**Exhibit10.88**

 

THIS WARRANT AND THE SHARES OF COMMON STOCKISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THESECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS. THIS WARRANTAND THE COMMON STOCK ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BESOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVEREGISTRATION STATEMENT AS TO THIS WARRANT UNDER SAID ACT AND ANY APPLICABLESTATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO BIO-KEYINTERNATIONAL, INC. THAT SUCH REGISTRATION IS NOT REQUIRED.

 

Right toPurchase up to 4,750,000 Shares of Common Stock of**BIO-key International, Inc.******(subject to adjustment asprovided herein)

 

**COMMONSTOCK PURCHASE WARRANT**

** **
| No.  W-09-1 | Issue  Date: December 28, 2009   |
|------------------|-------------------------------------------------|

 

BIO-KEY INTERNATIONAL, INC., a corporation organizedunder the laws of the State of Delaware (“**BIO-key**”),hereby certifies that, for value received, THE SHAAR FUND, LTD., or assigns(the “**Holder**”), is entitled, subject to theterms set forth below, to purchase from the Company (as defined herein) fromand after the Issue Date of this Warrant and at any time or from time to timebefore 5:00 p.m., New York time, through the close of business the fifthanniversary of the date hereof (the “**Expiration Date**”),up to Four Million Seven Hundred Fifty Thousand (4,750,000) fully paid andnonassessable shares (the “**Initial Number**”of Warrant Shares) of Common Stock (as defined below) at the Exercise Price pershare (as defined below).  The number andcharacter of such shares of Common Stock and the Exercise Price per share aresubject to adjustment as provided herein.

 

As used herein the following terms, unless thecontext otherwise requires, have the following respective meanings:

 

(a)           The term “**Company**”shall include BIO-key and any corporation which shall succeed, or assume theobligations of, BIO-key hereunder.

 

(b)           The term “**Common Stock**”includes (i) the Company’s Common Stock, par value $0.0001 per share; and (ii) anyother securities into which or for which any of the securities described in (a) maybe converted or exchanged pursuant to a plan of recapitalization,reorganization, merger, sale of assets or otherwise.

 

(c)           The term “**OtherSecurities**” refers to any capital stock (other than Common Stock)and other securities of the Company or any other person (corporate orotherwise) which the holder of the Warrant at any time shall be entitled toreceive, or shall have received, on the exercise of the Warrant, in lieu of orin addition to Common Stock, or which at any time shall be issuable or shallhave been issued in exchange for or in replacement of Common Stock or OtherSecurities pursuant to Section 4 or otherwise.

 

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(d)           The term “**Exercise Price**”means $0.30 per share, as adjusted from time to time as provided herein.

 

1.             **Exercise of Warrant**.

 

1.1           **Number of Shares Issuableupon Exercise**.  From and after the date hereof through andincluding the Expiration Date, the Holder shall be entitled to receive, uponexercise of this Warrant in whole or in part, by delivery of an original or faxcopy of an exercise notice in the form attached hereto as Exhibit A(the “**Exercise Notice**”), shares of CommonStock of the Company, subject to adjustment pursuant to Section 4.

 

1.2           **Company Acknowledgment**. The Company will, at the time of the exercise of the Warrant, upon therequest of the holder hereof, acknowledge in writing its continuing obligationto afford to such holder any rights to which such holder shall continue to beentitled after such exercise in accordance with the provisions of thisWarrant.  If the holder shall fail tomake any such request, such failure shall not affect the continuing obligationof the Company to afford to such holder any such rights.

 

1.3           **Trustee for WarrantHolders**.  In the event that a bank or trust companyshall have been appointed as trustee for the holders of the Warrant pursuant toSubsection 3.2, such bank or trust company shall have all the powers and dutiesof a warrant agent (as hereinafter described) and shall accept, in its own namefor the account of the Company or such successor person as may be entitledthereto, all amounts otherwise payable to the Company or such successor, as thecase may be, on exercise of this Warrant pursuant to this Section 1.

 

2.             **Procedure for Exercise**.

 

2.1           **Delivery of StockCertificates, Etc., on Exercise**.  The Companyagrees that the shares of Common Stock purchased upon exercise of this Warrantshall be deemed to be issued to the Holder as the record owner of such sharesas of the close of business on the date on which this Warrant shall have beensurrendered and payment made for such shares in accordance herewith.  As soon as practicable after the exercise ofthis Warrant in full or in part, and in any event within three (3) businessdays thereafter, the Company at its expense (including the payment by it of anyapplicable issue taxes) will cause to be issued in the name of and delivered tothe Holder, or as such Holder (upon payment by such Holder of any applicabletransfer taxes) may direct in compliance with applicable securities laws, acertificate or certificates for the number of duly and validly issued, fullypaid and nonassessable shares of Common Stock (or Other Securities) to whichsuch Holder shall be entitled on such exercise, plus, in lieu of any fractionalshare to which such holder would otherwise be entitled, cash equal to suchfraction multiplied by the then Fair Market Value (as defined below) of onefull share, together with any other stock or other securities and property(including cash, where applicable) to which such Holder is entitled upon suchexercise pursuant to Section 1 or otherwise.  For purposes hereof, the “**Fair Market Value**” of a share of Common Stock as of a particulardate (the “**Determination Date**”) shall mean:

 

(a)           If the Company’s Common Stock is tradedon the NYSE Amex Equities exchange or another national exchange or isquoted on the Global or Capital Market of The 

 

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NASDAQ Stock Market, Inc.(“**Nasdaq**”), then the closing or last sale price, respectively,reported for the last business day immediately preceding the DeterminationDate.

 

(b)           If the Company’s Common Stock is nottraded on the NYSE Amex Equitiesexchange or another national exchange or on theNasdaq, but is traded on the FINRA OTC Bulletin Board, then the mean of theaverage of the closing bid and asked prices reported for the last business dayimmediately preceding the Determination Date.

 

(c)           Except as provided in clause (d) below,if the Company’s Common Stock is not publicly traded, then as the Holder andthe Company agree or in the absence of agreement by arbitration in accordancewith the rules then in effect of the American Arbitration Association,before a single arbitrator to be chosen from a panel of persons qualified byeducation and training to pass on the matter to be decided.

 

(d)           If the Determination Date is the date ofa liquidation, dissolution or winding up, or any event deemed to be aliquidation, dissolution or winding up pursuant to the Company’s certificate ofincorporation, then all amounts to be payable per share to holders of theCommon Stock pursuant to the charter in the event of such liquidation,dissolution or winding up, plus all other amounts to be payable per share inrespect of the Common Stock in liquidation under the charter, assuming for thepurposes of this clause (d) that all of the shares of Common Stock thenissuable upon exercise of the Warrant are outstanding at the DeterminationDate.

 

2.2           **Exercise**. Payment may be made either (i) in cash or by certified or officialbank check payable to the order of the Company equal to the applicableaggregate Exercise Price, (ii) by delivery of the Warrant, or shares ofCommon Stock and/or Common Stock receivable upon exercise of the Warrant inaccordance with the formula set forth below, (iii) by application ofamounts due to the Holder under and in accordance with the terms of the SevenPercent (7%) Convertible Note dated the date hereof issued by the Company tothe Holder (the “Note”), or (iv) by a combination of any of the foregoingmethods, for the number of Common Shares specified in such Exercise Notice (assuch exercise number shall be adjusted to reflect any adjustment in the totalnumber of shares of Common Stock issuable to the Holder per the terms of thisWarrant) and the Holder shall thereupon be entitled to receive the number ofduly authorized, validly issued, fully-paid and non-assessable shares of CommonStock (or Other Securities) determined as provided herein.  Notwithstanding any provisions herein to thecontrary, if the Fair Market Value of one share of Common Stock is greater thanthe Exercise Price (at the date of calculation as set forth below), in lieu ofexercising this Warrant for cash, the Holder may elect to receive shares equalto the value (as determined below) of this Warrant (or the portion thereofbeing exercised) by surrender of this Warrant at the principal office of theCompany together with the properly endorsed Exercise Notice in which event theCompany shall issue to the Holder a number of shares of Common Stock computedusing the following formula:

 

X = Y (A-B)

A

 
| Where  X = | the  number of shares of Common Stock to be issued to the Holder |
|------------|------------------------------------------------------------------|

 

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| Y  =   | the  number of shares of Common Stock purchasable under the Warrant or, if only a  portion of the Warrant is being exercised, the portion of the Warrant being  exercised (at the date of such calculation) |
|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                        |
| A  =   | the  Fair Market Value of one share of the Company’s Common Stock (at the date of  such calculation)                                                                                                   |
|   |                                                                                                                                                                                                        |
| B =    | Exercise Price (as adjusted to the date of such  calculation)                                                                                                                                               |

 

3.             **Effect of Reorganization,Etc**.

 

3.1           **Reorganization,Consolidation, Merger, Etc**.  In case atany time or from time to time, the Company shall (a) effect areorganization, (b) consolidate with or merge into any other person, or (c) transferall or substantially all of its properties or assets to any other person underany plan or arrangement contemplating the dissolution of the Company, then, ineach such case, as a condition to the consummation of such a transaction, theCompany shall have delivered to the Holder written notice thereof not less than10 days’ prior thereto and proper and adequate provision shall be made by theCompany whereby the Holder of this Warrant, on the exercise hereof as providedin Section 1 at any time after the consummation of such reorganization,consolidation or merger or the effective date of such dissolution, as the casemay be, shall receive, in lieu of the Common Stock (or Other Securities)issuable on such exercise prior to such consummation or such effective date,the stock and other securities and property (including cash) to which suchHolder would have been entitled upon such consummation or in connection withsuch dissolution, as the case may be, if such Holder had so exercised thisWarrant, immediately prior thereto, all subject to further adjustmentthereafter as provided in Section 4.

 

3.2           **Dissolution**. In the event of any dissolution of the Company following the transfer ofall or substantially all of its properties or assets, the Company, concurrentlywith any distributions made to holders of its Common Stock, shall at itsexpense deliver or cause to be delivered to the Holder the stock and othersecurities and property (including cash, where applicable) receivable by theHolder of the Warrant pursuant to Section 3.1, or, if the Holder shall soinstruct the Company, to a bank or trust company specified by the Holder andhaving its principal office in New York, NY as trustee for the Holder of theWarrant (the “**Trustee**”).

 

3.3           **Continuation of Terms**. Upon any reorganization, consolidation, merger or transfer (and anydissolution following any transfer) referred to in this Section 3, thisWarrant shall continue in full force and effect and the terms hereof shall beapplicable to the shares of stock and other securities and property receivableon the exercise of this Warrant after the consummation of such reorganization,consolidation or merger or the effective date of dissolution following any suchtransfer, as the case may be, and shall be binding upon the issuer of any suchstock or other securities, including, in the case of any such transfer, theperson acquiring all or substantially all of the properties or assets of theCompany, whether or not such person shall have expressly assumed the terms ofthis Warrant as provided in Section 4. In the event this Warrant does not continue in full force and effectafter the consummation of the transactions described in this Section 3,then the Company’s securities and property (including 

 

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cash, where applicable) receivable by theHolders of the Warrant will be delivered to Holder or the Trustee ascontemplated by Section 3.2.

 

4.             **Extraordinary EventsRegarding Common Stock**.  In the eventthat the Company shall (a) issue additional shares of the Common Stock asa dividend or other distribution on outstanding Common Stock, (b) subdivideits outstanding shares of Common Stock, or (c) combine its outstandingshares of the Common Stock into a smaller number of shares of the Common Stock,then, in each such event, the Exercise Price shall, simultaneously with thehappening of such event, be adjusted by multiplying the then Exercise Price bya fraction, the numerator of which shall be the number of shares of CommonStock outstanding immediately prior to such event and the denominator of whichshall be the number of shares of Common Stock outstanding immediately aftersuch event, and the product so obtained shall thereafter be the Exercise Pricethen in effect.  The Exercise Price, asso adjusted, shall be readjusted in the same manner upon the happening of anysuccessive event or events described herein in this Section 4.  The number of shares of Common Stock that theholder of this Warrant shall thereafter, on the exercise hereof as provided in Section 1,be entitled to receive shall be increased to a number determined by multiplyingthe number of shares of Common Stock that would otherwise (but for theprovisions of this Section 4) be issuable on such exercise by a fractionof which (a) the numerator is the Exercise Price that would otherwise (butfor the provisions of this Section 4) be in effect, and (b) thedenominator is the Exercise Price in effect on the date of such exercise.

 

5.             **Certificate as toAdjustments**.  In each case of any adjustment orreadjustment in the shares of Common Stock (or Other Securities) issuable onthe exercise of the Warrant, the Company at its expense will promptly cause itsChief Financial Officer or other appropriate designee to compute suchadjustment or readjustment in accordance with the terms of the Warrant andprepare a certificate setting forth such adjustment or readjustment and showingin detail the facts upon which such adjustment or readjustment is based,including a statement of (a) the consideration received or receivable bythe Company for any additional shares of Common Stock (or Other Securities)issued or sold or deemed to have been issued or sold, (b) the number ofshares of Common Stock (or Other Securities) outstanding or deemed to beoutstanding, and (c) the Exercise Price and the number of shares of CommonStock to be received upon exercise of this Warrant, in effect immediately priorto such adjustment or readjustment and as adjusted or readjusted as provided inthis Warrant.  The Company will forthwithmail a copy of each such certificate to the holder of the Warrant and anyWarrant agent of the Company (appointed pursuant to Section 11 hereof).

 

6.             **Reservation of StockIssuable on Exercise of Warrant**.  The Companywill at all times reserve and keep available, solely for issuance and deliveryon the exercise of the Warrant, shares of Common Stock (or Other Securities)from time to time issuable on the exercise of the Warrant.

 

7.             **Investment Representations**. In connection with the Holder’s acquisition of this Warrant, the Holderhereby represents and warrants to the Company as follows:

 

(a)           The Holder is acquiring this Warrant forits own account for investment only, and not with a view to, or for sale inconnection with, any distribution of this Warrant in 

 

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violation of the Securities Act of 1933, asamended (the “**Securities Act**”), any rule orregulation under the Securities Act, or any state, foreign or other securitieslaws.

 

(b)           The Holder acknowledges that aninvestment in thisWarrant involves a high degree of risk.

 

(c)           The Holder is able to protect its owninterest in the transactions contemplated hereby, can bear the economic risk ofthis investment (including possible complete loss of such investment) for anindefinite period of time and has such knowledge and experience in financial orbusiness matters such that he is capable of evaluating the merits and risks ofthe investment in thisWarrant.

 

(d)           The Holder understands that this Warrant has not been registeredunder the SecuritiesAct or under the securities laws of any jurisdiction, by reason ofreliance upon certain exemptions, and that the reliance of the Company on suchexemptions is predicated upon the accuracy of the representations andwarranties contained herein.

 

(e)           The Holder has had the opportunity toask questions of and receive answers from representatives of the Company and toobtain additional information, documents and records relating to the Company,its business and the investment contemplated hereby.

 

(f)            The Holder understands that this Warrant is characterized as a “restrictedsecurity” under the federal securities laws inasmuch as it has been acquired ina transaction not involving a public offering and that under such laws andapplicable regulations (and under other applicable securities laws) such Securities may not be transferred orresold without registration under the Securities Act or other applicable laws orpursuant to a valid exemption from registration under the Securities Act andsuch laws.  The Holder understands thatthe Company requires an opinion of counsel satisfactory to the Company thatregistration is not required as a condition to any transfer where this Warrant is not being registered.

 

(g)           The Holder understands that theCompany will be under no obligation to register this Warrant under the Securities Act (orany other applicable securities laws).

 

(h)           The Holder is familiar with Securitiesand Exchange Commission Rule 144 and understands the resale limitationsimposed thereby and by theSecurities Act; and

 

(i)            The Holder is an “Accredited Investor”pursuant to Rule 501 of Regulation D under the Securities Act.

 

8.             **Assignment; Exchange ofWarrant**.  Subject to compliance with applicablesecurities laws, this Warrant, and the rights evidenced hereby, may betransferred by any registered holder hereof (a “**Transferor**”)in whole or in part.  On the surrenderfor exchange of this Warrant, with the Transferor’s endorsement in the form of Exhibit Battached hereto (the “**Transferor****Endorsement Form**”) and together with evidence reasonablysatisfactory to the Company demonstrating compliance with applicable securitieslaws, which shall include, without limitation, the provision of a legal opinionfrom the Transferor’s counsel (at the Company’s expense) that such transfer isexempt from the registration requirements of applicable securities laws, andwith payment by the Transferor of any applicable transfer taxes) will issue anddeliver 

 

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to or on the order of the Transferor thereof a newWarrant of like tenor, in the name of the Transferor and/or the transferee(s) specifiedin such Transferor Endorsement Form (each a “**Transferee**”),calling in the aggregate on the face or faces thereof for the number of sharesof Common Stock called for on the face or faces of the Warrant so surrenderedby the Transferor.

 

9.             **Replacement of Warrant**. On receipt of evidence reasonably satisfactory to the Company of theloss, theft, destruction or mutilation of this Warrant and, in the case of anysuch loss, theft or destruction of this Warrant, on delivery of an indemnityagreement or security reasonably satisfactory in form and amount to the Companyor, in the case of any such mutilation, on surrender and cancellation of thisWarrant, the Company at its expense will execute and deliver, in lieu thereof,a new Warrant of like tenor.

 

10.           **Maximum Exercise**. In no event shall the Holder be entitled to exercise this Warrant withrespect to any shares of Common Stock or shall the Company have the obligationto issue any such shares to the extent that, after such exercise and issuance,the Holder would be deemed to be the beneficial owner of more than 4.99% of theoutstanding shares of Common Stock.  Forpurposes of this Section, beneficial ownership shall be determined inaccordance with Section 13(d) of the Securities Exchange Act of 1934,as amended.  Notwithstanding theforegoing, the restriction described in this Section 10 may be revokedupon 75 days prior notice from the Holder to the Company or immediately uponnotice upon an Event of Default under the Convertible Note.

 

11.           **Warrant Agent**. The Company may, by written notice to the each Holder of the Warrant,appoint an agent for the purpose of issuing Common Stock (or Other Securities)on the exercise of this Warrant pursuant to Section 1, exchanging thisWarrant pursuant to Section 8, and replacing this Warrant pursuant to Section 9,or any of the foregoing, and thereafter any such issuance, exchange orreplacement, as the case may be, shall be made at such office by such agent.

 

12.           **Transfer on the Company’sBooks**.  Until this Warrant is transferred on thebooks of the Company, the Company may treat the registered holder hereof as theabsolute owner hereof for all purposes, notwithstanding any notice to thecontrary.

 

13.           **Notices, Etc**. All notices and other communications from the Company to the Holder ofthis Warrant shall be mailed by first class registered or certified mail,postage prepaid, at such address as may have been furnished to the Company inwriting by such Holder or, until any such Holder furnishes to the Company anaddress, then to, and at the address of, the last Holder of this Warrant whohas so furnished an address to the Company.

 

14.           **Governing Law**. THIS WARRANT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THEALWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OFLAWS.  ANY ACTION BROUGHT BY ANY PARTYAGAINST ANOTHER CONCERNING THE TRANSACTIONS CONTEMPLATED BY THIS WARRANT SHALLBE BROUGHT ONLY IN THE STATE COURTS OF NEW YORK OR IN THE FEDERAL COURTSLOCATED IN THE STATE OF NEW YORK IN EACH CASE SITTING IN THE CITY OF NEW YORK,BOROUGH OF MANHATTAN.  ALL PARTIES ANDTHE INDIVIDUALS EXECUTING THIS WARRANT 

 

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ON BEHALF OF THE COMPANY AGREE TO SUBMIT TO THEJURISDICTION OF SUCH COURTS AND WAIVE TRIAL BY JURY.  IN THE EVENT THAT ANY PROVISION OF THISWARRANT DELIVERED IN CONNECTION HEREWITH IS INVALID OR UNENFORCEABLE UNDER ANYAPPLICABLE STATUTE OR RULE OF LAW, THEN SUCH PROVISION SHALL BE DEEMEDINOPERATIVE TO THE EXTENT THAT IT MAY CONFLICT THEREWITH AND SHALL BEDEEMED MODIFIED TO CONFORM WITH SUCH STATUTE OR RULE OF LAW.  ANY SUCH PROVISION WHICH MAY PROVEINVALID OR UNENFORCEABLE UNDER ANY LAW SHALL NOT AFFECT THE VALIDITY ORENFORCEABILITY OF ANY OTHER PROVISION OF THIS WARRANT.

 

15.           **Miscellaneous**. This Warrant and any term hereof may be changed, waived, discharged orterminated only by an instrument in writing signed by the party against whichenforcement of such change, waiver, discharge or termination is sought.  The prevailing party shall be entitled torecover from the other party its reasonable attorney’s fees and costs.  The headings in this Warrant are for purposesof reference only, and shall not limit or otherwise affect any of the termshereof.  The invalidity orunenforceability of any provision hereof shall in no way affect the validity orenforceability of any other provision hereof. The Company acknowledges that legal counsel participated in thepreparation of this Warrant and, therefore, stipulates that the rule ofconstruction that ambiguities are to be resolved against the drafting partyshall not be applied in the interpretation of this Warrant to favor any partyagainst the other party.

 

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IN WITNESS WHEREOF, each of the undersigned hasexecuted this Warrant as of the date first written above.

 
|                             |   | BIO-KEY  INTERNATIONAL, INC. |
|----------------------------------|--------|------------------------------|
|                             |   |                         |
|                             |   | By:                          |   |
|                             |   | Name:                        |   |
|                             |   | Title:                       |   |
|                             |   |                         |
|                             |   |                         |
| Acknowledged  and agreed:        |   |                         |
|                             |   |                         |
| THE  SHAAR FUND, LTD.            |   |                         |
|                             |   |                         |
| By:  SS&C Fund Services N.V. |   |                         |
|                             |   |                         |
| By:                              |   |                         |   |
| Name:                            |   |                         |   |
| Title:                           |   |                         |   |

 

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**EXHIBIT A**

** **

**FORM OFSUBSCRIPTION**

** **

(To Be SignedOnly On Exercise Of Warrant)

 

TO:         BIO-key International, Inc.

 

Attention:              Chief Financial Officer

 

The undersigned, pursuant to the provisions setforth in the attached Warrant (No.    ), hereby irrevocablyelects to purchase (check applicable box):

 
| o      |                       shares of the Common Stock covered by such Warrant; or |
|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                             |
| o      | the maximum number of  shares of Common Stock covered by such Warrant pursuant to the cashless  exercise procedure set forth in Section 2.                                  |

 

The undersigned herewith makes payment of the fullExercise Price for such shares at the price per share provided for in suchWarrant, which is $                .  Such payment takes the form of (checkapplicable box or boxes):

 
| o      | $                    in lawful money of the United States; and/or                                                                                                                                                                                                                                                                                  |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| o      | the cancellation of such  portion of the attached Warrant as is exercisable for a total of                       shares of Common Stock (using a Fair Market Value of $                    per share for purposes of this calculation); and/or |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| o      | the cancellation of such  number of shares of Common Stock as is necessary, in accordance with the  formula set forth in Section 2.2, to exercise this Warrant with respect  to the maximum number of shares of Common Stock purchasable pursuant to the  cashless exercise procedure set forth in Section 2; and/or                                                                                                                         |
|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| o      | the application of $                  in respect of the annual installment of principal or accrued interest owing  under the Convertible Note.                                                                                                                                                                                                               |

 

The undersigned requests that the certificates forsuch shares be issued in the name of, and delivered to                                                      whose address is                                                                                                  .

 

The undersigned represents and warrants that alloffers and sales by the undersigned of the securities issuable upon exercise ofthe within Warrant shall be made pursuant to registration of the Common Stockunder the Securities Act of 1933, as amended (the “**SecuritiesAct**”) or pursuant to an exemption from registration under theSecurities Act.

 

A-1

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| Dated: |   |   |                                                                                |
|--------|--------|--------|-------------------------------------------------------------------------------------|
|   |   |   | (Signature  must conform to name of holder as specified on the face of the Warrant) |
|   |   |   | Address:                                                                            |   |
|   |   |   |                                                                                |

 

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**EXHIBIT B**

** **

**FORM OFTRANSFEROR ENDORSEMENT**

** **

(To Be SignedOnly On Transfer Of Warrant)

 

For value received, the undersigned hereby sells,assigns, and transfers unto the person(s) named below under the heading “**Transferees**” the right represented by the within Warrant topurchase the percentage and number of shares of Common Stock of BIO-keyInternational, Inc.  into which thewithin Warrant relates specified under the headings “Percentage Transferred”and “**Number Transferred**,” respectively,opposite the name(s) of such person(s) and appoints each such personAttorney to transfer its respective right on the books of BIO-key International, Inc.  with full power of substitution in thepremises.

 
| **Transferees** | ** ** | **Address** | ** ** | **Percentage  Transferred** | ** ** | **Number  Transferred** |
|-----------------|------------|-------------|------------|-----------------------------|------------|-------------------------|
|            |       |        |       |                        |       |                    |
|            |       |        |       |                        |       |                    |
|            |       |        |       |                        |       |                    |

 

 
| Dated:               |   |                                                                                |   |
|----------------------|--------|-------------------------------------------------------------------------------------|--------|
|                 |   | (Signature  must conform to name of holder as specified on the face of the Warrant) |
|                 |   | Address:                                                                            |   |
|                 |   |                                                                                |
|                 |   |                                                                                |
|                 |   | SIGNED  IN THE PRESENCE OF:                                                         |
|                 |   |                                                                                |
|                 |   |                                                                                |
|                 |   | (Name)                                                                              |
|                 |   |                                                                                |
| ACCEPTED AND AGREED: |   |
| [TRANSFEREE]         |   |
|                 |   |
|                 |   |                                                                                |
| (Name)               |   |                                                                                |
|                      |        |                                                                                     |        |  |  |

 

B-1

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