Exhibit 10.4

EXCHANGE AGREEMENT
 
This Exchange Agreement (this “Agreement”) is dated as of September __, 2018
(the “Closing Date”), by and among ImageWare Systems, Inc., a Delaware
corporation (the “Company”), and ________ (“______”).
 
RECITALS
 
WHEREAS, the Company and Crocker are currently parties to that certain
Convertible Promissory Note, dated _________, as amended ________ (as amended,
the “Note”), which Note provides for maximum borrowings of up to $_______;
 
WHEREAS, as of September __, 2018, the total amount of advances under the Note,
including outstanding principal and all accrued and unpaid interest thereon,
equals $_______ (the “Outstanding Amount”); and
 
WHEREAS, subject to the terms and conditions set forth herein, the Company and
_______ desire that, concurrently with the execution and delivery of this
Agreement by the Company and ____________, (i) the Outstanding Amount shall be
exchanged for shares of the Company’s Series A Convertible Preferred Stock, par
value $0.01 per share, with a stated value of $1,000 per share (the “Exchange
Shares”) (the “Exchange”), which Exchange Shares shall be convertible into
shares of common stock of the Company, par value $0.01 per share (“Conversion
Shares”), and (ii) all indebtedness, liabilities and other obligations arising
under or relating to the Note (including, without limitation, principal,
interest, fees, expenses, costs, disbursements, premium, and indemnification) be
deemed cancelled, extinguished, released, discharged and satisfied in full
without the requirement for the payment or provision of any consideration or
other amounts (except for the issuance of the Exchange Shares in exchange for
the Outstanding Amount as contemplated herein), each on the terms and conditions
set forth in this Agreement.
 
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby agreed and acknowledged, the parties hereby agree as
follows:
 
AGREEMENT
 
1. Securities Exchange.
 
(a) In consideration of and in express reliance upon the representations,
warranties, covenants, terms and conditions of this Agreement, ____________
hereby exchanges the Outstanding Amount for that number of Exchange Shares equal
to the Outstanding Amount divided by 1,000 (rounded down to the nearest whole
share), it being understood that the number of Exchange Shares issued in
connection with the Exchange shall include accrued and unpaid interest on such
Note up to and including the Closing Date. In consideration for the foregoing,
the Company agrees to issue and deliver the Exchange Shares to ____________, as
directed by ____________. For the avoidance of doubt, the number of Exchange
Shares issued by the Company in exchange for the Outstanding Amount pursuant to
this Section 1(a) is _________ (_____) Exchange Shares.
 
(b) Within five business days after the Closing Date, the Company shall issue
and deliver to ____________ a certificate evidencing the Exchange Shares against
delivery of the Note to the Company. Following the Closing Date, the parties
agree that all indebtedness, liabilities and other obligations arising under or
relating to the Note (including, without limitation, principal, interest, fees,
expenses, costs, disbursements, premium, and indemnification) shall be deemed
cancelled, extinguished, released, discharged and satisfied in full without the
requirement for the payment or provision of any consideration or other amounts
(except for the issuance of the Exchange Shares in exchange for the Outstanding
Amount as contemplated herein), and the Note shall be marked cancelled and paid
in full. As a result of the foregoing the Note shall be terminated and of no
further force and effect.
 
 
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2. Representations, Warranties and Covenants of ____________. ____________
hereby makes the following representations and warranties to the Company, and
covenants for the benefit of the Company:
 
(a) This Agreement has been duly authorized, validly executed and delivered by
____________ and is a valid and binding agreement and obligation of ____________
enforceable against ____________ in accordance with its terms, subject to
limitations on enforcement by general principles of equity and by bankruptcy or
other laws affecting the enforcement of creditors’ rights generally, and
____________ has full power and authority to execute and deliver the Agreement
and the other agreements and documents contemplated hereby and to perform its
obligations hereunder and thereunder.
 
(b) ____________ understands that the Exchange Shares are being offered and sold
to it in reliance on the truth and accuracy of the representations, warranties,
agreements, acknowledgments and understandings of ____________ set forth herein.
 
(c) ____________ is and will be acquiring the Exchange Shares for ____________’s
own account, for investment purposes, and not with a view to any resale or
distribution in whole or in part, in violation of the Securities Act of 1933, as
amended (“Securities Act”) or any applicable securities laws.
 
(d) ____________ owns and holds, beneficially and of record, the entire right,
title, and interest in and to the Note free and clear of all rights and
Encumbrances (as defined below). ____________ has full power and authority to
transfer and dispose of the Note free and clear of any right or Encumbrance.
Other than the transactions contemplated by this Agreement, there is no
outstanding plan, pending proposal, or other right of any person to acquire all
or any of the Note. Encumbrances shall mean any security or other property
interest or right, claim, lien, pledge, option, charge, security interest,
contingent or conditional sale, or other title claim or retention agreement,
interest or other right or claim of third parties, whether perfected or not
perfected, voluntarily incurred or arising by operation of law, and including
any agreement (other than this Agreement) to grant or submit to any of the
foregoing in the future.
 
(e) ____________ agrees and acknowledges that it is currently an “affiliate” of
the Company, as such term is defined in the Securities Act, and as a result
cannot resell the Exchange Shares or Conversion Shares, as such term is defined
in the Certificate of Designations, Preferences and Rights of the Exchange
Shares, except in compliance with the Securities Act and any applicable state
blue sky laws.
 
3. Representations, Warranties and Covenants of the Company. The Company
represents and warrants to ____________, and covenants for the benefit of
____________, as follows:
 
(a) The Company has been duly incorporated and is validly existing and in good
standing under the laws of the State of Delaware, with full corporate power and
authority to own, lease and operate its properties and to conduct its business
as currently conducted, and is duly registered and qualified to conduct its
business and is in good standing in each jurisdiction or place where the nature
of its properties or the conduct of its business requires such registration or
qualification, except where the failure to register or qualify would not have a
Material Adverse Effect. For purposes of this Agreement, “Material Adverse
Effect” shall mean any material adverse effect on the business, operations,
properties, prospects, or financial condition of the Company and its
subsidiaries and/or any condition, circumstance, or situation that would
prohibit or otherwise materially interfere with the ability of the Company to
perform any of its obligations under this Agreement in any material respect.
 
(b) The Exchange Shares have been duly authorized by all necessary corporate
action and, when paid for or issued in accordance with the terms hereof, the
Exchange Shares shall be validly issued and outstanding, fully paid and
nonassessable, free and clear of all liens, encumbrances and rights of refusal
of any kind.
 
(c) This Agreement has been duly authorized, validly executed and delivered on
behalf of the Company and is a valid and binding agreement and obligation of the
Company enforceable against the Company in accordance with its terms, subject to
limitations on enforcement by general principles of equity and by bankruptcy or
other laws affecting the enforcement of creditors’ rights generally, and the
Company has full power and authority to execute and deliver the Agreement and
the other agreements and documents contemplated hereby and to perform its
obligations hereunder and thereunder.
 
 
 
 
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(d) The Company has complied and will comply with all applicable federal and
state securities laws in connection with the offer, issuance and delivery of the
Exchange Shares hereunder.
 
4. Governing Law; Consent to Jurisdiction. This Agreement shall be governed by
and interpreted in accordance with the laws of the State of California without
giving effect to conflict of law principles that would result in the application
of the substantive laws of another jurisdiction. Each of the parties consents to
the exclusive jurisdiction of the Federal courts whose districts encompass any
part of the State of California in connection with any dispute arising under
this Agreement and hereby waives, to the maximum extent permitted by law, any
objection, including any objection based on forum non conveniens, to the
bringing of any such proceeding in such jurisdictions. Each party waives its
right to a trial by jury. Each party to this Agreement irrevocably consents to
the service of process in any such proceeding by the mailing of copies thereof
by registered or certified mail, postage prepaid, to such party at its address
set forth herein. Nothing herein shall affect the right of any party to serve
process in any other manner permitted by law.
 
5. Entire Agreement. This Agreement constitutes the entire understanding and
agreement of the parties with respect to the subject matter hereof and
supersedes all prior and/or contemporaneous oral or written proposals or
agreements relating thereto all of which are merged herein. This Agreement may
not be amended or any provision hereof waived in whole or in part, except by a
written amendment signed by both of the parties.
 
6. Counterparts. This Agreement may be executed by facsimile signature and in
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
 
 
 
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IN WITNESS WHEREOF, this Agreement was duly executed on the date first written
above.
 
 
 
IMAGEWARE SYSTEMS, INC.
 
 
 By:______________________________________
       Name:
       Title:
 
 
 
______________:
________________________________________

 
 
 
 
 
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