 

	  	6.  	  	Method
of Giving Notice. All notices and all other communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States registered or certified mail, return receipt requested,
postage pre-paid, addressed to the last known residence address of the Executive, or in the case of the Company, to its principal
office to the attention of each of the then directors of the Company with a copy to its Secretary, or to such other address as
either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be
effective only upon receipt. 

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	  	7.  	  	 Miscellaneous.
No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by the parties. No waiver by either party thereto at any time of any breach by the other party to this
Agreement, or of compliance with any condition or provision of this Agreement to be performed by such other party, shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any prior or similar time. No agreements or
representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party
which are not expressly set forth in this Agreement. This Agreement shall be governed by the laws of the State of Minnesota.

	  	8.  	  	 Arbitration
of Disputes. Any and all disputes between the parties relating to this Agreement or any alleged breach of this Agreement shall
be resolved by binding arbitration held in the City of Minneapolis pursuant to the Commercial Arbitration Rules of the American
Arbitration Association before a single arbitrator. In the event that Executive is determined by the arbitrator to be the
prevailing party in such an arbitration, the arbitrator shall award Executive, as an additional element of damages, his or her
attorneys’ fees and legal expenses actually incurred in the enforcement of this Agreement and in the arbitration proceeding.
Judgment on the arbitration award may be entered by any court having jurisdiction. 

	  	9.  	  	 Successors.
This Agreement shall be binding upon and inure to the benefit of the respective heirs, personal representatives, successors and
assigns of the parties hereto. 

        IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first written
above. 

	EXECUTIVE:	 	INSIGNIA SYSTEMS, INC.
	
/s/ Justin W. Shireman 	 	
 By     /s/ Scott Drill 
	
	 	

		 	Its      President and CEO
                                                                               
		 	

4Insignia Systems 10-Q dated March 31, 2005

EXHIBIT 10.2  

SUBLEASE 

        AGREEMENT,
made this 31st day of March, 2005 between Insignia Systems, Inc., a Minnesota
corporation having an office at 6470 Sycamore Court, Maple Grove, MN 55369 (hereinafter
referred to as “Sublessor”) and Vascular Solutions, Inc., a Minnesota
corporation, having an office at 6464 Sycamore Court, Maple Grove, MN 55369 (hereinafter
referred to as “Sublessee”). 

WITNESSETH: 

        WHEREAS,
pursuant to Lease dated October 31, 2002, between 321 Corporation, a Minnesota Limited
Liability Company, and assigned to IRET-Plymouth, a Minnesota Limited Liability Company
(the “Landlord”), as landlord, and Insignia Systems, Inc., as tenant, a copy of
which lease is attached hereto as Exhibit A (hereinafter referred to as the
“Lease”), covering a portion of the building known as Northgate I, located at
6464-6470 Sycamore Court, Maple Grove, MN 55369, (hereinafter referred to as the
Leasehold); and 

        WHEREAS,
Sublessee desires to sublease from Sublessor and Sublessor desires to sublease unto
Sublessee those portions of the Leasehold indicated on Exhibit B containing approximately
10,227 square feet (hereinafter referred to as the Premises); and, 

        NOW,
THEREFORE, in consideration of the Premises and the mutual undertakings, covenants,
promises, and agreements of the parties, IT IS AGREED AS FOLLOWS: 

	  	1.  	  	Providing
all of the terms and conditions contained within this Agreement are fulfilled, Sublessor
shall sublease unto Sublessee and Sublessee shall accept the sublease of the Premises,
subject to the rents as set forth herein and the other terms, conditions and provisions
of this Sublease. The commencement dates for the Sublease, the portions of the Premises
to be subleased, and the alterations to be made by Sublessee, are as follows:  

	  	  	  	Commencing April
1, 2005, 1,183 square feet designated on the attached Exhibit B as “Phase I”.
Sublessee will, at its expense, make the following alterations and improvements:
construct an insulated wall on the east side of the Phase I space; construct one 8’6” x
12’ office as part of the Phase I improvements, including painted walls, VCT
flooring, drop ceiling and standard lighting and electrical/data; the existing double
doorway will be removed and the opening closed off with standard framing/drywall
construction compatible with the construction and materials already in place in the
space; one 230 volt, 10 amp, 3 phase electrical circuit will be reallocated to the Phase
I space; all utilities to the Phase I space will be separately metered to be billed to
Sublessee, which includes any work necessary to separate HVAC;  

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	  	  	  	Commencing on
October 1, 2005, (or such earlier date as is mutually agreed upon), an additional 9,044
square feet, comprised of 8,676 square feet designated on the attached Exhibit “B” as
“Phase II” and an undivided one-half interest in the electrical panel room of
368 square feet designated on the attached Exhibit B as “Shared Space.” Sublessee
will at its expense construct the following alterations and improvements: construct a
wall on the east side of Phase II to separate Phase II from the Sublessor’s space
with standard framing/drywall construction compatible with the construction and materials
already in place in the space, including relocation of any existing electrical to new
wall; all utilities to the Phase II space will be separately metered to be billed to
Sublessee; the necessary portion of ceiling tiles now in the Phase II space will be
removed and delivered to Sublessor’s new production area; the ceiling tiles now in
the Sublessor’s new production area will be removed and replace tiles taken from the
Phase II space; construct a wall on the west side of the Shared Space with standard
framing/drywall construction compatible with the construction and materials already in
place in the space allowing access to the Shared Space by both Sublessor and Sublessee,
but maintaining security to the Sublessor’s and Sublessee’s respective areas.  

	  	2.  	  	In
consideration for this Sublease, Sublessee shall pay Sublessor rent:  

	  	  	(a)  	  	for
the Phase I space, in advance on the first day of each and every month, Nine
               Hundred Eighty-Five and 83/100 Dollars ($985.83); commencing on April 1,
2005;  

	  	  	(b)  	  	for
the Phase II space, in advance on the first day of each and every month,
               Seven Thousand Two Hundred Thirty and 00/100 Dollars ($7,230.00)
commencing on                October 1, 2005 or such earlier date as may be agreed
between the parties;  

	  	  	(c)  	  	for
the Shared Space, in advance on the first day of each and every month, One
               Hundred Fifty-Three and 34/100 Dollars ($153.34), commencing on October 1,
2005,                or such earlier date as may be agreed upon by the parties; and  

	  	  	(d)  	  	As
additional rent, Sublessee shall also pay Sublessor the amount charged by the
               Landlord for, or otherwise attributable to, “Operating Expenses” (as
               such term is defined in Section 2.3 of the Lease) for the Phase I and
Phase II                space and for one-half of the Shared Space, in equal monthly
payments during the                term of the subtenancy for each such space.  

	  	  	  	Monthly rents
for the Phase I and Phase II space are calculated using a rent of $10.00 per square foot
per year and for the Shared Space using a rent of $5.00 per square foot per year.  

	  	3.  	  	This
Agreement and the performance of it is conditioned upon the completion of
               all of the following conditions:  

	  	  	(a)  	  	This
Agreement is executed by the Sublessor and Sublessee; and  

	  	  	(b)  	  	The
Consent to Sublease, attached hereto as Exhibit C, is executed by the
               Landlord, Sublessor and Sublessee.  

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	  	4.  	  	The
term of this Sublease shall automatically terminate on the earlier of (i)
               September 30, 2008, or (ii) such date after September 30, 2008 as
Sublessee may                elect (by written notice which, to be effective, must be
received by Sublessor                no later than August 1, 2008), but not to extend
past January 14, 2010.                Sublessee shall have no first right of refusal to
lease any contiguous space in                the Leasehold.  

	  	5.  	  	Sublessee
represents and warrants that it has read the Lease and agrees that:  

	  	  	(a)  	  	The
terms, covenants, promises, and conditions of the Lease are incorporated
               herein, with Sublessee having all of the rights and obligations of the
Tenant                under the Lease, and the Sublessor having all the rights and
obligations of the                Landlord under the Lease; and  

	  	  	(b)  	  	Sublessee
shall perform, with respect to the Premises, all of the obligations of                the
“Tenant” provided for in the Lease, and shall otherwise comply
               with and be bound by all of the terms, covenants, promises, and conditions
of                the Lease and the Consent to Sublease;  

	  	  	(c)  	  	Sublessee
shall comply (without delay) with all reasonable requirements for
               obtaining the Landlord’s consent to this Sublease.  

	  	6.  	  	Sublessor
shall duly observe and perform those obligations imposed upon the                Tenant
under the Lease to the extent that such obligations are not provided in
               this Sublease to be observed or performed by Sublessee, except with
respect to                any failure in such observance or performance which results
from any default by                Sublessee.  

	  	7.  	  	Sublessor
warrants and represents to Sublessee that on the Commencement Date:  

	  	  	(a)  	  	The
Lease is valid and existing, there are no existing defaults on the part of
               the Landlord or the Sublessor with respect thereto, and the Landlord does
not                hold any claim against the Sublessor;  

	  	  	(b)  	  	There
are and will be no contracts for service or otherwise on account of
               maintenance or repairs which expressly or impliedly are or will be binding
upon                Sublessee or upon the Premises.  

	  	8.  	  	Sublessee
shall not make or allow to be made any alterations or physical                additions
in or to the Premises, except as specifically provided herein, without
               first obtaining the written consent of Sublessor, which consent will not
be                unreasonably withheld. Any alterations, physical additions or
improvements to                the Premises made by Sublessee shall be surrendered to
Sublessor upon the                termination of the Sublease. This clause shall not
apply to moveable equipment                or furniture owned by Sublessee which may be
removed by Sublessee at the end of                the term of this Sublease. Sublessee
shall obtain and deliver to Sublessor lien                waivers for all such work, no
later than sixty (60) days after each item of work                is completed.  

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	  	9.  	  	Any
notices shall be in writing and shall be sent by registered or certified
               mail return receipt requested, addressed to the parties at the addresses
               indicated on page one hereof, or such other address as such party has been
               advised of in writing.  

	  	10.  	  	This
Agreement contains the entire agreement and understanding between the
               parties hereto with respect to the Premises, and there are no other terms,
               covenants, obligations, or representations, oral or written, of any kind
               whatsoever.  

	  	11.  	  	This
Agreement shall be binding upon, and shall inure to the benefit of, the
               parties hereto, their respective heirs, executors, administrators,
successors,                and assigns, and may not be revoked or amended, except by
instrument, in                writing, subscribed by the party sought to be charged
therewith.  

	  	12.  	  	This
Agreement shall be interpreted and governed by the laws of the State of
               Minnesota.  

        IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date, month,
and year first above written. 

	SUBLESSOR 	SUBLESSEE 
	
INSIGNIA SYSTEMS, INC. 	
VASCULAR SOLUTIONS, INC.
	
By:      /s/ Scott Drill

                                                                          Its:     CEO  	
By:      /s/ Jim Quackenbush

                                                                                   Its:     V.P. of Mfg.

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