Exhibit 10.1

AMENDMENT NO. 1 TO OFFICE LEASE

This AMENDMENT NO. 1 TO OFFICE LEASE (“Amendment No. 1”) is entered into as of
June 12, 2006 (“Effective Date”), by and between THORNMINT I, A CALIFORNIA
LIMITED PARTNERSHIP (“Landlord”), and IMAGEWARE SYSTEMS, INC., (“Tenant”) with
reference to the facts set forth in the Recitals below.

RECITALS

A.             Landlord and Tenant are parties to an Office Lease Agreement and
Addendum dated September 26, 2003 (“Lease”), by and between Thornmint I, a
California limited partnership (“Landlord”) and ImageWare Systems Inc.,
(“Tenant”) for certain Leased Premises consisting of 16,020 square feet of
rentable area of the Building located at 10883 Thornmint Road, San Diego, CA
92127, as more specifically described in the Lease.  The term of this Lease is
scheduled to expire on September 30, 2006.

B.               Landlord and Tenant have agreed to extend the term of this
Lease for a new twenty-four (24) month term (“Extension Term”) under all of the
same terms and conditions of the Lease and Addendum, except as specifically
provided below in this Amendment No. 1.  Landlord and Tenant have further agreed
to make certain modifications to the Lease, including, among other things, (i)
modifying the Base Rental payable under the Lease.

AMENDMENT

NOW, THEREFORE, in consideration of the Recitals above, the mutual covenants and
conditions below, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

1.                 Extension of the Term.  Landlord and Tenant hereby agree that
the term of the Lease shall be extended for the Extension Term, commending on
October 1, 2006, on all of the same terms and conditions of the Lease and
Addendum, except as specifically modified by this Amendment No. 1.  All
references o the Lease Agreement to the “Expiration Date” shall mean September
30, 2008.

2.                 Base Rental.  Base Rental Payment during the Extension Term
shall be payable pursuant to the following schedule:

 

Months

 

Monthly Base Rental

01-12

 

$

18,423.33

13-24

 

$

19,224.00

 

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3.                 Tenant Improvements.  Landlord, at Landlord’s expense, shall
complete the following Tenant Improvements utilizing building standard materials
within sixty (60) days from full executive of this Lease Amendment 1:

%                 Install a new building standard garbage disposal.

%                 Re-paint reception entrance handrails and the handrails in the
stairwell on the west side of the Building.

%                 Repair roof leaks.

%                 Replace damaged ceiling tiles.

%                 Men’s restrooms:

•      1st Floor:
Replace damaged flooring tile.

•      2nd Floor:
Repair leaking urinal.
Repair/replace one (1) fan.
Install new plastic light covers for the restroom lights above the sinks (1st &
2nd Floors).

%                 Women’s restrooms:

•      1st Floor:
Repair/replace two (2) fans.

•      2nd Floor:
Repair/replace one (1) fan.
Install new plastic light covers for the restroom lights above the sinks (1st &
2nd Floors).

%                 Cap one (1) existing floor plug on the first floor that is
exposed.

%                Remove wallpaper in the reception entrance up to the top of the
stairwell and repaint the reception area with a mutually agreed upon color.

%                 Repair/replace two (2) recessed lights in the reception area.

%                 Investigate the possibility of fixing the fraying carpet in
Wayne Wetherall’s office.

All Tenant Improvement work shall be completed during normal business hours and
Tenant shall be responsible for the removal of their Furniture, Fixtures and
Equipment as necessary in order for Landlord to complete the above mentioned
Tenant Improvement work.

4.                 Brokers.  Tenant represents and warrants to Landlord that it
has dealt directly with (and only with) CB Richard Ellis (“Landlord’s Broker”)
as broker in connection with this Amendment No. 1.

5.                 No Construction Against Party Drafting Amendment.  Landlord
and Tenant acknowledge and agree that each of them, and their respective
professional advisors, have reviewed this Amendment and that the provisions of
this Amendment shall not be construed against either party.  The rule of
construction ambiguities are to be construed against the party drafting the
agreement shall not imply to the interpretation of this Amendment No. 1 and is
waived.

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6.                 Continued Effect.  Except as specifically modified by this
Amendment No. 1, all of the terms, conditions and provisions of the Lease shall
remain in full force and effect.  Unless otherwise specifically defined in this
Amendment No. 1, terms with initial capital letter in this Amendment No. 1 shall
have the same meaning as such terms have in the Lease.

IN WITNESS WHEREOF, the parties have executed this Amendment No. 1 to Office
lease as of the Effective Date.

“LANDLORD”

Thornmint 1, a California Limited Partnership

 

 

 

 

 

 

 

By:

s/David C. Price

 

 

 

 

 

Name:

David C. Price

 

 

 

 

 

Title:

General Partner

 

 

 

 

 

Date:

July 3, 2006

 

 

 

 

 

 

 

‘TENANT”

ImageWare Systems, Inc.

 

 

 

 

By:

s/S. James Miller, Jr.

 

 

 

 

 

Name:

S. James Miller, Jr.

 

 

 

 

 

Title:

Chairman & CEO

 

 

 

 

 

Date:

June 23, 2006

 

 

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