EXCHANGE AGREEMENT



                          SECURITIES EXCHANGE AGREEMENT





     THIS SECURITIES EXCHANGE AGREEMENT, dated as of the date of acceptance set

forth below (this "Agreement"), is entered into by and between SAC TECHNOLOGIES,

INC. a Minnesota corporation, with headquarters located at 1285 Corporate Center

Drive, Suite No. 175, Eagan, MN 55121 (the "Company"), and The Shaar Fund, Ltd.

(the "Buyer").



                              W I T N E S S E T H:



     WHEREAS, the Company and the Buyer are executing and delivering this

Agreement in accordance with and in reliance upon the exemption from securities

registration afforded, inter alia, by Rule 506 under Regulation D ("Regulation

D") as promulgated by the United States Securities and Exchange Commission (the

"SEC") under the Securities Act of 1933, as amended (the "1933 Act"), and/or

Section 4(2) of the 1933 Act; and



     WHEREAS, the Buyer is the record and beneficial owner of 18,449 shares (the

"Series A Shares") of the Company's Series A Convertible Preferred Stock, $.01

par value per share (the "Series A Preferred Stock"), and a 5% Convertible

Debenture due June 30, 2001 of the Company in the outstanding principal amount

of $418,000 (the "June Debenture"); and



     WHEREAS, the Buyer wishes to exchange the Series A Shares and June

Debenture and the Company wishes to issue, upon the terms and subject to the

conditions of this Agreement, shares of the Company's Series B Convertible

Preferred Stock, $.01 par value per share (the Series B Preferred Stock"), and a

newly issued 5% Convertible Debenture Due September 30, 2003 (the "Debenture").



     NOW THEREFORE, in consideration of the premises and the mutual covenants

contained herein and other good and valuable consideration, the receipt and

sufficiency of which are hereby acknowledged, the parties agree as follows:



     1. AGREEMENT TO EXCHANGE; CERTAIN DEFINITIONS.



          (a) Exchange and Issuance. Subject to the terms and conditions of this

Agreement and the other Related Agreements ( as defined in that certain Funding

Agreement dated as of even date herewith by and between the Company and Buyer

(the "Funding Agreement")), the Company agrees to issue, and the Buyer agrees to

exchange; (i) 21,430 shares (the "Series B Shares") of Series B Preferred Stock

with such rights preferences and designations set forth in the Certificate of

Designation attached as Exhibit A hereto in exchange for (A) 18,449 shares of

Series A Preferred Stock; and (B) the waiver of all accrued but unpaid dividends

due on the Series A Shares, all accrued interest on such accrued but unpaid

dividends and all of the Company's other obligations to Buyer under the

Certificate of Designation of Series A Preferred Stock; and (ii) the Debenture

in substantially the form attached hereto as Exhibit "B"





<PAGE>





together with all accrued and unpaid interest due thereon in exchange for the

surrender and cancellation of the June Debenture.



          (b) Certain Definitions. As used herein, each of the following terms

has the meaning set forth below, unless the context otherwise requires:



               (i) "Securities" means the Series B Preferred Stock, the

Debenture and the Conversion Shares.

Home        Intelligence        Services        Subscriptions        News        About Us

Contact Us       Terms of Use       Resend Documents       Shopping Cart

Copyright © 2008 The Consus Group LLC