Document:

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                                                                   Exhibit 10.18

                          SECURITIES PURCHASE AGREEMENT

     SECURITIES PURCHASE AGREEMENT dated as of June 30, 1999, between VIISAGE
TECHNOLOGY, INC., a Delaware corporation with principal executive offices
located at 30 Porter Road, Littleton, Massachusetts 01460 (the "Company"), and
the undersigned ("Buyer").

                              W I T N E S S E T H:

     WHEREAS, Buyer desires to purchase from Company, and the Company desires to
issue and sell to the Buyer, upon the terms and subject to the conditions of
this Agreement, (i) 1,500 shares of the Company's Series A 7% Convertible
Preferred Stock, par value $.001 per share (the "Preferred Shares") and (ii)
75,000 Common Stock Purchase Warrants in the form attached hereto as Exhibit A
(the "Warrants") on the Funding Date (as defined in Section VII below):

     WHEREAS, upon the terms and subject to the designations, preferences and
rights set forth in the Company's Certificate of Designations to the Company's
Certificate of Incorporation in the form attached hereto as Exhibit B (the
"Certificate of Designation"), the Preferred Shares are convertible into shares
of the Company's common stock, par value $0.001 per share (the "Common Stock");
and

     WHEREAS, the Warrants, upon the terms and subject to the conditions
therein, will be exercisable to purchase shares of Common Stock for a period of
three (3) years from and after the Funding Date.

     NOW THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto, intending to be legally bound, hereby
agree as follows:

I.   PURCHASE AND SALE OF PREFERRED SHARES AND WARRANTS

     A. Transaction. Subject to the terms and conditions contained herein, Buyer
hereby agrees to purchase from the Company, and the Company hereby agrees to
issue and sell to the Buyer in a transaction exempt from the registration and
prospectus delivery requirements of the Securities Act of 1933, as amended (the
"Securities Act"), the Preferred Shares and the Warrants.

     B. Purchase Price; Form of Payment.

     1. The purchase price for the Preferred Shares and the Warrants to be
purchased by Buyer hereunder shall be $1,500,000, less deductions for fees and
expenses (the "Purchase Price").

     2. Buyer shall pay the Purchase Price by wire transfer of immediately
available funds to the escrow agent (the "Escrow Agent") identified in those
certain Escrow Instructions dated as of the date hereof, a copy of which is
attached hereto as Exhibit C (the "Escrow Instructions").
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Simultaneously against receipt by the Escrow Agent of the Purchase Price, the
Company shall deliver to the Escrow Agent or its designated depository one or
more duly authorized, issued and executed certificates (in the name of Buyer or,
if the Company has been notified otherwise, in the name of Buyer's nominee)
evidencing the Preferred Shares and the Warrants which the Buyer is purchasing.
By executing and delivering this Agreement, Buyer and the Company each hereby
agrees to observe the terms and conditions of the Escrow Instructions, all of
which are incorporated herein by reference as if fully set forth herein.

     C. Method of Payment. Payment into escrow of the Purchase Price shall be
made by wire transfer of immediately available funds to:

          Chase Manhattan Bank
          1211 Avenue of the Americas
          New York, New York 10036

          For the Account of: Herrick, Feinstein LLP Attorney Trust Account
          Account# 967-123445
          ABA Reference# 021-000-021

Simultaneously with the execution of this Agreement, the Buyer shall deposit
with the Escrow Agent the Purchase Price and the Company shall deposit with the
Escrow Agent the Preferred Shares and the Warrants representing the securities
to be purchased.

II.  BUYER'S REPRESENTATIONS, WARRANTIES; ACCESS TO
     INFORMATION; INDEPENDENT INVESTIGATION.

     Buyer represents and warrants to and covenants and agrees with the Company
as follows:

     A. Buyer is purchasing the Preferred Shares, the Warrants, the Common Stock
issuable upon exercise of the Warrants (the "Warrant Shares") and the shares of
Common Stock issuable upon conversion of the Preferred Shares (the "Conversion
Shares" and, collectively with the Preferred Shares, the Warrants and the
Warrant Shares, the "Securities") for its own account, for investment purposes
only and not with a view towards or in connection with the public sale or
distribution thereof in violation of the Securities Act.

     B. Buyer is (i) an "accredited investor" within the meaning of Rule 501 of
Regulation D under the Securities Act, (ii) experienced in making investments of
the kind contemplated by this Agreement, (iii) capable, by reason of its
business and financial experience, of evaluating the relative merits and risks
of an investment in the Securities, and (iv) able to afford the loss of its
investment in the Securities.

     C. Buyer understands that the Securities are being offered and sold by the
Company in reliance on an exemption from the registration requirements of the
Securities Act and equivalent state securities and "blue sky" laws, and that the
Company is relying upon the accuracy

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of, and Buyer's compliance with, Buyer's representations, warranties and
covenants set forth in this Agreement to determine the availability of such
exemption and the eligibility of Buyer to purchase the Securities;

     D. Buyer has been furnished with or provided access to all materials
relating to the business, financial position and results of operations of the
Company, and all other materials requested by Buyer to enable it to make an
informed investment decision with respect to the Securities.

     E. Buyer acknowledges that it has had access to all press releases issued
by the Company since December 31, 1998 and has had access to copies of the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1998, and all other reports and documents heretofore filed by the Company with
the Commission pursuant to the Securities Act and the Securities Exchange Act of
1934, as amended (the "Exchange Act"), since November 8, 1996 (collectively, the
"Commission Filings").

     F. Buyer acknowledges that in making its decision to purchase the
Securities it has been given an opportunity to ask questions of, and to receive
answers from, the Company's executive officers, directors and management
personnel concerning the terms and conditions of the private placement of the
Securities by the Company.

     G. Buyer understands that the Securities have not been approved or
disapproved by the Commission or any state securities commission and that the
foregoing authorities have not reviewed any documents or instruments in
connection with the offer and sale to it of the Securities and have not
confirmed or determined the adequacy or accuracy of any such documents or
instruments.

     H. This Agreement has been duly and validly authorized, executed and
delivered by Buyer and is a valid and binding agreement of Buyer enforceable
against it in accordance with its terms, subject to applicable bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally.

     I. Neither Buyer nor its affiliates nor any person acting on its or their
behalf will enter into, at any time prior to the conversion of all the Preferred
Stock and the exercise of the Warrants, any put option, short position or other
similar instrument or position with respect to the Common Stock, and neither
Buyer nor any of its affiliates nor any person acting on its or their behalf has
or will use at any time shares of Common Stock acquired pursuant to this
Agreement or otherwise to settle any put option, short position or other similar
instrument or position that may have been entered into prior to the execution of
this Agreement.

III. COMPANY'S REPRESENTATIONS

     The Company represents and warrants to Buyer that:

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     A.   Capitalization.

     1. The authorized capital stock of the Company consists of: (i) 20,000,000
shares of Common Stock, of which, as of June 29, 1999, 8,457,619 shares were
issued and outstanding and none were held in treasury; and (ii) 2,000,000 shares
of "blank check" preferred stock, of which no shares are issued and outstanding
on the date hereof. All of the issued and outstanding shares of Common Stock
have been duly authorized and validly issued and are fully paid and
non-assessable. As of the date hereof, the Company has outstanding 1,889,823
stock options under management, employee and director stock option plans to
purchase shares of Common Stock. The Conversion Shares and Warrant Shares have
been duly and validly authorized and reserved for issuance by the Company, and
when issued by the Company upon conversion of or in lieu of accrued dividends on
the Preferred Shares, or on exercise of the Warrants, will be duly and validly
issued, fully paid and non-assessable and will not subject the holder thereof to
personal liability by reason of being such holder. There are no preemptive,
subscription, "call", convertible debt instruments or other similar rights to
acquire the Common Stock (including the Conversion Shares and Warrant Shares)
that have been issued or granted to any person, except as disclosed on Schedule
III.A.1. hereto or otherwise previously disclosed in writing to Buyer.

     2. Except as disclosed on Schedule III.A.2. hereto, the Company does not
own or control, directly or indirectly, any material interest in any other
corporation, partnership, limited liability company, unincorporated business
organization, association, trust or other business entity.

     B.   Organization; Reporting Company Status.

     1. The Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and is duly qualified as a
foreign corporation in all jurisdictions in which the failure to so qualify
would have a material adverse effect on the business, properties, prospects,
condition (financial or otherwise) or results of operations of the Company or on
the consummation of any of the transactions contemplated by this Agreement (a
"Material Adverse Effect").

     2. Except as disclosed on Schedule III.B.2, the Company has registered
certain of its Common Stock pursuant to Section 12(g) of the Exchange Act and
has timely filed with the Commission all reports and information required to be
filed by it pursuant to all reporting obligations under Section 13(a) or 15(d),
as applicable, of the Exchange Act for the 12-month period immediately preceding
the date hereof. Such Common Stock is listed and traded on The NASDAQ Stock
Market, Inc. national market system ("NMS") and the Company has not received any
notice regarding, and to its knowledge there is no threat, of the termination or
discontinuance of the eligibility of such Common Stock for such listing.

     C. Authorized Shares. The Company has duly and validly authorized and
reserved for issuance shares of Common Stock sufficient in number for the
conversion of the Preferred Shares and the exercise of the Warrants. The Company
understands and acknowledges the potentially dilutive effect to the Common Stock
of the issuance of the Preferred Shares and Warrant

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Shares upon conversion of the Preferred Shares and exercise of the Warrants. The
Company further acknowledges that its obligation to issue Conversion Shares upon
conversion of the Preferred Shares and Warrant Shares upon exercise of the
Warrants in accordance with this Agreement, the Certificate of Designation and
the Warrants is, subject to Section II.I, absolute and unconditional regardless
of the dilutive effect that such issuance may have on the ownership interests of
other stockholders of the Company.

     D. Authority; Validity and Enforceability. The Company has the requisite
corporate power and authority to file and perform its obligations under the
Certificate of Designation and to enter into the Documents (as hereinafter
defined), and to perform all of its obligations hereunder and thereunder
(including the issuance, sale and delivery to Buyer of the Securities). The
execution, delivery and performance by the Company of the Documents, and the
consummation by the Company of the transactions contemplated hereby and thereby
(including, without limitation, the filing of the Certificate of Designation
with the Delaware Secretary of State's office, the issuance of the Preferred
Shares, the Warrants and the issuance and reservation for issuance of the
Conversion Shares and Warrant Shares), has been duly authorized by all necessary
corporate action on the part of the Company. Each of the Documents (as defined
below) has been duly and validly executed and delivered by the Company and the
Certificate of Designation has been duly filed with the Delaware Secretary of
State's office by the Company, and each instrument constitutes a valid and
binding obligation of the Company enforceable against it in accordance with its
terms, subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and similar laws affecting creditors' rights and
remedies generally. The Securities have been duly and validly authorized for
issuance by the Company and, when executed and delivered by the Company, will be
valid and binding obligations of the Company enforceable against it in
accordance with their terms, subject to applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally. For purposes of this Agreement, the
term "Documents" means (i) this Agreement; (ii) the Registration Rights
Agreement of even date herewith between the Company and Buyer, a copy of which
is annexed hereto as Exhibit D (the "Registration Rights Agreement"); (iii) the
Warrants; (iv) the Certificate of Designation; and (v) the Escrow Instructions.

     E. Authorization of the Securities. The authorization, issuance, sale and
delivery of the Preferred Shares and Warrants has been duly authorized by all
requisite corporate action on the part of the Company. As of the Funding Date,
the Preferred Shares and the Warrants, and the Conversion Shares and the Warrant
Shares upon payment of the consideration provided therefor and their issuance in
accordance with the Certificate of Designation and the Warrants, respectively,
will be validly issued and outstanding, fully paid and nonassessable, and not
subject to any preemptive rights, rights of first refusal or other similar
rights.

     F. Non-contravention. The execution and delivery by the Company of the
Documents, the issuance of the Securities, and the consummation by the Company
of the other transactions contemplated hereby and thereby, including, without
limitation, the filing of the Certificate of Designation with the Delaware
Secretary of State's office, do not and will not conflict with or result in a
breach by the Company of any of the terms or provisions of, or constitute a
default (or an event which, with notice, lapse of time or both, would constitute
a default) under (i) the

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certificate of incorporation or by-laws of the Company or (ii) any indenture,
mortgage, deed of trust or other material agreement or instrument to which the
Company is a party or by which its properties or assets are bound, or any law,
rule, regulation, decree, judgment or order of any court or public or
governmental authority having jurisdiction over the Company or any of the
Company's properties or assets.

     G. Approvals. No authorization, approval or consent of any third party or
entity, including, without limitation, any court or public or governmental
authority is required to be obtained by the Company for the issuance and sale of
the Securities to Buyer as contemplated by this Agreement, except such
authorizations, approvals and consents that have been obtained by the Company
prior to the date hereof.

     H. Commission Filings. None of the Commission Filings contained at the time
they were filed any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary to make the statements
made therein, in light of the circumstances under which they were made, not
misleading.

     I. Absence of Certain Changes. Except as provided on Schedule III.B.2,
since the Balance Sheet Date (as defined in Section III.M.), there has not
occurred any change, event or development in the business, financial condition,
prospects or results of operations of the Company, and there has not existed any
condition having or reasonably likely to have, a Material Adverse Effect.

     J. Full Disclosure. There is no fact known to the Company (other than
general economic or industry conditions known to the public generally) that has
not been fully disclosed in writing to the Buyer or in the Commission Filings
that (i) reasonably could be expected to have a Material Adverse Effect or (ii)
reasonably could be expected to materially and adversely affect the ability of
the Company to perform its obligations pursuant to the Documents.

     K. Absence of Litigation. There is no action, suit, claim, proceeding,
inquiry or investigation pending or, to the Company's knowledge, threatened, by
or before any court or public or governmental authority which, if determined
adversely to the Company, would have a Material Adverse Effect.

     L. Absence of Events of Default. No "Event of Default" or "Default" (as
each such term is defined in any agreement or instrument to which the Company is
a party) and no event which, with notice, lapse of time or both, would
constitute an Event of Default (as so defined) or Default (as so defined), has
occurred and is continuing, which could have a Material Adverse Effect.

     M. Financial Statements; No Undisclosed Liabilities. The Company has made
available to Buyer true and complete copies of its audited balance sheet as at
December 31, 1998, and the related audited statements of operations and cash
flows for the fiscal year ended December 31, 1998, including the related notes
and schedules thereto (collectively, the "Financial Statements"), and all
management letters, if any, from the Company's independent auditors relating to
the dates and periods covered by the Financial Statements. Each of the Financial
Statements is complete and

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fairly stated in all material respects, has been prepared in accordance with
United States Generally Accepted Accounting Principles ("GAAP") (subject, in the
case of the interim Financial Statements, to normal year end adjustments and the
absence of footnotes) and in conformity with the practices consistently applied
by the Company without modification of the accounting principles used in the
preparation thereof, and fairly presents the financial position, results of
operations and cash flows of the Company as at the dates and for the periods
indicated. For purposes hereof, the balance sheet of the Company as at March 28,
1999, as filed in connection with the Company's Quarterly Report on Form 10-Q on
May 12, 1999, is hereinafter referred to as the "Balance Sheet" and March 28,
1999, is hereinafter referred to as the "Balance Sheet Date". The Company has no
indebtedness, obligations or liabilities of any kind (whether accrued, absolute,
contingent or otherwise, and whether due or to become due) that would have been
required to be reflected in, reserved against or otherwise described in the
Balance Sheet or in the notes thereto in accordance with GAAP, which was not
fully reflected in, reserved against or otherwise described in the Balance Sheet
or the notes thereto or was not incurred in the ordinary course of business
consistent with the Company's past practices since the Balance Sheet Date.

     N. Compliance with Laws; Permits. The Company is in compliance with all
laws, rules, regulations, codes, ordinances and statutes (collectively "Laws")
applicable to it or to the conduct of its business, except for such
noncompliance which would not have a Material Adverse Effect. The Company
possesses all permits, approvals, authorizations, licenses, certificates and
consents from all public and governmental authorities which are necessary to
conduct its business, except for those the absence of which would not have a
Material Adverse Effect.

     O. Related Party Transactions. Except as set forth on Schedule III.O.
hereto, or otherwise described in the Financial Statements or Commission
Filings, neither the Company nor any of its officers, directors or "Affiliates"
(as such term is defined in Rule 12b-2 under the Exchange Act) has borrowed any
moneys from or has outstanding any indebtedness or other similar obligations to
the Company. Except as set forth on Schedule III.O. hereto or Commission
Filings, neither the Company nor any of its officers, directors or Affiliates
(i) owns any direct or indirect interest constituting more than a one percent
equity (or similar profit participation) interest in, or controls or is a
director, officer, partner, member or employee of, or consultant to or lender to
or borrower from, or has the right to participate in the profits of, any person
or entity which is (x) a competitor, supplier, customer, landlord, tenant,
creditor or debtor of the Company, (y) engaged in a business related to the
business of the Company , or (z) a participant in any transaction to which the
Company is a party (other than in the ordinary course of the Company's business)
or (ii) is a party to any contract, agreement, commitment or other arrangement
with the Company.

     P. Insurance. The Company maintains insurance coverage with financially
sound and reputable insurers and such insurance coverage is adequate, consistent
with industry standards and the Company's historical claims experience, and
includes coverage for such things as property and casualty, general liability,
workers' compensation, personal injury and other similar types of insurance. The
Company has not received notice from, and has no knowledge of any threat by, any
insurer (that has issued any insurance policy to the Company) that such insurer
intends to deny coverage under or cancel, discontinue or not renew any insurance
policy presently in force.

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     Q. Securities Law Matters. Based, in part, upon the representations and
warranties of Buyer set forth in Section II hereof, the offer and sale by the
Company of the Securities is exempt from (i) the registration and prospectus
delivery requirements of the Securities Act and the rules and regulations of the
Commission thereunder and (ii) the registration and/or qualification provisions
of all applicable state securities and "blue sky" laws. Other than pursuant to
an effective registration statement under the Securities Act, the Company has
not issued, offered or sold the Preferred Shares or any shares of Common Stock
(including for this purpose any securities of the same or a similar class as the
Preferred Shares or Common Stock, or any securities convertible into or
exchangeable or exercisable for the Preferred Shares or Common Stock or any such
other securities) within the one-year immediately preceding the date hereof,
except as disclosed on Schedule III.Q. hereto, and the Company shall not
directly or indirectly take, and shall not permit any of its directors, officers
or Affiliates directly or indirectly to take, any action (including, without
limitation, any offering or sale to any person or entity of the Preferred Shares
or shares of Common Stock or any of the other Securities), so as to make
unavailable the exemption from Securities Act registration being relied upon by
the Company for the offer and sale to Buyer of the Securities as contemplated by
this Agreement. No form of general solicitation or advertising has been used or
authorized by the Company or any of its officers, directors or Affiliates in
connection with the offer or sale of the Securities as contemplated by this
Agreement or any other agreement to which the Company is a party.

     R. Environmental Matters. To the Company's knowledge:

     1. The operations of the Company are in compliance with all applicable
Environmental Laws (as defined below) and all permits issued pursuant to
Environmental Laws or otherwise;

     2. the Company has obtained or applied for all permits required under all
applicable Environmental Laws necessary to operate its business;

     3. the Company is not the subject of any outstanding written order of or
agreement with any governmental authority or person respecting (i) Environmental
Laws, (ii) Remedial Action or (iii) any Release or threatened Release of
Hazardous Materials;

     4. the Company has not received, since the Balance Sheet Date, any written
communication alleging that it may be in violation of any Environmental Law or
any permit issued pursuant to any Environmental Law, or may have any liability
under any Environmental Law;

     5. the Company does not have any current contingent liability in connection
with any Release of any Hazardous Materials into the indoor or outdoor
environment (whether on-site or off-site);

     6. except as set forth on Schedule III.R.6 hereto, to the Company's
knowledge, there are no investigations of the business, operations, or currently
or previously owned, operated or leased property of the Company pending or
threatened which could lead to the imposition of any liability pursuant to any
Environmental Law;

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     7. there is not located at any of the properties of the Company any (A)
underground storage tanks, (B) asbestos-containing material or (C) equipment
containing polychlorinated biphenyls; and,

     8. the Company has provided to Buyer all environmentally related audits,
studies, reports, analyses, and results of investigations that have been
performed with respect to the currently or previously owned, leased or operated
properties of the Company.

     For purposes of this Section III.R.:

     "Environmental Law" means any foreign, federal, state or local statute,
regulation, ordinance, or rule of common law as now or hereafter in effect in
any way relating to the protection of human health and safety or the environment
including, without limitation, the Comprehensive Environmental Response,
Compensation and Liability Act (42 U.S.C.ss.9601 et seq.), the Hazardous
Materials Transportation Act (49 U.S.C. App.ss.1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C.ss.6901 et seq.), the Clean Water Act
(33 U.S.C.ss. 1251 et seq.), the Clean Air Act (42 U.S.C.ss.7401 et seq.), the
Toxic Substances Control Act (15 U.S.C.ss.2601 et seq.), the Federal
Insecticide, Fungicide, and Rodenticide Act (7 U.S.C.ss.136 et seq.), and the
Occupational Safety and Health Act (29 U.S.C.ss.651 et seq.), and the
regulations promulgated pursuant thereto.

     "Hazardous Material" means any substance, material or waste which is
regulated by the United States, Canada or any of its provinces, or any state or
local governmental authority including, without limitation, petroleum and its
by-products, asbestos, and any material or substance which is defined as a
"hazardous waste," "hazardous substance," "hazardous material," "restricted
hazardous waste," "industrial waste," "solid waste," "contaminant," "pollutant,"
"toxic waste" or toxic substance" under any provision of any Environmental Law.

     "Release" means any release, spill, filtration, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, or leaching into the indoor
or outdoor environment, or into or out of any property.

     "Remedial Action" means all actions to (x) clean up, remove, treat or in
any other way address any Hazardous Material; (y) prevent the Release of any
Hazardous Material so it does not endanger or threaten to endanger public health
or welfare or the indoor or outdoor environment; or (z) perform pre-remedial
studies and investigations or post-remedial monitoring and care.

     S. Labor Matters. The Company is not party to any labor or collective
bargaining agreement and there are no labor or collective bargaining agreements
which pertain to employees of the Company. No employees of the Company are
represented by any labor organization and none of such employees has made a
pending demand for recognition, and there are no representation proceedings or
petitions seeking a representation proceeding presently pending or, to the
Company's knowledge, threatened to be brought or filed, with the National Labor
Relations Board or other labor relations tribunal. There is no organizing
activity involving the Company pending or to the Company's knowledge, threatened
by any labor organization or group of

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employees of the Company. There are no (i) strikes, work stoppages, slowdowns,
lockouts or arbitrations or (ii) material grievances or other labor disputes
pending or, to the knowledge of the Company, threatened against or involving the
Company. There are no unfair labor practice charges, grievances or complaints
pending or, to the knowledge of the Company, threatened by or on behalf of any
employee or group of employees of the Company.

     T. ERISA Matters. The Company and its ERISA Affiliates (as defined below)
are in compliance in all material respects with all provisions of ERISA (as
defined below) applicable to it. No Reportable Event (as defined below) has
occurred, been waived or exists as to which the Company or any ERISA Affiliate
was required to file a report with the Pension Benefits Guaranty Corporation,
and the present value of all liabilities under all Plans (based on those
assumptions used to fund such Plans) did not, as of the most recent annual
valuation date applicable thereto, exceed the value of the assets of all such
Plans (as defined below) in the aggregate. None of the Company or ERISA
Affiliates has incurred any Withdrawal Liability that could result in a Material
Adverse Effect. None of the Company or ERISA Affiliates has received any
notification that any Multiemployer Plan is in reorganization or has been
terminated within the meaning of Title IV of ERISA, and no Multiemployer Plan is
reasonably expected to be in reorganization or termination where such
reorganization or termination has resulted or could reasonably be expected to
result in increases to the contributions required to be made to such Plan or
otherwise.

     For purposes of this Section III.T.:

     "ERISA" means the Employee Retirement Income Security Act of 1974, or any
successor statute, together with the regulations thereunder, as the same may be
amended from time to time.

     "ERISA Affiliate" means any trade or business (whether or not incorporated)
that was, is or hereafter may become, a member of a group of which the Company
is a member and which is treated as a single employer under ss. 414 of the
Internal Revenue Code of 1986, as amended (the "Internal Revenue Code").

     "Multiemployer Plan" means a multiemployer plan as defined in Section
4001(a)(3) of ERISA to which the Company or any ERISA Affiliate (other than one
considered an ERISA Affiliate only pursuant to subsection (m) or (o) of ss. 414
of the Internal Revenue Code) is making or accruing an obligation to make
contributions, or has within any of the preceding five plan years made or
accrued an obligation to make contributions.

     "PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.

     "Plan" means any pension plan (other than a Multiemployer Plan) subject to
the provision of Title IV of ERISA or ss. 412 of the Internal Revenue Code that
is maintained for employees of the Company or any ERISA Affiliate.

     "Reportable Event" means any reportable event as defined in Section 4043(b)
of ERISA or the regulations issued thereunder with respect to a Plan (other than
a Plan maintained by

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an ERISA Affiliate that is considered an ERISA Affiliate only pursuant to
subsection (m) or (o) of ss. 414 of the Internal Revenue Code.

     "Withdrawal Liability" means liability to a Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan, as such terms
are defined in Part I of Subtitle E of Title IV of ERISA.

     U. Tax Matters.

     1. The Company has filed all Tax Returns which it is required to file under
applicable Laws, except for such Tax Returns in respect of which the failure to
so file does not and could not have a Material Adverse Effect; all such Tax
Returns are complete and fairly stated in all material respects and have been
prepared in compliance with all applicable Laws; the Company has paid all Taxes
(as defined below) due and owing by it (whether or not such Taxes are required
to be shown on a Tax Return) and have withheld and paid over to the appropriate
taxing authorities all Taxes which it is required to withhold from amounts paid
or owing to any employee, stockholder, creditor or other third parties; and
since the Balance Sheet Date, the charges, accruals and reserves for Taxes with
respect to the Company (including any provisions for deferred income taxes)
reflected on the books of the Company are adequate to cover any Tax liabilities
of the Company if its current tax year were treated as ending on the date
hereof.

     2. No claim has been made by a taxing authority in a jurisdiction where the
Company does not file tax returns that such corporation is or may be subject to
taxation by that jurisdiction. There are no foreign, federal, state or local tax
audits or administrative or judicial proceedings pending or being conducted with
respect to the Company; no information related to Tax matters has been requested
by any foreign, federal, state or local taxing authority; and, except as
disclosed above, no written notice indicating an intent to open an audit or
other review has been received by the Company from any foreign, federal, state
or local taxing authority. There are no material unresolved questions or claims
concerning the Company's Tax liability. The Company (A) has not executed or
entered into a closing agreement pursuant to ss. 7121 of the Internal Revenue
Code or any predecessor provision thereof or any similar provision of state,
local or foreign law; or (B) has not agreed to or is required to make any
adjustments pursuant to ss. 481 (a) of the Internal Revenue Code or any similar
provision of state, local or foreign law by reason of a change in accounting
method initiated by the Company or any of its subsidiaries or has any knowledge
that the IRS has proposed any such adjustment or change in accounting method, or
has any application pending with any taxing authority requesting permission for
any changes in accounting methods that relate to the business or operations of
the Company. The Company has not been a United States real property holding
corporation within the meaning of ss. 897(c)(2) of the Internal Revenue Code
during the applicable period specified in ss. 897(c)(1)(A)(ii) of the Internal
Revenue Code.

     3. The Company has not made an election underss.341(f) of the Internal
Revenue Code. The Company is not liable for the Taxes of another person that is
not a subsidiary of the Company under (A) Treas. Reg. ss. 1.1502-6 (or
comparable provisions of state, local or foreign law), (B) as a transferee or
successor, (C) by contract or indemnity or (D) otherwise. Except as disclosed in
the Commission Filings, the Company is not a party to any tax sharing agreement.

                                     - 11 -
<PAGE>

The Company has not made any payments, is obligated to make payments or is a
party to an agreement that could obligate it to make any payments that would not
be deductible under ss. 28OG of the Internal Revenue Code.

     For purposes of this Section III.U.:

     "IRS" means the United States Internal Revenue Service.

     "Tax" or "Taxes" means federal, state, county, local, foreign, or other
income, gross receipts, ad valorem, franchise, profits, sales or use, transfer,
registration, excise, utility, environmental, communications, real or personal
property, capital stock, license, payroll, wage or other withholding,
employment, social security, severance, stamp, occupation, alternative or add-on
minimum, estimated and other taxes of any kind whatsoever (including, without
limitation, deficiencies, penalties, additions to tax, and interest attributable
thereto) whether disputed or not.

     "Tax Return" means any return, information report or filing with respect to
Taxes, including any schedules attached thereto and including any amendment
thereof.

     V. Property. The Company has good and marketable title to all real and
personal property owned by it, free and clear of all liens, encumbrances and
defects except as are described on Schedule III.V. hereto or in the Commission
Filings or such as do not materially affect the value of such property and do
not interfere with the use made and proposed to be made of such property by the
Company; and any real property and buildings held under lease by the Company are
held by it under valid, subsisting and enforceable leases with such exceptions
as are not material and do not interfere with the use made and proposed to be
made of such property and buildings by the Company.

     W. Intellectual Property. The Company owns or possesses adequate and
enforceable rights to use all patents, patent applications, trademarks,
trademark applications, trade names, service marks, copyrights, copyright
applications, licenses, know-how (including trade secrets and other unpatented
and/or unpatentable proprietary or confidential information, systems or
procedures) and other similar rights and proprietary knowledge (collectively,
"Intangibles") for the conduct of its business as now being conducted as
described on Schedule III.W. hereto. The Company is not infringing upon or in
conflict with any right of any other person with respect to any Intangibles.
Except as disclosed on Schedule III.W. hereto, no claims have been asserted by
any person to the ownership or use of any Intangibles and the Company has no
knowledge of any basis for such claim.

     X. Internal Controls and Procedures. The Company maintains accurate books
and records and internal accounting controls which provide reasonable assurance
that (i) all transactions to which the Company is a party or by which its
properties are bound are executed with management's authorization; (ii) the
reported accountability of the Company's assets is compared with existing assets
at regular intervals; (iii) access to the Company's assets is permitted only in
accordance with management's authorization; and (iv) all transactions to which
the Company is a party or by which its properties are bound are recorded as
necessary to permit preparation of the

                                     - 12 -
<PAGE>

financial statements of the Company in accordance with U.S. generally accepted
accounting principles consistently applied.

     Y. Payments and Contributions. Neither the Company nor any of its
directors, officers or, to its knowledge, other employees has (i) used any
Company funds for any unlawful contribution, endorsement, gift, entertainment or
other unlawful expense relating to political activity; (ii) made any direct or
indirect unlawful payment of Company funds to any foreign or domestic government
official or employee; (iii) violated or is in violation of any provision of the
Foreign Corrupt Practices Act of 1977, as amended; or (iv) made any bribe,
rebate, payoff, influence payment, kickback or other similar payment to any
person with respect to Company matters.

     Z. No Misrepresentation. No representation or warranty of the Company
contained in this Agreement, any schedule, annex or exhibit hereto or any
agreement, instrument or certificate furnished by the Company to Buyer pursuant
to this Agreement, contains any untrue statement of a material fact or omits to
state a material fact required to be stated therein or necessary to make the
statements therein, not misleading.

IV.  CERTAIN COVENANTS AND ACKNOWLEDGMENTS.

     A. Restrictive Legend. Buyer acknowledges and agrees that, upon issuance
pursuant to this Agreement, the Preferred Shares and the Warrants (and any
shares of Common Stock issued in conversion of the Preferred Shares or exercise
of the Warrants) shall have endorsed thereon a legend in substantially the
following form (and a stop-transfer order may be placed against transfer of the
Preferred Shares and the Conversion Shares until such legend has been removed):

          "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
          SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
          ACT"), OR THE SECURITIES LAWS OF ANY STATE, AND ARE
          BEING OFFERED AND SOLD PURSUANT TO AN EXEMPTION FROM
          THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND
          SUCH LAWS. THESE SECURITIES MAY NOT BE SOLD OR
          TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE
          REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR
          PURSUANT TO AN AVAILABLE EXEMPTION FROM THE
          REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR SUCH
          OTHER LAWS."

     B. Filings. The Company shall make all necessary Commission Filings and
"blue sky" filings required to be made by the Company in connection with the
sale of the Securities to the Buyer as required by all applicable Laws, and
shall provide a copy thereof to the Buyer promptly after such filing.

                                     - 13 -
<PAGE>

     C. Reporting Status. So long as the Buyer beneficially owns any of the
Securities, the Company shall use its best efforts to timely file all reports
required to be filed by it with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act.

     D. Use of Proceeds. The Company shall use the net proceeds from the sale of
the Securities (excluding amounts paid by the Company for legal fees and
finder's fees in connection with such sale) solely for general corporate and
working capital purposes.

     E0 Listing. Except to the extent the Company lists its Common Stock on The
New York Stock Exchange, the Company shall use its best efforts to maintain its
listing of the Common Stock on the NMS.

     F0 Reserved Conversion Shares. The Company at all times from and after the
date hereof shall have a sufficient number of shares of Common Stock duly and
validly authorized and reserved for issuance to satisfy the conversion, in full,
of the Preferred Shares and upon the exercise of the Warrants.

V    TRANSFER AGENT INSTRUCTIONS.

     A0 The Company undertakes and agrees that no instruction other than the
instructions referred to in this Section V and customary stop transfer
instructions prior to the registration and sale of the Common Stock pursuant to
an effective Securities Act registration statement will be given to its transfer
agent for the Common Stock and that the Common Stock issuable upon conversion of
the Preferred Shares and exercise of the Warrants otherwise shall be freely
transferable on the books and records of the Company as and to the extent
provided in this Agreement, the Registration Rights Agreement and applicable
law. Nothing contained in this Section V.A. shall affect in any way Buyer's
obligations and agreement to comply with all applicable securities laws upon
resale of such Common Stock. If, at any time, Buyer provides the Company with an
opinion of counsel reasonably satisfactory to the Company and its counsel that
registration of the resale by Buyer of such Common Stock is not required under
the Securities Act and that the removal of restrictive legends is permitted
under applicable law, the Company shall permit the transfer of such Common Stock
and, promptly instruct the Company's transfer agent to issue one or more
certificates for Common Stock without any restrictive legends endorsed thereon.

     B0 The Company shall permit Buyer to exercise its right to convert the
Preferred Shares by telecopying an executed and completed Notice of Conversion
to the Company. Each date on which a Notice of Conversion is telecopied to and
received by the Company in accordance with the provisions hereof shall be deemed
a Conversion Date. The Company shall transmit the certificates evidencing the
shares of Common Stock issuable upon conversion of any Preferred Shares
(together with certificates evidencing any Preferred Shares not being so
converted) to Buyer via express courier, by electronic transfer or otherwise,
within ten (10) business days after receipt by the Company of the Notice of
Conversion (the "Delivery Date"). Within 30 days after Buyer delivers the Notice
of Conversion to the Company, Buyer shall deliver to the Company the Preferred
Shares being converted.

                                     - 14 -
<PAGE>

     C0 The Company shall permit Buyer to exercise its right to purchase shares
of Common Stock pursuant to exercise of the Warrants in accordance with its
applicable terms of the Warrants. The last date that the Company may deliver
shares of Common Stock issuable upon any exercise of Warrants is referred to
herein as the "Warrant Delivery Date."

     D0 The Company understands that a delay in the issuance of the shares of
Common Stock issuable in lieu of cash dividends on the Preferred Shares, upon
the conversion of the Preferred Shares or exercise of the Warrants beyond the
applicable Dividend Payment Due Date (as defined in the Certificate of
Designation), Delivery Date or Warrant Delivery Date could result in economic
loss to Buyer. As compensation to Buyer for such loss (and not as a penalty),
the Company agrees to pay to Buyer for late issuance of Common Stock issuable in
lieu of cash dividends on the Preferred Shares, upon conversion of the Preferred
Shares or exercise of the Warrants in accordance with the following schedule
(where "No. Business Days" is defined as the number of business days beyond ten
(10) business days from the Dividend Payment Due Date (as that term is defined
in the Certificate of Designation), the Delivery Date on the Warrant Delivery
Date, as applicable):

<TABLE>
<CAPTION>
                                             Compensation For Each 10
                                             Shares of Preferred Shares and
                                             Related Dividends Not
             No. Business Days               Converted Timely or 5,000
             -----------------               Shares of Common Stock
                                             Issuable Upon Exercise of
                                             Warrants
                                             ------------------------------
<S>                                          <C>
                    1                                     $25
                    2                                     $50
                    3                                     $75
                    4                                    $100
                    5                                    $125
                    6                                    $150
                    7                                    $175
                    8                                    $200
                    9                                    $225
                   10                                    $250
               more than 10                  $250 + $100 for each Business
                                              Day Late beyond 10 business
                                                         days
</TABLE>

                                     - 15 -
<PAGE>

The Company shall pay to Buyer the compensation described above as liquidated
damages, by the transfer of immediately available funds upon Buyer's demand.
Nothing herein shall limit Buyer's right to pursue actual damages for the
Company's failure to issue and deliver Common Stock to Buyer, and in addition to
any other remedies which may be available to Buyer, in the event the Company
fails for any reason to effect delivery of such shares of Common Stock within
ten (10) business days after the relevant Dividend Payment Due Date, the
Delivery Date or the Warrant Delivery Date, as applicable, Buyer shall be
entitled to rescind the relevant Notice of Conversion or exercise of Warrants by
delivering a notice to such effect to the Company whereupon the Company and
Buyer shall each be restored to their respective original positions immediately
prior to delivery of such Notice of Conversion on delivery.

VI   DELIVERY INSTRUCTIONS.

     The Securities shall be delivered by the Company to the Escrow Agent
pursuant to Section I.B. hereof on a "delivery-against-payment basis" at the
closing of the transactions contemplated hereby.

VII  FUNDING DATE.

     The date and time of the issuance and sale of the Preferred Shares and the
Warrants (the "Funding Date") shall be the date hereof or such other date as
shall be mutually agreed upon in writing. The issuance and sale of the Preferred
Shares and the Warrants shall occur on the Funding Date, at the offices of the
Escrow Agent. Notwithstanding anything to the contrary contained herein, the
Escrow Agent shall not be authorized to release to the Company the Purchase
Price and to Buyer the certificate(s) evidencing the Preferred Shares and the
Warrants unless the conditions set forth in VIII.C. and IX.G hereof have been
satisfied.

VIII CONDITIONS TO THE COMPANY'S OBLIGATIONS.

     The Buyer understands that the Company's obligation to sell the Securities
on the Funding Date to Buyer pursuant to this Agreement is conditioned upon:

     A0 Delivery by Buyer to the Escrow Agent of the Purchase Price on the
Funding Date.

     B0 The accuracy in all material respects on the Funding Date of the
representations and warranties of Buyer contained in this Agreement as if made
on the Funding Date (except for representations and warranties which, by their
express terms, speak as of and relate to a specified date, in which case such
accuracy shall be measured as of such specified date) and the performance by
Buyer in all material respects on or before the Funding Date of all covenants
and agreements of Buyer required to be performed by it pursuant to this
Agreement on or before the Funding Date;

                                     - 16 -
<PAGE>

     C0 There shall not be in effect any Law or order, ruling, judgment or writ
of any court or public or governmental authority restraining, enjoining or
otherwise prohibiting any of the transactions contemplated by this Agreement.

IX   CONDITIONS TO BUYER'S OBLIGATIONS.

     The Company understands that Buyer's obligation to purchase the Securities
on the Funding Date pursuant to this Agreement is conditioned upon:

     A0 Delivery by the Company to the Escrow Agent on or before the Funding
Date of one or more certificates evidencing the Securities;

     B0 The accuracy in all respects on the Funding Date of the representations
and warranties of the Company contained in this Agreement as if made on the
Funding Date (except for representations and warranties which, by their express
terms, speak as of and relate to a specified date, in which case such accuracy
shall be measured as of such specified date) and the performance by the Company
in all respects on or before the Funding Date of all covenants and agreements of
the Company required to be performed by it pursuant to this Agreement on or
before the Funding Date;

     C0 Buyer having received an opinion of counsel for the Company, dated the
Funding Date, in form, scope and substance satisfactory to the Buyer.

     D0 There not having occurred (i) any general suspension of trading in, or
limitation on prices listed for, the Common Stock on the NMS, (ii) the
declaration of a banking moratorium or any suspension of payments in respect of
banks in the United States, (iii) the commencement of a war, armed hostilities
or other international or national calamity directly or indirectly involving the
United States or any of its territories, protectorates or possessions, or (iv)
in the case of the foregoing existing at the date of this Agreement, a material
acceleration or worsening thereof.

     E0 There not having occurred any event or development, and there being in
existence no condition, having or which reasonably and foreseeably could have a
Material Adverse Effect.

     F0 The Company shall have delivered to Buyer (as provided in the Escrow
Instructions) reimbursement of Buyer's reasonable out-of-pocket costs and
expenses incurred in connection with the transactions contemplated by this
Agreement.

     G0 There shall not be in effect any Law or order, ruling, judgment or writ
of any court or public or governmental authority restraining, enjoining or
otherwise prohibiting any of the transactions contemplated by this Agreement.

                                     - 17 -
<PAGE>

X    TERMINATION.

     A0 Termination by Mutual Written Consent. This Agreement may be terminated
and the transactions contemplated hereby may be abandoned, for any reason and at
any time prior to the Funding Date, by the mutual written consent of the Company
and Buyer.

     B0 Termination by the Company or Buyer. This Agreement may be terminated
and the transactions contemplated hereby may be abandoned by action of the
Company or Buyer if (i) the Funding Date shall not have occurred at or prior to
5:00 p.m., New York City time, on July 9, 1999; provided, however, that the
right to terminate this Agreement pursuant to this Section X.B.(i) shall not be
available to any party whose failure to fulfill any of its obligations under
this Agreement has been the cause of or resulted in the failure of the Funding
Date to occur at or before such time and date or (ii) any court or public or
governmental authority shall have issued an order, ruling, judgment or writ, or
there shall be in effect any Law, restraining, enjoining or otherwise
prohibiting the consummation of any of the transactions contemplated by this
Agreement.

     C0 Termination by Buyer. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned by Buyer at any time prior to
the Funding Date, if (i) the Company shall have failed to comply with any of its
covenants or agreements contained in this Agreement, (ii) there shall have been
a breach by the Company with respect to any representation or warranty made by
it in this Agreement, or (iii) there shall have occurred any event or
development, or there shall be in existence any condition, having or reasonably
and foreseeably likely to have a Material Adverse Effect.

     D0 Termination by the Company. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned by the Company at any time
prior to the Funding Date, if (i) Buyer shall have failed to comply with any of
its covenants or agreements contained in this Agreement or (ii) there shall have
been a breach by Buyer with respect to any representation or warranty made by it
in this Agreement.

XI   SURVIVAL; INDEMNIFICATION.

     A0 The representations, warranties and covenants made by each of the
Company and Buyer in this Agreement, the annexes, schedules and exhibits hereto
and in each instrument, agreement and certificate entered into and delivered by
them pursuant to this Agreement, shall survive the Funding Date and the
consummation of the transactions contemplated hereby for a period of three (3)
years from and after the Funding Date or such later date as when all of the
Preferred Shares have been converted to Common Stock. In the event of a breach
or violation of any of such representations, warranties or covenants, the party
to whom such representations, warranties or covenants have been made shall have
all rights and remedies for such breach or violation available to it under the
provisions of this Agreement or otherwise, whether at law or in equity,
irrespective of any investigation made by or on behalf of such party on or prior
to the Funding Date.

     B0 The Company hereby agrees to indemnify and hold harmless the Buyer, its
Affiliates and their respective officers, directors, partners and members
(collectively, the "Buyer

                                     - 18 -
<PAGE>

Indemnitees"), from and against any and all losses, claims, damages, judgments,
penalties, liabilities and deficiencies (collectively, "Losses"), and agrees to
reimburse the Buyer Indemnitees for all out-of-pocket expenses (including the
fees and expenses of legal counsel), in each case promptly as incurred by the
Buyer Indemnitees and to the extent arising out of or in connection with:

               1 any misrepresentation, omission of fact or
          breach of any of the Company's representations or
          warranties contained in this Agreement or the other
          Documents, or the annexes, schedules or exhibits hereto
          or thereto or any instrument, agreement or certificate
          entered into or delivered by the Company pursuant to
          this Agreement or the other Documents; or

               2 any failure by the Company to perform in any
          material respect any of its covenants, agreements,
          undertakings or obligations set forth in this Agreement
          or the other Documents, or the annexes, schedules or
          exhibits hereto or thereto or any instrument, agreement
          or certificate entered into or delivered by the Company
          pursuant to this Agreement or the other Documents.

     C0 Buyer hereby agrees to indemnify and hold harmless the Company, its
Affiliates and their respective officers, directors, partners and members
(collectively, the "Company Indemnitees"), from and against any and all Losses,
and agrees to reimburse the Company Indemnitees for all out-of-pocket expenses
(including the fees and expenses of legal counsel), in each case promptly as
incurred by the Company Indemnitees and to the extent arising out of or in
connection with:

               1 any misrepresentation, omission of fact, or
          breach of any of Buyer's representations or warranties
          contained in this Agreement or the other Documents, or
          the annexes, schedules or exhibits hereto or thereto or
          any instrument, agreement or certificate entered into
          or delivered by Buyer pursuant to this Agreement or the
          other Documents; or

               2 any failure by Buyer to perform in any material
          respect any of its covenants, agreements, undertakings
          or obligations set forth in this Agreement or the other
          Documents or any instrument, certificate or agreement
          entered into or delivered by Buyer pursuant to this
          Agreement or the other Documents.

     D0 Promptly after receipt by either party hereto seeking indemnification
pursuant to this Section XI (an "Indemnified Party") of written notice of any
investigation, claim, proceeding or other action in respect of which
indemnification is being sought (each, a "Claim"), the Indemnified Party
promptly shall notify the party against whom indemnification pursuant to this
Section XI is being sought (the "Indemnifying Party") of the commencement
thereof; but the omission to so notify the Indemnifying Party shall not relieve
it from any liability that it otherwise may have to the Indemnified Party,
except to the extent that the Indemnifying Party is materially

                                     - 19 -
<PAGE>

prejudiced and forfeits substantive rights and defenses by reason of such
failure. In connection with any Claim as to which both the Indemnifying Party
and the Indemnified Party are parties, the Indemnifying Party shall be entitled
to assume the defense thereof. Notwithstanding the assumption of the defense of
any Claim by the Indemnifying Party, the Indemnified Party shall have the right
to employ separate legal counsel and to participate in the defense of such
Claim, and the Indemnifying Party shall bear the reasonable fees, out-of-pocket
costs and expenses of such separate legal counsel to the Indemnified Party if
(and only if): (x) the Indemnifying Party shall have agreed to pay such fees,
out-of-pocket costs and expenses, (y) the Indemnified Party and the Indemnifying
Party reasonably shall have concluded that representation of the Indemnified
Party and the Indemnifying Party by the same legal counsel would not be
appropriate due to actual or, as reasonably determined by legal counsel to the
Indemnified Party, potentially differing interests between such parties in the
conduct of the defense of such Claim, or if there may be legal defenses
available to the Indemnified Party that are in addition to or disparate from
those available to the Indemnifying Party, or (z) the Indemnifying Party shall
have failed to employ legal counsel reasonably satisfactory to the Indemnified
Party within a reasonable period of time after notice of the commencement of
such Claim. If the Indemnified Party employs separate legal counsel in
circumstances other than as described in clauses (x), (y) or (z) above, the
fees, costs and expenses of such legal counsel shall be borne exclusively by the
Indemnified Party. Except as provided above, the Indemnifying Party shall not,
in connection with any Claim in the same jurisdiction, be liable for the fees
and expenses of more than one firm of legal counsel for the Indemnified Party
(together with appropriate local counsel). The Indemnifying Party shall not,
without the prior written consent of the Indemnified Party (which consent shall
not unreasonably be withheld), settle or compromise any Claim or consent to the
entry of any judgment that does not include an unconditional release of the
Indemnified Party from all liabilities with respect to such Claim or judgment.

     E0 In the event one party hereunder should have a claim for indemnification
that does not involve a claim or demand being asserted by a third party, the
Indemnified Party promptly shall deliver notice of such claim to the
Indemnifying Party. If the Indemnified Party disputes the claim, such dispute
shall be resolved by mutual agreement of the Indemnified Party and the
Indemnifying Party or by binding arbitration conducted in accordance with the
procedures and rules of the American Arbitration Association. Judgment upon any
award rendered by any arbitrators may be entered in any court having competent
jurisdiction thereof.

XII  GOVERNING LAW: MISCELLANEOUS.

                                     - 20 -
<PAGE>

     This Agreement shall be governed by and interpreted in accordance with the
laws of the State of Delaware, without regard to the conflicts of law principles
of such state. Each of the parties consents to the jurisdiction of the federal
courts whose districts encompass any part of the City of New York or the state
courts of the State of New York sitting in the City of New York in connection
with any dispute arising under this Agreement and hereby waives, to the maximum
extent permitted by law, any objection, including any objection based on forum
non conveniens, to the bringing of any such proceeding in such jurisdictions. A
facsimile transmission of this signed Agreement shall be legal and binding on
all parties hereto. This Agreement may be signed in one or more counterparts,
each of which shall be deemed an original. The headings of this Agreement are
for convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement. if any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement or the validity or enforceability of this Agreement
in any other jurisdiction. This Agreement may be amended only by an instrument
in writing signed by the party to be charged with enforcement. This Agreement
supersedes all prior agreements and understandings among the parties hereto with
respect to the subject matter hereof.

XIII NOTICES.

     Except as may be otherwise provided herein, any notice or other
communication or delivery required or permitted hereunder shall be in writing
and shall be sent by facsimile with a copy delivered personally or sent by a
nationally recognized overnight courier service, and shall be deemed given when
so delivered personally or by overnight courier service, as follows:

     (1)  if to the Company, to:

          VIISAGE TECHNOLOGY, INC.
          30 Porter Road
          Littleton, Massachusetts  01460
          Attention:  Thomas J. Colatosti
                      Chief Executive Officer
          Telephone:  (978) 952-2200
          Facsimile:  (978) 952-2218

          With a copy to:

          Finnegan, Hickey, Dinsmoor & Johnson, PC
          175 Federal Street
          Boston, Massachusetts  02110
          Attention:  Charles Johnson, Esq.
          Telephone:  (617) 523-2500
          Facsimile:  (617) 422-6080

                                     - 21 -
<PAGE>

     (2)  if to the Buyer, to

          THE SHAAR FUND LTD.,
          c/o SHAAR ADVISORY SERVICES LTD.
          62 King George Street, Apartment 4F
          Jerusalem, Israel
          Attention: Sam Levinson

          with a copy to:

          Herrick, Feinstein LLP
          2 Park Avenue
          New York, New York 10016
          Attention:  Irwin A. Kishner, Esq.
          Telephone:  (212) 592-1400
          Facsimile:  (212) 889-7577

     (3)  if to the Escrow Agent, to:

          Herrick, Feinstein LLP
          2 Park Avenue
          New York, New York 10016
          Attention:  Irwin A. Kishner, Esq.
          Telephone:  (212) 592-1400
          Facsimile:  (212) 889-7577

The Company, the Buyer or the Escrow Agent may change the foregoing address by
notice given pursuant to this Section XIII.

XIV  CONFIDENTIALITY.

     Each of the Company and Buyer agrees to keep confidential and not to
disclose to or use for the benefit of any third party the terms of this
Agreement or any other information which at any time is communicated by the
other party as being confidential without the prior written approval of the
other party; provided, however, that this provision shall not apply to
information which, at the time of disclosure, is already part of the public
domain (except by breach of this Agreement) and information which is required to
be disclosed by law (including, without limitation, pursuant to Item 10 of Rule
601 of Regulation S-K under the Securities Act and the Exchange Act).

                                     - 22 -
<PAGE>

XV   ASSIGNMENT.

     This Agreement shall not be assignable by either of the parties hereto
without the prior written consent of the other party, and any attempted
assignment contrary to the provisions hereby shall be null and void; provided,
however, that Buyer may assign its rights and obligations hereunder, in whole or
in part, to any affiliate of Buyer who furnishes to the Company the
representations and warranties set forth in Section II hereof and otherwise
agrees to be bound by the terms of this Agreement.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

                                     - 23 -
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement on the date first written above.

                                        THE COMPANY:

                                        VIISAGE TECHNOLOGY, INC.

                                             By:  /s/  William A. Marshall
                                                  -----------------------------
                                             Name:     William A. Marshall
                                             Title:    Chief Financial Officer

                                        BUYER:

                                        THE SHAAR FUND LTD.

                                        By:  INTERCARRIBBEAN SERVICES, INC.

                                             By:  /s/  Sam Levinson
                                                  -----------------------------
                                             Name:     Sam Levinson
                                             Title:

                                     - 24 -
<PAGE>

                                    EXHIBIT A

                          Common Stock Purchase Warrant

                                     - 25 -
<PAGE>

                                    EXHIBIT B

                           Certificate of Designation

                                     - 26 -
<PAGE>

                                    EXHIBIT C

                               Escrow Instructions

                                     - 27 -
<PAGE>

                                    EXHIBIT D

                          Registration Rights Agreement

                                     - 28 -
<PAGE>

                                Schedule III.A.1

                                 Capitalization

                                     - 29 -
<PAGE>

                                Schedule III.A.2

                                  Subsidiaries

                                     - 30 -
<PAGE>

                                 Schedule III.O.

                           Related Party Transactions

                                     - 31 -
<PAGE>

                                 Schedule III.Q.

                             Securities Law Matters

                                     - 32 -
<PAGE>

                                Schedule III.R.6.

                              Environmental Matters

                                     - 33 -
<PAGE>

                                 Schedule III.V.

                                    Property

                                     - 34 -
<PAGE>

                                 Schedule III.W.

                              Intellectual Property

                                     - 35 -<PAGE>

                                                                   Exhibit 10.19

                          REGISTRATION RIGHTS AGREEMENT

     REGISTRATION RIGHTS AGREEMENT dated as of June 30, 1999 (this "Agreement"),
between VIISAGE TECHNOLOGY, INC., a Delaware corporation with principal
executive offices located at 30 Porter Road, Littleton, Massachusetts 01460 (the
"Company"), and the undersigned (the "Investor").

                              W I T N E S S E T H :

     WHEREAS, upon the terms and subject to the conditions of the Securities
Purchase Agreement dated as of the date hereof, between the Investor and the
Company (the "Securities Purchase Agreement"), the Company has agreed to issue
and sell to the Investor on the date hereof, (i) 1,500 shares of the Company's
Series A 7% Convertible Preferred Stock, par value $.001 per share (the
"Preferred Shares") which, upon the terms of and subject to the conditions of
the Company's Certificate of Designation to the Company's Certificate of
Incorporation (the "Certificate of Designation"), are convertible into shares of
the Company's common stock, par value $0.001 per share (the "Common Stock"), and
(ii) 75,000 Common Stock Purchase Warrants (the "Warrants") to purchase shares
of Common Stock; and

     WHEREAS, to induce the Investor to execute and deliver the Securities
Purchase Agreement, the Company has agreed to provide with respect to the Common
Stock issued or issuable in lieu of cash dividend payments on the Preferred
Shares, upon conversion of the Preferred Shares and exercise of the Warrants
certain registration rights under the Securities Act;

     NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties hereto, intending to be legally bound, hereby
agree as follows:

     1. Definitions.

     (a) As used in this Agreement, the following terms shall have the following
meanings:

          (i) "Affiliate", of any specified Person means any other Person who
     directly, or indirectly through one or more intermediaries, is in control
     of, is controlled by, or is under common control with, such specified
     Person. For purposes of this definition, control of a Person means the
     power, directly or indirectly, to direct or cause the direction of the
     management and policies of such Person whether by contract, securities,
     ownership or otherwise; and the terms "controlling" and "controlled" have
     the respective meanings correlative to the foregoing.

          (iii) "Commission" means the Securities and Exchange Commission.

          (iv) "Current Market Price" on any date of determination means the
     closing bid price of a share of the Common Stock on such day as reported by
     the NASDAQ Stock Market, National Market System ("NMS"). If such security
     is not listed or admitted to trading on
<PAGE>

     the NMS, on the principal national security exchange or quotation system on
     which such security is quoted or listed or admitted to trading, or, if not
     quoted or listed or admitted to trading on any national securities exchange
     or quotation system, the closing bid price of such security on the
     over-the-counter market on the day in question as reported by the National
     Quotation Bureau Incorporated, or a similar generally accepted reporting
     service, or if not so available, in such manner as furnished by any NASD
     member firm selected from time to time by the Board of Directors of the
     Company for that purpose, or a price determined in good faith by the Board
     of Directors of the Company as being equal to the fair market value
     thereof, as the case may be.

          (v) "Exchange Act" means the Securities Exchange Act of 1934, as
     amended, and the rules and regulations of the Commission thereunder, or any
     similar successor statute.

          (ii) "Funding Date" means the date and time of the issuance and sale
     of the Preferred Shares and the Warrants.

          (vi) "Investors" means the Investor and any transferee or assignee of
     Registrable Securities who agrees to become bound by all of the terms and
     provisions of this Agreement in accordance with Section 8 hereof.

          (vii) "Public Offering" means an offer registered with the Commission
     and the appropriate state securities commissions by the Company of its
     Common Stock and made pursuant to the Securities Act.

          (viii) "Person" means any individual, partnership, corporation,
     limited liability company, joint stock company, association, trust,
     unincorporated organization, or a government or agency or political
     subdivision thereof.

          (ix) "Prospectus" means the prospectus (including, without limitation,
     any preliminary prospectus and any final prospectus filed pursuant to Rule
     424(b) under the Securities Act, including any prospectus that discloses
     information previously omitted from a prospectus filed as part of an
     effective registration statement in reliance on Rule 430A under the
     Securities Act) included in the Registration Statement, as amended or
     supplemented by any prospectus supplement with respect to the terms of the
     offering of any portion of the Registrable Securities covered by the
     Registration Statement and by all other amendments and supplements to such
     prospectus, including all material incorporated by reference in such
     prospectus and all documents filed after the date of such prospectus by the
     Company under the Exchange Act and incorporated by reference therein.

          (x) "Registrable Securities" means the Common Stock issued or issuable
     (i) in lieu of cash dividend payments on the Preferred Shares, (ii) upon
     conversion of the Preferred Shares or (iii) upon exercise of the Warrants;
     provided, however, that a share of Common Stock shall cease to be a
     Registrable Security for purposes of this Agreement when it no longer is a
     Restricted Security.

          (xi) "Registration Statement" means a registration statement of the
     Company filed on an appropriate form under the Securities Act providing for
     the registration of, and the sale on a continuous or delayed basis by the
     holders of, all of the Registrable Securities pursuant

                                      -2-
<PAGE>

     to Rule 415 under the Securities Act, including the Prospectus contained
     therein and forming a part thereof, any amendments to such registration
     statement and supplements to such Prospectus, and all exhibits and other
     material incorporated by reference in such registration statement and
     Prospectus.

          (xii) "Restricted Security" means any share of Common Stock issued or
     issuable in lieu of cash dividend payments on the Preferred Shares, upon
     conversion of the Preferred Shares or exercise of the Warrants except any
     such share that (i) has been registered pursuant to an effective
     registration statement under the Securities Act, (ii) has been transferred
     in compliance with the resale provisions of Rule 144 under the Securities
     Act (or any successor provision thereto) or is transferable pursuant to
     paragraph (d) of Rule 144 under the Securities Act (or any successor
     provision thereto), or (iii) otherwise has been transferred and a new share
     of Common Stock not subject to transfer restrictions under the Securities
     Act has been delivered by or on behalf of the Company.

          (xiv) "Securities Act" means the Securities Act of 1933, as amended,
     and the rules and regulations of the Commission thereunder, or any similar
     successor statute.

     (b) All capitalized terms used and not defined herein have the respective
meaning assigned to them in the Securities Purchase Agreement.

     2. Registration.

     (a) Filing and Effectiveness of Registration Statement. The Company shall
prepare and file with the Commission not later than ninety (90) days after the
Funding Date, a Registration Statement relating to the offer and sale of all of
the Registrable Securities and shall use its best efforts to cause the
Commission to declare such Registration Statement effective under the Securities
Act as promptly as practicable but not later than one hundred and eighty (180)
days after the Funding Date. The Company shall not include any other securities
in the Registration Statement relating to the offer and sale of the Registrable
Securities, except for (i) shares of Common Stock underlying convertible
debentures and options held by Lau Technologies and, (ii) certain shares issued
to directors in lieu of cash fees and otherwise, each as set forth on Schedule
III.A.1 of the Securities Purchase Agreement. The Company shall notify the
Investor by written notice that such Registration Statement has been declared
effective by the Commission within 24 hours of such declaration by the
Commission.

     (b) Registration Default. (i) If the Registration Statement covering the
Registrable Securities required to be filed by the Company pursuant to Section 2
(a) hereof is not (A) filed with the Commission within ninety (90) days after
the Funding Date or (B) declared effective by the Commission within one hundred
and eighty (180) days after the Funding Date (either of which, without
duplication, an "Initial Date"), then the Company shall make the payments to the
Investor as provided in the next sentence as liquidated damages and not as a
penalty. The amount to be paid by the Company to the Investor shall be
determined as of each Computation Date (as defined below), and such amount shall
be equal to 2% (the "Liquidated Damage Rate") of the Purchase Price (as defined
in the Securities Purchase Agreement) from the Initial Date to the first
Computation Date and for each Computation Date thereafter, calculated on a pro
rata basis to the date on which the Registration Statement is filed with or
declared effective by the Commission (the "Periodic Amount"); provided, however,
that in no event shall the Liquidated Damages be less than

                                      -3-
<PAGE>

$15,000. The full Periodic Amount shall be paid by the Company to the Investor
by wire transfer of immediately available funds within three days after each
Computation Date.

     (ii) As used in this Section 2(b), "Computation Date" means the date which
is 30 days after the applicable Initial Date and, if the Registration Statement
required to be filed by the Company pursuant to Section 2(a) has not theretofore
been declared effective by the Commission, each date which is 30 days after the
most recent applicable Computation Date until such Registration Statement is so
declared effective.

     (iii) Notwithstanding the above, if the Registration Statement covering the
Registrable Securities required to be filed by the Company pursuant to Section
2(a) hereof, as the case may be, is not filed with the Commission by the
ninetieth (90th) day after the Funding Date, the Company shall be in default of
this Registration Rights Agreement.

     (c) (i) If the Company proposes to register any of its warrants, Common
Stock or any other shares of common stock under the Securities Act (other than a
registration (A) on Form S-8 or S-4 or any successor or similar forms, (B)
relating to Common Stock or any other shares of common stock of the Company
issuable upon exercise of employee share options or in connection with any
employee benefit or similar plan of the Company or (C) in connection with a
direct or indirect acquisition by the Company of another Person or any
transaction with respect to which Rule 145 (or any successor provision) under
the Securities Act applies, whether or not for sale for its own account), it
will at each such time, give written notice at least 20 days prior to the
anticipated filing date of the registration statement relating to such
registration to the Investor, which notice shall set forth such Investor's
rights under Section 3 hereof and shall offer the Investor the opportunity to
include in such registration statement such number of Registrable Shares as the
Investor may request. Upon the written request of the Investor made within ten
(10) days after the receipt of notice from the Company (which request shall
specify the number of Registrable Shares intended to be disposed of by such
Investor), the Company will use its best efforts to effect the registration
under the Securities Laws of all Registrable Shares that the Company has been so
requested to register by the Investor, to the extent requisite to permit the
disposition of the Registrable Shares so to be registered; provided, however,
that (A) if such registration involves a Public Offering, the Investor must sell
its Registrable Shares to the underwriters selected as provided in Section 3(b)
hereof on the same terms and conditions as apply to the Company and (B) if, at
any time after giving written notice of its intention to register any
Registrable Shares pursuant to Section 3 hereof and prior to the effective date
of the registration statement filed in connection with such registration, the
Company shall determine for any reason not to register such Registrable Shares,
the Company shall give written notice to the Investor and, thereupon, shall be
relieved of its obligation to register any Registrable Shares in connection with
such registration. The Company's obligations under this Section 2(c) shall
terminate on the date that the registration statement to be filed in accordance
with Section 2(a) is declared effective by the Commission.

     (ii) If a registration pursuant to this Section 2(c) involves a Public
Offering and the managing underwriter thereof advises the Company that, in its
view, the number of shares of Common Stock, Warrants or other shares of Common
Stock that the Company and the Investor intend to include in such registration
exceeds the largest number of shares of Common Stock or Warrants (including any
other shares of Common Stock or Warrants of the Company) that can be sold
without having an adverse effect on such Public Offering (the "Maximum Offering
Size"), the Company will include in such registration, only that number of
shares of Common Stock

                                      -4-
<PAGE>

or Warrants, as applicable, such that the number of Registrable Shares
registered does not exceed the Maximum Offering Size, with the difference
between the number of shares in the Maximum Offering Size and the number of
shares to be issued by the Company to be allocated (after including all shares
to be issued and sold by the Company) among the Company, the Investor, Lau
Technologies, and other holders of registration rights, pro rata on the basis of
the relative number of Registrable Shares offered for sale under such
registration by each of the Company and the Investor.

     (iii) If as a result of the proration provisions of Section 2 (c) (ii)
above, any Investor is not entitled to include all such Registrable Shares in
such registration, such Investor may elect to withdraw its request to include
any Registrable Shares in such registration. With respect to registrations
pursuant to this Section 2(c), the number of securities required to satisfy any
underwriters' over-allotment option shall be allocated pro rata among the
Company, the Investor, Lau Technologies, and other holders of registration
rights on the basis of the relative number of securities otherwise to be
included by each of them in the registration with respect to which such
over-allotment option relates.

     3. Obligations of the Company. In connection with the registration of the
Registrable Securities, the Company shall:

     (a) Promptly (i) prepare and file with the Commission such amendments
(including post-effective amendments) to the Registration Statement and
supplements to the Prospectus as may be necessary to keep the Registration
Statement continuously effective and in compliance with the provisions of the
Securities Act applicable thereto so as to permit the Prospectus forming part
thereof to be current and useable by Investors for resales of the Registrable
Securities for a period of one (1) year from the date on which the Registration
Statement is first declared effective by the Commission (the "Effective Time")
or such shorter period that will terminate when all the Registrable Securities
covered by the Registration Statement have been sold pursuant thereto in
accordance with the plan of distribution provided in the Prospectus, transferred
pursuant to Rule 144 under the Securities Act or otherwise transferred in a
manner that results in the delivery of new securities not subject to transfer
restrictions under the Securities Act (the "Registration Period") and (ii) take
all lawful action such that each of (A) the Registration Statement and any
amendment thereto does not, when it becomes effective, contain an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein, not misleading and
(B) the Prospectus forming part of the Registration Statement, and any amendment
or supplement thereto, does not at any time during the Registration Period
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading.
Notwithstanding the foregoing provisions of this Section 3(a), the Company may,
during the Registration Period, suspend the use of the Prospectus for a period
not to exceed 60 days (whether or not consecutive) in any 12-month period if the
Board of Directors of the Company determines in good faith that because of valid
business reasons, including pending mergers or other business combination
transactions, the planned acquisition or divestiture of assets, pending material
corporate developments and similar events, it is in the best interests of the
Company to suspend such use, and prior to or contemporaneously with suspending
such use the Company provides the Investors with written notice of such
suspension, which notice need not specify the nature of the event giving rise to
such suspension. At the end of any such suspension period, the Company shall
provide the Investors with written notice of the termination of such suspension.

                                      -5-
<PAGE>

     (b) During the Registration Period, comply with the provisions of the
Securities Act with respect to the Registrable Securities of the Company covered
by the Registration Statement until such time as all of such Registrable
Securities have been disposed of in accordance with the intended methods of
disposition by the Investors as set forth in the Prospectus forming part of the
Registration Statement;

     (c) (i) Prior to the filing with the Commission of any Registration
Statement (including any amendments thereto) and the distribution or delivery of
any Prospectus (including any supplements thereto), provide draft copies thereof
to the Investors and reflect in such documents all such comments as the
Investors (and their counsel) reasonably may propose and (ii) furnish to each
Investor whose Registrable Securities are included in the Registration Statement
and its legal counsel identified to the Company, (A) promptly after the same is
prepared and publicly distributed, filed with the Commission, or received by the
Company, one copy of the Registration Statement, each Prospectus, and each
amendment or supplement thereto, and (B) such number of copies of the Prospectus
and all amendments and supplements thereto and such other documents, as such
Investor may reasonably request in order to facilitate the disposition of the
Registrable Securities owned by such Investor;

     (d) (i) Register or qualify the Registrable Securities covered by the
Registration Statement under such securities or "blue sky" laws of such
jurisdictions as the Investors who hold a majority-in-interest of the
Registrable Securities being offered reasonably request, (ii) prepare and file
in such jurisdictions such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof at all times during the Registration Period,
(iii) take all such other lawful actions as may be necessary to maintain such
registrations and qualifications in effect at all times during the Registration
Period, and (iv) take all such other lawful actions reasonably necessary or
advisable to qualify the Registrable Securities for sale in such jurisdictions;
provided, however, that the Company shall not be required in connection
therewith or as a condition thereto to qualify to do business in any
jurisdiction where it would not otherwise be required to qualify but for this
Section 3(d);

     (e) As promptly as practicable after becoming aware of such event, notify
each Investor of the occurrence of any event, as a result of which the
Prospectus included in the Registration Statement, as then in effect, includes
an untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, and
promptly prepare an amendment to the Registration Statement and supplement to
the Prospectus to correct such untrue statement or omission, and deliver a
number of copies of such supplement and amendment to each Investor as such
Investor may reasonably request;

     (f) As promptly as practicable after becoming aware of such event, notify
each Investor who holds Registrable Securities being sold (or, in the event of
an underwritten offering, the managing underwriters) of the issuance by the
Commission of any stop order or other suspension of the effectiveness of the
Registration Statement at the earliest possible time and take all lawful action
to effect the withdrawal, recession or removal of such stop order or other
suspension;

     (g) Cause all the Registrable Securities covered by the Registration
Statement to be listed on a national securities exchange, and included in an
inter-dealer quotation system of a

                                      -6-
<PAGE>

registered national securities association, on or in which securities of the
same class or series issued by the Company are then listed or included;

     (h) Maintain a transfer agent and registrar, which may be a single entity,
for the Registrable Securities not later than the effective date of the
Registration Statement;

     (i) Cooperate with the Investors who hold Registrable Securities being
offered to facilitate the timely preparation and delivery of certificates for
the Registrable Securities to be offered pursuant to the Registration Statement
and enable such certificates for the Registrable Securities to be in such
denominations or amounts, as the case may be, as the Investors reasonably may
request and registered in such names as the Investor may request; and, within
three business days after a Registration Statement which includes Registrable
Securities is declared effective by the Commission, deliver and cause legal
counsel selected by the Company to deliver to the transfer agent for the
Registrable Securities (with copies to the Investors whose Registrable
Securities are included in such Registration Statement) an appropriate
instruction and, to the extent necessary, an opinion of such counsel;

     (j) Take all such other lawful actions reasonably necessary to expedite and
facilitate the disposition by the Investors of their Registrable Securities in
accordance with the intended methods therefor provided in the Prospectus which
are customary under the circumstances;

     (k) Make generally available to its security holders as soon as
practicable, but in any event not later than three (3) months after (i) the
effective date (as defined in Rule 158(c) under the Securities Act) of the
Registration Statement, and (ii) the effective date of each post-effective
amendment to the Registration Statement, as the case may be, an earnings
statement of the Company and its subsidiaries complying with Section 11(a) of
the Securities Act and the rules and regulations of the Commission thereunder
(including, at the option of the Company, Rule 158);

     (l) In the event of an underwritten offering, promptly include or
incorporate in a Prospectus supplement or post-effective amendment to the
Registration Statement such information as the managers reasonably agree should
be included therein and to which the Company does not reasonably object and make
all required filings of such Prospectus supplement or post-effective amendment
as soon as practicable after it is notified of the matters to be included or
incorporated in such Prospectus supplement or post-effective amendment;

     (m) (i) Make reasonably available for inspection by Investors, any
underwriter participating in any disposition pursuant to the Registration
Statement, and any attorney, accountant or other agent retained by such
Investors or any such underwriter all relevant financial and other records,
pertinent corporate documents and properties of the Company and its
subsidiaries, and (ii) cause the Company's officers, directors and employees to
supply all information reasonably requested by such Investors or any such
underwriter, attorney, accountant or agent in connection with the Registration
Statement, in each case, as is customary for similar due diligence examinations;
provided, however, that all records, information and documents that are
designated in writing by the Company, in good faith, as confidential,
proprietary or containing any material nonpublic information shall be kept
confidential by such Investors and any such underwriter, attorney, accountant or
agent (pursuant to an appropriate confidentiality agreement in the case of any
such holder or agent), unless such disclosure is made pursuant to judicial
process in a court proceeding (after first giving the Company an opportunity
promptly to seek a protective order or otherwise limit

                                      -7-
<PAGE>

the scope of the information sought to be disclosed) or is required by law, or
such records, information or documents become available to the public generally
or through a third party not in violation of an accompanying obligation of
confidentiality; provided, however, that such records, information and documents
shall be used by such person solely for the purpose of determining that
disclosures made in the Registration Statement are true and correct, and for no
other purpose; and provided further that, if the foregoing inspection and
information gathering would otherwise disrupt the Company's conduct of its
business, such inspection and information gathering shall, to the maximum extent
possible, be coordinated on behalf of the Investors and the other parties
entitled thereto by one firm of counsel designed by and on behalf of the
majority in interest of Investors and other parties;

     (n) In connection with any underwritten offering, make such representations
and warranties to the Investors participating in such underwritten offering and
to the managers, in form, substance and scope as are customarily made by the
Company to underwriters in secondary underwritten offerings;

     (o) In connection with any underwritten offering, obtain opinions of
counsel to the Company (which counsel and opinions (in form, scope and
substance) shall be reasonably satisfactory to the managers) addressed to the
underwriters, covering such matters as are customarily covered in opinions
requested in secondary underwritten offerings (it being agreed that the matters
to be covered by such opinions shall include, without limitation, as of the date
of the opinion and as of the Effective Time of the Registration Statement or
most recent post-effective amendment thereto, as the case may be, the absence
from the Registration Statement and the Prospectus, including any documents
incorporated by reference therein, of an untrue statement of a material fact or
the omission of a material fact required to be stated therein or necessary to
make the statements therein (in the case of the Prospectus, in light of the
circumstances under which they were made) not misleading, subject to customary
limitations);

     (p) In connection with any underwritten offering, obtain "cold comfort"
letters and updates thereof from the independent public accountants of the
Company (and, if necessary, from the independent public accountants of any
subsidiary of the Company or of any business acquired by the Company, in each
case for which financial statements and financial data are, or are required to
be, included in the Registration Statement), addressed to each underwriter
participating in such underwritten offering (if such underwriter has provided
such letter, representations or documentation, if any, required for such cold
comfort letter to be so addressed), in customary form and covering matters of
the type customarily covered in "cold comfort" letters in connection with
secondary underwritten offerings;

     (q) In connection with any underwritten offering, deliver such documents
and certificates as may be reasonably required by the managers, if any; and

     (r) In the event that any broker-dealer registered under the Exchange Act
shall be an "Affiliate" (as defined in Rule 2729(b)(1) of the rules and
regulations of the NASD (the "NASD Rules") (or any successor provision thereto))
of the Company or has a "conflict of interest" (as defined in Rule 2720(b)(7) of
the NASD Rules (or any successor provision thereto)) and such broker-dealer
shall underwrite, participate as a member of an underwriting syndicate or
selling group or assist in the distribution of any Registrable Securities
covered by the Registration Statement, whether as a holder of such Registrable
Securities or as an underwriter, a placement or sales agent

                                      -8-
<PAGE>

or a broker or dealer in respect thereof, or otherwise, the Company shall assist
such broker-dealer in complying with the requirements of the NASD Rules,
including, without limitation, by (A) engaging a "qualified independent
underwriter" (as defined in Rule 2720(b) (15) of the NASD Rules (or any
successor provision thereto)) to participate in the preparation of the
Registration Statement relating to such Registrable Securities, to exercise
usual standards of due diligence in respect thereof and to recommend the public
offering price of such Registrable Securities, (B) indemnifying such qualified
independent underwriter to the extent of the indemnification of underwriters
provided in Section 6(a) hereof, and (C) providing such information to such
broker-dealer as may be required in order for such broker-dealer to comply with
the requirements of the NASD Rules.

     4. Obligations of the Investors. In connection with the registration of the
Registrable Securities, the Investors shall have the following obligations:

     (a) It shall be a condition precedent to the obligations of the Company to
complete the registration pursuant to this Agreement with respect to the
Registrable Securities of a particular Investor that such Investor shall furnish
to the Company such information regarding itself, the Registrable Securities
held by it and the intended method of disposition of the Registrable Securities
held by it as shall be reasonably required to effect the registration of such
Registrable Securities and shall execute such documents in connection with such
registration as the Company may reasonably request. As least ten (10) business
days prior to the first anticipated filing date of the Registration Statement,
the Company shall notify each Investor of the information the Company requires
from each such Investor (the "Requested Information") if such Investor elects to
have any of its Registrable Securities included in the Registration Statement.
If at least five (5) business days prior to the anticipated filing date the
Company has not received the Requested Information from an Investor (a
"Non-Responsive Investor") , then the Company may file the Registration
Statement without including Registrable Securities of such Non-Responsive
Investor and have no further obligations to the Non-Responsive Investor;

     (b) Each Investor by its acceptance of the Registrable Securities agrees to
cooperate with the Company in connection with the preparation and filing of the
Registration Statement hereunder, unless such Investor has notified the Company
in writing of its election to exclude all of its Registrable Securities from the
Registration Statement; and

     (c) Each Investor agrees that, upon receipt of any notice from the Company
of the occurrence of any event of the kind described in Section 3(e) or 3(f), it
shall immediately discontinue its disposition of Registrable Securities pursuant
to the Registration Statement covering such Registrable Securities until such
Investor's receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(e) and, if so directed by the Company, such Investor
shall deliver to the Company (at the expense of the Company) or destroy (and
deliver to the Company a certificate of destruction) all copies in such
Investor's possession, of the Prospectus covering such Registrable Securities
current at the time of receipt of such notice.

     5. Expenses of Registration. All expenses, other than underwriting
discounts and commissions, incurred in connection with registrations, filings or
qualifications pursuant to Section 3, but including, without limitation, all
registration, listing, and qualifications fees, printing and engraving fees,
accounting fees, and the fees and disbursements of counsel for the Company, and
the reasonable fees of one firm of counsel to the holders of a majority in
interest of the Registrable Securities shall be borne by the Company.

                                      -9-
<PAGE>

     6. Indemnification and Contribution.

     (a) The Company shall indemnify and hold harmless each Investor and each
underwriter, if any, which facilitates the disposition of Registrable
Securities, and each of their respective officers and directors and each person
who controls such Investor or underwriter within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act (each such person being
sometimes hereinafter referred to as an "Indemnified Person") from and against
any losses, claims, damages or liabilities, joint or several, to which such
Indemnified Person may become subject under the Securities Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement or an
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, not misleading, or
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in any Prospectus or an omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; and the Company hereby agrees to
reimburse such Indemnified Person for all reasonable legal and other expenses
incurred by them in connection with investigating or defending any such action
or claim as and when such expenses are incurred; provided, however, that the
Company shall not be liable to any such Indemnified Person in any such case to
the extent that any such loss, claim, damage or liability arises out of or is
based upon (i) an untrue statement or alleged untrue statement made in, or an
omission or alleged omission from, such Registration Statement or Prospectus in
reliance upon and in conformity with written information furnished to the
Company by such Indemnified Person expressly for use therein or (ii) in the case
of the occurrence of an event of the type specified in Section 3(e), the use by
the Indemnified Person of an outdated or defective Prospectus after the Company
has provided to such Indemnified Person an updated Prospectus correcting the
untrue statement or alleged untrue statement or omission or alleged omission
giving rise to such loss, claim, damage or liability.

     (b) Indemnification by the Investors and Underwriters. Each Investor
agrees, as a consequence of the inclusion of any of its Registrable Securities
in a Registration Statement, and each underwriter, if any, which facilitates the
disposition of Registrable Securities shall agree, as a consequence of
facilitating such disposition of Registrable Securities, severally and not
jointly, to (i) indemnify and hold harmless the Company, its directors
(including any person who, with his or her consent, is named in the Registration
Statement as a director nominee of the Company), its officers who sign any
Registration Statement and each person, if any, who controls the Company within
the meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act, against any losses, claims, damages or liabilities to which the
Company or such other persons may become subject, under the Securities Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in such Registration Statement or
Prospectus or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein (in light of the circumstances under which they were
made, in the case of the Prospectus), not misleading, in each case to the
extent, but only to the extent, that such untrue statement or alleged untrue
statement or omission or alleged omission was made in reliance upon and in
conformity with written information furnished to the Company by such holder or
underwriter expressly for use therein; provided, however, that no

                                      -10-
<PAGE>

Investor or underwriter shall be liable under this Section 6(b) for any amount
in excess of the net proceeds paid to such Investor or underwriter in respect of
shares sold by it, and (ii) reimburse the Company for any legal or other
expenses incurred by the Company in connection with investigating or defending
any such action or claim as such expenses are incurred.

     (c) Notice of Claims, etc. Promptly after receipt by a party seeking
indemnification pursuant to this Section 6 (an "Indemnified Party") of written
notice of any investigation, claim, proceeding or other action in respect of
which indemnification is being sought (each, a "Claim"), the Indemnified Party
promptly shall notify the party against whom indemnification pursuant to this
Section 6 is being sought (the "Indemnifying Party") of the commencement
thereof; but the omission to so notify the Indemnifying Party shall not relieve
it from any liability that it otherwise may have to the Indemnified Party,
except to the extent that the Indemnifying Party is materially prejudiced and
forfeits substantive rights and defenses by reason of such failure. In
connection with any Claim as to which both the Indemnifying Party and the
Indemnified Party are parties, the Indemnifying Party shall be entitled to
assume the defense thereof. Notwithstanding the assumption of the defense of any
Claim by the Indemnifying Party, the Indemnified Party shall have the right to
employ separate legal counsel and to participate in the defense of such Claim,
and the Indemnifying Party shall bear the reasonable fees, out-of-pocket costs
and expenses of such separate legal counsel to the Indemnified Party if (and
only if): (x) the Indemnifying Party shall have agreed to pay such fees, costs
and expenses, (y) the Indemnified Party and the Indemnifying Party shall
reasonably have concluded that representation of the Indemnified Party by the
Indemnifying Party by the same legal counsel would not be appropriate due to
actual or, as reasonably determined by legal counsel to the Indemnified Party,
potentially differing interests between such parties in the conduct of the
defense of such Claim, or if there may be legal defenses available to the
Indemnified Party that are in addition to or disparate from those available to
the Indemnifying Party, or (z) the Indemnifying Party shall have failed to
employ legal counsel reasonably satisfactory to the Indemnified Party within a
reasonable period of time after notice of the commencement of such Claim. If the
Indemnified Party employs separate legal counsel in circumstances other than as
described in clauses (x) , (y) or (z) above, the fees, costs and expenses of
such legal counsel shall be borne exclusively by the Indemnified Party. Except
as provided above, the Indemnifying Party shall not, in connection with any
Claim in the same jurisdiction, be liable for the fees and expenses of more than
one firm of counsel for the Indemnified Party (together with appropriate local
counsel). The Indemnifying Party shall not, without the prior written consent of
the Indemnifying Party (which consent shall not unreasonably be withheld),
settle or compromise any Claim or consent to the entry of any judgment that does
not include an unconditional release of the Indemnifying Party from all
liabilities with respect to such Claim or judgment.

     (d) Contribution. If the indemnification provided for in this Section 6 is
unavailable to or insufficient to hold harmless an Indemnified Person under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative fault of the Indemnifying Party and the Indemnified Party in connection
with the statements or omissions which resulted in such losses, claims, damages
or liabilities (or actions in respect thereof), as well as any other relevant
equitable considerations. The relative fault of such Indemnifying Party and
Indemnified Party shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied

                                      -11-
<PAGE>

by such Indemnified Party or by such Indemnified Party, and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The parties hereto agree that it would not
be just and equitable if contribution pursuant to this Section 6(d) were
determined by pro rata allocation (even if the Investors or any underwriters
were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred
to in this Section 6 (d) . The amount paid or payable by an Indemnified Party as
a result of the losses, claims, damages or liabilities (or actions in respect
thereof) referred to above shall be deemed to include any legal or other fees or
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The obligations of the Investors
and any underwriters in this Section 6(d) to contribute shall be several in
proportion to the percentage of Registrable Securities registered or
underwritten, as the case may be, by them and not joint.

     (e) Notwithstanding any other provision of this Section 6, in no event
shall any (i) Investor be required to undertake liability to any person under
this Section 6 for any amounts in excess of the dollar amount of the proceeds to
be received by such Investor from the sale of such Investor's Registrable
Securities (after deducting any fees, discounts and commissions applicable
thereto) pursuant to any Registration Statement under which such Registrable
Securities are to be registered under the Securities Act and (ii) underwriter be
required to undertake liability to any Person hereunder for any amounts in
excess of the aggregate discount, commission or other compensation payable to
such underwriter with respect to the Registrable Securities underwritten by it
and distributed pursuant to the Registration Statement.

     (f) The obligations of the Company under this Section 6 shall be in
addition to any liability which the Company may otherwise have to any
Indemnified Person and the obligations of any Indemnified Person under this
Section 6 shall be in addition to any liability which such Indemnified Person
may otherwise have to the Company. The remedies provided in this Section 6 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to an indemnified party at law or in equity.

     7. Rule 144. With a view to making available to the Investors the benefits
of Rule 144 under the Securities Act or any other similar rule or regulation of
the Commission that may at any time permit the Investors to sell securities of
the Company to the public without registration ("Rule 144"), the Company agrees
to use its best efforts to:

     (a) comply with the provisions of paragraph (c) (1) of Rule 144; and

     (b) file with the Commission in a timely manner all reports and other
documents required to be filed by the Company pursuant to Section 13 or 15(d)
under the Exchange Act; and, if at any time it is not required to file such
reports but in the past had been required to or did file such reports, it will,
upon the request of any Holder, make available other information as required by,
and so long as necessary to permit sales of, its Registrable Securities pursuant
to Rule 144.

     8 Assignment. The rights to have the Company register Registrable
Securities pursuant to this Agreement shall be automatically assigned by the
Investors to not more than five (5) transferees of all or any portion of such
securities (or all or any portion of any Preferred Shares

                                      -12-
<PAGE>

or Warrant of the Company which is convertible into such securities) of
Registrable Securities only if: (a) the Investor agrees in writing with the
transferee or assignee to assign such rights subject to the terms and conditions
of this Agreement and the Securities Purchase Agreement, and a copy of such
agreement is furnished to the Company within a reasonable time after such
assignment, (b) the Company is, within a reasonable time after such transfer or
assignment, furnished with written notice of (i) the name and address of such
transferee or assignee and (ii) the securities with respect to which such
registration rights are being transferred or assigned, (c) immediately following
such transfer or assignment, the securities so transferred or assigned to the
transferee or assignee constitute Restricted Securities, and (d) at or before
the time the Company received the written notice contemplated by clause (b) of
this sentence the transferee or assignee agrees in writing with the Company to
be bound by all of the provisions contained herein.

     9 Amendment and Waiver. Any provision of this Agreement may be amended and
the observance thereof may be waived (either generally or in a particular
instance and either retroactively or prospectively) , only with the written
consent of the Company and Investors who hold a majority-in-interest of the
Registrable Securities. Any amendment or waiver effected in accordance with this
Section 9 shall be binding upon each Investor and the Company.

     10 Miscellaneous.

     (a) A person or entity shall be deemed to be a holder of Registrable
Securities whenever such person or entity owns of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more persons or entities with respect to the same
Registrable Securities, the Company shall act upon the basis of instructions,
notice or election received from the registered owner of such Registrable
Securities.

     (b) If, after the date hereof and prior to the Commission declaring the
Registration Statement to be filed pursuant to Section 2(a) effective under the
Securities Act, the Company grants to any Person any registration rights with
respect to any Company securities which are more favorable to such other Person
than those provided in this Agreement, then the Company forthwith shall grant
(by means of an amendment to this Agreement or otherwise) identical registration
rights to all Investors hereunder.

     (c) Except as may be otherwise provided herein, any notice or other
communication or delivery required or permitted hereunder shall be in writing
and shall be sent by facsimile with a copy delivered personally or sent by a
nationally recognized overnight courier service, and shall be deemed given when
so delivered personally or by overnight courier service, as follows:

     (1)  if to the Company, to:

          VIISAGE TECHNOLOGY, INC.
          30 Porter Road
          Littleton, Massachusetts  01460
          Attention:   Thomas J. Colatosti
                       Chief Executive Officer
          Telephone:   (978) 952-2200
          Facsimile:   (978) 952-2218

                                      -13-
<PAGE>

          With a copy to:

          Finnegan, Hickey, Dinsmoor & Johnson, PC
          175 Federal Street
          Boston, Massachusetts  01460
          Attention:   Charles Johnson, Esq.
          Telephone:   (617) 523-2500
          Facsimile:   (617) 422-0080

     (2)  if to the Investor, to:

          THE SHAAR FUND LTD.,
          c/o SHAAR ADVISORY SERVICES LTD.
          62 King George Street, Apartment 4F
          Jerusalem, Israel
          Attention: Sam Levinson

          with a copy to:

          HERRICK, FEINSTEIN LLP
          2 Park Avenue
          New York, New York 10016
          Attention: Irwin A. Kishner, Esq.
          Telephone:   (212) 592-1400
          Facsimile:   (212) 889-7577

     (3)  if to any other Investor, at such address as such Investor shall have
          provided in writing to the Company.

The Company or any Investor may change the foregoing address by notice given
pursuant to this Section 10(c).

     (d) Failure of any party to exercise any right or remedy under this
Agreement or otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

     (e) This Agreement shall be governed by and interpreted in accordance with
the laws of the State of Delaware. Each of the parties consents to the
jurisdiction of the federal courts whose districts encompass any part of the
City of New York or the state courts of the State of New York sitting in the
City of New York in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any objection including
any objection based on forum non conveniens, to the bringing of any such
proceeding in such jurisdictions.

     (f) The remedies provided in this Agreement are cumulative and not
exclusive of any remedies provided by law. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction to be
invalid, illegal, void or unenforceable, the remainder of the terms, provision,
covenants and restrictions set forth herein shall remain in full

                                      -14-
<PAGE>

force and effect and shall in no way be affected, impaired or invalidated, and
the parties hereto shall use their best efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.

     (g) Subsequent to the date hereof, the Company shall not enter into any
agreement with respect to its securities that is inconsistent with the rights
granted to the holders of Registrable Securities in this Agreement or otherwise
conflicts with the provisions hereof. Subject to the registration rights set
forth on Schedule IIIA.I of the Securities Purchase Agreement, the Company is
not currently a party to any agreement granting any registration rights with
respect to any of its securities to any person which conflicts with the
Company's obligations hereunder or gives any other party the right to include
any securities in any Registration Statement filed pursuant hereto, except for
such rights and conflicts as have been irrevocably waived. Without limiting the
generality of the foregoing, without the written consent of the Holders of a
majority in interest of the Registrable Securities, the Company shall not grant
to any person the right to request it to register any of its securities under
the Securities Act unless the rights so granted are subject in all respect to
the prior rights of the holders of Registrable Securities set forth herein, and
are not otherwise in conflict or inconsistent with the provisions of this
Agreement. The restrictions on the Company's rights to grant registration rights
under this paragraph shall terminate on the date the Registration Statement to
be filed pursuant to Section 2(a) is declared effective by the Commission.

     (h) This Agreement, the Securities Purchase Agreement, the Escrow
Instructions, dated as of the date hereof (the "Escrow Instructions"), between
the Company, the Investor and Herrick, Feinstein LLP, the Preferred Shares and
the Warrants constitute the entire agreement among the parties hereto with
respect to the subject matter hereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein.
This Agreement, the Securities Purchase Agreement, the Escrow Instructions, the
Certificate of Designation and the Warrants supersede all prior agreements and
undertakings among the parties hereto with respect to the subject matter hereof.

     (i) Subject to the requirements of Section 8 hereof, this Agreement shall
inure to the benefit of and be binding upon the successors and assigns of each
of the parties hereto.

     (j) All pronouns and any variations thereof refer to the masculine,
feminine or neuter, singular or plural, as the context may require.

     (k) The headings in this Agreement are for convenience of reference only
and shall not limit or otherwise affect the meaning thereof.

     (l) The Company acknowledges that any failure by the Company to perform its
obligations under Section 3, or any delay in such performance could result in
direct damages to the Investors and the Company agrees that, in addition to any
other liability the Company may have by reason of any such failure or delay, the
Company shall be liable for all direct damages caused by such failure or delay.

                                      -15-
<PAGE>

     (m) This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original but all of which shall constitute one and the
same agreement. A facsimile transmission of this signed Agreement shall be legal
and binding on all parties hereto.

                                      -16-
<PAGE>

     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the date first above written.

                                        THE COMPANY:

                                        VIISAGE TECHNOLOGY, INC.

                                        By:  /s/  William A. Marshall
                                             ----------------------------------
                                             Name:  William A. Marshall
                                             Title: Chief Financial Officer

                                        BUYER:

                                        THE SHAAR FUND LTD.

                                        By:  INTERCARRIBBEAN SERVICES, INC.

                                             By:  /s/  Sam Levinson
                                                  -----------------------------
                                                  Name:  Sam Levinson
                                                  Title:

                                      -17-

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