On March 8, 2016, ImageWare Systems, Inc. (the "Company") and Neal I. Goldman, a director of the Company (the "Holder"), entered into the fourth amendment (the "Fourth Amendment") to the convertible promissory note previously issued by the Company to the Holder on March 27, 2013 (the "Goldman Note"). The Amendment (i) provides the Company with the ability to borrow up to $5.0 million under the terms of the Goldman Note; (ii) permits the Holder to convert the outstanding principal, plus any accrued but unpaid interest due under the Goldman Note (the "Outstanding Balance"), into shares of the Company's common stock, par value $0.001 per share ("Common Stock"), for $1.25 per share; and (iii) extends the maturity date of the Goldman Note to June 30, 2017.

In addition, on March 8, 2016, the Company and Charles Crocker, also a director of the Company (the "Second Holder"), entered into a new line of credit and promissory note (the "Crocker Note"), in the principal amount of $500,000. The Crocker Note shall accrue interest at a rate of 8% per annum, and matures on the earlier to occur of June 30, 2017 or such date that the Company consummates a debt and/or equity financing resulting in net proceeds to the Company of at least $3.5 million. All outstanding amounts due under the terms of the Crocker Note shall be convertible into the Company's Common Stock at $1.25 per share.

As of the date of this Current Report on Form 8-K, no amounts were outstanding under the terms of either the Goldman Note or Crocker Note.

The foregoing description of the Amendment and Crocker Note does not purport to be complete, and is qualified in its entirety by reference to the Amendment and Crocker Note attached hereto as Exhibits 10.1 and 10.2, respectively, and are incorporated by reference herein.

See Exhibit Index.