<Page>


                                                                Exhibit 10.43




       THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
       REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
       MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS
       THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
       COVERING SUCH SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH
       RULE 144, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE
       HOLDER OF THESE SECURITIES, REASONABLY SATISFACTORY TO THE
       COMPANY, STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR
       HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS
       DELIVERY REQUIREMENTS OF SUCH ACT.


                         OPTION TO PURCHASE COMMON STOCK
                                       OF
                           BIO-KEY INTERNATIONAL, INC.
                          Void after September 15, 2011

       This certifies that, for value received, Harlan Plumley ("Holder"), is
entitled, subject to the terms set forth below, to purchase from BIO-KEY
INTERNATIONAL, INC., a Minnesota corporation (the "Company"), shares of the
common stock, $.01 par value per share, of the Company ("Common Stock"), as
constituted on the date hereof (the "Option Issue Date"), with the Notice of
Exercise attached hereto duly executed, and simultaneous payment therefor in
lawful money of the United States or as otherwise provided in Section 3 hereof,
at the Exercise Price then in effect. The number, character and Exercise Price
of the shares of Common Stock issuable upon exercise hereof are subject to
adjustment as provided herein.

       1. TERM OF OPTION. Subject to compliance with the vesting provisions
identified at Section 2.3 hereof, this Option shall be exercisable, in whole or
in part, during the term commencing on the Option Issue Date and ending at 5:00
p.m. CST on September 15, 2011 (the "Option Expiration Date") and shall be void
thereafter.

       2. NUMBER OF SHARES, EXERCISE PRICE AND VESTING PROVISIONS.

            2.1 NUMBER OF SHARES. The number of shares of Common Stock which may
be purchased pursuant to this Option shall be 200,000 shares (the "Shares"),
subject, however, to adjustment pursuant to Section 11 hereof.

            2.2 EXERCISE PRICE. The Exercise Price at which this Option, or
portion thereof, may be exercised shall be $1.05(1) per Share, subject,
however, to adjustment pursuant to Section 11 hereof.

----------

(1)  The last sale price of the Company's common stock as reported on the OTC
     Bulletin Board on the Option Issue Date.


<Page>


            2.3 VESTING. This Option shall vest in accordance with the following
schedule:

                 (i)    66,666 Shares shall vest on September 15, 2005;


                 (ii)   66,667 Shares shall vest on September 15, 2006; and


                 (iii)  66,667 Shares shall vest on September 15, 2007.

       3. EXERCISE OF OPTION.

            3.1 PAYMENT OF EXERCISE PRICE. Subject to the terms hereof, the
purchase rights represented by this Option are exercisable by the Holder in
whole or in part, at any time, or from time to time, by the surrender of this
Option and the Notice of Exercise annexed hereto duly completed and executed on
behalf of the Holder, at the office of the Company (or such other office or
agency of the Company as it may designate by notice in writing to the Holder at
the address of the Holder appearing on the books of the Company) accompanied by
payment of the Exercise Price in full (i) in cash or by bank or certified check
for the Shares with respect to which this Option is exercised; (ii) by delivery
to the Company of shares of the Company's Common Stock having a Fair Market
Value (as defined below) equal to the aggregate Exercise Price of the Shares
being purchased which Holder is the record and beneficial owner of and which
have been held by the Holder for at least six (6) months; (iii) if the Shares
are eligible for public resale, by delivering to the Company a Notice of
Exercise together with an irrevocable direction to a broker-dealer registered
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), to
sell a sufficient portion of the Shares and deliver the sales proceeds directly
to the Company to pay the Exercise Price; or (iv) by any combination of the
procedures set forth in subsections (i), (ii) and (iii) of this Section 3.1.

            3.2 FAIR MARKET VALUE. If previously owned shares of Common Stock
are tendered as payment of the Exercise Price, the value of such shares shall be
the "Fair Market Value" of such shares on the trading date immediately preceding
the date of exercise. For the purpose of this Agreement, the "Fair Market Value"
shall be:

                 (a) If the Common Stock is admitted to quotation on the
National Association of Securities Dealers Automated Quotation System
("NASDAQ"), the Fair Market Value on any given date shall be the average of the
highest bid and lowest asked prices of the Common Stock as reported for such
date or, if no bid and asked prices were reported for such date, for the last
day preceding such date for which such prices were reported;

                 (b) If the Common Stock is admitted to trading on a United
States securities exchange or the NASDAQ National Market System, the Fair Market
Value on any date shall be the closing price reported for the Common Stock on
such exchange or system for such date or, if no sales were reported for such
date, for the last day preceding such date for which a sale was reported;


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                 (c) If the Common Stock is traded in the over-the-counter
market and not on any national securities exchange nor in the NASDAQ Reporting
System, the Fair Market Value shall be the average of the mean between the last
bid and ask prices per share, as reported by the National Quotation Bureau,
Inc., or an equivalent generally accepted reporting service, or if not so
reported, the average of the closing bid and asked prices for a share as
furnished to the Company by any member of the National Association of Securities
Dealers, Inc., selected by the Company for that purpose; or

                 (d) If the Fair Market Value of the Common Stock cannot be
determined on the basis previously set forth in this definition on the date that
the Fair Market Value is to be determined, the Board of Directors of the Company
shall in good faith determine the Fair Market Value of the Common Stock on such
date.

If the tender of previously owned shares would result in an issuance of a whole
number of Shares and a fractional Share of Common Stock, the value of such
fractional share shall be paid to the Company in cash or by check by the Holder.

            3.3 TERMINATION OF EMPLOYMENT; DEATH.

                 (a) If Holder shall cease to be employed by the Company, all
Options to which Holder is then entitled to exercise may be exercised only
within ninety (90) days after the termination of employment and prior to the
Option Termination Date or, if such termination was due to disability or
retirement (as hereinafter defined), within one (1) year after termination of
employment and prior to the Option Termination Date. Notwithstanding the
foregoing, in the event that any termination of employment shall be for Cause as
that term is defined in any employment agreement by and between the Holder and
the Company, then this Option shall forthwith terminate.

                 (b) If Holder shall die while employed by the Company and prior
to the Option Termination Date, any Options then exercisable may be exercised
only within one (1) year after Holder's death, prior to the Option Termination
Date and only by the Holder's personal representative or persons entitled
thereto under the Holder's will or the laws of descent and distribution.

                 (c) This Option may not be exercised for more Shares (subject
to adjustment as provided in Section 11 hereof) after the termination of the
Holder's employment or death, as the case may be, than the Holder was entitled
to purchase thereunder at the time of the termination of the Holder's employment
or death.

            3.4 EXERCISE DATE; DELIVERY OF CERTIFICATES. This Option shall be
deemed to have been exercised immediately prior to the close of business on the
date of its surrender for exercise as provided above, and Holder shall be
treated for all purposes as the holder of record of such Shares as of the close
of business on such date. As promptly as practicable on or after such date and
in any event within ten (10) days thereafter, the Company at its expense shall
issue and deliver to the Holder a certificate or certificates for the number of
Shares issuable upon such exercise. In the event that this Option is exercised
in part, the Company at its expense will


                                       3
<Page>


execute and deliver a new Option of like tenor exercisable for the number of
shares for which this Option may then be exercised.

       4. NO FRACTIONAL SHARES OR SCRIP. No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this Option.
In lieu of any fractional share to which the Holder would otherwise be entitled,
the Company shall make a cash payment equal to the Exercise Price multiplied by
such fraction.

       5. REPLACEMENT OF OPTION. On receipt of evidence reasonably satisfactory
to the Company of the loss, theft, destruction or mutilation of this Option and,
in the case of loss, theft or destruction, on delivery of an indemnity agreement
reasonably satisfactory in form and substance to the Company or, in the case of
mutilation, on surrender and cancellation of this Option, the Company at its
expense shall execute and deliver, in lieu of this Option, a new Option of like
tenor and amount.

       6. RIGHTS OF STOCKHOLDER. Except as otherwise contemplated herein, the
Holder shall not be entitled to vote or receive dividends or be deemed the
holder of Common Stock or any other securities of the Company that may at any
time be issuable on the exercise hereof for any purpose, nor shall anything
contained herein be construed to confer upon the Holder, as such, any of the
rights of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action (whether upon any
recapitalization, issuance of stock, reclassification of stock, change of par
value, or change of stock to no par value, consolidation, merger, conveyance or
otherwise) or to receive notice of meetings, or to receive dividends or
subscription rights or otherwise until the Option shall have been exercised as
provided herein.

       7. TRANSFER OF OPTION.

            7.1. NON-TRANSFERABILITY. This Option shall not be assigned,
transferred, pledged or hypothecated in any way, nor subject to execution,
attachment or similar process, otherwise than by will or by the laws of descent
and distribution. Any attempted assignment, transfer, pledge, hypothecation or
other disposition of this Option contrary to the provisions hereof, and the levy
of an execution, attachment, or similar process upon the Option, shall be null
and void and without effect.

            7.2. COMPLIANCE WITH SECURITIES LAWS; RESTRICTIONS ON TRANSFERS. In
addition to restrictions on transfer of this Option and Shares set forth in
Section 7.1 above.

                 (a) The Holder of this Option, by acceptance hereof,
acknowledges that this Option and the Shares to be issued upon exercise hereof
are being acquired solely for the Holder's own account and not as a nominee for
any other party, and for investment (unless such shares are subject to resale
pursuant to an effective prospectus), and that the Holder will not offer, sell
or otherwise dispose of any Shares to be issued upon exercise hereof except
under circumstances that will not result in a violation of applicable federal
and state securities laws. Upon exercise of this Option, the Holder shall, if
requested by the Company, confirm in writing, in a form satisfactory 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, for


                                       4
<Page>

investment (unless such shares are subject to resale pursuant to an effective
prospectus), and not with a view toward distribution or resale.

                 (b) Neither this Option nor any share of Common Stock issued
upon exercise of this Option may be offered for sale or sold, or otherwise
transferred or sold in any transaction which would constitute a sale thereof
within the meaning of the 1933 Act, unless (i) such security has been registered
for sale under the 1933 Act and registered or qualified under applicable state
securities laws relating to the offer an sale of securities; (ii) exemptions
from the registration requirements of the 1933 Act and the registration or
qualification requirements of all such state securities laws are available and
the Company shall have received an opinion of counsel satisfactory to the
Company that the proposed sale or other disposition of such securities may be
effected without registration under the 1933 Act and would not result in any
violation of any applicable state securities laws relating to the registration
or qualification of securities for sale, such counsel and such opinion to be
satisfactory to the Company. The Holder of this Option, by acceptance hereof,
acknowledges that the Company has no obligation to file a registration statement
with the Securities and Exchange Commission or any state securities commission
to register the issuance of the Shares upon exercise hereof or the sale or
transfer of the Shares after issuance.

                 (c) All Shares issued upon exercise hereof shall be stamped or
imprinted with a legend in substantially the following form (in addition to any
legend required by state securities laws).

            THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
            REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT
            BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN
            EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH
            SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144, OR THE
            COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE
            SECURITIES, REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT
            SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE
            REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.

                 (d) Holder recognizes that investing in the Option and the
Shares involves a high degree of risk, and Holder is in a financial position to
hold the Option and the Shares indefinitely and is able to bear the economic
risk and withstand a complete loss of its investment in the Option and the
Shares. The Holder is a sophisticated investor and is capable of evaluating the
merits and risks of investing in the Company. The Holder has had an opportunity
to discuss the Company's business, management and financial affairs with the
Company's management, has been given full and complete access to information
concerning the Company, and has utilized such access to its satisfaction for the
purpose of obtaining information or verifying information and has had the
opportunity to inspect the Company's operation. Holder has had the opportunity
to ask questions of, and receive answers from the management of the Company (and
any person acting on its behalf) concerning the Option and the Shares and the
agreements and transactions contemplated hereby, and to obtain any additional
information as Holder may have requested in making its investment decision.


                                       5
<Page>


                 (e) Holder acknowledges and represents: (i) that he has been
afforded the opportunity to review and is familiar with the business prospects
and finances of the Company and has based his decision to invest solely on the
information contained therein and has not been furnished with any other
literature, prospectus or other information except as included in such reports;
(ii) he maintains his domicile and is not a transient or temporary resident at
the address on the books and records of the Company; (iii) he understands that
no federal or state agency has approved or disapproved the Option or Shares or
made any finding or determination as to the fairness of the Option and Common
Stock for investment; and (iv) that the Company has made no representations,
warranties, or assurances as to (A) the future trading value of the Common
Stock, (B) whether there will be a public market for the resale of the Common
Stock or (C) the filing of a registration statement with the Securities and
Exchange Commission or any state securities commission to register the issuance
of the Shares upon exercise hereof or the sale or transfer of the Shares after
issuance.

       8. RESERVATION AND ISSUANCE OF STOCK; PAYMENT OF TAXES.

            (a) The Company covenants that during the term that this Option is
exercisable, the Company will reserve from its authorized and unissued Common
Stock a sufficient number of shares to provide for the issuance of the Shares
upon the exercise of this Option, and from time to time will take all steps
necessary to amend its Certificate of Incorporation to provide sufficient
reserves of shares of Common Stock issuable upon the exercise of the Option.

            (b) The Company further covenants that all shares of Common Stock
issuable upon the due exercise of this Option will be free and clear from all
taxes or liens, charges and security interests created by the Company with
respect to the issuance thereof, however, the Company shall not be obligated or
liable for the payment of any taxes, liens or charges of Holder, or any other
party contemplated by Section 7, incurred in connection with the issuance of
this Option or the Common Stock upon the due exercise of this Option. The
Company agrees that its issuance of this Option shall constitute full authority
to its officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for the shares of Common Stock upon
the exercise of this Option. The Common Stock issuable upon the due exercise of
this Option, will, upon issuance in accordance with the terms hereof, be duly
authorized, validly issued, fully paid and non-assessable.

            (c) Upon exercise of the Option, the Company shall have the right to
require the Holder to remit to the Company an amount sufficient to satisfy
federal, state and local tax withholding requirements prior to the delivery of
any certificate for Shares of Common Stock purchased pursuant to the Option, if
in the opinion of counsel to the Company such withholding is required under
applicable tax laws.

            (d) If Holder is obligated to pay the Company an amount required to
be withheld under applicable tax withholding requirements may pay such amount
(i) in cash; (ii) in the discretion of the Board of Directors of the Company,
through the delivery to the Company of previously-owned shares of Common Stock
having an aggregate Fair Market Value equal to the tax obligation provided that
the previously owned shares delivered in satisfaction of the withholding
obligations must have been held by the Holder for at least six (6) months; (iii)
in the


                                       6
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discretion of the Board of Directors of the Company, through the withholding of
Shares of Common Stock otherwise issuable to the Holder in connection with the
Option exercise; or (iv) in the discretion of the Board of Directors of the
Company, through a combination of the procedures set forth in subsections (i),
(ii) and (iii) of this Section 8(d).

       9. NOTICES.

            (a) Whenever the Exercise Price or number of shares purchasable
hereunder shall be adjusted pursuant to Section 11 hereof, the Company shall
issue a certificate signed by its Chief Financial Officer setting forth, in
reasonable detail, the event requiring the adjustment, the amount of the
adjustment, the method by which such adjustment was calculated, and the Exercise
Price and number of shares purchasable hereunder after giving effect to such
adjustment, and shall cause a copy of such certificate to be mailed (by
first-class mail, postage prepaid) to the Holder of this Option.

            (b) All notices, advices and communications under this Option shall
be deemed to have been given, (i) in the case of personal delivery, on the date
of such delivery and (ii) in the case of mailing, on the third business day
following the date of such mailing, addressed as follows:

                 If to the Company:

                 BIO-key International, Inc.
                 1285 Corporate Center Drive
                 Suite 175
                 Eagan, MN 55121

                 With a copy to:

                 Duane Morris LLP
                 51 Haddonfield Road, Suite 340
                 Cherry Hill, NJ 08002
                 Attn.:  Vincent A. Vietti, Esquire

                 and to the Holder:

                 Harlan Plumley
                 83 Ferncroft Road
                 Waban, MA 02468


       Either of the Company or the Holder may from time to time change the
address to which notices to it are to be mailed hereunder by notice in
accordance with the provisions of this Paragraph 9.


                                       7
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         10.      AMENDMENTS.

            (a) Any term of this Option may be amended with the written consent
of the Company and the Holder. Any amendment effected in accordance with this
Section 10 shall be binding upon the Holder, each future holder and the Company.

            (b) No waivers of, or exceptions to, any term, condition or
provision of this Option, in any one or more instances, shall be deemed to be,
or construed as, a further or continuing waiver of any such term, condition or
provision.

       11. ADJUSTMENTS. The number of Shares of Common Stock purchasable
hereunder and the Exercise Price is subject to adjustment from time to time upon
the occurrence of certain events, as follows:

            11.1. REORGANIZATION, MERGER OR SALE OF ASSETS. If at any time while
this Option, or any portion thereof, is outstanding and unexpired there shall be
(i) a reorganization (other than a combination, reclassification, exchange or
subdivision of shares otherwise provided for herein); or (ii) a merger or
consolidation of the Company in which the shares of the Company's capital stock
outstanding immediately prior to the merger are converted by virtue of the
merger into other property, whether in the form of securities, cash or
otherwise, then, as a part of such reorganization, merger, or consolidation,
lawful provision shall be made so that the holder of this Option shall upon such
reorganization, merger, or consolidation, have the right by exercising such
Option, to purchase the kind and number of shares of Common Stock or other
securities or property (including cash) otherwise receivable upon such
reorganization, merger or consolidation by a holder of the number of shares of
Common Stock that might have been purchased upon exercise of such Option
immediately prior to such reorganization, merger or consolidation. The foregoing
provisions of this Section 11.1 shall similarly apply to successive
reorganizations, consolidations or mergers. If the per-share consideration
payable to the Holder hereof for shares in connection with any such transaction
is in a form other than cash or marketable securities, then the value of such
consideration shall be determined in good faith by the Company's Board of
Directors. In all events, appropriate adjustment (as determined in good faith by
the Company's Board of Directors) shall be made in the application of the
provisions of this Option with respect to the rights and interests of the Holder
after the transaction, to the end that the provisions of this Option shall be
applicable after that event, as near as reasonably may be, in relation to any
shares or other property deliverable after that event upon exercise of this
Option.

            11.2. RECLASSIFICATION. If the Company, at any time while this
Option, or any portion thereof, remains outstanding and unexpired, by
reclassification of securities or otherwise, shall change any of the securities
as to which purchase rights under this Option exist into the same or a different
number of securities of any other class or classes, this Option shall thereafter
represent the right to acquire such number and kind of securities as would have
been issuable as the result of such change with respect to the securities that
were subject to the purchase rights under this Option immediately prior to such
reclassification or other change and the Exercise Price therefor shall be
appropriately adjusted, all subject to further adjustment as provided in this
Section 11.


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            11.3. SPLIT, SUBDIVISION OR COMBINATION OF SHARES. If the Company at
any time while this Option, or any portion thereof, remains outstanding and
unexpired shall split, subdivide or combine the securities as to which purchase
rights under this Option exist, into a different number of securities of the
same class, the Exercise Price and the number of shares issuable upon exercise
of this Option shall be proportionately adjusted.

            11.4. ADJUSTMENTS FOR DIVIDENDS IN STOCK OR OTHER SECURITIES OR
PROPERTY. If while this Option, or any portion hereof, remains outstanding and
unexpired the holders of the securities as to which purchase rights under this
Option exist at the time shall have received, or, on or after the record date
fixed for the determination of eligible Stockholders, shall have become entitled
to receive, without payment therefor, other or additional stock or other
securities or property (other than cash) of the Company by way of dividend, then
and in each case, this Option shall represent the right to acquire, in addition
to the number of shares of the security receivable upon exercise of this Option,
and without payment of any additional consideration therefor, the amount of such
other or additional stock or other securities or property (other than cash) of
the Company that such holder would hold on the date of such exercise had it been
the holder of record of the security receivable upon exercise of this Option on
the date hereof and had thereafter, during the period from the date hereof to
and including the date of such exercise, retained such shares and/or all other
additional stock, other securities or property available by this Option as
aforesaid during such period.

            11.5 GOOD FAITH. The Company will not, by any voluntary action,
avoid or seek to avoid the observance or performance of any of the terms to be
observed or performed hereunder by the Company, but will at all times in good
faith assist in the carrying out of all the provisions of this Section 11 and in
the taking of all such action as may be necessary or appropriate in order to
protect the rights of the Holder of this Option against impairment.

       12. FUNDAMENTAL TRANSACTION. For purposes of this Section 12, a
"Fundamental Transaction" shall mean (i) the dissolution or liquidation of the
Company; (ii) a merger, reorganization or consolidation in which the Company is
acquired by another person or entity (other than a holding company or subsidiary
formed by the Company); (iii) the sale of all or substantially all of the assets
of the Company to any person or persons; or (iv) the sale in a single
transaction or a series of related transactions of voting stock representing
more than fifty percent (50%) of the voting power of all outstanding shares of
the Company to any person or persons. In the event of a Fundamental Transaction,
this Option shall automatically become immediately exercisable in full, and
shall be deemed to have attained such status immediately prior to the
Fundamental Transaction. Holder shall be given at least 15 days prior written
notice of a Fundamental Transaction and shall be permitted to exercise any
vested Options during this 15 day period (including those Options vesting as a
result of the provisions of this Section 12). In the event of a Fundamental
Transaction, any Options which are neither assumed or substituted for in
connection with the Fundamental Transaction nor exercised as of the date of the
Fundamental Transaction, shall terminate and cease to be outstanding effective
as of the date of the Fundamental Transaction, unless otherwise provided by the
Board of Directors of the Company.

       13. SEVERABILITY. Whenever possible, each provision of this Option shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision


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of this Option is held to be invalid, illegal or unenforceable in any respect
under any applicable law or rule in any jurisdiction, such invalidity,
illegality or unenforceability shall not affect the validity, legality or
enforceability of any other provision of this Option in such jurisdiction or
affect the validity, legality or enforceability of any provision in any other
jurisdiction, but this Option shall be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision had never
been contained herein.

       14. GOVERNING LAW. The corporate law of the State of Minnesota shall
govern all issues and questions concerning the relative rights of the Company
and its stockholders. All other questions concerning the construction, validity,
interpretation and enforceability of this Option and the exhibits and schedules
hereto shall be governed by, and construed in accordance with, the laws of the
State of Massachusetts, without giving effect to any choice of law or conflict
of law rules or provisions (whether of the State of Massachusetts or any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Massachusetts.

       15. JURISDICTION. The Holder and the Company agree to submit to personal
jurisdiction and to waive any objection as to venue in the federal or state
courts of Massachusetts. Service of process on the Company or the Holder in any
action arising out of or relating to this Option shall be effective if mailed to
such party at the address listed in Section 9 hereof.

       16. ARBITRATION. If a dispute arises as to interpretation of this Option,
it shall be decided finally by three arbitrators in an arbitration proceeding
conforming to the Rules of the American Arbitration Association applicable to
commercial arbitration. The arbitrators shall be appointed as follows: one by
the Company, one by the Holder and the third by the said two arbitrators, or, if
they cannot agree, then the third arbitrator shall be appointed by the American
Arbitration Association. The third arbitrator shall be chairman of the panel and
shall be impartial. The arbitration shall take place in Minneapolis, Minnesota.
The decision of a majority of the arbitrators shall be conclusively binding upon
the parties and final, and such decision shall be enforceable as a judgment in
any court of competent jurisdiction. Each party shall pay the fees and expenses
of the arbitrator appointed by it, its counsel and its witnesses. The parties
shall share equally the fees and expenses of the impartial arbitrator.

       17. INTENTIONALLY OMITTED.

       18. SUCCESSORS AND ASSIGNS. This Option shall inure to the benefit of and
be binding on the respective successors, assigns and legal representatives of
the Holder and the Company.


                                       10
<Page>


       IN WITNESS WHEREOF, the Company and Holder have caused this Option to be
executed as of September 15, 2004.


                                         BIO-KEY INTERNATIONAL, INC.


                                         By: /s/ Michael W. DePasquale
                                            -----------------------------------
                                            Name:  Michael W. DePasquale
                                                   --------------------------
                                            Title: Chief Executive Officer
                                                   --------------------------

AGREED AND ACCEPTED:

HARLAN PLUMLEY


 /s/ Harlan Plumley
-----------------------
     Signature


                                       11
<Page>


                               NOTICE OF EXERCISE

TO:  _____________________________


       (1) The undersigned hereby elects to purchase _______ shares of Common
Stock of Bio-key International, Inc. pursuant to the terms of the attached
Option, and tenders herewith payment of the purchase price for such shares in
full in the following manner (please check one of the following choices):

        [_]  In Cash

        [_]  Cashless exercise through a broker; or

        [_]  Delivery of previously owned shares.

       (2) In exercising this Option, the undersigned hereby confirms and
acknowledges that the shares of Common Stock to be issued upon conversion
thereof are being acquired solely for the account of the undersigned and not as
a nominee for any other party, and for investment (unless such shares are
subject to resale pursuant to an effective prospectus), and that the undersigned
will not offer, sell or otherwise dispose of any such shares of Common Stock
except under circumstances that will not result in a violation of the Securities
Act of 1933, as amended, or any state securities laws.

       (3) Please issue a certificate or certificates representing said shares
of Common Stock in the name of the undersigned.




                                         ----------------------------



--------------------------               -----------------------------
(Date)                                   (Signature)




                                       12