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                                                                Exhibit 10.45


     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 ________ , 2011

     This certifies that, for value received, Kenneth Souza ("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 _______ , 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 300,000 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) 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.

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

               (i)   100,000 Shares shall vest on _________, 2005;

               (ii)  100,000 Shares shall vest on ______ , 2006; and

               (iii) 100,000 Shares shall vest on _______, 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

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     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

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          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.

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               (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

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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:

                    Kenneth Souza
                    18 Harris Farm Road
                    Bolton, MA 01740

          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.

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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

                                       9
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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.

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


                                        Bio-key International, Inc.


                                        By: ________________________________

                                            Name: __________________________

                                            Title: _________________________

AGREED AND ACCEPTED:

KENNETH SOUZA


____________________________
         Signature

                                       11
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                               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)



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