Fargo Electronics and ImageWare Systems Enter Into Strategic Distribution Agreement.

Business Editors/High-Tech Writers

MINNEAPOLIS--(BUSINESS WIRE)--July 22, 2003

Fargo Electronics, Inc. (Nasdaq:FRGO) and ImageWare Systems, Inc. (AMEX:IW) have entered into an agreement that will establish Fargo as a master distributor of ImageWare's off-the-shelf photo ID badge design and management software. ImageWare develops software solutions for the creation of secure photo IDs and credentials that are used for driver's licenses, passports, national IDs, secure access control and more. Fargo creates innovative printing systems that personalize plastic identification cards, complete with digital images and text, lamination and electronically encoded information.

Beginning August 1, Fargo will distribute ImageWare's EPI Suite(R) products in the Americas. Distribution internationally will begin later. EPI Suite products include EPI Suite Pro, EPI Suite Classic and EPI Suite Lite, and enable users to design ID cards; capture photographs and biometrics; maintain a secure database of cardholder information; encode magnetic stripes and smart chips; and print a variety of bar codes, including 2D.

"This agreement continues our drive to provide our distribution partners and end user customers with the very best card personalization systems," says Gary Holland, Fargo's president and CEO. "By providing ImageWare's best-selling application software with Fargo's innovative printer/encoders, our distribution partners can now offer a more seamless experience with state-of-the-art, tested and compatible systems. Plus, we are looking forward to new system developments from Fargo and ImageWare."

ImageWare's EPI Suite products will be sold with Fargo's Professional and Persona(R) Series card printer/encoders and Fargo Certified Supplies. Fargo printer/encoders will remain on an "open architecture" platform for users who want to use their own or previously purchased software. ImageWare's identification software will also retain its open architecture and continue to work with a variety of printers, cameras and other devices.

"Leveraging Fargo's global distribution network is a key asset in increasing our sales," commented Joe Schuler, president of ImageWare's ID Solutions Group.

"The market is demanding more complete end-to-end solutions," added Schuler. "The ImageWare-Fargo alliance will allow us to combine best-of-breed ID software and printers and provide our distribution partners a one-stop-shop for all of their credentialing needs. By streamlining distribution, ImageWare and Fargo will be able to jointly respond to changing market conditions more quickly, ensuring that our solutions effectively meet the ever-changing needs of our customers."

"This is a prime opportunity for ImageWare to get back to our roots in software development and project sales," stated Jim Miller, ImageWare's president and CEO. "This partnership helps to ensure ImageWare's leadership position in packaged ID software. It also permits us to aggressively go after high-end project sales in both the private and government sectors with our system integration and OEM partners. With this renewed focus on high-end projects, we will be better able to successfully support our distribution channel partners by becoming a value added resource for their ID project activity."

About ImageWare Systems

ImageWare Systems, Inc. is the leader in software solutions for digital imaging, biometrics, law enforcement and secure credentials. Through its ID product line, ImageWare applies its core technology to create secure identification systems for airports, universities, government agencies and private businesses. ImageWare's law enforcement product line empowers its customers to quickly capture, search, retrieve and share digital photographs and criminal history records on stand alone, networked or Web-based platforms. ImageWare additionally leverages its imaging technology to create software and Web-based solutions for professional photographers. ImageWare is headquartered in San Diego, with offices in Canada, Germany and Singapore. For more information, visit www.iwsinc.com.

About Fargo

Fargo is the world's leader in innovative technologies for desktop plastic card personalization systems. Based in Eden Prairie, Minnesota, Fargo is the only manufacturer to offer three distinct technologies in printing systems - High Definition Printing(TM) (reverse image), traditional Direct-to-Card printing (dye-sublimation), and CardJet Printing(TM) Technology (inkjet) - to personalize plastic identification cards, complete with digital images and text, lamination and electronically encoded information.

Personalized identification cards provide physical, information and transaction security for a wide variety of applications including Corporations, National IDs, Drivers' Licenses, Universities, Schools, Government Installations, Transportation, Casinos, Healthcare Facilities, E-commerce, Retail Stores, Correctional Institutions, Associations, Sports Events and Recreation Sites. More than 70,000 Fargo systems have been sold in the U.S. and in over 80 other countries. For more information, visit Fargo's Web site at http://www.fargo.com.

Forward-looking Statements 

Statements made in this release concerning the Companies' expectations about future results or events are "forward-looking statements." Such statements are subject to the safe harbor created by the Private Securities Reform Act of 1995, and are necessarily subject to risks and uncertainties. Actual results may differ materially from those reflected in these forward-looking statements. These statements are based on current expectations, marketing conditions, general domestic and international economic conditions, and other factors. Descriptions of the risks, uncertainties and other factors that could affect the Companies' future operations and results can be found in the Companies' filings with the Securities and Exchange Commission.