Exhibit 10.91

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS (COLLECTIVELY, THE
“LAWS”). THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF EITHER (I) AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE LAWS, OR (II) AN
OPINION OF COUNSEL PROVIDED TO THE ISSUER IN FORM, SUBSTANCE AND SCOPE
REASONABLY ACCEPTABLE TO THE ISSUER TO THE EFFECT THAT REGISTRATION IS NOT
REQUIRED UNDER THE LAWS DUE TO AN AVAILABLE EXCEPTION TO OR EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE LAWS.

 

DATE:   December 28, 2009

 

U.S. $64,878.00

 

BIO-KEY INTERNATIONAL, INC.

 

SEVEN PERCENT (7%) CONVERTIBLE NOTE

 

FOR VALUE RECEIVED, BIO-KEY INTERNATIONAL, INC., a corporation duly organized
and validly existing under the laws of the State of Delaware, U.S.A. (the
“Company”), promises to pay to the order of THOMAS J. COLATOSTI, the registered
holder hereof and its successors and assigns (the “Holder”), Sixty-Four Thousand
Eight Hundred and Seventy-Eight Dollars ($64,878.00), and to pay interest on the
principal sum outstanding, at the rate of seven percent (7%) per annum,
compounded annually.  Except as provided in Section 5 below, principal and
interest outstanding on this Note from time to time shall not be payable in cash
but shall be payable in shares of the Company’s common stock, par value $.0001
per share (the “Common Stock”), as set forth herein at the Holder’s option.  The
interest so payable will be paid to the person in whose name this Note (or one
or more predecessor Notes) is registered on the records of the Company regarding
registration of the Note (the “Note Register”).

 

This Note is subject to the following additional provisions:

 

1.             Note Exchangeable.  The Note is exchangeable at any time for an
equal aggregate principal amount of Notes of different authorized denominations,
as requested by the Holder surrendering the same without the Company’s written
consent. No service charge will be made for such registration or transfer or
exchange.

 

2.             Withholding.  The Company shall be entitled to withhold from all
payments of principal or interest pursuant to this Note any amounts required to
be withheld under the applicable provisions of the United States income tax or
other applicable laws at the time of such payments.

 

3.             Transfer/Exchange of Note; Legend.

 

(a)           This Note has been issued subject to investment representations of
the original purchaser hereof and may be transferred or exchanged only in
compliance with the Securities Act of

 

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1933, as amended (the “1933 Act”) and applicable state securities laws. Prior to
due presentment for transfer of this Note, the Company and any agent of the
Company may treat the person in whose name this Note is duly registered on the
Company’s Note Register as the owner hereof for the purpose of receiving payment
as herein provided and for all other purposes, whether or not his Note be
overdue, and neither the Company nor any such agent shall be affected or bound
by notice to the contrary.  If presentment for transfer is made, the parties
agree hereunder to execute any and all documents necessary to effectuate said
transfer within thirty (30) days of presentment.

 

(b)           The Holder understands and acknowledges by its acceptance hereof
that (i) except as provided herein, this Note and the shares of Common Stock
issuable upon conversion thereof as herein provided (“Conversion Shares”) have
not been and are not being registered under the 1933 Act or any state securities
laws, and may not be offered for sale, sold, assigned or transferred unless
(a) subsequently registered thereunder, or (b) pursuant to an exemption from
such registration; (ii) any sale of such securities made in reliance on Rule 144
promulgated under the 1933 Act may be made only in accordance with the terms of
said Rule and further, if said Rule is not applicable, any resale of such
securities under circumstances in which the seller (or the person through whom
the sale is made) may be deemed to be an underwriter (as that term is defined in
the 1933 Act) may require compliance with some other regulation and/or exemption
under the 1933 Act or the rules and regulations of the United States Securities
and Exchange Commission (the “SEC”) thereunder; and (iii) neither the Company
nor any other person is under any obligation, other than as provided herein to
register such securities under the 1933 Act or any state securities laws or to
comply with the terms and conditions of any exemption thereunder.

 

(c)           Any Conversion Shares issued upon conversion of this Note shall,
if and only to the extent required by law, bear legends in similar form to the
legends set forth on the first page of this Note.

 

4.             Conversion of Note into Common Stock; No Prepayment.

 

(a)           The Holder of this Note is entitled, at its option at any time or
from time to time to convert all or a portion of the original principal face
amount of this Note, and all or a portion of the interest accrued hereon, into
shares of Common Stock, at the Conversion Price.  The Conversion Price shall be
equal to the lower of (i) the average closing price of the Company’s Common
Stock as quoted by Bloomberg for the ten (10) trading days prior to the date
that the notice of conversion is transmitted to the Company, and (ii) $0.30
(subject to adjustment as provided in Section 8(b) below).  Each conversion
shall be achieved by submitting to the Company a notice of conversion, in the
form attached hereto as Exhibit A (the “Notice of Conversion”) executed by the
Holder of this Note evidencing such Holder’s intention to convert this Note or
the specified portion.  If such notice of conversion is submitted via facsimile
to the Company, the Holder need not send an original notice to the Company.  The
Company and the Holder shall each keep records with respect to the portion of
this Note then being converted and all portions previously converted; upon
receipt by the Holder of the requisite Conversion Shares, the outstanding
principal amount of the Note or the accrued interest hereon, or both, shall be
reduced by the amount specified in the Notice of Conversion resulting in such
Conversion Shares. If no amount shall be specified, the applicable reduction
shall be applied first to the accrued interest and then to the outstanding
principal amount.  The Company may from time to time, but is not required to,
instruct the Holder and the Holder

 

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shall surrender this Note along with the notice of conversion for the purposes
of making a notation thereon as to the amount of principal or interest, or both,
being converted, or of canceling this Note and issuing a new Note in the same
form with the principal amount of such Note reduced by the amount converted.
Such new or notated Note shall be delivered to the Holder within three
(3) business days after such Holder’s surrender to the Company. No fractional
shares or scrip representing fractions of shares will be issued on conversion,
but the number of shares issuable shall be rounded to the nearest whole share.
The date on which a notice of conversion is given (the “Conversion Date”) shall
be deemed to be the date on which notice of conversion is submitted via
facsimile to the Company, or if the notice of conversion is not submitted by
facsimile to the Company, the date the notice of conversion is otherwise
delivered to the Company.

 

In all cases, the Company shall deliver the Conversion Shares to the Holder
within five (5) business days after the Conversion Date with respect to such
Conversion Shares being delivered, and at the address specified in the Notice of
Conversion.

 

Notwithstanding anything herein to the contrary, the Holder shall not have the
right, and the Company shall not have the obligation, to convert all or any
portion of the Note if and to the extent that the issuance to the Holder of
shares of Common Stock upon such conversion would result in the Holder being
deemed the “beneficial owner” of more than 4.9% of the then outstanding shares
of Common Stock within the meaning of Section 13(d) of the Securities Exchange
Act of 1934, as amended, and the rules promulgated hereunder.  If any court of
competent jurisdiction shall determine that the foregoing limitation is
ineffective to prevent the Holder from being deemed the beneficial owner of more
than 4.9% of the then outstanding shares of Common Stock, then the Company shall
redeem so much of such Holder’s Note as necessary to cause such Holder to be
deemed the beneficial owner of not more than 4.9% of the then outstanding shares
of Common Stock.  Such redemption shall be for cash at a redemption price equal
to the sum of (i) 100% of the principal value of the Note and (ii) any accrued
and unpaid interest to the date of such redemption.

 

(b)          The Company shall not have the right to prepay all or any portion
of this Note.

 

5.             Default.  If one or more of the following described “Events of
Default” shall occur:

 

(a)           The Company shall fail to perform or observe, in any material
respect, any covenant, term, provision, condition, agreement or obligation of
the Company under this Note and such failure shall continue uncured for a period
of seven (7) days after written notice from the Holder of such failure; or

 

(b)           The Company shall either:  (i) become insolvent; (ii) admit in
writing its inability to pay its debts generally or as they become due;
(iii) make an assignment for the benefit of creditors or commence proceedings
for its dissolution; or (iv) apply for, or consent to the appointment of, a
trustee, liquidator, or receiver for its or for a substantial part of its
property or business; or

 

(c)           A Change of Control shall occur; or

 

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(d)           A trustee, liquidator or receiver shall be appointed for the
Company or for a substantial part of its property or business without the
Company’s consent and such appointment is not discharged within sixty (60) days
after such appointment; or

 

(e)           Any governmental agency or any court of competent jurisdiction at
the instance of any governmental agency shall assume custody or control of the
whole or any substantial portion of the properties or assets of the Company and
shall not be dismissed within sixty (60) days thereafter; or

 

(f)            After the date of this Note, any money judgment, writ or note of
attachment, or similar process in excess of One Hundred Thousand Dollars
($100,000.00) in the aggregate shall be entered or filed against the Company or
any of its properties or assets and shall remain unpaid, unvacated, unbonded or
unstayed for a period of fifteen (15) days or in any event later than five
(5) days prior to the date of any proposed sale thereunder; or

 

(g)           The Company shall default in the payment of any other outstanding
indebtedness incurred or guaranteed by the Company beyond any period of notice
and opportunity to cure, or the payment of such indebtedness shall be
accelerated by the holder thereof; or

 

(h)           Bankruptcy, reorganization, insolvency or liquidation proceedings
or other proceedings for relief under any bankruptcy law or any law for the
relief of debtors shall be instituted by or against the Company and, if
instituted against the Company, shall not be dismissed within sixty days after
such institution or the Company shall by any action or answer approve of,
consent to, or acquiesce in any such proceedings or admit the material
allegations of, or default in answering a petition filed in, any such
proceeding;

 

then, or at any time thereafter, and in any and every such case, unless such
Event of Default shall have been waived in writing by the Holder (which waiver
in one instance shall not be deemed to be a waiver in another instance or for
any other prior or subsequent Event of Default) at the option of the Holder and
in the Holder’s sole discretion, the Holder may immediately declare this Note
due and payable, whereupon all principal and interest hereunder shall be
immediately due and payable, without presentment, demand, protest or notice of
any kind, all of which are hereby expressly waived by the Company, anything
herein or other instrument contained to the contrary notwithstanding, payable in
cash or Common Stock of the Company at the Conversion Price as set forth herein
at the Holder’s option, and the Holder may immediately, and upon the expiration
of any period of grace, enforce any and all of the Holder’s rights and remedies
provided herein or any other rights or remedies afforded by law or equity.  In
addition, if this Note is not paid when due, the Company shall pay interest on
overdue principal and (to the fullest extent permitted by law) on overdue
interest at the rate of twelve (12%) percent per annum, payable in cash or
Common Stock of the Company at the Conversion Price as set forth herein at the
Holder’s option.

 

As used herein, “Change of Control” means (i) any merger, consolidation, share
exchange, business combination, issuance of securities, acquisition of
securities, tender offer, exchange offer or other similar transaction (A) in
which the Company is a constituent corporation, (B) in which a person, firm or
other entity (“Person”)  or “group” (as defined in the Securities Exchange Act
of 1934, as amended, and the rules promulgated thereunder) of Persons directly
or indirectly

 

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acquires beneficial or record ownership of securities representing more than 50%
of the outstanding voting securities of the Company, or (C) in which the Company
issues securities representing more than 50% of the outstanding securities of
any class of voting securities of the Company or (ii) any sale, lease, exchange,
transfer, license, acquisition or disposition of any assets that constitute more
than 50% of the assets of the Company on a consolidated basis.

 

6.             Maximum Payments.  Nothing contained herein shall be deemed to
establish or require the payment of a rate of interest or other charges in
excess of the maximum permitted by applicable law.  In the event that the rate
of interest required to be paid or other charges hereunder exceed the maximum
permitted by such law, any payments in excess of such maximum shall be credited
against amounts owed by the Company to the Holder and thus refunded to the
Company.

 

7.             Obligations of the Company herein are Unconditional.  No
provision of this Note shall alter or impair the obligation of the Company,
which obligation is absolute and unconditional, to repay the principal amount of
this Note at the time, place, rate, and in the coin, currency or Common Stock,
hereinabove stated. This Note and all other Notes now or hereafter issued in
replacement of this Note on the same or similar terms are direct obligations of
the Company. This Note ranks at least equally with all other Notes now or
hereafter issued under the terms set forth herein. The Conversion Price and
number of shares of Common Stock issuable upon conversion shall be subject to
adjustment from time to time as provided in Section 8(b) below.

 

8.             Merger; Consolidation; Stock Splits.

 

(a)           In the event the Company, at any time while all or any portion of
this Note is outstanding, shall be consolidated with or merged into any other
corporation or corporations or shall sell or lease all or substantially all of
its property and business as an entirety, then lawful provisions shall be made
as part of the terms of such consolidation, merger, sale or lease so that the
holder of this Note may thereafter receive in lieu of such Common Stock
otherwise issuable to such holder upon conversion of this Note, but at the
conversion rate which would otherwise be in effect at the time of conversion, as
hereinbefore provided, the same kind and amount of securities or assets as may
be issuable, distributable or payable upon such consolidation, merger, sale or
lease with respect to Common Stock of the Company.

 

(b)           In the event, at any time while all or any portion of this Note is
outstanding, the outstanding shares of Common Stock shall be subdivided,
consolidated or combined, by stock split, stock dividend, combination or like
event, into a greater or lesser number of shares of Common Stock, the fixed
portion of the Conversion Price specified in Section 4(a)(ii) above in effect
immediately prior to such subdivision, combination, consolidation or stock
dividend shall, concurrently with the effectiveness of such subdivision,
combination, consolidation or stock dividend, be proportionately adjusted.

 

9.             Note Holder Not Deemed a Stockholder.  No Holder, as such, of
this Note shall be entitled (prior to conversion of this Note into Common Stock,
and only then to the extent of such conversion) to vote or receive dividends or
be deemed the holder of shares of the Company for any purpose, nor shall
anything contained in this Note be construed to confer upon the Holder hereof,
as

 

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such, any of the rights of a stockholder of the Company or any right to vote,
give or withhold consent to any corporate action (whether any reorganization,
issue of stock, reclassification of stock, consolidation, merger, conveyance or
otherwise), receive notice of meetings, receive dividends or subscription
rights, or otherwise, prior to the issuance to the holder of this Note of the
Conversion Shares which he or she is then entitled to receive upon the due
conversion of all or a portion of this Note. Notwithstanding the foregoing, the
Company will provide the Holder with copies of the same notices and other
information given to the stockholders of the Company generally,
contemporaneously with the giving thereof to the stockholders.

 

10.           Restrictive Covenant.   Until the principal amount of this Note
and all accrued and unpaid interest is paid in full or converted into Common
Stock as provided herein, the Company shall not issue any loan or debt secured
by any of the assets of the Company.

 

11.           No Limitation on Corporate Action.  No provisions of this Note and
no right or option granted or conferred hereunder shall in any way limit, affect
or abridge the exercise by the Company of any of its corporate rights or powers
to recapitalize, amend its Certificate of Incorporation, reorganize, consolidate
or merge with or into another corporation, or to transfer all or any part of its
property or assets, or the exercise of any other of its corporate rights and
powers.

 

12.           Representations of Holder.  Upon conversion of all or a portion of
this Note, the Holder shall confirm in writing, in a form reasonably
satisfactory to the Company, that the Conversion Shares so purchased are being
acquired solely for the Holder’s own account and not as a nominee for any other
party, and that such Holder is an Accredited Investor (as defined in
Rule 501(a) of Regulation D promulgated under the 1933 Act). The Company
acknowledges that Holder’s duly executed certification on the Notice of
Conversion is satisfactory confirmation of the facts set forth in the
immediately preceding sentence. If such Holder cannot make such representations
because they would be factually incorrect, it shall be a condition to such
Holder’s conversion of all or a portion of the Note that the Company receive
such other representations as the Company considers reasonably necessary to
assure the Company that the issuance of its securities upon conversion of the
Note shall not violate any United States or state securities laws.

 

13.           Waiver of Demand, Presentment, Etc.  The Company hereby expressly
waives demand and presentment for payment, notice of nonpayment, protest, notice
of protest, notice of dishonor, notice of acceleration or intent to accelerate,
bringing of suit and diligence in taking any action to collect amounts called
for hereunder and shall be directly and primarily liable for the payment of all
sums owing and to be owing hereunder, regardless of and without any notice,
diligence, act or omission as or with respect to the collection of any amount
called for hereunder.

 

14.           Failure or Delay Not Waiver.  No failure or delay on the part of
the Holder in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other right, power or privilege.  All rights and remedies existing hereunder
are cumulative to, and not exclusive of, any rights or remedies otherwise
available.

 

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15.           Attorney’s Fees.  The Company agrees to pay all costs and
expenses, including without limitation reasonable attorney’s fees, which may be
incurred by the Holder in collecting any amount due under this Note or in
enforcing any of Holder’s conversion rights as described herein.

 

16.           Access to Books and Records.  The Holder will have the right to
inspect and audit the Company’s original books, records, and documents at any
time and from time to time, during normal business hours, upon reasonable notice
to the Company.

 

17.           Enforceability.  In case any provision of this Note is held by a
court of competent jurisdiction to be excessive in scope or otherwise invalid or
unenforceable, such provision shall be adjusted rather than voided, if possible,
so that it is enforceable to the maximum extent possible, and the validity and
enforceability of the remaining provisions of this Note will not in any way be
affected or impaired thereby.

 

18.           Governing Law.  This Note shall be governed by and construed in
accordance with the laws of the state of New York without giving effect to
applicable principles of conflict of law. Each of the parties submits to the
exclusive jurisdiction of the state and federal courts of New York County, New
York in connection with any dispute arising under this Note 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. To the extent determined by such court, the Company shall
reimburse the Holder for any reasonable legal fees and disbursements incurred by
the Holder in enforcement of or protection of any of its rights under this Note.

 

19.           Assignment.  This Note shall not be assigned by the Company
without the prior written consent of the Holder.  This Note shall bind the
Company and its successors and permitted assigns and shall inure to the benefit
of the Holder and its successors and assigns.

 

20.           AMENDMENT PROVISION. NEITHER THIS NOTE NOR ANY TERM HEREOF MAY BE
AMENDED, WAIVED, DISCHARGED OR TERMINATED OTHER THAN BY A WRITTEN INSTRUMENT
SIGNED BY THE COMPANY AND THE HOLDER.

 

21.           ENTIRE AGREEMENT.  THIS NOTE AND CONSTITUTES THE FULL AND ENTIRE
UNDERSTANDING BETWEEN THE COMPANY AND THE HOLDER WITH RESPECT TO THE SUBJECT
MATTER HEREOF AND THEREOF.

 

22.           NOTICES.  ALL NOTICES AND OTHER COMMUNICATIONS GIVEN OR MADE
PURSUANT TO THIS NOTE SHALL BE IN WRITING AND SHALL BE DEEMED EFFECTIVELY GIVEN
UPON THE EARLIER OF ACTUAL RECEIPT OR:  (A) PERSONAL DELIVERY TO THE PARTY TO BE
NOTIFIED, (B) WHEN SENT, IF SENT BY ELECTRONIC MAIL OR FACSIMILE DURING NORMAL
BUSINESS HOURS OF THE RECIPIENT, AND IF NOT SENT DURING NORMAL BUSINESS HOURS,
THEN ON THE RECIPIENT’S NEXT BUSINESS DAY, (C) FIVE (5) DAYS AFTER HAVING BEEN
SENT BY REGISTERED OR CERTIFIED MAIL, RETURN RECEIPT REQUESTED, POSTAGE PREPAID,
OR (D) ONE (1) BUSINESS DAY AFTER DEPOSIT WITH A NATIONALLY RECOGNIZED OVERNIGHT
COURIER, FREIGHT PREPAID, SPECIFYING NEXT BUSINESS DAY DELIVERY, WITH WRITTEN
VERIFICATION OF RECEIPT.  ALL COMMUNICATIONS SHALL BE SENT TO THE RESPECTIVE
PARTIES AT THE FOLLOWING ADDRESSES OR TO SUCH OTHER E-MAIL ADDRESS, FACSIMILE
NUMBER OR ADDRESS AS SUBSEQUENTLY MODIFIED BY WRITTEN NOTICE GIVEN IN ACCORDANCE
WITH THIS SECTION 23:

 

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If to the Borrower, to:

 

BIO-key International, Inc.
3349 Highway 138
Building D, Suite B
Wall, NJ 07719
Attn: Chief Executive Officer
Facsimile: (508) 460 4098

 

 

 

with a copy (which shall not constitute notice) to:

 

Choate, Hall & Stewart LLP
Two International Place
Boston, MA 02110
Attention: Charles J. Johnson, Esq.
Facsimile: (617) 248-4000

 

 

 

If to the Holder, to:

 

The Shaar Fund Ltd.
c/o SS&C Fund Services N.V.
Pareraweg 45
Curacao, Netherlands Antilles
Facsimile: (599-9) 434-3560

 

 

 

with a copy (which shall not constitute notice) to:

 

Meltzer, Lippe, Goldstein & Breitstone, LLP
190 Willis Avenue
Mineola, NY 11501
Attention: Ira R. Halperin, Esq.
Facsimile: (516) 747-0653

 

23.           Waiver of Jury Trial.   THE COMPANY EXPRESSLY WAIVES ANY RIGHT TO
TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OFACTION (A) ARISING UNDER
THIS NOTE OR ANY OTHER INSTRUMENT,  DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH, OR (B) IN ANY WAY CONNECTED WITH OR RELATED OR
INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO
THIS NOTE OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED
IN CONNECTION HEREWITH, OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT
OR TORT OR OTHERWISE; AND THE BORROWER HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THIS WAIVER OF THE RIGHT TO TRIAL
BY JURY.

 

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IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed
by an officer thereunto duly authorized, all as of the date first hereinabove
written.

 

 

 

BIO-KEY INTERNATIONAL, INC

 

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

Commonwealth of Massachusetts

)

 

 

) ss:

 

 

 

County of                                        )

 

 

 

 

On the          day of           , 20     before me, the undersigned, personally
appeared                             , personally known to me or proved to me on
the basis of satisfactory evidence to be the individual whose name is subscribed
to the within instrument and acknowledged to me that he/she executed the same in
his/her capacity, and that by his/her signature on the instrument, the
individual, or the person upon behalf of which the individual acted, executed
the instrument.

 

 

 

 

 

Notary Public

 

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EXHIBIT A

 

FORM OF NOTICE OF CONVERSION

 

                  , 20        

 

BIO-key International, Inc.

3349 Highway 138

Building D, Suite B

Wall, NJ  07719

Attn:  Chief Executive Officer

 

The undersigned, holder of BIO-key International, Inc.’s (the “Company”) Seven
Percent (7%) Convertible Note (the “Note”), hereby exercises its option to
convert $                       of the principal amount of the Note and [all]
[$                ] of the accrued interest on this Note into shares of the
Company’s common stock, $.0001 par value per share (the “Common Stock”), in
accordance with the terms of the Note.  All capitalized terms used and not
defined herein have the respective meanings assigned to them in the Note.

 

The undersigned hereby instructs the Company to convert the portion of the Note
specified above into                  shares of Common Stock at the Conversion
Price in accordance with the provisions of Section 4 of the Note. The
undersigned directs that (i) the Common Stock issuable and certificates therefor
deliverable upon conversion, and (ii) if so delivered by the Holder, the Note,
recertificated in the principal amount, if any, not being surrendered for
conversion hereby be issued in the name of and delivered to the undersigned
unless a different name has been indicated below.

 

By delivering this conversion notice, the undersigned represents and warrants to
the Company that the shares of Common Stock so purchased are being acquired
solely for the Holder’s own account and not as a nominee for any other party,
and that such Holder is an Accredited Investor (as defined in Rule 501(a) of
Regulation D promulgated under the 1933 Act).

 

 

HOLDER:

 

 

 

 

 

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