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

  



 









 



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.









 



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