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ImageWare Systems and Digimarc Expand Software License Relationship in Support of Enhancing Driver License Systems

SAN DIEGO, CA, March 21, 2006 - ImageWare Systems, Inc. (AMEX: IW), a leading developer and provider of identity management solutions, today announced that Digimarc Corporation (NASDAQ: DMRC), a leading supplier of secure identity and media management solutions, has licensed ImageWare’s IWS™ EPI™ Builder SDK. Under the terms of the agreement, Digimarc will use the EPI™ Builder SDK in various over-the-counter driver license programs.

“ImageWare is extremely pleased to continue our long-standing relationship with Digimarc,” said Jim Miller, ImageWare’s chairman and CEO. “Digimarc has proven leadership in providing state-of-the-art secure ID issuance solutions and we are pleased to be working with them in support of their efforts in meeting the unique needs of the U.S. driver license market.”

“The card design and card rendering components of IWS EPI Builder SDK provide us the modularity and ease of integration needed for many of our customer installations,” said J. Scott Carr, executive vice president, Digimarc. “We have used ImageWare solutions successfully for the deployment of instant issuance solutions in several State driver license programs. We are pleased to continue our work with ImageWare.”

ImageWare's secure credentialing technologies, such as the IWS EPI Builder, offer organizations the necessary tools to develop fully compliant custom identification solutions or incorporate sophisticated identification capabilities into existing applications.

About ImageWare Systems, Inc.
ImageWare Systems, Inc. (AMEX:IW), is a 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 Washington DC and Canada. 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.


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