Document:

Exhibit 10.27

                               AMENDMENT NO. 1 TO
                             NOTE PURCHASE AGREEMENT

         AMENDMENT  NO. 1 TO NOTE  PURCHASE  AGREEMENT  dated  October  31, 2003
(the  "Amendment")  by  and  between  Bio-key  International,  Inc., a Minnesota
corporation (the "Company"), and The Shaar Fund, Ltd. (the "Investor").

                                   WITNESSETH:

         WHEREAS,  the Company and Investor  (collectively,  the  "Parties") are
parties to that  certain Note  Purchase  Agreement  dated  January 27, 2003 (the
"Note Purchase Agreement"); and

         WHEREAS,  the Parties have agreed to amend the Note Purchase  Agreement
to, among other things, provide additional funding to the Company.

         NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements set forth in this Amendment and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
intending to be legally bound, the Parties hereby agree as follows:

         1. Amendments to Note Purchase Agreement.

                  (a) Section  1.2(a) of the Note  Purchase  Agreement is hereby
amended to include the following additional language:

                  "Subject to the terms and  conditions  set forth  herein,  the
                  Investor  shall loan up to Two Million Five  Hundred  Thousand
                  ($2,500,000)  Dollars of additional  funding (the  "Additional
                  Funding")  to  the  Company.   Investor   shall   provide  the
                  Additional Funding to the Company by advancing to the Company,
                  subject to the  conditions set forth in Sections 1(b) and 1(c)
                  of the Note Purchase  Agreement,  $300,000 on November 1, 2003
                  and  $200,000  on the  first  day  of  each  month  commencing
                  December 1, 2003 and terminating October 1, 2004."

                  (b)  Section  2(a) of the Note  Purchase  Agreement  is hereby
amended to include the following additional language:

                  "The  Additional  Funding  shall  be  evidenced  by a  secured
                  convertible  promissory note (the  "Additional  Funding Note")
                  payable  to the  order of the  Investor  or its  assignee,  in
                  substantially  the form attached to this  Amendment as Exhibit
                  A."

<PAGE>

                  (c)      Section 7 of the Note  Purchase  Agreement  is hereby
amended to include the following additional language:

                  "The  Investor  hereby WAIVES the  application  of any and all
                  provisions  of the Prior  Securities  which  would  reduce the
                  conversion  ratio or conversion  price applicable to the Prior
                  Securities  as a  result  of the  issuance  of the  Additional
                  Funding Note or the issuance of shares of capital stock of the
                  Company  upon  conversion  thereof,  such  that  the  forgoing
                  issuances shall not effect the conversion ratios or conversion
                  prices applicable to any of the Prior Securities."

                  (d)  Section  10 of the  Note  Purchase  Agreement  is  hereby
amended by deleting  proviso (i) and deleting  proviso (ii) and  replacing  them
with the following:

                  "(i)  that such  Additional  Registration  Statement  shall be
                  required  to be filed  sixty (60) days after the date on which
                  Investor  provides written notice to the Company of its demand
                  that the Additional  Registration  Statement be filed with the
                  SEC and shall be declared effective within two hundred and ten
                  (210)  days  after  such  written  notice;  and (ii) that such
                  Additional  Registration Statement shall include the shares of
                  common  stock  issuable  upon   conversion  of  the  Note  and
                  Additional  Funding  Note  and  all  other  securities  of the
                  Company owned by the Investor,  unless such shares are covered
                  by a different registration statement."

         2. Miscellaneous.

                  (a)  Capitalized  terms used and not defined herein shall have
the meanings assigned to them in the Note Purchase Agreement.

                  (b) Each of the Company and Investor  represents and  warrants
that its  signatory  hereto has the full  power  and authority  to execute  this
Amendment  in  the  name  of  and on  behalf  of the  Company  or  Investor,  as
applicable.

                  (c) All  terms of the Note  Purchase  Agreement  shall  remain
unaltered and in full force and effect except as modified by this Amendment.

                  (d) This Amendment may be delivered via facsimile and executed
in  counterpart,  each of which shall be deemed to be an  original,  and both of
which shall constitute one and the same instrument.

                                       2
<PAGE>

                  IN WITNESS WHEREOF,  the Parties have caused this Amendment to
be duly executed as of the day, month and year first above written.

                                          BIO-KEY INTERNATIONAL, INC.

                                          By: /s/ Gary Wendt
                                              -----------------
                                              Name: Gary Wendt
                                              Title: Chief Financial Officer

                                          THE SHAAR FUND LTD

                                          By: LEVINSON CAPITAL
                                              MANAGEMENT, INC.

                                          By: /s/  Sam Levinson
                                              ------------------
                                              Director

                                       3Exhibit 10.29

                           BIO-KEY INTERNATIONAL, INC.
                           1285 Corporate Center Drive
                                    Suite 175
                                 Eagan, MN 55121
                              Phone: (651) 687-0414
                               Fax: (651) 687-0515

                                October 31, 2003

The Shaar Fund, Ltd.
9 Kaya Flamboyan
Curacao, Netherland Antilles

Gentlemen:

         Reference  is  hereby  made  to the  following  securities  of  BIO-key
International, Inc. (the "Borrower") all of which were issued to The Shaar Fund,
Ltd.  (the  "Lender")  between  November  26,  2001 and  August  28,  2002:  (a)
Convertible  Debenture in the principal  amount of $1,000,000  due September 30,
2003 (the  "Debenture");  (b) Secured Note in the principal amount of $4,092,920
due September 30, 2003 (the "Note"); (c) Secured Notes issued between March 2002
and August 2002 in the aggregate  principal  amount of $1,080,000  (the "Advance
Notes");  and (d) Secured  Convertible  Note in the principal amount of $750,000
dated August 28, 2002 (the "August Note", and together with the Debenture,  Note
and Advance Note, collectively,  the "Notes"). Capitalized terms used herein and
not otherwise  defined herein,  shall have the meanings  ascribed thereto in the
Debenture, Note, Advance Note or August Note, as applicable.

         Pursuant  to the terms of the Notes or of waiver  letters  executed  by
Lender applicable to certain of the Notes, all principal and accrued interest on
each of the Notes was due and payable on September 30, 2003. By executing below,
Lender hereby  WAIVES the Event of Default  under each of the Notes  relating to
Borrower's  failure to timely make such principal and interest  payments and all
consequences  thereof  contemplated  by each of the  Notes,  including,  but not
limited to, the application of any section of any of the Notes providing for the
acceleration  of the payment of  principal  or  interest,  the  imposition  of a
default  rate of interest or the taking of any remedial  action,  until June 30,
2003,  and hereby  amends each of the Notes to provide  that all  principal  and
interest  due  under  each of the  Notes  shall be due and  payable  in a single
payment on June 30, 2004.

         Further,  effective upon the mutual execution hereof, the Borrower, for
itself and on behalf of all affiliates, representatives, and all predecessors in
interest, successors and assigns (collectively, the "Releasing Parties"), hereby
releases and forever discharges each of Lender,

<PAGE>

and  Lender's  direct and indirect  partners,  officers,  directors,  employees,
affiliates,  representatives,  agents, trustees, beneficiaries,  predecessors in
interest,  successors  in interest  and nominees of and from any and all claims,
demands,  actions and causes of action arising prior to the date of execution of
this Agreement, whether known or unknown, fixed or contingent, that the Borrower
may have had,  or may now have with  respect to any  matters  whatsoever  under,
relating to or arising  from any  securities  purchase  agreement,  Registration
Statement,  and any  agreements  entered  into by the  Borrower  and  Lender  in
connection  therewith (the "Prior  Agreements"),  or relating to or arising from
any other  matter.  The Borrower  also fully waives any offsets it may have with
respect  to the  amounts  owed  under the Prior  Agreements.  Additionally,  the
Borrower  represents,  warrants and  covenants  that it has not, and at the time
this release becomes effective will not have, sold,  assigned,  transferred,  or
otherwise  conveyed  to any other  person or entity  all or any  portion  of its
rights, claims, demands, actions, or causes of action herein released.

         By executing  below,  each of the  undersigned  represents and warrants
that its  signatory  hereto has the full  power and  authority  to execute  this
letter in the name of and on behalf of the Borrower or Lender, as applicable.

         This letter may be delivered via facsimile and executed in counterpart,
each of which  shall be deemed  to be an  original,  and both of which  together
shall constitute one and the same instrument

                                               Very truly yours,

                                               BIO-KEY INTERNATIONAL, INC.

                                               By: /s/ Michael W. DePasquale
                                                  -----------------------------
                                                  Name: Michael W. DePasquale
                                                  Title:  CEO
Agreed and Accepted

THE SHAAR FUND, LTD.

By: Levinson Capital Management

By: /s/ Sam Levinson
    -------------------------
    Sam Levinson
    Manager

By: Cita Investments Ltd.

By: /s/  Uri Wolfson
    ------------------------
    Uri Wolfson
    Sub-Advisor

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