ImageWare Systems, Inc. ▼

                 AGREEMENT OF MERGER AND PLAN OF REORGANIZATION

                                      AMONG

                             IMAGEWARE SYSTEMS, INC.

                                 (THE "COMPANY")

                           ITC ACQUISITION CORPORATION

                                   ("NEWCO"),

                         IMAGING TECHNOLOGY CORPORATION

                          (THE "SURVIVING CORPORATION")

                                       AND

                CERTAIN STOCKHOLDERS OF THE SURVIVING CORPORATION



      . . .

ASSET PURCHASE AGREEMENT

AND PLAN OF REORGANIZATION

among:

SOL LOGIC, INC.,

a California corporation;

FRANK MITCHELL,
a Shareholder of Sol Logic, Inc.;

WINK JONES,

as the Seller Representative;

and

IMAGEWARE SYSTEMS, INC.,

a Delaware corporation

Dated as of December 19, 2007

                            ASSET PURCHASE AGREEMENT


                                     among:


                            IMAGEWARE SYSTEMS, INC.,
                            a California corporation;

                          I.W. SYSTEMS CANADA COMPANY,
                   a Nova Scotia unlimited liability company;

                               G & A IMAGING LTD.,
                           a Canadian corporation; and

                               R & G IMAGING LTD.,
                             a Canadian corporation.
                          ---- . . .

                            ASSET PURCHASE AGREEMENT


                                     among:


                            IMAGEWARE SYSTEMS, INC.,
                            a California corporation;

                          I.W. SYSTEMS CANADA COMPANY,
                   a Nova Scotia unlimited liability company;

                               G & A IMAGING LTD.,
                           a Canadian corporation; and

                               R & G IMAGING LTD.,
                             a Canadian corporation.
                          ---- . . .

IMAGEWARE SYSTEMS, INC.

CODE OF BUSINESS CONDUCT AND ETHICS

Introduction

ImageWare Systems, Inc. (�ImageWare�) is committed to maintaining the highest standards of business conduct and ethics.  This Code of Business Conduct and Ethics (the �Code�) reflects the business practices and principles of behavior that support this commitment.  We expect every employee, officer and director to read and understand the Code and its application to the performance of his or her business responsibilities.  References in the Code to employees are intended to  . . .

CONVERTIBLE SUBORDINATED PROMISSORY NOTE

$                       

March       , 2003

San Diego, CA

For value received, ImageWare Systems, Inc., a California corporation (Payor), hereby promises to pay to the order of                         (the Holder) the principal sum of                         Dollars ($                  ) together with accrued and unpaid interest thereon, each due and payable on the dates and in the manner set forth below.

The term Note and all references thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented.  This Note is being issued by Payor along with similar convertible notes designated as Convertible Subordinated Promissory Notes (together with this Note, the Notes).  Holders of the Notes shall collectively be referred to herein as the Holders.

1.             Principal and Interest; Pro Rata Payments; Place and Application of Payments.  Unless this Note has been converted in accordance with the terms of Section 2 below, the entire outstanding principal amount of this Note shall be due and payable on April 15, 2005 (the Maturity Date).  Payor further promises to pay interest on the outstanding principal amount hereof from the date hereof until this Note is converted pursuant to Section 2 below or paid in full (whichever is earlier), which interest shall be payable at the rate of eight and one-half percent (8%) per annum or the maximum rate permissible by law (which under the laws of the State of California shall be deemed to be the laws relating to permissible rates of interest on commercial loans), whichever is less.  Interest shall be due and payable semi-annually in arrears on each April 15^th and October 15^th and shall be calculated on the basis of a 365-day year for the actual number of days elapsed.  All payments of interest and principal shall be in lawful money of the United States of America and shall be made pro rata among all Holders of Notes.  All amounts payable hereunder shall be payable at the office of Holder,                                              , unless another place of payment shall be specified in writing by Holder.  Payment on this Note shall be applied first to accrued interest, and thereafter to the outstanding principal balance hereof.

IMAGEWARE SYSTEMS, INC.

EMPLOYMENT AGREEMENT

This Employment Agreement (the �Agreement�) is made and entered into effective as of                       , 2005 (the �Effective Date�), by and between Mr. S. James Miller, Jr. (the �Executive�) and ImageWare Systems, Inc., a California corporation (the �Company�).

R E C I T A L S

A.            WHEREAS, Executive is currently  . . .

IMAGEWARE SYSTEMS, INC.

EMPLOYMENT AGREEMENT

This Employment Agreement (the �Agreement�) is made and entered into effective as of                       , 2005 (the �Effective Date�), by and between Mr. Wayne Wetherell (the �Executive�) and ImageWare Systems, Inc., a California corporation (the �Company�).

R E C I T A L S

A.            WHEREAS, Executive is currently employed by  . . .

                             IMAGEWARE SYSTEMS, INC.
                              EMPLOYMENT AGREEMENT

This EMPLOYMENT AGREEMENT ("Agreement") is made and entered into effective and
contingent upon the occurrence of the Closing (as defined in the Asset Purchase
Agreement which is defined below) of I.W. Systems Canada Company's purchase of G
& A Imaging Ltd.'s assets by and between ImageWare Systems, Inc. (herein the
"Company") and Ian Fraser (herein "Fraser"). I.W. Systems Canada Company (the
"Purchaser"), a wholly owned subsidiary of  . . .