Successfully Produced More Than 17,000 Employee Badges

SAN DIEGO, CA, May 12, 2003 - ImageWare Systems, Inc. (AMEX: IW) today announced the successful issuance of more than 17,000 employee badges to date for the U.S. Department of State (DoS) using an integrated secure credentialing solution developed with XTec and ImageWare technologies.

XTec employed ImageWare's identification technologies to incorporate image capture, badge design and print functionality into the Company's SmartBadge 2000Ô card issuance, credentialing and badging software used by the DoS.

"We are very pleased to support the DoS project by providing the credential system," said Albert Fernandez, president and CEO of XTec. "In our quest to provide our public and private sector clients with the best image capture, badge design, and print functionality for SmartBadge, it became obvious early on that ImageWare's technology was the best solution for our software."

As a subcontractor of Northrop Grumman Information Technology, XTec was selected to provide a smart card issuance and production solution along with secured smart card access control readers.

"ImageWare's identification solutions are readily integrated with a variety of applications and can be used not only to incorporate advanced card design capabilities, but can also support the capture of virtually any biometric and encode that data into a barcode, magnetic stripe or smart chip," said Jim Miller, ImageWare's chairman and CEO. "We are proud to add the State Department to the list of fine government agencies such as FEMA, U.S. Senate & U.S. House, and United Nations, which all employ ImageWare solutions."

XTec is supporting the rollout of the DoS project to more than 35,000 State Department employees. The completion of the project will make them one of the first federal agencies to comply with the Government Smart Card Interoperability Specification (GSC-IS). According to the General Services Administration and the National Institute of Standards and Technology, the primary goal of the Government Smart Card Program is to build a framework for smart card interoperability, enabling broad adoption of this critical technology by the public and private sectors.

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.

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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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