Mexico Expands Relationship with ImageWare Systems for Additional Biometric Security Solutions for Government Facilities; Demand for ImageWare's Biometric Solutions Mounts, on Track for Banner 2006.

SAN DIEGO -- ImageWare(R) Systems, Inc. (AMEX:IW), a world-leading developer and provider of identity management solutions, today announced that the Mexican Government has exercised its options for additional implementations as part of a comprehensive multi-biometric identity management system for visitor management and entry access control. The options for additional implementations have a total contract value of approximately $400,000.

Under the terms of the agreement, ImageWare Systems will develop and deploy additional multi-biometric identity management systems, utilizing a combination of the company's IWS(TM) Biometric Engine and investigative solutions, enabling the enrollment of employees, vendors and visitors, and control access to secure areas. The system will initially utilize fingerprint biometrics, with the ability to seamlessly integrate face, iris and signature recognition capabilities in the future.

"As a leading biometric identification management developer and provider, we are judged on the quality of our products and services," said Jim Miller, Chairman and CEO, ImageWare Systems. "Mexico's decision to exercise the option for additional implementations demonstrates our ability to consistently deliver and speaks to the effectiveness of our products, services, solution and people."

About ImageWare Systems, Inc.

ImageWare Systems, Inc. (AMEX:IW) is a world-leading developer and provider of identity management solutions, providing biometric, secure credential, law enforcement and digital imaging technologies. Scalable for worldwide deployment, the company's biometric product line includes a multi-biometric engine that is hardware and algorithm independent, enabling the enrollment and management of unlimited population sizes. ImageWare's identification products are used to manage and issue secure credentials, including national IDs, passports, driver licenses, smart cards and access control credentials. ImageWare's digital booking products provide law enforcement with integrated mug shot, fingerprint Livescan and investigative capabilities. The Company also provides comprehensive digital workflow solutions for the professional photography industry. ImageWare is headquartered in San Diego, with offices in Canada and Germany. For more information visit www.iwsinc.com.

Safe Harbor Statement

This news release may contain forward-looking statements made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. While these statements are meant to convey to the public the company's progress, business opportunities and growth prospects, readers are cautioned that such forward-looking statements represent management's opinion. While management believes such representation to be true and accurate based on the information available to the company, actual results may differ materially from those described. The company's operations and business prospects are always subject to risks and uncertainties. Important facts that may cause actual results to differ are set forth in the company's periodic filings with the U.S. Securities and Exchange Commission.