Document:

Exhibit 4.1

 

AMENDMENT NO. 1 TO
REGISTRATION RIGHTS AGREEMENT

 

THIS  AMENDMENT
NO. 1 TO REGISTRATION RIGHTS AGREEMENT, dated as of March 28,
2008 (the “Amendment”), is made by and
among IMAGEWARE SYSTEMS, INC., a Delaware
corporation (the “Company”), Sol Logic, Inc.,
a California corporation (the “Holder”),
and WINK JONES, in his capacity as the
representative of Holder (the “Seller Representative”).  Capitalized terms used but not defined herein
shall have the meaning assigned to them in the Amended Purchase Agreement (as
defined below).

 

RECITALS

 

A.                                   WHEREAS,
the Company, the Holder, the Seller Representative and Frank Mitchell, a
shareholder of the Holder, entered into that certain Asset Purchase Agreement
and Plan of Reorganization, dated as of December 19, 2007 (the “Purchase Agreement”), pursuant to
which, among other things, Holder provided for the sale of substantially all of
Holder’s assets to the Company (the “Asset Sale”).

 

B.                                     WHEREAS,
in connection with the Asset Sale, the Company, the Holder and the Seller
Representative entered into that certain Registration Rights Agreement, dated
as of December 19, 2007 (the “Registration Rights
Agreement”), whereby the Company agreed to file with the
Securities and Exchange Commission a registration statement (the “Registration Statement”) covering
the resale of an aggregate of 306,185 shares of common stock of the Company
issued to the Holder pursuant to the terms of the Purchase Agreement.

 

C.                                     WHEREAS,
the Company and the Seller Representative revised the terms of the Purchase
Agreement pursuant to Amendment No. 1 to Asset Purchase Agreement, dated
as of March 28, 2008
(together with the Purchase Agreement, the “Amended Purchase
Agreement”) to provide, among other things, for the distribution
of an aggregate of 210,395 shares of the Company’s common stock currently held
in escrow to the Holder, the distribution of the remaining 257,149 shares of
the Company’s common stock currently held in escrow to the Company, and the
modification of the terms under which additional shares of the Company’s common
stock may become issuable by the Company to the Holder in connection with the
Asset Sale.

 

D.                                    WHEREAS,
in accordance with Section 10 of the Registration Rights Agreement, the
Company, the Holder and the Seller Representative desire to amend the
Registration Rights Agreement, effective as of December 19, 2007, in
accordance with the terms of the Amended Purchase Agreement to, among other
things, provide for the inclusion in the Registration Statement of an aggregate
of 371,755 additional shares of common stock of the Company issuable to the
Holder pursuant to the terms of the Amended Purchase Agreement, and to provide
certain additional registration rights with respect to the additional shares of
the Company’s common stock that may become issuable to the Holder in connection
with the Asset Sale, in each case subject to the terms set forth herein.

 

1

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing
recitals, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound, hereby agree as follows:

 

1.                                       References.  Upon effectiveness of this Amendment, all
references in the Registration Rights Agreement to “the Agreement,”
“hereunder,” “herein,” “hereof,” or words of like import referring to the
Registration Rights Agreement shall be deemed to refer to the Registration
Rights Agreement as amended by this Amendment.

 

2.                                       Amendment
to Preamble.  The preamble of the
Registration Rights Agreement is hereby amended and restated in its entirety,
effective as of December 19, 2007, to read as follows:

 

“THIS
REGISTRATION RIGHTS AGREEMENT (this “Agreement”),
dated as of December 19, 2007, is entered into by and among ImageWare
Systems, Inc., a Delaware corporation (the “Company”), Sol Logic, Inc., a
California corporation (“Holder”),
and Wink Jones, in his capacity as the representative of Holder (the “Seller Representative”).  All capitalized terms used but not defined
herein shall have the meanings ascribed thereto in that certain Asset Purchase
Agreement dated as of even date herewith, by and among the Company, Holder and
the Seller Representative, as amended by that certain Amendment No. 1 to
Asset Purchase Agreement, dated as of March 28, 2008 (the “Purchase Agreement”).”

 

3.                                       Amendment
to Registrable Securities.  Section 1(c) of the Registration Rights
Agreement is hereby amended and restated in its entirety, effective as of December 19,
2007, to read as follows:

 

“(c)                            “Registrable Securities” means: (i) an aggregate of 677,940
Shares issued to Holder pursuant to the Purchase Agreement; (ii) any
Additional Shares issued to Holder pursuant to the Purchase Agreement; and (iii) any
Escrow Shares issued to Holder pursuant to the Purchase Agreement (together
with the Additional Shares, the “Earnout Shares”),
in any case only for so long as all Shares (A) have not been disposed of
pursuant to a registration statement declared effective by the SEC, (B) have
not been sold in a transaction exempt from the registration and prospectus
delivery requirements of the Securities Act so that all transfer restrictions
and restrictive legends with respect thereto are removed upon the consummation
of such sale, (C) are not eligible to be sold under Rule 144 during
any 90-day period without any limitations as to volume or holding period.”

 

4.                                       Amendment
to Timing of Filing of Registration Statement.  Section 2 of the Registration Rights Agreement is hereby amended and
restated in its entirety, effective as of December 19, 2007, to read as
follows:

 

2

 

“2.

 

(a)                                  As soon as practicable, but no later than May 1,
2008, the Company will file a
registration statement covering the resale of the Initial Shares on a Form S-1
or Form S-3 Registration Statement (the “Registration Statement”)
with the SEC (the “Filing Date”).  The Company will further use its commercially
reasonable efforts to have the Registration Statement declared effective by the
SEC within a reasonable time after the Filing Date.  The Company shall not be obligated to enter
into any underwriting agreement for the sale of any of the Initial Shares.  The Company shall be entitled to include in
the Registration Statement shares of the capital stock of the Company to be
sold by the Company for its own account or for the account of any other
security holders of the Company.

 

(b)                                  If
an Additional Issuance Date occurs in accordance with the Purchase Agreement,
and, during the one-year period following such Additional Issuance Date, the
Company shall determine to prepare and file with the SEC a registration
statement relating to an offering for its own account or the account of others
under the Securities Act of any of its equity securities, other than on Form S-4
or Form S-8 (each as promulgated under the Securities Act) or their then
equivalents relating to equity securities to be issued solely in connection
with any acquisition of any entity or business or equity securities issuable in
connection with the Company’s stock option or other employee benefit plans,
then the Company shall deliver to Holder a written notice of such determination
and, if within fifteen (15) days after the date of the delivery of such notice,
the Holder shall so request in writing, the Company shall include in such
registration statement all or any part of the Earnout Shares the Holder
requests to be registered; provided, however,
that the Company shall not be required to register any Earnout Shares pursuant
to this Section 2(b) that are the subject of a then effective
registration statement.”

 

5.                                       Amendment
to Correct Scrivener’s Error.  Section 3 of the Registration Rights Agreement
is hereby amended and restated in its entirety, effective as of December 19,
2007, to read as follows:

 

“3.                                All Registration Expenses shall be borne by
the Company.  All Selling Expenses shall
be borne by the Holder.”

 

6.                                       Amendment
to Transferability.  Section 8
of the Registration Rights Agreement is hereby amended and restated in its
entirety, effective as of December 19, 2007, to read as follows:

 

“8.                                The benefits granted to Holder by the Company
under Section 2 may not be assigned. 
Notwithstanding the foregoing, Holder may transfer its rights under Section 2
to any Person who was a shareholder of Holder as of December 19, 2007
(each, a “Transferee”); provided, however, that each such Transferee complies with
each obligation and covenant of Holder pursuant to this Agreement, including
but not limited to those obligations and covenants of Holder set forth in
Sections 5, 6 and 7 of this Agreement. 
Any benefits granted to a Transferee by Holder pursuant to this Section 8

 

3

 

may not be assigned by such
Transferee.  Any attempted transfer by
Holder or a Transferee in contravention of this Section 8 shall cause all
rights of Holder or such Transferee under this Agreement to be forfeited in
their entirety.”

 

7.                                       No
Further Amendments.  Except as
amended hereby, the Registration Rights Agreement shall remain in full force
and effect in accordance with its terms. 
In the event of a conflict or inconsistency between this Amendment and
the Registration Rights Agreement, the provisions of this Amendment shall
govern.

 

8.                                       Counterparts.  This Amendment may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Amendment and all of which, when taken together, will be deemed to constitute
one and the same agreement.  Signatures
of the parties transmitted by facsimile or other electronic means shall be
deemed to be their original signatures for all purposes.

 

9.                                       Severability.  Any
term or provision of this Amendment that is invalid or unenforceable in any
situation in any jurisdiction shall not affect the validity or enforceability
of the remaining terms and provisions hereof or the validity or enforceability
of the offending term or provision in any other situation or in any other
jurisdiction. If the final judgment of a court of competent jurisdiction
declares that any term or provision hereof is invalid or unenforceable, the
parties hereto agree that the court making such determination shall have the
power to limit the term or provision, to delete specific words or phrases, or
to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing
the intention of the invalid or unenforceable term or provision, and this
Amendment shall be enforceable as so modified. In the event such court does not
exercise the power granted to it in the prior sentence, the parties hereto
agree to replace such invalid or unenforceable term or provision with a valid
and enforceable term or provision that will achieve, to the extent possible,
the economic, business and other purposes of such invalid or unenforceable
term.

 

10.                                 Headings.  The underlined headings contained in this
Amendment are for convenience of reference only, shall not be deemed to be a
part of this Amendment and shall not be referred to in connection with the
construction or interpretation of this Amendment.

 

11.                                 Governing
Law.  This Amendment shall be
construed in accordance with, and governed in all respects by, the internal
laws of the State of California (without giving effect to principles of
conflicts of laws).

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

4

 

The
parties to this Amendment have caused this Amendment to be executed and
delivered as of the date first written above.

 

	
   

  	
  “PURCHASER”

  
	
   

  	
   

  
	
   

  	
  IMAGEWARE SYSTEMS, INC.,

  
	
   

  	
   a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ S. James Miller, Jr.

  
	
   

  	
  Name: S. James Miller, Jr.

  
	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  “HOLDER”

  
	
   

  	
   

  
	
   

  	
  SOL LOGIC, INC.,

  
	
   

  	
   a California corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Wink Jones

  
	
   

  	
  Name:

  	
  Wink Jones

  
	
   

  	
  Title:

  	
  CEO

  
	
   

  	
   

  
	
   

  	
  “SELLER REPRESENTATIVE”

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Wink Jones

  
	
   

  	
  Name:  Wink
  JonesExhibit 10.1

 

AMENDMENT NO. 1 TO
ASSET PURCHASE AGREEMENT AND

 

PLAN OF
REORGANIZATION

 

THIS  AMENDMENT
NO. 1 TO ASSET PURCHASE AGREEMENT AND PLAN OF REORGANIZATION,
dated as of March 28, 2008
(the “Amendment”), is made by and
between IMAGEWARE SYSTEMS, INC., a Delaware
corporation (“Purchaser”) and WINK JONES (the “Seller Representative”),
in his capacity as the representative of the shareholders of Sol Logic, Inc.,
a California corporation (the “Seller”).  Capitalized terms used but not defined herein
shall have the meaning assigned to them in the Asset Purchase Agreement (as
defined below).

 

RECITALS

 

A.            WHEREAS,
Purchaser, the Seller, the Seller Representative and Frank Mitchell, a
shareholder of the Seller, entered into that certain Asset Purchase Agreement
and Plan of Reorganization, dated as of December 19, 2007 (the “Asset Purchase Agreement”), pursuant
to which, among other things, Seller provided for the sale of substantially all
of Seller’s assets to Purchaser (the “Asset Sale”).

 

B.            WHEREAS,
such parties closed the Asset Sale on December 19, 2007, at which time the
Purchaser (i) paid to the Seller $171,000 in cash, (ii) issued to the
Seller an aggregate of 467,545 shares of the Purchaser’s common stock, and (iii) deposited
into an escrow account on behalf of the Seller an aggregate of 467,544 shares
of the Purchaser’s common stock, which escrow shares are to be used to satisfy
any indemnity and reimbursement claims of the Purchaser pursuant to the Asset
Purchase Agreement.

 

C.            WHEREAS,
in accordance with Section 6.13 of the Asset Purchase Agreement, Purchaser
and the Seller Representative desire to amend the Asset Purchase Agreement,
effective as of December 19, 2007, on the terms and subject to the
conditions set forth in this Amendment to, among other things, distribute an
aggregate of 210,395 shares of Purchaser’s common stock currently held in such
escrow to the Seller and distribute the remaining 257,149 shares of the
Purchaser’s common stock currently held in such escrow to the Purchaser and modify
the terms under which additional shares of the Purchaser’s common stock may
become issuable by the Purchaser to the Seller in connection with the Asset
Sale, in each case pursuant to the terms set forth herein.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing
recitals, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties, intending to be
legally bound, hereby agree as follows:

 

1.             References.  Upon effectiveness of this Amendment, all
references in the Asset Purchase Agreement to “the Agreement,” “hereunder,”
“herein,” “hereof,” or words of like import referring to the Asset Purchase
Agreement shall be deemed to refer to the Asset Purchase Agreement as amended
by this Amendment.

 

1

 

2.             Amendment to
Purchase Price.  Section 1.5 of the Asset Purchase Agreement is
hereby amended and restated in its entirety, effective as of December 19,
2007, to read as follows:

 

“1.5        Purchase Price.

 

(a)           As
consideration for the sale of the Assets to the Purchaser (such total
consideration being referred to herein as the “Purchase
Price”):

 

(i)            The
Purchaser shall assume the Assumed Liabilities;

 

(ii)           The
Purchaser shall, effective as of the Closing, (i) issue to the Seller an
aggregate of 677,940 shares (the
“Initial Shares”) of common
stock of the Purchaser (the “Common Stock”),
467,545 of which were previously issued to the Seller and the remaining 210,395
of which shall be released to the Seller from the shares of Common Stock
previously deposited by the Purchaser in the Escrow Account (as defined below)
on behalf of the Seller. The
remaining 257,149 shares of Common Stock previously deposited by the
Purchaser in the Escrow Account on behalf of the Seller shall be released to
the Purchaser simultaneously with the release of the shares of Common Stock
from the Escrow Account to the Seller pursuant to the foregoing sentence.

 

(iii)          Not
later than October 15, 2008, the Purchaser shall prepare and deliver to
the Seller Representative an abbreviated income statement (the “Initial  Income
Statement”) setting forth the revenue (which includes the sale
amount included in executed purchase orders, booked revenue and related
deferred revenue) of Purchaser and its subsidiaries solely from the sale by or
on behalf of the Purchaser of products included in the Purchaser’s Mediator Suite of
Products, which includes CollabID, an integrated product containing the
Purchaser’s Biometric Engine, as well as services (including installation,
integration and ongoing support) related to the Mediator Suite of Products
(the “Revenue Determination”), for the
six-month period commencing on March 6, 2008 and ending at the close of
business on September 6, 2008 (the “Initial Period”),
together with documentation that reasonably supports the Revenue Determination
(the “Purchaser Documentation”) set
forth on such Initial Income Statement.

 

(1)           Within
ten business days after delivery to the Seller Representative of the Initial
Income Statement that includes a Revenue Determination with respect to the
Initial Period of less than U.S. $3,000,000, the Seller Representative shall
deliver to Purchaser a written response in which the Seller Representative will
either:

 

A.            agree
in writing with the Revenue Determination set forth in the Initial Income
Statement; or

 

B.            dispute the Revenue Determination set forth
in the Initial Income Statement by delivering to the Purchaser a written
notice (a “Dispute Notice”) setting
forth in reasonable detail the basis for such disputed item and certifying that
all such disputed items are being disputed in good faith.

 

2

 

(2)           If
the Seller Representative fails to take either of the foregoing actions within
10 business days after delivery of the Initial Income Statement, then the
Seller and the Seller Representative will be deemed to have irrevocably
accepted the Revenue Determination set forth in the Initial Income Statement,
in which case such Revenue Determination will be final and binding on the
parties.

 

(3)           If
the Seller Representative timely delivers a Dispute Notice to the Purchaser,
then the Purchaser and the Seller Representative will attempt in good faith,
for a period of 10 business days, to agree on the Revenue Determination for the
Initial Period. Any resolution by Purchaser and the Seller Representative
during such 10 business day period as to any disputed items will be final and
binding on the parties. If the Purchaser and the Seller Representative do not
resolve the disputed item by the end of 10 business days after the date of
delivery of the Dispute Notice, then Purchaser and the Seller Representative
will submit the remaining items in dispute to a mutually agreeable independent
accounting firm, which firm is not the regular auditing firm of the Purchaser,
the Seller, the Seller Representative or any of their Affiliates (the “Independent Accounting Firm”).
Purchaser and the Seller Representative will instruct the Independent
Accounting Firm to render its determination with respect to the items in
dispute in a written report that specifies the conclusions of the Independent
Accounting Firm as to each item in dispute and the resulting Revenue
Determination. Purchaser and the Seller Representative will each use
commercially reasonable efforts to cause the Independent Accounting Firm to
render its determination within 30 days after referral of the items to such
firm or as soon thereafter as reasonably practicable. The Independent
Accounting Firm’s determination of the Revenue Determination as set forth in
its report will be final and binding on the parties.  If the conclusions of the Independent
Accounting Firm are such that the Revenue Determination for the Initial Period
is higher than that set forth on the Initial Income Statement, the fees and
expenses of the Independent Accounting Firm will be borne by the Purchaser; if
the conclusions of the Independent Accounting Firm are such that the Revenue
Determination is equal to or lower than that set forth on the Initial Income
Statement for the Initial Period, the fees and expenses of the Independent
Accounting Firm will be borne by the Seller.

 

(4)           In
the event that, under the procedures set forth under Section 1.5(a)(iii) hereof,
the Revenue Determination for
the Initial Period is determined to equal or exceed U.S. $3,000,000, the
Purchaser shall (Y) no later than 10 days following the date of such
determination, issue to the Seller that
number of shares of Common Stock equal to (I) the quotient obtained by dividing
$1,008,224 by the
Additional Per Share Price (rounded up to the nearest whole share) (the “Additional Shares”); and (Z) deposit into an escrow account (the “Escrow Account”) established as of
the Closing pursuant to an escrow agreement by and among the Seller, the Seller
Representative (as defined in Section 6.2(a)), which Escrow Account was
created at the Closing, the Purchaser and LaSalle National Bank (the “Escrow Agent”), in a form agreed
upon by such parties (the “Escrow Agreement”), that
number of shares of Common Stock equal
to the quotient obtained by dividing $913,700 by the Additional Per Share
Price (the “Escrow Shares” and, together
with the Initial Shares and the Additional Shares, the “Shares”).
The “Additional Per Share Price” shall
be the greater of: (A) the volume weighted average closing price of the
Common Stock over the 20 trading-day period ending on the date 

 

3

 

immediately preceding the
Additional Issuance Date (as defined in Section 1.5(a)(v) hereof), as
reported on The American Stock Exchange (“AMEX”) and,
if the Common Stock is not quoted on AMEX at any time during such period, as
reported on the Over-the-Counter Bulletin Board (the “OTCBB”)
or the Pink Sheets Electronic Quotation Service (the “Pink
Sheets”), as applicable, for the portion of such period that the
Common Stock is listed or quoted on the OTCBB or the Pink Sheets; and (B) $1.10.

 

(iv)          In
the event it is determined, under the procedures set forth under 1.5(a)(iii) hereof,
that the Revenue Determination
for the Initial Period is less than U.S. $3,000,000, then not later than (A) 45
days after the end of each fiscal quarter, commencing with the fiscal quarter
ending September 30, 2008 through the fiscal quarter ending June 30,
2009, the Purchaser shall prepare and
deliver to the Seller Representative an abbreviated income
statement setting forth the
Revenue Determination for the period commencing on March 6, 2008 and
ending at the close of business on the last date of such immediately preceding
fiscal quarter of the Purchaser. In
addition, no later than October 23, 2009, the Purchaser shall prepare and deliver to the Seller
Representative an abbreviated income statement  setting forth the Revenue
Determination for the period commencing on March 6, 2008 and ending at the
close of business on September 8, 2009. Each income statement delivered
pursuant to this Section 1.5(a)(iv) shall be an “Additional  Income Statement” and shall include
Purchaser Documentation with respect to the applicable period.

 

(1)           Within
10 business days after delivery of an Additional Income Statement that includes
a Revenue Determination for the applicable period of less than U.S. $5,000,000,
the Seller Representative shall deliver to Purchaser a written response in
which the Seller Representative will either:

 

A.            agree
in writing with such Revenue Determination; or

 

B.            dispute such Revenue Determination by
delivering to the Purchaser a written notice (each, an “Extended Dispute Notice”)  setting forth in reasonable detail the basis
for such disputed item and certifying that all such disputed items are being
disputed in good faith.

 

(2)           If
the Seller Representative fails to take either of the foregoing actions within
10 business days after delivery of any such Additional Income Statement, then
the Seller and the Seller Representative will be deemed to have irrevocably
accepted the corresponding Revenue Determination for the applicable period, in
which case, such Revenue Determination will be final and binding on the
parties.

 

(3)           If
the Seller Representative timely delivers an Extended Dispute Notice to
Purchaser, then Purchaser and the Seller Representative will attempt in good
faith, for a period of 10 business days, to agree on such Additional Income Statement
and such Revenue Determination. Any resolution by the Purchaser and the Seller
Representative during such 10 business day period as to any disputed items will
be final and binding on the parties. If the Purchaser and the Seller
Representative do not resolve all disputed items by the end of 10 business days
after the date of delivery of the Dispute 

 

4

 

Notice, then
Purchaser and the Seller Representative will submit the remaining items in
dispute to the Independent Accounting Firm. Purchaser and the Seller
Representative will instruct the Independent Accounting Firm to render its
determination with respect to the items in dispute in a written report that
specifies the conclusions of the Independent Accounting Firm as to each item in
dispute and the resulting Revenue Determination. Purchaser and the Seller
Representative will each use commercially reasonable efforts to cause the
Independent Accounting Firm to render its determination within 30 days after
referral of the items to such firm or as soon thereafter as reasonably
practicable. The Independent Accounting Firm’s determination of such Revenue
Determination as set forth in its report will be final and binding on the
parties.  If the conclusions of the
Independent Accounting Firm are such that the Revenue Determination for the
applicable period is higher than that set forth on the applicable Additional
Income Statement, the fees and expenses of the Independent Accounting Firm will
be borne by the Purchaser; if the conclusions of the Independent Accounting
Firm are such that the Revenue Determination is equal to or lower than that set
forth on the applicable Additional Initial Income Statement for the applicable
period, the fees and expenses of the Independent Accounting Firm will be borne
by the Seller.

 

(4)           In
the event, under the procedures set forth under Section 1.5(a)(iv) hereof,
the Revenue Determination from March 6,
2008 through the end of any applicable period (and through no later than September 6,
2009) (in any case, the “Subsequent Period”)
is determined to equal or exceed U.S. $5,000,000, the Purchaser shall: (Y) no
later than 10 days following the date of such determination, issue the Additional Shares to the Seller; and (Z) deposit the Escrow Shares into the Escrow Account.

 

(v)           For purposes of this Agreement, (i) the
“Additional Issuance Date” shall be (a) for
purposes of Section 1.5(a)(iii) hereof, the date it is finally
determined that the Revenue Determination for the Initial Period equals or
exceeds U.S. $3,000,000, and (b) for purposes of Section 1.5(a)(iv) hereof, the
date it is finally determined that the Revenue Determination for the Subsequent
Period equals or exceeds U.S. $5,000,000; (ii) the “Indemnification Escrow
Shares”  shall be comprised of 33.33% of the Escrow Shares; and (iii) the
“Reimbursement Escrow Shares” shall
be comprised of 66.66% of the Escrow Shares.”

 

3.             Amendment to
Purchaser Deliveries.  Section 1.12
of the Asset Purchase Agreement is hereby amended and restated in its entirety,
effective as of December 19, 2007, to read as follows:

 

“1.12      On the Additional Issuance Date, the
Purchaser shall:

 

(a)           issue
to the Seller the Additional Shares; and

 

(b)           deposit
the Escrow Shares into the Escrow Account.”

 

5

 

4.             Additional
Amendments.

 

(a)           Section 5.4 of the
Asset Purchase Agreement is hereby deleted in its entirety.

 

(b)           Section 5.12
is hereby amended and restated in its entirety to read as follows:

 

“5.12  Restrictions on Seller
Dissolution. The  Seller shall
not dissolve until the one year anniversary following the Closing.”

 

5.             No Further
Amendments.  Except as amended
hereby, the Asset Purchase Agreement shall remain in full force and effect in
accordance with its terms.  In the event
of a conflict or inconsistency between this Amendment and the Asset Purchase
Agreement and the exhibits thereto, the provisions of this Amendment shall
govern.

 

6.             Counterparts.  This Amendment may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Amendment and all of which, when taken together, will be deemed to constitute
one and the same agreement.  Signatures
of the parties transmitted by facsimile or other electronic means shall be deemed
to be their original signatures for all purposes.

 

7.             Severability.  Any
term or provision of this Amendment that is invalid or unenforceable in any
situation in any jurisdiction shall not affect the validity or enforceability
of the remaining terms and provisions hereof or the validity or enforceability
of the offending term or provision in any other situation or in any other
jurisdiction. If the final judgment of a court of competent jurisdiction
declares that any term or provision hereof is invalid or unenforceable, the
parties hereto agree that the court making such determination shall have the
power to limit the term or provision, to delete specific words or phrases, or
to replace any invalid or unenforceable term or provision with a term or provision
that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Amendment
shall be enforceable as so modified. In the event such court does not exercise
the power granted to it in the prior sentence, the parties hereto agree to
replace such invalid or unenforceable term or provision with a valid and
enforceable term or provision that will achieve, to the extent possible, the
economic, business and other purposes of such invalid or unenforceable term.

 

8.             Headings.  The underlined headings contained in this
Amendment are for convenience of reference only, shall not be deemed to be a
part of this Amendment and shall not be referred to in connection with the
construction or interpretation of this Amendment.

 

9.             Governing Law.  This Amendment shall be construed in
accordance with, and governed in all respects by, the internal laws of the
State of California (without giving effect to principles of conflicts of laws).

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

6

 

The
parties to this Amendment have caused this Amendment to be executed and
delivered as of the date first written above.

 

	
   

  	
  “PURCHASER”

  
	
   

  	
   

  
	
   

  	
  IMAGEWARE SYSTEMS, INC.,

  
	
   

  	
   a Delaware corporation

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ S. James Miller, Jr.

  
	
   

  	
  Name: S. James Miller, Jr.

  
	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
  “SELLER REPRESENTATIVE”

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Wink Jones

  
	
   

  	
  Name: Wink Jones

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00140-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00140-of-00352.parquet"}]]