Document:

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                                                                   Exhibit 10.20

THIS COMMON STOCK PURCHASE WARRANT AND THE SECURITIES REPRESENTED HEREBY HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE
TRANSFERRED IN VIOLATION OF SUCH ACT, THE RULES AND REGULATIONS THEREUNDER OR
THE PROVISIONS OF THIS COMMON STOCK PURCHASE WARRANT.

                    Number of Shares of Common Stock: 75,000

                          COMMON STOCK PURCHASE WARRANT

                           To Purchase Common Stock of

                            Viisage Technology, Inc.

     THIS IS TO CERTIFY THAT The Shaar Fund Ltd., or its registered assigns, is
entitled, at any time from the Funding Date (as hereinafter defined) to the
Expiration Date (as hereinafter defined), to purchase from VIISAGE TECHNOLOGY,
INC., a Delaware corporation (the "Company"), 75,000 shares of Common Stock (as
hereinafter defined and subject to adjustment as provided herein), in whole or
in part, including fractional parts, at a purchase price equal to $1.54 per
share, all on the terms and conditions and pursuant to the provisions
hereinafter set forth.

1.   DEFINITIONS

     As used in this Common Stock Purchase Warrant (this "Warrant"), the
following terms have the respective meanings set forth below:

     "Additional Shares of Common Stock" shall mean all shares of Common Stock
issued by the Company after the Funding Date, other than Warrant Shares.

     "Business Day" shall mean any day that is not a Saturday or Sunday or a day
on which banks are required or permitted to be closed in the State of New York.

     "Certificate of Designation" shall mean that certificate indicating the
designations, rights and preferences of the Company's Series A 7% Convertible
Preferred Stock, as filed with the Secretary of State of the State of Delaware,
as of June 30, 1999.

     "Commission" shall mean the Securities and Exchange Commission or any other
federal agency then administering the Securities Act and other federal
securities laws.

     "Common Stock" shall mean (except where the context otherwise indicates)
the Common Stock, par value $0.001, of the Company as constituted on the Funding
Date, and any capital stock into which such Common Stock may thereafter be
changed, and shall also include
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(i) capital stock of the Company of any other class (regardless of how
denominated) issued to the holders of shares of Common Stock upon any
reclassification thereof which is also not preferred as to dividends or assets
over any other class of stock of the Company and which is not subject to
redemption and (ii) shares of common stock of any successor or acquiring
corporation received by or distributed to the holders of Common Stock of the
Company in the circumstances contemplated by Section 4.4.

     "Convertible Securities" shall mean evidences of indebtedness, shares of
stock or other securities which are convertible into or exchangeable, with or
without payment of additional consideration in cash or property, for shares of
Common Stock, either immediately or upon the occurrence of a specified date or a
specified event.

     "Current Warrant Price" shall mean, in respect of a share of Common Stock
at any date herein specified, the price at which a share of Common Stock may be
purchased pursuant to this Warrant on such date.

     "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended,
or any successor federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect from time to time.

     "Exercise Period" shall mean the period during which this Warrant is
exercisable pursuant to Section 2.1.

     "Expiration Date" shall mean June 30, 2002.

     "Funding Date" means the date and time of the issuance and sale of the
Preferred Shares and the Warrants (each as defined in the Securities Purchase
Agreement).

     "Holder" shall mean the Person in whose name the Warrant or Warrant Shares
set forth herein is registered on the books of the Company maintained for such
purpose.

     "Market Price" shall have the meaning set forth in the Certificate of
Designation.

     "Other Property" shall have the meaning set forth in Section 4.4.

     "Outstanding" shall mean, when used with reference to Common Stock, at any
date as of which the number of shares thereof is to be determined, all issued
shares of Common Stock, except shares then owned or held by or for the account
of the Company or any subsidiary thereof, and shall include all shares issuable
in respect of outstanding scrip or any certificates representing fractional
interests in shares of Common Stock.

     "Person" shall mean any individual, sole proprietorship, partnership, joint
venture, trust, incorporated organization, association, corporation,
institution, public benefit corporation, entity or government (whether federal,
state, county, city, municipal or otherwise, including, without limitation, any
instrumentality, division, agency, body or department thereof).

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     "Registration Rights Agreement" shall mean the Registration Rights
Agreement dated a date even herewith by and between the Company and The Shaar
Fund Ltd., as it may be amended from time to time.

     "Restricted Common Stock" shall mean shares of Common Stock which are, or
which upon their issuance on the exercise of this Warrant would be, evidenced by
a certificate bearing the restrictive legend set forth in Section 9.1(a).

     "Securities Act" shall mean the Securities Act of 1933, as amended, or any
successor federal statute, and the rules and regulations of the Commission
thereunder, all as the same shall be in effect at the time.

     "Securities Purchase Agreement" shall mean the Securities Purchase
Agreement dated as of a date even herewith by and between the Company and The
Shaar Fund, Ltd. as it may be amended from time to time.

     "Transfer" shall mean any disposition of any Warrant or Warrant Shares or
of any interest in either thereof, which would constitute a sale thereof within
the meaning of the Securities Act.

     "Transfer Notice" shall have the meaning set forth in Section 9.2.

     "Warrants" shall mean this Warrant and all warrants issued upon transfer,
division or combination of, or in substitution for, any thereof. All Warrants
shall at all times be identical as to terms and conditions and date, except as
to the number of shares of Common Stock for which they may be exercised.

     "Warrant Price" shall mean an amount equal to (i) the number of shares of
Common Stock being purchased upon exercise of this Warrant pursuant to Section
2.1, multiplied by (ii) the Current Warrant Price as of the date of such
exercise.

     "Warrant Shares" shall mean the shares of Common Stock purchased by the
holders of the Warrants upon the exercise thereof.

2.   EXERCISE OF WARRANT

     2.1 Manner of Exercise. From and after the Funding Date and until 5:00
P.M., New York City time, on the Expiration Date, Holder may exercise this
Warrant, on any Business Day, in increments of 15,000 shares of Common Stock
purchasable hereunder.

     In order to exercise this Warrant, in whole or in part, Holder shall
deliver to the Company at its principal office at 30 Porter Road, Littleton,
Massachusetts 01460, or at the office or agency designated by the Company
pursuant to Section 12, (i) a written notice of Holder's election to exercise
this Warrant, which notice shall specify the number of shares of Common Stock to
be purchased, (ii) payment of the Warrant Price in cash or by wire transfer or
cashier's check drawn on a United States bank and (iii) this Warrant. Such
notice shall be substantially in the form of the subscription form appearing at
the end of this Warrant as Exhibit A, duly executed by Holder or its agent or
attorney. Upon receipt of the items referred to in

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clauses (i), (ii) and (iii) above, the Company shall, as promptly as
practicable, and in any event within ten (10) Business Days thereafter, execute
or cause to be executed and deliver or cause to be delivered to Holder a
certificate or certificates representing the aggregate number of full shares of
Common Stock issuable upon such exercise, together with cash in lieu of any
fraction of a share, as hereinafter provided. The stock certificate or
certificates so delivered shall be, to the extent possible, in such denomination
or denominations as Holder shall request in the notice and shall be registered
in the name of Holder or, subject to Section 9, such other name as shall be
designated in the notice. This Warrant shall be deemed to have been exercised
and such certificate or certificates shall be deemed to have been issued, and
Holder or any other Person so designated to be named therein shall be deemed to
have become a holder of record of such shares for all purposes, as of the date
the notice, together with the cash or check or checks and this Warrant, is
received by the Company as described above and all taxes required to be paid by
Holder, if any, pursuant to Section 2.2 prior to the issuance of such shares
have been paid. If this Warrant shall have been exercised in part, the Company
shall, at the time of delivery of the certificate or certificates representing
Warrant Shares, deliver to Holder a new Warrant evidencing the rights of Holder
to purchase the unpurchased shares of Common Stock called for by this Warrant,
which new Warrant shall in all other respects be identical with this Warrant,
or, at the request of Holder, appropriate notation may be made on this Warrant
and the same returned to Holder. Notwithstanding any provision herein to the
contrary, the Company shall not be required to register shares in the name of
any Person who acquired this Warrant (or part hereof) or any Warrant Shares
otherwise than in accordance with this Warrant.

     2.2 Payment of Taxes and Charges. All shares of Common Stock issuable upon
the exercise of this Warrant pursuant to the terms hereof shall be validly
issued, fully paid and nonassessable, and without any preemptive rights. The
Company shall pay all expenses in connection with, and all taxes and other
governmental charges (excluding income and related taxes) that may be imposed
with respect to, the issue or delivery thereof, unless such tax or charge is
imposed by law upon Holder, in which case such taxes or charges shall be paid by
Holder. The Company shall not be required, however, to pay any tax or other
charge imposed in connection with any transfer involved in the issue of any
certificate for shares of Common Stock issuable upon exercise of this Warrant in
any name other than that of Holder, and in such case the Company shall not be
required to issue or deliver any stock certificate until such tax or other
charge has been paid or it has been established to the satisfaction of the
Company that no such tax or other charge is due.

     2.3 Fractional Shares. The Company shall not be required to issue a
fractional share of Common Stock upon exercise of any Warrant. As to any
fraction of a share which Holder would otherwise be entitled to purchase upon
such exercise, the Company shall pay a cash adjustment in respect of such final
fraction in an amount equal to the same fraction of the Market Price per share
of Common Stock as of the Initial Funding Date.

     2.4 Continued Validity. A holder of shares of Common Stock issued upon the
exercise of this Warrant, in whole or in part (other than a holder who acquires
such shares after the same have been publicly sold pursuant to a Registration
Statement under the Securities Act or sold pursuant to Rule 144 thereunder),
shall continue to be entitled with respect to such shares to all rights to which
it would have been entitled as Holder under Sections 9, 10 and 14 of this
Warrant. The Company will, at the time of exercise of this Warrant, in whole or
in part, upon the request of Holder, acknowledge in writing, in form reasonably
satisfactory to Holder, its

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continuing obligation to afford Holder all such rights; provided, however, that
if Holder shall fail to make any such request, such failure shall not affect the
continuing obligation of the Company to afford to Holder all such rights.

3.   TRANSFER, DIVISION AND COMBINATION

     3.1 Transfer. Subject to compliance with the Securities Purchase Agreement
and Section 3.1 and Section 9 herein, transfer of this Warrant and all rights
hereunder, in whole or in part, shall be registered on the books of the Company
to be maintained for such purpose, upon surrender of this Warrant at the
principal office of the Company referred to in Section 2.1 or the office or
agency designated by the Company pursuant to Section 12, together with a written
assignment of this Warrant substantially in the form of Exhibit B hereto duly
executed by Holder or its agent or attorney and funds sufficient to pay any
transfer taxes payable upon the making of such transfer. Upon such surrender
and, if required, such payment, the Company shall, subject to Section 9, execute
and deliver a new Warrant or Warrants in the name of the assignee or assignees
and in the denomination specified in such instrument of assignment, and shall
issue to the assignor a new Warrant evidencing the portion of this Warrant not
so assigned, and this Warrant shall promptly be cancelled. A Warrant, if
properly assigned in compliance with Section 9, may be exercised by a new Holder
for the purchase of shares of Common Stock without having a new warrant issued.

     3.2 Division and Combination. Subject to Section 3.1 and 9, this Warrant
may be divided or combined with other Warrants upon presentation hereof at the
aforesaid office or agency of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by Holder or its agent or attorney. Subject to compliance with Section
3.1 and with Section 9, as to any transfer which may be involved in such
division or combination, the Company shall execute and deliver a new Warrant or
Warrants in exchange for the Warrant or Warrants to be divided or combined in
accordance with such notice.

     3.3 Expenses. The Company shall prepare, issue and deliver at its own
expense (other than transfer taxes) the new Warrant or Warrants under this
Section 3.

     3.4 Maintenance of Books. The Company agrees to maintain, at its aforesaid
office or agency, books for the registration and the registration of transfer of
the Warrants.

4.   ADJUSTMENTS

     The number of shares of Common Stock for which this Warrant is exercisable,
or the price at which such shares may be purchased upon exercise of this
Warrant, shall be subject to adjustment from time to time as set forth in this
Section 4. The Company shall give Holder notice of any event described below
which requires an adjustment pursuant to this Section 4 at the time of such
event.

     4.1 Stock Dividends, Subdivisions and Combinations. If at any time the
Company shall:

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          (a) take a record of the holders of its Common Stock for the purpose
     of entitling them to receive a dividend payable in, or other distribution
     of, Additional Shares of Common Stock,

          (b) subdivide its outstanding shares of Common Stock into a larger
     number of shares of Common Stock, or

          (c) combine its outstanding shares of Common Stock into a smaller
     number of shares of Common Stock,

then (i) the number of shares of Common Stock for which this Warrant is
exercisable immediately after the occurrence of any such event shall be adjusted
to equal the number of shares of Common Stock which a record holder of the same
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to the occurrence of such event would own or be entitled to
receive after the happening of such event, and (ii) the Current Warrant Price
shall be adjusted to equal (A) the Current Warrant Price multiplied by the
number of shares of Common Stock for which this Warrant is exercisable
immediately prior to the adjustment divided by (B) the number of shares for
which this Warrant is exercisable immediately after such adjustment.

     4.2 Certain Other Distributions. If at any time the Company shall take a
record of the holders of its Common Stock for the purpose of entitling them to
receive any dividend or other distribution of:

          (a) cash,

          (b) any evidences of its indebtedness, any shares of its stock or any
     other securities or property of any nature whatsoever (other than cash,
     Convertible Securities or Additional Shares of Common Stock), or

          (c) any warrants or other rights to subscribe for or purchase any
     evidences of its indebtedness, any shares of its stock or any other
     securities or property of any nature whatsoever (other than cash,
     Convertible Securities or Additional Shares of Common Stock),

then Holder shall be entitled to receive such dividend or distribution as if
Holder had exercised this Warrant. A reclassification of the Common Stock (other
than a change in par value, or from par value to no par value or from no par
value to par value) into shares of Common Stock and shares of any other class of
stock shall be deemed a distribution by the Company to the holders of its Common
Stock of such shares of such other class of stock within the meaning of this
Section 4.2 and, if the outstanding shares of Common Stock shall be changed into
a larger or smaller number of shares of Common Stock as a part of such
reclassification, such change shall be deemed a subdivision or combination, as
the case may be, of the outstanding shares of Common Stock within the meaning of
Section 4.1.

     4.3 Other Provisions Applicable to Adjustments under this Section. The
following provisions shall be applicable to the making of adjustments of the
number of shares of Common

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Stock for which this Warrant is exercisable and the Current Warrant Price
provided for in this Section 4:

          (a) When Adjustments to Be Made. The adjustments required by this
     Section 4 shall be made whenever and as often as any specified event
     requiring an adjustment shall occur. For the purpose of any adjustment, any
     specified event shall be deemed to have occurred at the close of business
     on the date of its occurrence.

          (b) Fractional Interests. In computing adjustments under this Section
     4, fractional interests in Common Stock shall be taken into account to the
     nearest 1/10th of a share.

          (c) When Adjustment Not Required. If the Company shall take a record
     of the holders of its Common Stock for the purpose of entitling them to
     receive a dividend or distribution or subscription or purchase rights and
     shall, thereafter and before the distribution to stockholders thereof,
     legally abandon its plan to pay or deliver such dividend, distribution,
     subscription or purchase rights, then thereafter no adjustment shall be
     required by reason of the taking of such record and any such adjustment
     previously made in respect thereof shall be rescinded and annulled.

          (d) Challenge to Good Faith Determination. Whenever the Board of
     Directors of the Company shall be required to make a determination in good
     faith of the fair value of any item under this Section 4, such
     determination may be challenged in good faith by the Holder, and any
     dispute shall be resolved by an investment banking firm of recognized
     national standing selected by the Company and reasonably acceptable to the
     Holder.

     4.4 Reorganization, Reclassification, Merger, Consolidation or Disposition
of Assets. If the Company shall reorganize its capital, reclassify its capital
stock, consolidate or merge with or into another corporation (where the Company
is not the surviving corporation or where there is a change in or distribution
with respect to the Common Stock of the Company), or sell, transfer or otherwise
dispose of all or substantially all of its property, assets or business to
another corporation and, pursuant to the terms of such reorganization,
reclassification, merger, consolidation or disposition of assets, shares of
common stock of the successor or acquiring corporation, or any cash, shares of
stock or other securities or property of any nature whatsoever (including
warrants or other subscription or purchase rights) in addition to or in lieu of
common stock of the successor or acquiring corporation ("Other Property"), are
to be received by or distributed to the holders of Common Stock of the Company,
then Holder shall have the right thereafter to receive, upon exercise of the
Warrant within ten (10) business days following the Company's notice of such
event, the number of shares of common stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and Other
Property receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event. In the case of any such reorganization,
reclassification, merger, consolidation or disposition of assets, the successor
or acquiring corporation (if other than the Company) shall expressly assume the
due and punctual observance and performance of each and every covenant and
condition of this Warrant to be performed and observed by the Company and all
the obligations and liabilities hereunder, subject to such

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modifications as may be deemed appropriate (as determined by resolution of the
Board of Directors of the Company) in order to provide for adjustments of shares
of Common Stock for which this Warrant is exercisable which shall be as nearly
equivalent as practicable to the adjustments provided for in this Section 4. For
purposes of this Section 4.4, "common stock of the successor or acquiring
corporation" shall include stock of such corporation of any class which is not
preferred as to dividends or assets over any other class of stock of such
corporation and which is not subject to redemption and shall also include any
evidences of indebtedness, shares of stock or other securities which are
convertible into or exchangeable for any such stock, either immediately or upon
the arrival of a specified date or the happening of a specified event and any
warrants or other rights to subscribe for or purchase any such stock. The
foregoing provisions of this Section 4.4 shall similarly apply to successive
reorganizations, reclassifications, mergers, consolidations or disposition of
assets.

     4.5 Other Action Affecting Common Stock. If at any time or from time to
time the Company shall take any action in respect of its Common Stock, other
than any action described in this Section 4, which would have a materially
adverse effect upon the rights of the Holder, the number of shares of Common
Stock and/or the purchase price thereof shall be adjusted in such manner as may
be equitable in the circumstances, as determined in good faith by the Board of
Directors of the Company.

     4.6 Certain Limitations. Notwithstanding anything herein to the contrary,
the Company agrees not to enter into any transaction which, by reason of any
adjustment hereunder, would cause the Current Warrant Price to be less than the
par value per share of Common Stock.

5.   NOTICES TO HOLDER

     5.1 Notice of Adjustments. Whenever the number of shares of Common Stock
for which this Warrant is exercisable, or whenever the price at which a share of
such Common Stock may be purchased upon exercise of the Warrants, shall be
adjusted pursuant to Section 4, the Company shall forthwith prepare a
certificate to be executed by the chief financial officer of the Company setting
forth, in reasonable detail, the event requiring the adjustment and the method
by which such adjustment was calculated (including a description of the basis on
which the Board of Directors of the Company determined the fair value of any
evidences of indebtedness, shares of stock, other securities or property or
warrants or other subscription or purchase rights referred to in Section 4.2),
specifying the number of shares of Common Stock for which this Warrant is
exercisable and (if such adjustment was made pursuant to Section 4.4 or 4.5)
describing the number and kind of any other shares of stock or Other Property
for which this warrant is exercisable, and any change in the purchase price or
prices thereof, after giving effect to such adjustment or change. The Company
shall promptly cause a signed copy of such certificate to be delivered to the
Holder in accordance with Section 14.2. The Company shall keep at its office or
agency designated pursuant to Section 12 copies of all such certificates and
cause the same to be available for inspection at said office during normal
business hours by the Holder or any prospective purchaser of a Warrant
designated by the Holder.

     5.2 Notice of Corporate Action. If at any time

          (a) the Company shall take a record of the holders of its Common Stock
     for the purpose of entitling them to receive a dividend or other
     distribution, or any right to

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     subscribe for or purchase any evidences of its indebtedness, any shares of
     stock of any class or any other securities or property, or to receive any
     other right, or

          (b) there shall be any capital reorganization of the Company, any
     reclassification or recapitalization of the capital stock of the Company or
     any consolidation or merger of the Company with, or any sale, transfer or
     other disposition of all or substantially all the property, assets or
     business of the Company to, another corporation, or

          (c) there shall be a voluntary or involuntary dissolution, liquidation
     or winding up of the Company;

then, in any one or more of such cases, the Company shall give to Holder (i) at
least ten 10 business days' prior written notice of the date on which a record
date shall be selected for such dividend, distribution or right or for
determining rights to vote in respect of any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up, and (ii) in the case of any such
reorganization, reclassification, merger, consolidation, sale, transfer,
disposition, dissolution, liquidation or winding up, at least ten (10) business
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause also shall specify (i) the date
on which any such record is to be taken for the purpose of such dividend,
distribution or right, the date on which the holders of Common Stock shall be
entitled to any such dividend, distribution or right, and the amount and
character thereof, and (ii) the date on which any such reorganization,
reclassification, merger, consolidation, sale, transfer, disposition,
dissolution, liquidation or winding up is to take place and the time, if any
such time is to be fixed, as of which the holders of Common Stock shall be
entitled to exchange their shares of Common Stock for securities or other
property deliverable upon such reorganization, reclassification, merger,
consolidation, sale, transfer, disposition, dissolution, liquidation or winding
up. Each such written notice shall be sufficiently given if addressed to Holder
at the last address of Holder appearing on the books of the Company and
delivered in accordance with Section 14.2.

6.   NO IMPAIRMENT

     (a) The Company shall not by any action, including, without limitation,
amending its certificate of incorporation or through any reorganization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Warrant, but will at all times in
good faith assist in the carrying out of all such terms and in the taking of all
such actions as may be necessary or appropriate to protect the rights of Holder
against impairment. Without limiting the generality of the foregoing, the
Company will (i) not increase the par value of any shares of Common Stock
receivable upon the exercise of this Warrant above the amount payable therefor
upon such exercise immediately prior to such increase in par value, (ii) take
all such action as may be necessary or appropriate in order that the Company may
validly and legally issue fully paid and nonassessable shares of Common Stock
upon the exercise of this warrant, and (iii) use its best efforts to obtain all
such authorizations, exemptions or consents from any public regulatory body
having jurisdiction thereof as may be necessary to enable the Company to perform
its obligations under this Warrant.

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     (b) Upon the request of Holder, the Company will at any time during the
period this Warrant is outstanding acknowledge in writing, in form satisfactory
to Holder, the continuing validity of this Warrant and the obligations of the
Company hereunder.

7.   RESERVATION AND AUTHORIZATION OF COMMON STOCK

     (a) From and after the Funding Date, the Company shall at all times reserve
and keep available for issue upon the exercise of Warrants such number of its
authorized but unissued shares of Common Stock as will be sufficient to permit
the exercise in full of all outstanding Warrants. All shares of Common Stock
which shall be so issuable, when issued upon exercise of any Warrant and payment
therefor in accordance with the terms of such Warrant, shall be duly and validly
issued and fully paid and nonassessable, and not subject to preemptive rights.

     (b) Before taking any action which would cause an adjustment reducing the
Current Warrant Price below the then par value, if any, of the shares of Common
Stock issuable upon exercise of the Warrants, the Company shall take any
corporate action which may be necessary in order that the Company may validly
and legally issue fully paid and non-assessable shares of such Common Stock at
such adjusted Current Warrant Price.

     (c) Before taking any action which would result in an adjustment in the
number of shares of Common Stock for which this Warrant is exercisable or in the
Current Warrant Price, the Company shall obtain all such authorizations or
exemptions thereof, or consents thereto, as may be necessary from any public
regulatory body or bodies having jurisdiction thereof.

8.   TAKING OF RECORD; STOCK AND WARRANT TRANSFER BOOKS

     In the case of all dividends or other distributions by the Company to the
holders of its Common Stock with respect to which any provision of Section 4
refers to the taking of a record of such holders, the Company will in each such
case take such a record and will take such record as of the close of business on
a Business Day. The Company will not at any time, except upon dissolution,
liquidation or winding up of the Company, close its stock transfer books or
Warrant transfer books so as to result in preventing or delaying the exercise or
transfer of any Warrant.

9.   RESTRICTIONS ON TRANSFERABILITY

     The Warrants and the Warrant Shares shall not be transferred, hypothecated
or assigned before satisfaction of the conditions specified in this Section 9,
which conditions are intended to ensure compliance with the provisions of the
Securities Act with respect to the Transfer of any Warrant or any Warrant
Shares. Holder, by acceptance of this Warrant, agrees to be bound by the
provisions of this Section 9.

     9.1 Restrictive Legend. (a) The Holder by accepting this Warrant and any
Warrant Shares agrees that unless registered under the Securities Act of 1933,
as amended (the "Securities Act"), subsequent to the Funding Date and prior to
the exercise hereof, this Warrant and the Warrant Shares issuable upon exercise
hereof may not be assigned or otherwise transferred unless and until (i) the
Company has received an opinion of counsel for the Holder reasonably
satisfactory to the Company and its counsel that such securities may be sold
pursuant to an exemption from registration under the Securities Act or (ii) a
registration statement relating to such securities has been filed by the Company
and declared effective by the Commission.

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     (b) Each certificate for Warrant Shares issuable hereunder shall bear a
legend as follows unless such securities have been sold pursuant to an effective
registration statement under the Securities Act:

          "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."

     (c) Except as otherwise provided in this Section 9, the Warrant shall be
stamped or otherwise imprinted with a legend in substantially the following
form:

     "This Warrant and the securities represented hereby have not been
     registered under the Securities Act of 1933, as amended, and may
     not be transferred in violation of such Act, the rules and
     regulations thereunder or the provisions of this Warrant."

     9.2 Notice of Proposed Transfers. Prior to any Transfer or attempted
Transfer of any Warrants or any shares of Restricted Common Stock, the Holder
shall give ten days, prior written notice (a "Transfer Notice") to the Company
and its counsel of Holder's intention to effect such Transfer, describing the
manner and circumstances of the proposed Transfer, and obtain from counsel to
Holder who shall be reasonably satisfactory to the Company, an opinion that the
proposed Transfer of such Warrants or such Restricted Common Stock may be
effected without registration under the Securities Act. After receipt of the
Transfer Notice and opinion, the Company shall, within five (5) business days
thereof, notify the Holder as to whether such opinion is reasonably satisfactory
and, if so, such holder shall thereupon be entitled to Transfer such Warrants or
such Restricted Common Stock, in accordance with the terms of the Transfer
Notice. Each certificate, if any, evidencing such shares of Restricted Common
Stock issued upon such Transfer shall bear the restrictive legend set forth in
Section 9.1(b), and the Warrant issued upon such Transfer shall bear the
restrictive legend set forth in Section 9.1(c), unless in the opinion of such
counsel such legend is not required in order to ensure compliance with the
Securities Act. The Holder shall not be entitled to Transfer such Warrants or
such Restricted Common Stock until receipt of notice from the Company under this
Section 9.2 that such opinion is reasonably satisfactory.

     9.3 Required Registration. Pursuant to the terms and conditions set forth
in the Registration Rights Agreement, the Company shall prepare and file with
the Commission not later than the ninetieth (90th) day after the Funding Date, a
Registration Statement relating to the offer and sale of the Common Stock
issuable upon exercise of the Warrants 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 no later than one hundred and
eighty (180) days after the Funding Date.

                                      -11-
<PAGE>

     9.4 Termination of Restrictions. Notwithstanding the foregoing provisions
of Section 9, the restrictions imposed by this Section upon the transferability
of the Warrants, the Warrant Shares and the Restricted Common Stock (or Common
Stock issuable upon the exercise of the Warrants) and the legend requirements of
Section 9.1 shall terminate as to any particular Warrant or share of Warrant
Shares or Restricted Common Stock (or Common Stock issuable upon the exercise of
the warrants) (i) when and so long as such security shall have been effectively
registered under the Securities Act and disposed of pursuant thereto or (ii)
when the Company shall have received an opinion of counsel reasonably
satisfactory to it and its counsel that such shares may be transferred without
registration thereof under the Securities Act. Whenever the restrictions imposed
by Section 9 shall terminate as to this Warrant, as hereinabove provided, the
Holder hereof shall be entitled to receive from the Company upon written request
of the Holder, at the expense of the Company, a new Warrant bearing the
following legend in place of the restrictive legend set forth hereon:

          "THE RESTRICTIONS ON TRANSFERABILITY OF THE WITHIN WARRANT
          CONTAINED IN SECTION 9 HEREOF TERMINATED ON
          _________________, AND ARE OF NO FURTHER FORCE AND EFFECT."

All Warrants issued upon registration of transfer, division or combination of,
or in substitution for, any Warrant or Warrants entitled to bear such legend
shall have a similar legend endorsed thereon. Whenever the restrictions imposed
by this Section shall terminate as to any share of Restricted Common Stock, as
hereinabove provided, the holder thereof shall be entitled to receive from the
Company, at the Company's expense, a new certificate representing such Common
Stock not bearing the restrictive legend set forth in Section 9.1(b).

     9.5 Listing on Securities Exchange. If the Company shall list any shares of
Common Stock on any securities exchange, it will, at its expense, list thereon,
maintain and, when necessary, increase such listing of, all shares of Common
Stock issued or, to the extent permissible under the applicable securities
exchange rules, issuable upon the exercise of this Warrant so long as any shares
of Common Stock shall be so listed during any such Exercise Period.

10.  SUPPLYING INFORMATION

     The Company shall cooperate with Holder in supplying such information as
may be reasonably necessary for Holder to complete and file any information
reporting forms presently or hereafter required by the Commission as a condition
to the availability of an exemption from the Securities Act for the sale of any
Warrant or Restricted Common Stock.

11.  LOSS OR MUTILATION

     Upon receipt by the Company from Holder of evidence reasonably satisfactory
to it of the ownership of and the loss, theft, destruction or mutilation of this
Warrant and indemnity reasonably satisfactory to it (it being understood that
the written agreement of the Holder shall be sufficient indemnity), and in case
of mutilation upon surrender and cancellation hereof, the Company will execute
and deliver in lieu hereof a new Warrant of like tenor to Holder; provided,

                                      -12-
<PAGE>

in the case of mutilation, no indemnity shall be required if this Warrant in
identifiable form is surrendered to the Company for cancellation.

12.  OFFICE OF THE COMPANY

     As long as any of the Warrants remain outstanding, the Company shall
maintain an office or agency (which may be the principal executive offices of
the Company) where the Warrants may be presented for exercise, registration of
transfer, division or combination as provided in this Warrant.

13.  LIMITATION OF LIABILITY

     No provision hereof, in the absence of affirmative action by Holder to
purchase shares of Common Stock, and no enumeration herein of the rights or
privileges of Holder hereof, shall give rise to any liability of Holder for the
purchase price of any Common Stock or as a stockholder of the Company, whether
such liability is asserted by the Company or by creditors of the Company.

14.  MISCELLANEOUS

     14.1 Nonwaiver and Expenses. No course of dealing or any delay or failure
to exercise any right hereunder on the part of Holder shall operate as a waiver
of such right or otherwise prejudice Holder's rights, powers or remedies. If the
Company fails to make, when due, any payments provided for hereunder, or fails
to comply with any other provision of this Warrant, the Company shall pay to
Holder such amounts as shall be sufficient to cover any reasonable costs and
expenses including, but not limited to, reasonable attorneys' fees, including
those of appellate proceedings, incurred by Holder in collecting any amounts due
pursuant hereto or in otherwise enforcing any of its rights, powers or remedies
hereunder.

     14.2 Notice Generally. 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) 422-6080

          (2)  if to the Holder, 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

The Company or the Holder may change the foregoing address by notice given
pursuant to this Section 14.2.

     14.3 Indemnification. The Company agrees to indemnify and hold harmless
Holder from and against any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, claims, costs, attorneys' fees, expenses
and disbursements of any kind which may be imposed upon, incurred by or asserted
against Holder in any manner relating to or arising out of any failure by the
Company to perform or observe in any material respect any of its covenants,
agreements, undertakings or obligations set forth in this Warrant; provided,
however, that the Company will not be liable hereunder to the extent that any
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, attorneys' fees, expenses or disbursements are found in a final
non-appealable judgment by a court to have resulted from Holder's gross
negligence, bad faith or willful misconduct in its capacity as a stockholder or
warrantholder of the Company.

     14.4 Remedies. Holder in addition to being entitled to exercise all rights
granted by law, including recovery of damages, will be entitled to specific
performance of its rights under Section 9 of this Warrant. The Company agrees
that monetary damages would not be adequate compensation for any loss incurred
by reason of a breach by it of the provisions of Section 9 of this Warrant and
hereby agrees to waive the defense in any action for specific performance that a
remedy at law would be adequate.

                                      -14-
<PAGE>

     14.5 Successors and Assigns. Subject to the provisions of Sections 3.1 and
9, this Warrant and the rights evidenced hereby shall inure to the benefit of
and be binding upon the successors of the Company and the successors and assigns
of Holder. The provisions of this Warrant are intended to be for the benefit of
all Holders from time to time of this Warrant and, with respect to Section 9
hereof, holders of Warrant Shares, and shall be enforceable by any such Holder
or holder of Warrant Shares.

     14.6 Amendment. This Warrant and all other Warrants may be modified or
amended or the provisions hereof waived with the written consent of the Company
and the Holder.

     14.7 Severability. Wherever possible, each provision of this Warrant shall
be interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Warrant shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Warrant.

     14.8 Headings. The headings used in this Warrant are for the convenience of
reference only and shall not, for any purpose, be deemed a part of this Warrant.

     14.9 Governing Law. This Warrant shall be governed by the laws of the State
of Delaware, without regard to the provisions thereof relating to conflict of
laws.

            [THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

                                      -15-
<PAGE>

     IN WITNESS WHEREOF, the Company has caused this Warrant to be duly executed
and its corporate seal to be impressed hereon and attested by its Secretary or
an Assistant Secretary.

Dated: June 30, 1999

                                            THE COMPANY:

                                            VIISAGE TECHNOLOGY, INC.

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

[SEAL]

                                      -16-
<PAGE>

                                    EXHIBIT A

                                SUBSCRIPTION FORM

                 [To be executed only upon exercise of Warrant]

     The undersigned registered owner of this Warrant irrevocably exercises this
warrant for the purchase of __________ Shares of Common Stock of Viisage
Technology, Inc. and herewith makes payment therefor, all at the price and on
the terms and conditions specified in this Warrant and requests that
certificates for the shares of Common Stock hereby purchased (and any securities
or other property issuable upon such exercise) be issued in the name of and
delivered to _____________________ whose address is _______________________ and,
if such shares of Common Stock shall not include all of the shares of Common
Stock issuable as provided in this Warrant, that a new Warrant of like tenor and
date for the balance of the shares of Common Stock issuable hereunder be
delivered to the undersigned.

                                        ________________________________________
                                        (Name of Registered owner)

                                        ________________________________________
                                        (Signature of Registered Owner)

                                        ________________________________________
                                        (Street Address)

                                        ________________________________________
                                        (city)         (State)        (Zip Code)

NOTICE:   The signature on this subscription must correspond with the name as
          written upon the face of the within Warrant in every particular,
          without alteration or enlargement or any change whatsoever.

                                      -17-
<PAGE>

                                    EXHIBIT B

                                 ASSIGNMENT FORM

     FOR VALUE RECEIVED the undersigned registered owner of this Warrant hereby
sells, assigns and transfers unto the Assignee named below all of the rights of
the undersigned under this Warrant, with respect to the number of shares of
Common Stock set forth below:

<TABLE>
<CAPTION>
                                                        No. of Shares of
Name and Address of Assignee                              Common Stock
----------------------------                            ----------------
<S>                                                     <C>

</TABLE>

and does hereby irrevocably constitute and appoint _____________
attorney-in-fact to register such transfer on the books of _____________
maintained for the purpose, with full power of substitution in the premises.

Dated: ________________                 Print Name: ____________________________

                                        Signature: _____________________________

                                        Witness: _______________________________

NOTICE:   The signature on this assignment must correspond with the name as
          written upon the face of the within Warrant in every particular,
          without alteration or enlargement or any change whatsoever.<PAGE>
                                                                   Exhibit 10.21

Statement of Work between Viisage Technology and
Compaq Computer Corporation for the
Maryland Motor Vehicle Administration
DLS/POS Systems and Related Modules
================================================================================

Program ID:          MVA

Copy No.             1

Document Version:    12.0

Date:                December 6, 1999

Abstract:   Viisage Technology will create and configure PC's and image servers
            supplied by Compaq and additional necessary hardware supplied by
            Viisage, a turnkey digitized driver's license system for the State
            of Maryland.

--------------------------------------------------------------------------------
<PAGE>
                          Viisage Statement of Work

                                 Version l2.0

Agreed To & Accepted By:

VIISAGE                                            COMPAQ COMPUTER CORPORATION

BY: /s/ Thomas J. Colatosti                        BY: /s/ Terence K. Thomas
    -------------------------                          -------------------------
TITLE: President & CEO                             TITLE: Program Director
       ----------------------                             ----------------------
DATE: December 7, 1999                             DATE: 12/8/99
      -----------------------                            -----------------------

Compaq Computers Corp      Identification: Viisage SOW                  Page i
Version: 12.0                  Status: Final Release
Release Date: 12/06/99              Confidential
<PAGE>

Contents
--------------------------------------------------------------------------------

1.  PURPOSE ................................................................ 1

2.  SCOPE .................................................................. 2

3.  ASSUMPTIONS ............................................................ 3

4.  VIISAGE RESPONSIBILITIES ............................................... 4

5.  PROJECT MANAGEMENT ..................................................... 5

  5.1  CHANGE CONTROL ...................................................... 5
  5.2  ISSUE RESOLUTION .................................................... 6
  5.3  CONFIGURATION MANAGEMENT ............................................ 6
  5.4  QUALITY ASSURANCE ................................................... 7

6.  REVIEWS, MEETINGS, AND REPORTS .........................................11

  6.1  REVIEWS .............................................................11
  6.2  STATUS MEETINGS .....................................................11
  6.3  STATUS REPORTS ......................................................11

7. CONTRACT MANAGEMENT .....................................................12

  7.1  PRIME CONTRACT ......................................................12

8.  DEPENDENCIES ...........................................................13

  8.1  EQUIPMENT, FACILITIES, AND OPERATIONS SUPPORT .......................13
  8.2  PROJECT PERSONNEL ...................................................13
  8.3  INFORMATION AND ASSISTANCE ..........................................13

9.  DELIVERABLES ...........................................................15

  9.1 PROJECT KICKOFF ......................................................15
  9.2 SPECIFICATIONS .......................................................15
    9.2.1  Project Plan ....................................................15
    9.2.2  Requirements Document ...........................................15
    9.2.3  Design Document .................................................16
    9.2.4  Quality Plan ....................................................16
    9.2.5  Configuration Plan ..............................................16
    9.2.6  Training Plan ...................................................16
    9.2.7  Acceptance Test Plan ............................................16
    9.2.8  Pilot Deployment Plan ...........................................16
    9.2.9  Final Deployment Plan ...........................................16
  9.3  DOCUMENTATION .......................................................16
    9.3.1  User Documentation ..............................................17
    9.3.2  Administrator Documentation .....................................17
    9.3.3  Training Documentation ..........................................17
    9.3.4  Maryland New Driver License & ID Card Booklet ...................17

Compaq Computers Corp      Identification: Viisage SOW                  Page ii
Version: 12.0                  Status: Final Release
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<PAGE>

  9.4  CUSTOM APPLICATION SOFTWARE .........................................17
  9.5  COMPUTERIZED VISUAL INSPECTION SYSTEM(VIS) ..........................17
  9.6  DLS SOFT WARE AND HARDWARE ..........................................17
  9.7  PROTOTYPE ...........................................................18
  9.8  TRAIN THE TRAINER ...................................................18
  9.9  TECHNICAL SUPPORT ...................................................18
  9.10  MAINFRAME INTEGRATION AND MIGRATION ................................18
  9.11  WARRANTY AND MAINTENANCE SERVICES ..................................18
  9.12  SUPPLIES ...........................................................19

10.  DELIVERABLE ACCEPTANCE ................................................20

  10.1   PROJECT KICKOFF ...................................................20
  10.2   SPECIFICATIONS ....................................................20
  10.3   DOCUMENTATION .....................................................21
  10.4   CUSTOM APPLICATION SOFTWARE .......................................21
  10.5   COMPUTERIZED VISUAL INSPECTION SYSTEM(VIS) ........................21
  10.6   DLS SOFT WARE AND HARDWARE ........................................21
  10.7   PROTOTYPE .........................................................21
  10.8   TRAIN THE TRAINER .................................................21
  10.9   TECHNICAL SUPPORT .................................................21
  10.10   MAINFRAME INTEGRATION AND MIGRATION ..............................21
  10.11   WARRANTY AND MAINTENANCE SERVICES ................................21
  10.12   SUPPLIES .........................................................21

11.  PRICE .................................................................23

12.  PAYMENT SCHEDULE ......................................................25

13.  REFERENCED DOCUMENTS ..................................................28

  13.1    MARYLAND CUSTOMER DOCUMENTS ......................................28
  13.2    VIISAGE DOCUMENTS TO COMPAQ ......................................28

14. ADDITIONAL TERMS AND CONDITIONS ........................................29

APPENDIX A. SCHEDULE ....................................................... 1

APPENDIX B. HARDWARE LIST .................................................. 1

APPENDIX C. CHANGE REQUEST FORM ............................................ 1

Compaq Computers Corp       Identification: Viisage SOW                 Page iii
Version: 12.0                  Status: Final Release
Release Date: 12/06/99              Confidential
<PAGE>

Preface
--------------------------------------------------------------------------------

     Distribution Control
     ---------------------------------------------------------------------------
     Copy No.                                Distribution
     ---------------------------------------------------------------------------
     1.  Approval Copy                       Compaq Computer Corporation

     2.  Approval Copy                       Viisage Technology, Inc.

     People Involved in the Preparation of This Document
     ---------------------------------------------------------------------------
     Function                                Name
     ---------------------------------------------------------------------------
     Compaq Program Manager                  Terence Thomas

     Compaq Deputy Program Manager           Kathy Stanton

     Review List
     ---------------------------------------------------------------------------
     Reviewed by                             Date
     ---------------------------------------------------------------------------
     [TEXT]                                  [text]
     [TEXT]                                  [text]
     ---------------------------------------------------------------------------

     Change History
     ---------------------------------------------------------------------------
     Version          Date             Revision Description
     ---------------------------------------------------------------------------
     1.0              11/03/99         Initial Draft

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

Compaq Computers Corp       Identification: Viisage SOW                 Page iv
Version: 12.0                  Status: Final Release
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<PAGE>

1.    Purpose

This Statement of Work defines the scope of the services and the deliverables
that Viisage Technology Inc., hereafter referred to as "Viisage", will provide
to Compaq Computer Corporation, hereafter referred to as "COMPAQ", under this
agreement.

The performance of this Statement of Work is contingent upon COMPAQ being
awarded a contract to deliver the same services to the Maryland MVA (hereafter
referred to as MVA) and issuing a corresponding purchase order to Viisage.

This Statement of Work details:

1.    The scope of work Viisage agrees to deliver to COMPAQ.
2.    The working relationship between Viisage and COMPAQ, including roles and
      responsibilities.
3.    Description of required deliverable items under this agreement.
4.    The process for deliverable acceptance.
5.    Significant tasks and schedule.
6.    Change procedure and issue resolution process.
7.    The quality assurance process to be followed.
8.    Additional terms and conditions under which the work will be performed.

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<PAGE>

2.    Scope

Under this agreement, Viisage will define, develop, and deliver to COMPAQ the
following items:
1.    Requirements Specification and System Design Specification
2.    Acceptance Test Specification
3.    User Manual, Training Material, and Technical Manual
4.    Application Software License for exclusive use in Maryland
5.    User Training (Training the Compaq Trainers)
6.    Maintenance parts and Help desk support on all items delivered by Viisage
      (as second level support)
7.    Card Supplies
8.    Prototype
9.    Pilot
10.   Staging, Configuration, and Associated Plans
11.   Creation of Drivers License ID Booklet
12.   First level support procedures on all items delivered by Viisage.
13.   Training on proper maintenance of Viisage Equipment

The deliverable items are described in Section 9, DELIVERABLES. All deliverable
items will, hereafter, be collectively referred to as "DELIVERABLES".

Viisage will define, develop, and deliver to COMPAQ the DELIVERABLES in
accordance with the contract and specification documents listed in Section 13,
Referenced Documents and Section 14, Terms and Conditions.

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Version: 12.0                  Status: Final Release
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<PAGE>

3.    Assumptions

1)    Compaq will provide for the MVA user's:
      a)  all PC's (including monitor, keyboard and mouse),
      b)  network connectivity,
      c)  PC operating system, layered software and licenses
      d)  image server hardware and system.
2)    Compaq will review with Viisage all hardware configurations and Viisage
      shall certify that the hardware is compatible with their product. The
      description and total quantity of all equipment to be provided by Viisage
      for all requirements [development, pilot, installation, training, spares,
      etc.] is given in Appendix B -- Hardware List.
3)    Compaq will post all bonds.
4)    Viisage will attend one Project Status Review per month on-site at the MVA
      facilities. For the Project Status Meetings, Viisage will participate by
      telephone on the conference call.
5)    To meet the MVA record retention requirements, Viisage will provide
      requested project files such as Project Deliverables, Status Reports, and
      Invoices in the mutually agreed upon formats.
6)    Training of Compaq-supplied trainers will occur at site(s) provided by
      Compaq.
7)    Pending Technical Agreements -- Compaq's and Viisage's Technical Teams
      will design during Phase I of the MVA DLS/POS Project final hardware and
      software configurations to include at a minimal:

      a)    Target production operating system. Because of the timing around the
            delivery of Windows 2000, both companies, as well as the customer,
            must consider the advantages of delivering the DLS solution on
            Windows 2000. Viisage will supply the application under the latest
            available version of Windows NT; the migration to Windows 2000 will
            be considered as a change order option when Windows 2000 is released
            to the public. Costs, if any, will be addressed at that time.

      b)    Dual monitor support. As required in the RFP, the turnkey DLS
            solution must support dual monitors. Viisage is supplying a single
            framegrabber card for single monitor support. Viisage will provide
            additional software [to be finalized during the specification/design
            phase] to support dual monitors at no additional cost; in
            consideration of this Compaq agrees to an accelerated payment
            schedule as mutually agreed. However, the 2nd monitor may require a
            2nd framegrabber card which is an out of pocket expense. Compaq and
            Viisage have agreed to negotiate a business arrangement that would
            address the impact of the out of pocket expense associated with the
            2nd framegraber card, such as expanding the scope of work/software
            development to be done by Viisage under a separate agreement.

Compaq Computers Corp       Identification: Viisage SOW             Page 3 of 31
Version: 12.0                  Status: Final Release
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<PAGE>

4.    Viisage Responsibilities

Viisage is responsible for:
1)    Customizing its base imaging and printing software to facilitate the
      production of driver's licenses (turnkey) in accordance with the contract
      and specification documents listed in Section 13, Referenced Documents and
      Section 14, Terms and Conditions.
2)    Provide consulting during image server/central issuance development to
      ensure compatibility and successful operation of the system.
3)    Retrieving existing portrait and signature images from the central imaging
      system after Compaq has converted the existing image database,
4)    Storing and Retrieving driver's license images (portrait and signature)
      and associated data, display data, and print cards
5)    Delivering the hardware defined in Appendix B,
6)    Assisting in configuring the PC's to meet imaging system requirements
7)    Supporting the driver's license imaging system,
8)    Producing manuals (user, technical, training),
9)    Performing training
10)   Viisage will provide spare parts and technician training to allow others
      to provide first level maintenance of the hardware defined in Appendix B
      and will provide 2nd level support for these devices,
11)   Providing 2nd level help desk support to Compaq as specified in Section
      9.9.
12)   Provide consulting during setup/conversion of images to ensure
      compatibility and successful operation of the system. Delivering a
      Train-the-trainer program to Compaq Trainers and associated training
      materials to enable Compaq Trainers to train MVA end users on the DL/ID
      system. Viisage will provide a training plan to accomplish this task.
13)   Viisage will provide a master hard disk drive [which can be duplicated
      using a disk duplicator], instructions, and support required to deploy the
      application. As required, during the Pilot and Phase II rollout, Viisage
      will provide on-site support.
14)   Providing the above and other services as described herein and according
      to documents specified in Section 13 and in accordance with the schedule.

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Version: 12.0                  Status: Final Release
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<PAGE>

5.    Project Management

5.1   Change Control

Both Viisage and COMPAQ must mutually agree upon any changes to this Work
Statement. No verbal agreement between persons involved in the project will be
binding on either Viisage or COMPAQ. Mutually acceptable changes in the scope of
work and adjustments in schedule and price will be incorporated as a
modification to this agreement or may become the basis of a new, follow-on
agreement.

Walter Krepcio has been designated as the authorized Viisage representative for
making changes to this Statement of Work. Terence K. Thomas or Kathy Stanton are
designated as the authorized COMPAQ representative(s) for making changes to this
Statement of Work.

Change requests that impact project scope must be submitted in writing using
Compaq Computer Corporation's standard Change Request Form contained in Appendix
C, Change Request Form. The Change Request Form is part of COMPAQ's change
control as defined in the COMPAQ Program Methodology/Transform.

The generic approval process for change requests is as follows

1.    Definition
      During this step, the requirements for change are defined and change
      impact is initially estimated. The proposed change is classified, and the
      effort required to evaluate its full impact is estimated. A review of the
      proposed change takes place. The status of the proposed change is logged
      and communicated.

2.    Evaluation
      Here, a full-scale impact analysis is conducted and any missing data are
      requested from the change originator. The status of the proposed change is
      logged and communicated.

3.    Approval
      The proposed change is reviewed here and a decision is reached regarding
      its approval, rejection, or deferral. If a change proposal is deferred,
      additional studies or external approval can be requested. Funding for
      implementing the change may need to be negotiated, and again the status of
      the request is logged and communicated.

4.    Implementation
      The change is implemented and the baseline information is updated. The
      change

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<PAGE>

      status is tracked and reported.

5.    Verification
      A check for correctness, completeness, and adherence to quality
      requirements is completed, and final status of the change is logged and
      reported.

5.2   Issue Resolution

The process for resolving issues will be in conformance with the COMPAQ's
Network and Systems Integration Services (NSIS) Standard for Issue Resolution.

An Issue Resolution Form is submitted when individuals working on customer
projects experience problems within a given area. The status of open issues and
actions taken or planned for resolution are published via the Issue Status
Report.

The following activities will be performed for each issue:

1.    Define the problem and decide that it should be handled as an issue.
2.    Evaluate the issue, estimate its impact on the project and potential
      financial exposure.
3.    Identify corrective action(s) and personnel responsible.
4.    Log and track the issue.
5.    Notify appropriate business management.
6.    Follow up until satisfactorily resolved.

Should issues need to be elevated beyond the process described here they will be
elevated to Kevin French of Compaq and Tom Colatosti of Viisage.

5.3   Configuration Management

Viisage will manage its deliverables and project process using the Configuration
Management Procedures to be developed and provided by Compaq. These procedures
will require Viisage adherence to these project standards throughout the term of
this agreement.

Configuration management is the process by which project management can
systematically identify, correlate, maintain, and control the various components
of a project. This process ensures the components' integrity and the
traceability of changes as they occur throughout the lifetime of the project.

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Configuration management allows the project team to pinpoint the status of any
component in its life cycle and allows for any version to be recreated at any
point. Components can include any combination of hardware, software, and
training. Configuration management is composed of four subprocesses, which
operate simultaneously:

1.    Configuration identification
2.    Configuration control
3.    Configuration status accounting
4.    Configuration audits/reviews

5.4   Quality Assurance

COMPAQ and Viisage will document the quality assurance process in accordance
with ISO 8402 and ISO 9000 series standards. This process will be followed
throughout the life of the project. Compaq will consider using Viisage's
methodology. Viisage must provide the methodology for Compaq's review. At a
minimal, the final methodology used must contain the necessary elements required
for Compaq to meet its requirements to the MVA.

Compaq's quality model proposed to the MVA defines three main processes:

Quality definition: specification of quality standards for the development
process as well as for the solution.
Quality management: defining, maintaining, and executing the Quality Plan to
meet COMPAQ requirements.
Quality assessment: reviewing and measuring the project at any time against the
quality requirements.

The following table shows a minimal list of the Quality Requirements:

--------------------------------------------------------------------------------
                              Quality Requirements
--------------------------------------------------------------------------------
Access Audit - The degree to which the system logs the access (who, when, from
where).
--------------------------------------------------------------------------------
Access Control - The degree to which the system restricts the access properly.
--------------------------------------------------------------------------------
Accessibility - The ease with which the system can be accessed.
--------------------------------------------------------------------------------
Accuracy -The precision of computations and control.
--------------------------------------------------------------------------------

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--------------------------------------------------------------------------------
                              Quality Requirements
--------------------------------------------------------------------------------
Audibility - The ease with which conformance to standards can be checked.
--------------------------------------------------------------------------------
Communication Communality - The degree to which standard interfaces, protocols,
and bandwidth are used.
--------------------------------------------------------------------------------
Communicativeness - The ease with which the system can be used.
--------------------------------------------------------------------------------
Completeness - The degree to which full implementation of a required function
has been achieved.
--------------------------------------------------------------------------------
Conciseness - The compactness of the program in terms of lines of code.
--------------------------------------------------------------------------------
Consistency - The use of uniform design and documentation techniques throughout
the software development project.
--------------------------------------------------------------------------------
Correctness - The extent to which a program satisfies its specifications and
thus fulfills the customer's mission objectives.
--------------------------------------------------------------------------------
Data Commonality - The use of standard data structures and types throughout the
program
--------------------------------------------------------------------------------
Efficiency - The amount of computing resources and code required by a program to
perform its function.
--------------------------------------------------------------------------------
Error Tolerance - The damage that occurs when the program encounters an error.
--------------------------------------------------------------------------------
Execution Efficiency - The run-time performance of a program.
--------------------------------------------------------------------------------
Expandability - The degree to which architectural, data, or procedural design
can be extended
--------------------------------------------------------------------------------
Flexibility - The effort required to modify an operational program
--------------------------------------------------------------------------------
Generality - The breadth of the potential application of program components.
--------------------------------------------------------------------------------
Hardware Independence - The degree to which the software is decoupled from the
hardware on which it operates.
--------------------------------------------------------------------------------
Human Engineering - The extent to which the application is built for human
interaction (user friendly).
--------------------------------------------------------------------------------

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--------------------------------------------------------------------------------
                              Quality Requirements
--------------------------------------------------------------------------------
Input/Output Volume - Amount of data which is passed to the user.
--------------------------------------------------------------------------------
Instrumentation - The degree to which the program monitors its own operation and
identifies errors that do occur.
--------------------------------------------------------------------------------
Integrity - The extent to which access to software or data by unauthorized
persons can be controlled.
--------------------------------------------------------------------------------
Interoperability - The effort required to couple one system to another.
--------------------------------------------------------------------------------
Legibility - The degree to which the documentation is easy to read.
--------------------------------------------------------------------------------
Maintainability - The effort required to locate and to fix an error in a program
(defects).
--------------------------------------------------------------------------------
Modifiability -The effort to change the application (enhancements).
--------------------------------------------------------------------------------
Modularity - The function independence of program components.
--------------------------------------------------------------------------------
Operability - The ease of operation of a program.
--------------------------------------------------------------------------------
Portability - The effort required to transfer the program from one hardware
and/or software system environment to another.
--------------------------------------------------------------------------------
Reliability - The extent to which a program can be expected to perform its
intended function with the required precision.
--------------------------------------------------------------------------------
Reusability -The extent to which a program (or parts of a program) can be reused
in other applications.
--------------------------------------------------------------------------------
Security - The availability of mechanisms that control or protect program and
data.
--------------------------------------------------------------------------------
Self-Descriptiveness - The degree to which the source code provides meaningful
documentation.
--------------------------------------------------------------------------------
Simplicity - The degree to which a program can be understood without difficulty.
--------------------------------------------------------------------------------
Software System Independence - The degree to which the program is independent of
nonstandard programming language features, operating system characteristics, and
other environmental constraints.
--------------------------------------------------------------------------------

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--------------------------------------------------------------------------------
                              Quality Requirements
--------------------------------------------------------------------------------
Storage Efficiency - The efficient usage of storage media.
--------------------------------------------------------------------------------
Testability - The effort required to test a program to ensure that it performs
its intended function.
--------------------------------------------------------------------------------
Traceability - The ability to trace a design representation or actual program
component back to requirements.
--------------------------------------------------------------------------------
Training - The degree to which the software assists in enabling new users to
apply the system
--------------------------------------------------------------------------------
Understandability - The level of complexity of the modules and the application.
--------------------------------------------------------------------------------
Usability - The effort required to learn, operate, input, and interpret the
output of a program.
--------------------------------------------------------------------------------

For each quality requirement COMPAQ and Viisage will jointly identify the
associated metric and method for the associated quality requirement in the
Quality Plan which will be jointly developed and mutually agreed upon by the
parties. This plan will cover the custom development for this project.

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6.    Reviews, Meetings, and Reports

6.1   Reviews

Customer Project Status Reviews will be conducted once a month on site at MVA
facilities.

Quarterly management reviews between Viisage and Compaq will be held at a
mutually agreed time and place.

Other reviews/walkthroughs will be defined and conducted as specified in the
Schedule and/or the Quality Plan. Viisage will participate in Project Status
Review via on-site representation by the Viisage project manager.

6.2   Status Meetings

Project Status Meetings will be conducted weekly except for the week of the
formal Project Status Review held monthly. Viisage will participate in Project
Status Meetings meetings via conference call. Viisage will participate on-site
for the formal Project Status Review. The Viisage's Project Manager and COMPAQ's
Project Manager will represent their organizations at these meetings. Status
Meetings will include, but are not limited to:

o     Review of progress against schedule
o     Review open Change Requests
o     Review open Issues
o     Review achievement against milestones

The COMPAQ Program Manager will take minutes at each Project Status Meeting. The
minutes will document decisions made and any action items. The minutes will be
distributed prior to the next Project Status Meeting.

6.3   Status Reports

Project Status Reports will be prepared by the Viisage Project Manager and sent
to COMPAQ's Program Manager no later than two (2) days before each scheduled
Project Status Review. Status Reports will contain, but are not limited to, the
following:
o     A project status summary
o     Change Request status (new, open, closed since last report)
o     Issue status (new, open, closed since last report)
o     A schedule status

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7.    Contract Management

7.1   Prime Contract

Compaq Computer Corporation is the prime contractor for the Maryland MVA DLS/POS
project. The COMPAQ Program Manager will communicate questions or issues
pertinent to this project to Maryland MVA.

As prime contractor, COMPAQ has engaged Viisage as a subcontractor to provide
project deliverables. This Statement of Work includes products and services to
be delivered by subcontractor(s) under COMPAQ's direction.

COMPAQ, as prime contractor, is the sole contact for Maryland MVA questions and
issues for these services. COMPAQ will provide a common, single interface to:

o     Solicit consulting and technical information
o     Resolve business and technical issues
o     Coordinate delivery schedules
o     Insure materials are delivered in a satisfactory time frame and condition

Viisage agrees to conduct any project-related communications through the COMPAQ
Program Managers.

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8.    Dependencies

8.1   Equipment, Facilities, and Operations Support

1.    Development System
      Software development for this project will be performed at both MVA
      facilities and at Viisage facilities. Compaq will provide all hardware and
      software that is needed to perform development at Viisage facilities; all
      equipment provided by Viisage for the entire scope of the project in
      quantity and type [development, pilot, installation, training, spares,
      etc.] is limited to that equipment specified in Appendix B --Hardware
      List. Compaq will provide a limited number of PCs for development to be
      performed at the Viisage site. These PCs will be returned to Compaq at the
      end of the project or as otherwise requested by Compaq. COMPAQ will
      provide the Server hardware and one (1) PC workstation for use by Viisage
      for work conducted at the MVA facility. Viisage will provide the necessary
      equipment as listed in Appendix B at the MVA facility to be able to
      perform testing and execute the acceptance test for the Viisage
      deliverables.

2.    Training Facilities
      Compaq will ensure that MVA will provide the facilities necessary to hold
      the training classes at MVA. Viisage will supply train-the trainer
      training to Compaq-supplied trainers at such MVA facilities. The training
      workstations are included in the equipment list in the COTS Hardware Lists
      contained in Appendix B.

3.    Computer Data
      Compaq will ensure that MVA makes available the MVA computer data that is
      needed for system interfaces, DLIS conversion, data migration, and system
      testing for the project.

8.2   Project Personnel
      Viisage will provide personnel with the appropriate skills to perform the
      tasks and services described herein. COMPAQ reserves the right to approve
      Viisage personnel assigned to the project or require replacement of any
      Viisage personnel assigned with another Viisage employee of equal or
      better experience.

8.3   Information and Assistance

      Viisage agrees to respond, within two (2) business days (unless otherwise
      agreed to by both the Viisage Project Manager and the COMPAQ Project
      Manager), to requests for the following documentation, information, or
      assistance needed for the PROJECT. This includes, but is not limited to,
      providing:

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o     Documentation and information needed for design, development, testing,
      evaluation, installation, etc.
o     Skilled and knowledgeable personnel to assist COMPAQ in the project.
o     Samples of data and/or the assistance of Viisage personnel to prepare
      required data for testing.

Viisage is responsible for the accuracy and completeness of all information it
provides.

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9.    Deliverables

Viisage will deliver the following items in accordance with the contract and
specification documents listed in Section 13, Referenced Documents ("Referenced
Documents"), and according to the Project Schedule contained in Appendix A,
hereafter referred to as the Schedule.

NOTE: THE PROJECT SCHEDULE SHOWS CUSTOMER MILESTONES. VIISAGE'S DELIVERABLES ARE
REQUIRED TEN (10) BUSINESS DAYS BEFORE THE ASSOCIATED CUSTOMER MILESTONE IS DUE.

Requests for enhancements or changes to these items will be considered Change
Requests and will be processed by the Change Control process.

9.1   Project Kickoff
Viisage will prepare and perform a demonstration at two project startup meetings
conducted at the MVA facility. The first meeting will be for MVA senior
management and the second meeting will be for the MVA technical teams.

9.2   Specifications
Viisage will prepare and deliver three (3) hard copies and one (1) soft copy to
Compaq of the following specifications according to the Schedule. Viisage will
deliver these specifications as Microsoft word documents in the format specified
by COMPAQ.

9.2.1 Project Plan
Viisage will provide the components of the Project Plan that describe the
project management plan for Viisage. Viisage will also provide the detail
project schedule of the tasks being performed by Viisage. This Project Plan will
be updated at the beginning of each phase to reflect changes in scope. The
project schedule is updated at the project status meetings.

9.2.2 Requirements Document
The Requirements Document will detail the functional requirements for the Driver
Licensing System (DLS) components and related modules. The baseline 0
requirements are specified in the Referenced Documents. The Requirements
Document will address the baseline 0 requirements and will detail each
requirement based on discussions and reviews with the MVA. Upon MVA acceptance
of the Requirements Document, it will become the Baseline 1 requirements and
will supercede Baseline 0. The Requirements Document forms the basis for the
Design Document and development of the applications.

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9.2.3 Design Document
The Design Document will detail the design for implementing the Driver Licensing
System (DLS) and related modules.

9.2.4 Quality Plan
The Quality Plan will detail the metrics and goals for achieving the quality
criteria as described in Section 5.4.

9.2.5 Configuration Plan
The Configuration Plan will detail all items under configuration control. For
each item the plan will detail the information collected, the method or process
for collecting the information, who is responsible for managing the information,
tools for managing the information, and the configuration control process. Items
include specifications, custom software, hardware, system operational
procedures, and COTS software.

9.2.6 Training Plan
The Training Plan will specify the types of training courses, the training
documentation requirements, the training class facility requirements, the
training system and data requirements, and the schedule for training.

9.2.7 Acceptance Test Plan
The Acceptance Test Plan documents the tests with associated test steps and
expected results for demonstrating that the delivered items conform to the
requirements as specified in the Requirements Document.

9.2.8 Pilot Deployment Plan
The Pilot Deployment Plan details the work to be performed by Compaq, Daly, and
Viisage in implementing their component of the Pilot System.

9.2.9 Final Deployment Plan
The Final Deployment Plan details the work to be performed by Viisage in
implementing their portion of the DLS/POS systems at the MVA locations. In
addition, this plan will include the system verification test. The system
verification test details specific tests that are run to verify that the
hardware is correctly installed and configured and that the application software
is correctly installed and operating.

9.3   Documentation
Unless specified differently below, Viisage will prepare and deliver three (3)
hard copies and one (1) soft copy to Compaq of the following documents according
to the Schedule. Viisage will deliver these specifications as Microsoft word
documents in the format specified by COMPAQ.

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9.3.1 User Documentation
The User Documentation describes how the system is to be operated from a user's
point of view. This document will include sample CRT screen layouts, sample
reports, step-by-step processing of each function, and a guide to run-time
errors generated by the system.

9.3.2 Administrator Documentation
The Administrator Documentation describes the system administrative functions.
This manual will describe how to operate and maintain the production driver
license system, including installation procedures, startup, shutdown, backup
procedures, and user authorization procedures.

9.3.3 Training Documentation
The Training Documentation documents exercises for the user to perform in
learning how to use the production drivers license system. Viisage will provide
one set of documentation in both hard copy and in Microsoft Word Format and one
camera-ready copy

9.3.4 Maryland New Driver License & ID Card Booklet
The Maryland New Driver License & ID Card Booklet is a maximum 6 page pamphlet
that describes the features of the new drivers license. Viisage will design the
pamphlet and provide one camera-ready copy in addition to one soft copy version.

9.4   Custom Application Software
Viisage will provide Compaq with Custom Application Software that integrates the
COTS software and conforms to the requirements outlined in the Requirements and
Design Documents and is delivered in accordance with the Schedule. Viisage will
provide a copy of the executable code, non-proprietary and custom source code,
and supporting procedures for the software installation.

9.5   Computerized Visual Inspection System(VIS)
Viisage will provide the Computerized Visual Inspection System according to the
requirements outlined in the Requirements and Design Documents and the Schedule.

9.6   DLS Software and Hardware
Viisage will provide the DSL software and hardware as described in Appendix B.
These products will be delivered to the Daly staging and configuration facility
in accordance with the Project Schedule. Viisage will configure these items at
the staging facility.

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9.7   Prototype
Viisage will develop a prototype of the drivers license custom solution in
accordance with Section 13, Reference Documents and the Schedule. This prototype
will demonstrate at a minimum receiving an item in queue, locally retrieving and
storing images, and printing a drivers license.

9.8   Train the Trainer
Viisage will provide a Train-the-Trainer training course to Compaq Trainers and
Installation Technicians along with associated training material/procedures.
This training will be provided in accordance with the requirements outlined in
the Referenced Documents and in accordance with the Schedule. This training
includes items such as:

1.    Implement and configure the Photo ID system
2.    Provide training to MVA end users on the Photo ID system
3.    Use the system as described in the attached requirements matrix

9.9   Technical Support
The Viisage Customer Support Help Desk will be the single point of contact for
2nd level support for all problem calls and operational issues associated with
the Viisage solution. Calls will come from a single help desk to be specified by
Compaq. The help desk shall be available Monday through Friday 8am to 9pm and
Saturday 8am to 6pm at a toll-free number. Viisage must return calls within 15
minutes Help desk calls must be logged and remain active until problem is
completely resolved. Viisage will also provide engineering/software
troubleshooting support if field efforts to fix a problem fail and it is
determined to be a system problem caused by Viisage provided elements.

9.10  Viisage will provide consulting during setup/conversion of images to
ensure compatibility and success for operation of the system.

9.10  Warranty and Maintenance Services

Viisage will provide a warranty for two (2) immediately-subsequent twenty-four
(24) month warranties, one beginning at the completion of the Phase II work, and
the other beginning at the completion of the Phase III work. Each warranty shall
cover all Viisage developed or supplied hardware, software and communications,
delivered during the applicable project Phase. Viisage will not provide first
level field maintenance services. Viisage will provide maintenance material,
training, second level support, and spare parts for personnel providing first
level support. Whole spare units are included in the equipment totals given in
Appendix B -- Hardware List. All service field labor is provided by Compaq.

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Viisage is also responsible for providing a pool of equipment regionally [per
Appendix B], necessary for the system and of sufficient number so that
replacement units can be deployed upon notification of a down operating unit.
Compaq will be responsible to deploy and allocate this material within the State
of Maryland. Whole spare units are included in the equipment totals given in
Appendix B -- Hardware List.

Should any of the equipment become obsolete throughout the performance of this
contract, i.e. Repair parts are no longer available, Viisage shall replace such
obsolete equipment with compatible equipment to keep the system operational.

Viisage shall be responsible for maintaining call logs and repair records on
Viisage-provided equipment. Viisage shall provide Compaq monthly, a written
record or summary of all repair, or equipment replacement calls.

Per industry standard, Compaq is responsible for one-way shipping charges to
return defective Viisage-supplied components for repair, and Viisage is
responsible for one-way shipping charges to return repaired Viisage-supplied
items to the MVA. In the event that the performance of maintenance services
result in a need to replace defective parts, such items may only be replaced by
new parts or refurbished parts which are equivalent to new parts. Compaq
reserves the right to refuse refurbished parts if Compaq's or MVA's documented
experience shows that re-furbished parts have not performed equivalent to new
parts.

9.11  Supplies
Viisage will provide supplies for Phase II follow-on, the first two year renewal
term and supplies for the second two year renewal term in accord with the prices
herein. Payment will be rendered based upon supplies actually ordered. The
pricing assumes supplies will be provided by Viisage for a total of 5,703,336
licenses during the term of this agreement and the first and second two year
renewal terms of this agreement. The number of licenses is an estimated
projection over the course of this agreement (inclusive of renewal options).
This quantity may be reviewed periodically and if necessary, a reconciliation
shall occur on an annual basis.

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10.   Deliverable Acceptance

The acceptance criteria for each deliverable is specified below.

Upon delivery of such Deliverables as defined in the Statement of Work which are
the subject of an acceptance test plan, Viisage shall notify COMPAQ and upon
Compaq's request commence the acceptance process as described in the Acceptance
Test Plan (ATP) to be agreed to by the parties or as described below.

If a formal acceptance test between Compaq and Viisage is provided for in the
ATP, Compaq shall appoint personnel who shall attend and verify the results of
the acceptance test. Within five (5) days of completion of the acceptance
process Compaq shall issue a written notice of preliminary acceptance of the
Deliverables or provide to Viisage a detailed list of any non-conformances. If a
list of non-conformances is issued, Viisage shall notify Compaq, in writing, of
its concurrence or objections within the shorter of the time set forth in the
Schedule or five (5) days from receipt of such list. Viisage and Compaq shall
jointly agree upon a reasonable cure period for each nonconformance with a goal
of five (5) days or less. Viisage shall demonstrate the corrections to Compaq
within the timeframe agreed upon to cure each nonconformance.

If a formal acceptance test between Compaq and MVA is provided for in the ATP,
Viisage shall provide all necessary support, as requested by Compaq, to perform
the test and assess and correct any non-conformances according the Schedule.

Deliverables which are not the subject matter of an Acceptance Test Plan will be
accepted as provided below.

In no case shall acceptance of any Deliverables for which there is an associated
MVA deliverable occur until Compaq has received acceptance of the associated
deliverable from MVA.

10.1  Project Kickoff
Delivery of the demo at Project Kickoff constitutes acceptance.

10.2  Specifications
Viisage shall deliver the Specifications in the timeframe defined in the
Schedule to the Compaq Project Manager. The Compaq Project Manager shall provide
a list of required changes or provide provisional acceptance to Viisage.
Required changes shall be made within three (3) days or according to the
Schedule. Final acceptance shall occur only after MVA has accepted the
associated Specification.

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10.3  Documentation
Viisage shall deliver the Documentation in the timeframe defined in the Schedule
to the Compaq Project Manager. The Compaq Project Manager shall provide a list
of required changes or provide provisional acceptance to Viisage. Required
changes shall be made within three (3) days or according to the Schedule. Final
acceptance shall occur only after MVA has accepted the associated Documentation.

10.4  Custom Application Software
Custom Application Software will be accepted in accordance with the Acceptance
Test Plan.

10.5  Computerized Visual Inspection System(VIS)
Acceptance is upon successful demonstration of a system verification test.

10.6  DLS Software and Hardware
DLS software and hardware will be accepted in accordance with the Acceptance
Test Plan.

10.7  Prototype
Prototype is accepted upon successful demonstration of the functions.

10.8  Train the Trainer
Delivery of the training classes and documents is accepted upon completion of
service and compliance with training acceptance criteria. These criteria will be
mutually agreed upon and documented in the training plan.

10.9  Technical Support
Acceptance is upon the successful and satisfactory delivery of services.
10.10. Viisage will provide consulting to ensure compatibility and successful
operation of the system.

10.10 Warranty and Maintenance Services

Warranty and repair Services are accepted upon delivery and agreement with
Compaq that the quality of service was at acceptable levels.

10.11 Supplies

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Supplies are accepted upon delivery, but defects may be shipped back for
replacement at no additional charge to Compaq.

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11.   Price

The services and supporting products described in this agreement are for a Fixed
Price as specified below in accordance with the contract and terms and
conditions contained herein. This price includes all travel & accommodations
required during all phases including warranty and support.

Viisage shall provide Phase II Follow-on System Maintenance and Supplies and at
Compaq's unilateral option, shall provide up to two (2) additional two-year
periods of system maintenance. Each successive year of maintenance may be
ordered by Compaq in writing at least twenty (20) days prior to expiration of
existing warranty or maintenance period.

Compaq reserves the right to renew annual maintenance from Viisage beyond the
two additional two-year period specified in this agreement as long as the need
exists and the price remains fair and reasonable. Compaq further reserves the
right to cancel maintenance as deemed necessary upon prior written notice to
Viisage. Maintenance cost shall then be adjusted accordingly.

MAIN PROJECT
o     $1,860,592 Phase I, II, III System Integration Services, Pilot, and 6
      month Warranty 5/14/01 to 11/14/01
o     $1,752,000 Phase I,11, III Hardware*
o     $ 499,900 Phase II to III Supplies
o     $1,206,534 First Two-Year Renewal - Supplies
o     $1,018,791 Second Two-Year Renewal - Supplies

OPTIONAL ONGOING SUPPORT RENEWALS:
o     $ 905,026 First Two-Year Renewal - Warranty/Maintenance
o     $1,014,860 Second Two-Year Renewal - Warranty/Maintenance

=     $8,257,703 Subtotal*

SELECTED OPTIONS
o     $ 393,000 VISUAL INSPECTION SYSTEM

OTHER OPTIONS

Compaq, upon MVA approval, may procure one or more of the following options:

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o     $.478 Per Card cost of all Supplies to produce additional Driver's
      Licenses, in excess of the contracted amount of 5,703,336.
o     $.25 Biometrics Facial Recognition Transaction Fee Per Image Capture
      (Note: License Fee Waived)
o     $150.00 Incremental Price per unit for Electronic Signature Pad
o     $3,500 per unit for Fingerprint Option
o     $ 500 Annual Bronze Support per unit for Fingerprint Option
o     $35,000 per unit for Fax On Demand
o     UV Printing per Card $.006
o     Microprinting per Card $.006

*PROJECT EFFICIENCY

To facilitate overall project efficiency, VIISAGE will sell and ship hardware
content directly to our staging, installation, and support partner, DALY
Computers. Selected hardware components are:

o     Printers and related Equipment           $838,000
o     Backdrops and Mounts                     $ 14,000
o     Sensor Masts                             $684,000
o     Central Production Equipment             $216,000

      Total                                  $1,752,000

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12.   Payment Schedule

Consistent with Maryland's processes, Compaq will issue Purchase Orders to
VIISAGE by phase and/or fiscal year.

For the selected hardware components, Compaq's partner, DALY Computers, will
issue the equipment Purchase Order(s) to Viisage upon receipt of Purchase
Order(s) from Compaq.

Payment terms will be milestone based as specified below. A precondition for
payment of any milestone is the acceptance of all deliverables which are
scheduled to be delivered prior to the deliverable directly associated with the
milestone.

Phase I

--------------------------------------------------------------------------------
MILESTONE                                         DATE        PAYMENT
--------------------------------------------------------------------------------
Project Kickoff                                    11/15/99   $50,000
--------------------------------------------------------------------------------
Phase I Requirements Document                      3/24/00    $50,000
--------------------------------------------------------------------------------
Phase I Design Document                            6/16/00    $41,001
--------------------------------------------------------------------------------
Phase Completion and Acceptance                    6/16/00    $40,000
--------------------------------------------------------------------------------
Total                                                         $181,001
--------------------------------------------------------------------------------

Phase II Compaq Payments

--------------------------------------------------------------------------------
MILESTONE                                         DATE        PAYMENT
--------------------------------------------------------------------------------
Prototype                                         7/31/00     $287,051
--------------------------------------------------------------------------------
Delivery of Mobile Demo System                    TBD         $ 20,000
--------------------------------------------------------------------------------
Pilot Site Accepted                               4/6/01      $350,000
--------------------------------------------------------------------------------
VIS Option                                        4/6/01      $493,000
--------------------------------------------------------------------------------
Phase Completion and Acceptance                   5/14/01     $325,600
--------------------------------------------------------------------------------
Total                                                         $1,475,651
--------------------------------------------------------------------------------

Compaq Computers Corp       Identification: Viisage SOW            Page 25 of 31
Version: 12.0                  Status: Final Release
Release Date: 12/06/99              Confidential
<PAGE>

Phase II Daly Payments
--------------------------------------------------------------------------------
MILESTONE                                         DATE        PAYMENT
--------------------------------------------------------------------------------
Hardware Procurement                              1/12/01     $1,752,000
--------------------------------------------------------------------------------
Total                                                         $1,752,000
--------------------------------------------------------------------------------

Phase III

--------------------------------------------------------------------------------
MILESTONE                                         DATE        PAYMENT
--------------------------------------------------------------------------------
Phase III Completion and Acceptance               9/31/01     $327,000
--------------------------------------------------------------------------------
Total                                                         $327,000
--------------------------------------------------------------------------------

Maintenance and Supplies

--------------------------------------------------------------------------------
MILESTONE                                         DATE        PAYMENT
--------------------------------------------------------------------------------
Phase II Follow on Supplies (6mo)                 5/14/01-    $499,900 Total
                                                  11/14/01    (invoiced monthly
                                                              at $83,316/mo)
--------------------------------------------------------------------------------
Phase II Follow on Maintenance(6mo)               5/14/01-    $289,940
                                                  11/14/01    (invoiced monthly
                                                              @ $48,323)
--------------------------------------------------------------------------------
Term I Supplies (24 months)                       11/14/01-   $1,206,534
                                                  11/14/03    (invoiced monthly
                                                              @$50,272)
--------------------------------------------------------------------------------
Term I Maintenance (24 months)                    11/14/01-   $905,026
                                                  11/14/03    (invoiced monthly
                                                              @37,709)
--------------------------------------------------------------------------------
Term 2 Supplies (24 months)                       11/14/01-   $1,018,791
                                                  11/14/03    (invoiced monthly
                                                              @ $42,449)
--------------------------------------------------------------------------------
Term 2 Maintenance (24 Months)                    11/14/01-   $1,014,860
                                                  11/14/03    (invoiced monthly
                                                              @$42,285)
--------------------------------------------------------------------------------

Compaq Computers Corp       Identification: Viisage SOW            Page 26 of 31
Version: 12.0                  Status: Final Release
Release Date: 12/06/99              Confidential
<PAGE>

--------------------------------------------------------------------------------
Total                                                         $4,935,051
--------------------------------------------------------------------------------

Note: the initial total contract amount [with selected VIS option] is
$8,670,703. Mobile Demo System includes mobile SensorMast, floor mounted
backdrop, mobile printer & custom engineering development. Supplies to be billed
at standard rate. PC and monitors to be provided by Compaq.

Compaq Computers Corp       Identification: Viisage SOW            Page 27 of 31
Version: 12.0                  Status: Final Release
Release Date: 12/06/99              Confidential
<PAGE>

13.   Referenced Documents

13.1  Maryland Customer Documents

o     Compaq's contract with the customer: "State of Maryland, Department of
      Transportation (MDOT), Motor Vehicle Administration, Driver Licensing
      Point of Sale Systems and Related Modules, DLS/POS, Contract No.
      V-HQ-99091-IP.
o     Statement of Work between Compaq and the State of Maryland.
o     The Administration's Request for Proposal V-HQ-99091-IP, Driver
      Licensing/Point of Sale Systems and Related Modules (DLS/POS)
      requirements, Amendments #1 through #6.
o     COMPAQ's Technical Proposal dated February 24,1999.
o     COMPAQ's Oral Presentation dated April 23, 1999 as set forth in the
      transcript thereof made contemporaneously with such presentation.
o     COMPAQ's Clarification Letters dated 4/30/99, 5/17/99, 5/31/99 and 6/8/99.

 13.2 Viisage Documents to Compaq
o     Viisage's proposal to Compaq for the State of Maryland, Department of
      Transportation (MDOT), Motor Vehicle Administration, Driver Licensing
      Point of Sale Systems and Related Modules, DLS/POS
o     Viisage's compliance matrix to Compaq State of Maryland, Department of
      Transportation (MDOT), Motor Vehicle Administration, Driver Licensing
      Point of Sale Systems and Related Modules, DLS/POS

Compaq Computers Corp       Identification: Viisage SOW            Page 28 of 31
Version: 12.0                  Status: Final Release
Release Date: 12/06/99              Confidential
<PAGE>

14.   Additional Terms and Conditions

This document is incorporated by reference into the Subcontract Agreement
between Viisage Technology, Inc. and Digital Equipment Corporation for this
Project.

The following additional terms and conditions are hereby agreed to between the
parties:

1.    All references to "Digital Equipment Corporation" and "Digital" in the
      Subcontract Agreement are hereby modified to include (i) Digital Equipment
      Corporation and all subsidiaries worldwide, (ii) Digital's parent company
      Compaq Computer Corporation and (iii) all worldwide subsidiaries of Compaq
      Computer Corporation.

2.    In case of a conflict between referenced documents, the following order of
      precedence shall apply:
      a)    this Statement of Work,
      b)    any Purchase Order issued pursuant to the Subcontract Agreement,
      c)    the Subcontract Agreement,
      d)    the Maryland Customer Documents,
      e)    Viisage's Proposal to Compaq, and
      f)    Viisage Compliance Matrix.

3.    Viisage agrees to comply with all relevant State and MDOT computerized
      record system security requirements in accordance with Appendix E of
      Customer's RFP.

4.    Should any of the equipment become obsolete throughout the performance of
      this contract; i.e. repair parts are no longer available, Viisage shall
      replace such obsolete equipment with compatible equipment to keep the MVA
      system operational, at Viisage's sole cost.

5.    Viisage agrees to adhere to the following language from Compaq's contract
      with the MVA:

      J.    CONFIDENTIALITY OF INFORMATION & COMPUTER SECURITY

            1.    Contractor and their employees agree to maintain in strictest
                  confidence and not willfully to disclose to any person, firm
                  or corporation, information relating to or contained in the
                  State's Data Base Information obtained as a result of
                  Contractor's work associated with this Agreement. Access to
                  and use of information and computer resources is limited to
                  what is required for performance of this Agreement. Contractor
                  shall be aware that the Administration adheres to State
                  policies for Data Processing Resources Security authorized by
                  the Governor's Executive Order 01.01.1983.18 and Article 27,
                  Section 45A and 146 of the Annotated Code of Maryland.

                  Failure of contractor to abide by these same policies and
                  statutes may result in the Administration's prosecuting or
                  seeking remedies made available to it by statute or
                  regulation. In addition, other Federal and State Laws and
                  Regulations affect the access to

Compaq Computers Corp       Identification: Viisage SOW            Page 29 of 31
Version: 12.0                  Status: Final Release
Release Date: 12/06/99              Confidential
<PAGE>

                  and use of computer information such as the U.S. Computer
                  Crime Statute (1984) Computer Security Act of 1987, Privacy
                  Act of 1974, Freedom of Information Act, the Computer Fraud
                  and Abuse Act (1986), and the Drivers Privacy and Protection
                  Act (1994). Contractor personnel shall individually sign an
                  agreement attesting to the above.

                  2. Each Contractor participant individual in the services
                  provided under this Agreement must sign the Office of Security
                  Advisory form (Appendix E), which will then be a part of this
                  Agreement.

6.    Viisage agrees that the settlement of any litigation and/or claim of
      infringement requires approval of the Attorney General of the State of
      Maryland.

7.    Viisage acknowledges that Compaq is the prime contractor and is
      responsible for the project. All contacts with MVA with respect to the
      Project will be the responsibility of Compaq. Any contacts made by Viisage
      will be with the consent and/or participation of Compaq. Viisage further
      acknowledges that repeated failure to adhere to this provision will
      constitute a breach of the Subcontract Agreement.

8.    Viisage agrees to provide personnel that have skills sufficient to perform
      the tasks described in this Statement of Work. Compaq reserves the right
      to interview, approve, reject and/or replace any Viisage personnel that
      Compaq deems, in its sole opinion, do not have sufficient skills to
      perform the Work.

9.    All documentation delivered under this Statement of Work may be reproduced
      by Compaq or MVA as required to meet the requirements of the Referenced
      Documents.

10.   Should any Viisage supplied Equipment be returned to Viisage for repair
      and not be repaired within five (5) business days of receipt of equipment
      by Viisage, Viisage agrees to provide a new unit at no additional charge
      to Compaq. Note: the software system will be thoroughly tested and
      accepted as part of the Pilot Test. Viisage cannot be held responsible for
      software system that is rendered unusable due to operator abuse of
      negligence.

Compaq Computers Corp       Identification: Viisage SOW            Page 30 of 31
Version: 12.0                  Status: Final Release
Release Date: 12/06/99              Confidential
<PAGE>

Appendix A. Schedule

Compaq Computers Corp       Identification: Viisage SOW                Page A-1
Version: 1.0                       Status: Draft
Release Date: 11/03/99              Confidential
<PAGE>

Appendix B. Hardware List

Final quantities may vary based on the final approved design or the addition of
more facilities. Adjustments will be made in accordance with unit prices below:

<TABLE>
<CAPTION>
Equipment                                       Description                              Quantity         Unit Price
---------                                       -----------                              --------         ----------
<S>                                             <C>                                           <C>          <C>
SensorMast with built-in signature pad          Viisage Image Capture                         151          $4,635.00
SensorMast mobile                               Image capture for mobile workstation.           2          $5,660.00
Hanging Backdrop                                Viisage Back Drops                            151             $88.00
Floor Mounted Backdrop                          Viisage Back Drops                              2            $515.00
Electronic Signature Pad (incremental cost)     Viisage Biometrics Signature Pad              151            $185.00
Drivers License Printers                        Eltron Printer                                151          $5,662.00
Mobile Drivers License Printers                 Eltron Printer                                  2          $7,532.00
</TABLE>

Compaq Computers Corp       Identification: Viisage SOW                Page B-1
Version: 1.0                       Status: Draft
Release Date: 11/03/99              Confidential
<PAGE>

Appendix C. Change Request Form

Compaq Computers Corp       Identification: Viisage SOW                Page C-1
Version: 1.0                       Status: Draft
Release Date: 11/03/99              Confidential

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