Document:

Exhibit 10.30

                              EMPLOYMENT AGREEMENT

         THIS AGREEMENT (along with all Exhibits attached hereto hereinafter
referred to as the "Agreement") made effective as of August 1, 2001 ("Effective
Date") by and between SAC Technologies, Inc. dba BIO-key International, a
Minnesota corporation with its principal place of business at 1285 Corporate
Center Drive, Suite 175, Eagan, MN 55121 (the "Company"), and H. Donald Rosacker
II, residing at ___________________________________ (the "Employee").

                                   WITNESSETH:

         WHEREAS, the Company desires to secure the employment of the Employee
as President in accordance with the provisions of this Agreement; and

         WHEREAS, the Employee desires and is willing to be employed by the
Company in accordance herewith.

         NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound
hereby, the parties hereto agree as follows:

         1. Employment Term. This Agreement shall remain in force and effect for
a term commencing on the Effective Date hereof and expiring on the first (1st)
anniversary hereof (the "Initial Term"), or until the employment relationship is
terminated pursuant to Section 4 hereof. Upon the expiration of the Initial
Term, this Agreement will be renewed automatically for successive one-year
periods (each, a "Renewal Term"), unless sooner terminated in accordance with
the provisions of Section 4 or unless Company gives written notice of
non-renewal at least one (1) month prior to the date on which the Employee's
employment would otherwise end.

         2. Duties; Exclusive Services and Best Efforts.

                  (a) Duties. Employee shall hold the position of President and
shall have the responsibility for all marketing, sales, and corporate and
business development activities for the Company including, but not limited to,
strategic planning, product roll out, beta test development, revenue forecasting
and maintaining Company directed pricing structures as well as any duties
assigned to the Employee by the Company's CEO. Employee, working with the
Company's CEO, will participate in negotiating contracts and strategic alliances
with outside vendors, prospective clients, and funding organizations.

                  (b) Exclusive Services and Best Efforts. The Employee agrees
to devote his best efforts, energies and skill to the faithful, competent and
diligent discharge of the duties and responsibilities attributable to his
position, and to this end, will devote his fulltime attention to the business
and affairs of the Company. The Employee also agrees that he shall not

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take personal advantage of any business opportunities that arise during his
employment that may benefit the Company. All material facts regarding such
opportunities must be promptly reported to the Company's Board of Directors for
its consideration. In addition, the Company acknowledges and agrees that the
Employee shall be permitted to engage in and pursue such contemporaneous
activities and interests, as the Employee may desire, for personal profit or
otherwise, provided such activities do not interfere with the Employee's
performance of his duties and obligations hereunder.

         3. Compensation. On and after the commencement of Employee's
employment, the Employee shall receive, for all services rendered to the Company
hereunder, the following:

                  (a) Base Salary. The Employee shall be paid a base annual
salary equal to One Hundred and Eight Thousand Dollars ($108,000) paid at the
rate of $9,000 per month. The Employee's annual base salary shall be payable in
equal installments in accordance with the Company's general salary payment
policies but no less frequently than monthly. Employee's Base Salary may be
increased annually, or at such other intervals, as the CEO shall determine from
time to time.

                  (b) Discretionary Bonus. In addition to Base Salary, a
"Discretionary Bonus" may be awarded to Executive on the basis of merit
performance on an annual basis in the discretion of the Board of Directors or
Compensation Committee thereof; provided, however, that the failure of the
Company to provide any Discretionary Bonus shall not give rise to any claim
against the Company. The Discretionary Bonus shall not exceed fifty (50%)
percent of the Employee's Base Salary. The Company in its sole discretion shall
determine the amount, if any, and timing of any Discretionary Bonus.

                  (c) Incentive Compensation. The Employee may be eligible for
awards from the Company's incentive compensation plans, including without
limitation, any stock option plans, applicable to high level executives of the
Company, in accordance with the terms thereof and on a basis commensurate with
his position and responsibilities. The Company in its sole discretion shall
determine any such compensation. Nothing herein shall effect any rights or
obligations of the Employee or the Company created pursuant to any stock option
plan or stock option agreement between the parties hereto.

                  (d) Stock Options. Employee shall be granted, subject to the
provisions of the Company's 1999 Stock Option Plan attached hereto as Exhibit A,
a stock option to purchase 300,000 shares of the Company's Common Stock; and,
subject to the terms of a stock option agreement to be entered into between the
Company and Employee in substantially the form attached hereto as Exhibit B, a
stock option to purchase 100,000 shares of the Company's Common Stock. Options
to purchase 60,000 shares shall vest on execution of this Agreement and Employee
completing ninety days (90) of employment with the Company; and options to
purchase the remaining 340,000 shares shall vest in equal monthly installments
over a thirty-six (36) month period commencing after Employee has completed
ninety days of employment with the Company.

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                  (f) Benefits Plans. The Employee shall be eligible to
participate in any and all employee welfare and health benefit plans (including,
but not limited to, life insurance, health, medical and dental plans) and other
employee benefit plans, including but not limited to qualified pension plans,
which may be established by the Company from time to time for the benefit of
other Company employees of comparable status. The Employee shall be required to
comply with the conditions attendant to coverage by such preceding plans and
policies and shall comply with and be eligible for benefits only in accordance
with the terms and conditions of such plans as they may be amended from time to
time. Nothing in this Section shall be construed as requiring the Company to
establish or continue any particular benefit plan in discharge of its
obligations under this Agreement.

                  (g) Vacation. The Employee shall be eligible for four (4)
weeks of paid vacation each year of his employment hereunder. The Employee shall
be permitted to carry over and accrue unused vacation time for a period of up to
one year. Except as required by applicable law, in no event shall the Employee
be entitled to receive any cash compensation in lieu of unused vacation time.

                  (h) Expenses. Subject to and in accordance with the Company's
policies and procedures, and, upon presentation of itemized accounts, the
Employee shall be reimbursed by the Company for reasonable and necessary
business-related expenses, which expenses are incurred by the Employee on behalf
of the Company.

                  (i) Deductions from Salary and Benefits. The Company will
withhold from any salary or benefits payable to the Employee all federal, state,
local, and other taxes and other amounts as required by law, rule or regulation.

         4. Termination. This Agreement may be terminated by either the Employee
or the Company at any time, subject only to the provisions of this Section 4.

                  (a) Voluntary Termination. If Employee terminates his own
employment, the Company shall be released from any and all further obligations
under this Agreement, except that the Company shall be obligated to pay Employee
his salary and benefits owing to Employee through the effective date of
termination. Employee shall also be entitled to any reimbursement owed in
accordance with Section 3(h). Employee's obligations under Sections 5, 7, 8 and
9 hereof and shall survive the termination of Employee's employment, and
Employee shall remain bound thereby.

                  (b) Death. This Agreement shall terminate on the date of the
Employee's death, in which event salary, benefits, and reimbursable expenses
owing to the Employee through the date of the Employee's death shall be paid to
his estate.

                  (c) Disability. If, during the term of this Agreement, in the
opinion of the Company, the Employee, because of physical or mental illness or
incapacity or disability, shall

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become unable to perform substantially all of the duties and services required
of him under this Agreement for a period of ninety (90) consecutive calendar
days or one hundred twenty (120) days in the aggregate during any twelve-month
period, the Company may, upon at least ten (10) days prior written notice given
at any time after the expiration of such ninety (90) day or one hundred twenty
(120) day period, notify the Employee of its intention to terminate this
Agreement as of the date set forth in the notice. In case of such termination,
the Employee shall be entitled to receive salary, benefits, and reimbursable
expenses owing to the Employee through the date of termination. The Company
shall have no further obligation or liability to the Employee. The Employee's
obligations under Sections 5, 7 8 and 9 hereof shall survive the termination of
Employee's employment, and employee shall remain bound thereby.

                  (d) Termination by the Company for Cause. This Agreement may
be terminated by the Company for "Cause" at any time. Upon such termination for
"Cause", the Company shall be released from any and all further obligations
under this Agreement, except that the Company shall be obligated to pay the
Employee his salary and benefits owing to the Employee through the effective
date of such termination. The Employee shall also be entitled to any
reimbursement owed in accordance with Section 3(h). The Employee's obligations
under Sections 5, 7, 8 and 9 hereof shall survive the termination of Employee's
employment, and employee shall remain bound thereby.

                  CAUSE. "Cause" for Termination shall include, but is not
limited to, the following conduct of the Employee:

                           (i) Breach of any material provision of this
Employment Agreement by the Employee if not cured within two (2) weeks after
receiving written notice thereof;

                           (ii) Misconduct as an Employee of the Company,
including but not limited to, misappropriating funds or property of the Company;
any attempt to obtain any personal profit from any transaction in which the
Employee has an interest that is adverse to the Company or any breach of the
duty of loyalty and fidelity to the Company; or any other act or omission of the
Employee which substantially impairs the Company's ability to conduct its
ordinary business in its usual manner;

                           (iii) Material neglect or refusal to perform the
duties assigned to the Employee pursuant to this Employment Agreement if not
cured within two (2) weeks after receiving notice thereof;

                           (iv) Conviction of a felony or plea of guilty or NOLO
CONTENDERE to a felony;

                           (v) Acts of dishonesty or moral turpitude by the
Employee that are detrimental to the Company or any other act or omission which
subjects the Company or any of its affiliates to public disrespect, scandal, or
ridicule, or that causes the Company to be in violation of governmental
regulations that subjects the Company either to sanctions by governmental
authority or to civil liability to its employees or third parties;

<PAGE>

                           (vi) Disclosure or use of confidential information of
the Company, other than as specifically authorized and required in the
performance of the Employee's duties.

                  (e) Termination by Employer Without Cause. Upon termination of
this Agreement without Cause, the Company shall be released from any and all
further obligations under this Agreement, except that the Employee shall
continue to be paid his base salary and receive benefits, in the same manner as
before termination, for a period of time ending nine (9) months from the date of
termination of the Employee without Cause, if, and only if, the Employee had
completed nine (9) months of employment with Company prior to such termination
and signs a valid general release of all claims against the Company, its
affiliates, subsidiaries, officers, directors and agents, in a form provided by
the Company. The Employee's obligations under Sections 5, 7, 8 and 9 hereof and
shall survive the termination of the Employee's employment, regardless of the
circumstances of any such termination, and the Employee shall remain bound
thereby.

                  (f) Termination by Mutual Agreement. This Agreement may be
terminated at any time by mutual agreement of the Employee and the Company.

                  (g) Termination by Employee for Cause. Employee for Cause may
terminate this Agreement if Employee's current salary or benefits are reduced by
more than 30%. In the event the Employee terminates employment for Cause,
Employee shall continue to be paid his base salary and receive benefits, in the
same manner as before termination, for a period of time ending two (2) months
from the date of termination of the Employee without Cause, if, and only if, the
Employee signs a valid general release of all claims against the Company, its
affiliates, subsidiaries, officers, directors and agents, in a form provided by
the Company. The Employee's obligations under Sections 5, 7, 8 and 9 hereof and
shall survive the termination of the Employee's employment, regardless of the
circumstances of any such termination, and the Employee shall remain bound
thereby.

         5. Non-Competition and Business Opportunities.

                  (a) Non-Competition. The Employee understands that the Company
is in the business of developing and licensing finger print identification
technologies, and distributing products incorporating such technologies, to
original equipment manufacturers and end users. The Employee agrees that during
the period of his employment hereunder and for a period of one (1) year
thereafter, the Employee will not directly or indirectly: (i) market, sell or
perform services such as are offered or conducted by the Company, its affiliates
and subsidiaries during the period of his employment, to any customer or client
of the Company or "Prospective Customer" or client of the Company; or (ii)
engage, directly or indirectly, whether as principal or as agent, officer,
director, employee, consultant, shareholder, or otherwise, alone or in

<PAGE>

association with any other person, corporation or other entity, in any
"Competing Business". For the purpose of this Section 5(a) "Prospective
Customer" shall mean any person with whom the Company has engaged in any
discussion or negotiation regarding the use of the Company's products or
services. For purposes of this Section 5(a), the term "shareholder" shall
exclude any interest owned by Employer in a public company to the extent the
Employer owns less than ten percent (10%) of any such company's outstanding
common stock. For the further purposes of this Agreement, the term "Competing
Business" shall mean any person, corporation or other entity developing and/or
licensing finger print identification technologies or distributing products
incorporating such technologies to original equipment manufacturers and end
users at the time of such termination or non-renewal. Due to the nature of the
markets served and the technology and products to be developed and marketed by
the Company which are intended to be available on a national basis, the
restrictions set forth in this Section 5(a) can not be limited to a specific
geographic area within the United States.

                  (b) Business Opportunities. The Employee agrees that during
the period of his employment hereunder, the Employee will not take personal
advantage of any business opportunities that are similar or substantially
similar to the business of the Company. In addition, all material facts
regarding any such business opportunities must be promptly and fully disclosed
by the Employee to the Board of Directors as soon as the Employee becomes aware
of any opportunity, and in no event later than forty-eight (48) hours after
learning of such opportunity. Business opportunities covered by this Section
5(b) shall include, but are not limited to, opportunities relating to the
development and licensing of finger print identification technologies or the
distribution of products incorporating such technologies to original equipment
manufacturers and end users.

                  (c) Non-Solicitation. The Employee agrees that during the
period of employment hereunder and for a period of one (1) year thereafter, the
Employee will not request or otherwise attempt to induce or influence, directly
or indirectly, any present customer, distributor or supplier, or Prospective
Customer, distributor or supplier, of the Company, or other persons sharing a
business relationship with the Company to cancel, to limit or postpone their
business with the Company, or otherwise take action which might be to the
material disadvantage of the Company. The Employee agrees that during the period
of employment hereunder and for a period of one (1) year thereafter, Employee
will not hire or solicit for employment, directly or indirectly, or induce or
actively attempt to influence, hire or solicit, any employee, agent, officer,
director, contractor, consultant or other business associate of the Company to
terminate his or her employment or discontinue such person's consultant,
contractor or other business association with the Company.

                  (d) Scope. The parties hereto agree that, due to the nature of
the Company's business, the duration and scope of the non-competition and
non-solicitation provisions set forth above are reasonable. In the event that
any court determines that the duration or the geographic scope, or both, are
unreasonable and that such provisions are to that extent unenforceable, the
parties hereto agree that such provisions shall remain in full force and effect
for the greatest time period and in the greatest area that would not render it
unenforceable. The parties intend that the

<PAGE>

non-competition and non-solicitation provisions herein shall be deemed to be a
series of separate covenants, one for each and every county of each and every
state of the United States of America and each and every political subdivision
of each and every country outside the United States of America where this
provision is intended to be effective. The Employee agrees that damages are an
inadequate remedy for any breach of such provisions and that the Company, shall,
whether or not it is pursuing any potential remedies at law, be entitled to seek
in any court of competent jurisdiction, equitable relief in the form of
preliminary and permanent injunctions without bond or other security upon any
actual or threatened breach of either of these competition provisions. If the
Employee shall violate this Section 5, the duration of this Section 5
automatically shall be extended as against the Employee for a period equal to
the period during which the Employee shall have been in violation of this
Section 5. The covenants contained in this Section 5 are deemed to be material
and the Company is entering into this Agreement relying on such covenants.

         6. Representations and Warranties of the Employee. The Employee, hereby
represents and warrants to the Company as follows: (i) The Employee has the
legal capacity and unrestricted right to execute and deliver this Agreement and
to perform all of his obligations hereunder; (ii) the execution and delivery of
this Agreement by the Employee and the performance of his obligations hereunder
will not violate or be in conflict with any fiduciary or other duty, instrument,
agreement, document, arrangement, or other understanding to which Employee is a
party or by which he is or may be bound or subject; and (iii) except as set
forth in Exhibit C attached hereto, the Employee is not a party to any
instrument, agreement, document, arrangement, including, but not limited to,
invention assignment agreement, confidential information agreement,
non-competition agreement, non-solicitation agreement, or other understanding
with any person (other than the Company) requiring or restricting the use or
disclosure of any confidential information or the provision of any employment,
consulting or other services.

           7. Disclosure of Innovations; Assignment of Ownership of Innovations;
Protection of Confidential Information. Employee hereby represents and warrants
to the Company that Employee understands that the Company is in the business of
developing and licensing finger print identification technologies, and
distributing products incorporating such technologies, to original equipment
manufacturers and end users and that Employee may have access to or acquire
information with respect to Confidential Information (as defined below),
including software, processes and methods, development tools, scientific,
technical and/or business innovations.

                  (a) Disclosure of Innovations. Employee agrees to disclose in
writing to the Company all inventions, improvements and other innovations of any
kind that Employee may make, conceive, develop or reduce to practice, alone or
jointly with others, during the term of Employee's employment with the Company,
whether or not such inventions, improvements or other innovations are related to
and grow out of Employee's work for the Company and whether or not they are
eligible for patent, copyright, trademark, trade secret or other legal
protection ("Innovations"). Examples of Innovations shall include, but are not
limited to, discoveries, research, inventions, formulas, techniques, processes,
know-how, marketing plans, new product plans, production processes, advertising,
packaging and marketing techniques and improvements to computer hardware or
software.

<PAGE>

                  (b) Assignment of Ownership of Innovations. Employee agrees
that all Innovations will be the sole and exclusive property of the Company and
Employee hereby assigns all of Employee's rights, title or interest in the
Innovations and in all related patents, copyrights, trademarks, trade secrets,
rights of priority and other proprietary rights to the Company. At the Company's
request and expense, during and after the period of Employee's employment with
the Company, Employee will assist and cooperate with the Company in all respects
and will execute documents, and, subject to Employee's reasonable availability,
give testimony and take further acts requested by the Company to obtain,
maintain, perfect and enforce for the Company patent, copyright, trademark,
trade secret and other legal protection for the Innovations. Employee hereby
appoints an authorized officer of the Company as Employee's attorney-in-fact to
execute documents on his behalf for this purpose. Employee has attached hereto
as Exhibit D a list of Innovations as of the date hereof which belong to
Employee and which are not assigned to the Company hereunder (the "Prior
Innovations"), or, if no such list is attached, Employee represents that there
are no Prior Innovations.

                  (c) Protection of Confidential Information of the Company.
Employee understands that Employee's work as an employee of the Company creates
a relationship of trust and confidence between Employee and the Company. During
and after the period of Employee's employment with the Company, Employee will
not use or disclose or allow anyone else to use or disclose any "Confidential
Information" (as defined below) relating to the Company, its products, services,
suppliers or customers except as may be necessary in the performance of
Employee's work for the Company or as may be specifically authorized in advance
by appropriate officers of the Company. "Confidential Information" shall
include, but not be limited to, information consisting of research and
development, patents, trademarks and copyrights and applications thereto,
technical information, computer programs, software, methodologies, innovations,
software tools, know-how, knowledge, designs, drawings, specifications,
concepts, data, reports, processes, techniques, documentation, pricing,
marketing plans, customer and prospect lists, trade secrets, financial
information, salaries, business affairs, suppliers, profits, markets, sales
strategies, forecasts, employee information and any other information not
available to the general public, whether written or oral, which Employee knows
or has reason to know the Company would like to treat as confidential for any
purpose, such as maintaining a competitive advantage or avoiding undesirable
publicity. Employee will keep Confidential Information secret and will not allow
any unauthorized use of the same, whether or not any document containing it is
marked as confidential. These restrictions, however, will not apply to
Confidential Information that has become known to the public generally through
no fault or breach of Employee's or that the Company regularly gives to third
parties without restriction on use or disclosure.

         8. WORK MADE FOR HIRE.

                  (a) Work Made For Hire. Employee further recognizes and
understands that Employee's duties at the Company may include the preparation of
materials, including without

<PAGE>

limitation written or graphic materials, and that any such materials conceived
or written by Employee shall be done as "work made for hire" as defined and used
in the Copyright Act of 1976, 17 U.S.C. ss.ss. 1 et seq. In the event of
publication of such materials, Employee understands that since the work is a
"work made for hire", the Company will solely retain and own all rights in said
materials, including right of copyright. In the event that any of such works
shall be deemed by a court of competent jurisdiction not to be a "work made for
hire," this Agreement shall operate as an irrevocable assignment by Employee to
the Company of all right, title and interest in and to such works, including,
without limitation, all worldwide copyright interests therein, in perpetuity.
The fact that such copyrightable works are created by Employee outside of the
Company's facilities or other than during Employee's working hours with the
Company shall not diminish the Company's right with respect to such works which
otherwise fall within this paragraph. Employee agrees to execute and deliver to
the Company such further instruments or documents as may be requested by the
Company in order to effectuate the purposes of this paragraph.

                  (b) Disclosure of Works and Inventions/Assignment of Patents.
In consideration of the promises set forth herein, Employee agrees to disclose
promptly to the Company, or to such person whom the Company may expressly
designate for this specific purpose (its "Designee"), any and all works,
inventions, discoveries and improvements authored, conceived or made by Employee
during the period of employment and related to the business or activities of the
Company, and Employee hereby assigns and agrees to assign all of Employee's
interest in the foregoing to the Company or to its Designee. Employee agrees
that, whenever he is requested to do so by the Company, Employee shall execute
any and all applications, assignments or other instruments which the Company
shall deem necessary to apply for and obtain Letters Patent or Copyrights of the
United States or any foreign country or to otherwise protect the Company's
interest therein. Such obligations shall continue beyond the termination or
nonrenewal of Employee's employment or service with respect to any works,
inventions, discoveries and/or improvements that are authored, conceived of, or
made by Employee during the period of Employee's employment or service, and
shall be binding upon Employee's successors, assigns, executors, heirs,
administrators or other legal representatives.

         9. Company Property. All records, files, lists, including computer
generated lists, drawings, documents, software, documents, equipment, models,
binaries, object modules, libraries, source code and similar items relating to
the Company's business that the Employee shall prepare or receive from the
Company and all Confidential Information shall remain the Company's sole and
exclusive property ("Company Business Property"). Upon termination of this
Agreement, the Employee shall promptly return to the Company all property of the
Company in his possession, including Company Business Property. The Employee
further represents that he will not copy or cause to be copied, print out, or
cause to be printed out any Company Business Property other than as specifically
authorized and required in the performance of the Employee's duties. The
Employee additionally represents that, upon termination of his employment with
the Company, he will not retain in his possession any such Company Business
Property.

<PAGE>

         10. Cooperation. The Employee and Company agree that during the term of
Employee's employment they shall, at the request of the other Party, render all
assistance and perform all lawful acts that each Party considers necessary or
advisable in connection with any litigation involving either Party or any
director, officer, employee, shareholder, agent, representative, consultant,
client, or vendor of the Company.

         11. Employment Dispute Settlement Procedure/Waiver of Rights. The
Employee and the Company each agree that, in the event either party (or its
representatives, successors or assigns) brings an action in a court of competent
jurisdiction relating to the Employee's recruitment, employment with, or
termination of employment from the Company, each party in such action agrees to
waive his, her or its right to a trial by jury, and further agrees that no
demand, request or motion will be made for trial by jury.

The parties hereto further agree that, in the event that either seeks relief in
a court of competent jurisdiction for a dispute covered by this Agreement, any
other Agreement between the Employee and the Company or which relates to the
Employee's recruitment, employment with, or termination of employment from the
Company, the defendant or third-party defendant in such action may, at any time
within sixty (60) days of the service of the complaint, third-party complaint or
cross-claim upon such party, at his, her or its option, require all or part of
the dispute to be arbitrated by one arbitrator in accordance with the rules of
the American Arbitration Association. The parties agree that the option to
arbitrate any dispute is governed by the Federal Arbitration Act. The parties
understand and agree that, if the other party exercises his, her or its option,
any dispute arbitrated will be heard solely by the arbitrator, and not by a
court. Judgment upon the award rendered, however, may be entered in any court of
competent jurisdiction. The cost of such arbitration shall be borne equally by
the parties.

This dispute resolution agreement will cover all matters directly or indirectly
related to the Employee's recruitment, employment or termination of employment
by the Company; including, but not limited to, claims involving laws against
discrimination whether brought under federal and/or state law and/or local law,
and/or claims involving co-employees but excluding Worker's Compensation Claims.
Nothing contained in this Section 11 shall limit the right of the Company to
enforce by court injunction or other equitable relief the Employee's obligations
under Sections 5, 7, 8 and 9 hereof.

         The right to a trial, and to a trial by jury, is of value.

                  THE EMPLOYEE MAY WISH TO CONSULT AN ATTORNEY PRIOR
                  TO SIGNING THIS AGREEMENT. IF SO, THE EMPLOYEE
                  SHOULD TAKE A COPY OF THIS AGREEMENT WITH HIM.
                  HOWEVER, THE EMPLOYEE WILL NOT BE OFFERED EMPLOYMENT
                  UNTIL THIS AGREEMENT IS SIGNED AND RETURNED TO
                  EMPLOYER.

<PAGE>

         12. Choice of Law and Jurisdiction. This Agreement shall be construed,
interpreted and the rights of the parties determined in accordance with the laws
of the State of Minnesota. Each of the parties hereto hereby irrevocably
consents and submits to the exclusive jurisdiction of the state courts of the
State of Minnesota, and of the United States District Court for the District of
Minnesota in connection with any suit, action, or other proceeding concerning
this Agreement or enforcement of Sections 5, 7, 8 and 9 hereof. The Employee
waives and agrees not to assert any defense that the court lacks jurisdiction,
venue is improper, inconvenient forum or otherwise. The Employee waives the
right to a jury trial and agrees to accept service of process by certified mail
at the Employee's last known address.

         13. Successors and Assigns. The Employee hereunder, may assign neither
this Agreement, nor any of the Employee's rights, powers, duties or obligations.
This Agreement shall be binding upon and inure to the benefit of the Employee
and his heirs and legal representatives and the Company and its successors.
Successors of the Company shall include, without limitation, any company or
companies, individuals, groups, associations, partnerships, firm, venture or
other entity or party acquiring, directly or indirectly, all or substantially
all of the assets of the Company, whether by merger, consolidation, purchase,
lease or otherwise. Any such successor referred to in this paragraph shall
thereafter be deemed "the Company" for the purpose hereof. All covenants and
restrictions upon the Employee hereunder, including, but not limited to Sections
5, 7, 8 and 9 hereof, are specifically assignable by the Company.

         14. Waiver. Any waiver or consent from the Company with respect to any
term or provision of this Agreement or any other aspect of the Employee's
conduct or employment shall be effective only in the specific instance and for
the specific purpose for which given and shall not be deemed, regardless of
frequency given, to be a further or continuing waiver or consent. The failure or
delay of the Company at any time or times to require performance of, or to
exercise any of its powers, rights or remedies with respect to any term or
provision of this Agreement or any other aspect of the Employee's conduct or
employment in no manner (except as otherwise expressly provided herein) shall
affect the Company's right at a later time to enforce any such term or
provision.

         15. Notices. All notices, requests, demands, and other communications
hereunder must be in writing and shall be deemed to have been duly given if
delivered by hand or mailed within the continental United States by first class,
registered mail, return receipt requested, postage and registry fees prepaid, to
the applicable party and addressed as follows:

                  (a) If to the Company:

                      SAC Technologies, Inc., dba: BIO-key International
                      1285 Corporate Center Drive, Suite 175
                      Eagan, MN 55121
                      Attn: Board of Directors

                      With a copy to:

<PAGE>

                      Buchanan Ingersoll Professional Corporation
                      Eleven Penn Center
                      1845 Market Street
                      Philadelphia, PA 19103
                      Attn: Vincent A. Vietti, Esquire

                  (b) If to the Employee:

                      H. Donald Rosacker II

                      [________________________________________________________
                       ________________________________________________________
                       ________________________________________________________]

         16. Construction of Agreement.

                  (a) Severability. In the event that any one or more of the
provisions of this Agreement shall be held to be invalid, illegal or
unenforceable, the validity, legality or enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.

                  (b) Headings. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience of reference only and
shall not constitute a part of this Agreement.

         17. Entire Agreement and Amendments. This Agreement, including all
Exhibits which shall form parts hereof, contains the entire agreement of the
parties concerning the Employee's employment and all promises, representations,
understandings, arrangements and prior agreements on such subject are merged
herein and superseded hereby. The provisions of this Agreement may not be
amended, modified, repealed, waived, extended or discharged except by an
agreement in writing signed by the party against whom enforcement of any
amendment, modification, repeal, waiver, extension or discharge is sought. No
person acting other than pursuant to a resolution of the Board of Directors
shall have authority on behalf of the Company to agree to amend, modify, repeal,
waive, extend or discharge any provision of this Agreement or anything in
reference thereto or to exercise any of the Company's rights to terminate or to
fail to extend this Agreement.

         18. Survival. The Employee's obligations under Paragraphs 5, 7, 8 and 9
shall survive and continue pursuant to the terms and conditions of this
Agreement following specific termination.

         19. Understanding. The Employee represents and agrees that he fully
understands his rights to discuss all aspects of this Agreement with his private
attorney, that to the extent he desires, he availed himself of this right, that
he has carefully read and fully understands all of the provisions of this
Agreement, that he is competent to execute this Agreement, that his decision to

<PAGE>

execute this Agreement has not been obtained by any duress and that he freely
and voluntarily enters into this Agreement, and that he has read this document
in its entirety and fully understands the meaning, intent, and consequences of
this Agreement.

         20. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.

         21. Injunctive Relief. The Employee hereby agrees and acknowledges that
in the event of a breach or threatened breach of this Agreement by the Employee,
the Company may suffer irreparable harm and monetary damages alone would not
adequately compensate the Company. Accordingly, the Company will therefore be
entitled to injunctive relief to enforce this Agreement.

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed and attested by its duly authorized officers, and the Employee has set
his hand, all as of the day and year first above written.

                                        SAC TECHNOLOGIES, INC.

                                        By: /s/ Jeffry R. Brown
                                            ------------------------------
                                            Name: Jeffry R. Brown
                                            Title: Chief Executive Officer

                                        EMPLOYEE

                                        /s/ H. Donald Rosacker II
                                        ----------------------------------
                                        H. Donald Rosacker II<PAGE>

                                                                 Exhibit 10.90.4

                                [LOGO OF GMAC]

June 29, 2001

Tarrant Apparel Group
Tag Mex, Inc.
Fashion Resource (TCL), Inc.
3151 East Washington Blvd.
Los Angeles, California 90023

Ladies/Gentlemen:

     Reference is made to the Revolving Credit, Factoring and Security Agreement
between us dated as of January 21, 2000 (the "Agreement").  All capitalized
terms not otherwise defined herein shall have such meaning as are ascribed to
them under the Agreement.

     You have advised us that you are in violation of certain provisions set
forth in Section 7.5 of the Agreement in that you did not achieve the required
levels of Tangible Net Worth as set forth in Section 7.5(a), meet the necessary
Fixed Charged Coverage Ratio required under Section 7.5(b), meet the necessary
Interest Coverage Ratio required in Section 7.5 (c) nor meet the Total Leverage
Ratio requirement set forth in Section 7.5(d) of the Agreement for the first
fiscal quarter of fiscal year 2001.  Your failure to achieve the required levels
of financial performance for the sections referred to in the preceding section
would constitute an Event of Default under the Agreement.

     This letter shall serve to confirm that we hereby waive your failure to
achieve the financial performance requirements of Sections 7.5(a), (b), (c), and
(d), for your first fiscal quarter for fiscal year 2001 as an Event of Default,
it being understood that such waiver is only with respect to the sections
described above and is only applicable for such specific time period and should
not be construed as a waiver of the requirements of any other section of the
Agreement nor of those specific sections for any other time period.

     In consideration of providing the waiver set forth above, you agree to pay
us a covenant waiver fee of $10,000.00, which fee shall be an addition to any
other fees, charges or interest payable by you to us under the Agreement, and
payment of which fee may be effectuated by our charging your loan account with
us.

     For your fiscal quarters ended June 30, 2001 and September 30, 2001 for
year ending December 31, 2001 only, those financial covenants set forth in
Section 7.5 of the Agreement which were heretofore measured on a rolling four
quarter basis shall for this one fiscal year be measured on a fiscal year to
date basis.  After December 31, 2001 the rolling four quarter basis of
calculation for these financial covenants shall be reinstated.

     This letter shall also serve to advise you that our recently completed
field examination of your company has identified that the Dilution of
Receivables calculated on a rolling twelve month basis was 10.9%.  As a result
of this increase in Dilution of Receivables and in accordance with the Agreement

        1290 AVENUE OF THE AMERICAS . NEW YORK, NY 10104 . 212-408-7000
<PAGE>

as amended by the Third Amendment thereto, we have the right to increase our
dilution reserve from 10% to 11%.  However, based upon your recent demonstration
to us that our examiner "double counted" one dilution component, we will delay
the implementation of the higher reserve pending the results of our next audit
or at such earlier time that we in our sole discretion determine such increase
is warranted.

     Additionally this letter shall also serve to confirm the agreement between
us, that the Warrant from which you were to issue in our favor, as set forth in
paragraph 2(C) of the Third Amendment to the Agreement dated February 2001,
shall not be issued by you to us, and that in lieu thereof you hereby agree to
pay us a facility fee of $500,000, which fee shall be in addition to any fees
charges or interest otherwise payable to us under the Agreement.  This
$500,000.00 fee shall be earned by us immediately upon the execution by you of
this letter agreement, and it shall be payable by you to us in installments of
$75,000.00 each paid on each of June 30, 2001, September 30, 2001, December 31,
2001, March 31, 2002, June 30, 2002 and September 30, 2002, and a final
installment of $50,000.00 paid on December 31, 2002. Payment of all such
installments may be effectuated by our charging your loan account with us.  Upon
the occurrence of any Event of Default, or if the Agreement is terminated for
any reason whatsoever, then in any such event the balance of the $500,000.00
facility fee then unpaid shall be immediately due and payable without the
necessity of any demand therefor.

     Except as hereby or heretofore modified or amended all of the provisions of
the Agreement shall continue to remain in full force and effect in accordance
with their original terms.

     If the foregoing correctly sets forth the agreement between us, please
execute a copy of this letter in the space provided below and return the fully
executed copy to our offices.

                                        Very truly yours,
                                        GMAC Commerical Credit LLC

                                        By:      /s/ Frank Imperat
                                           -------------------------------

                                        Title:         Illegible
                                              ----------------------------

                                        READ AND AGREED TO:

                                        TARRANT APPAREL GROUP

                                        By:       /s/ Scott Briskie
                                           -------------------------------

                                        Title:             CFO
                                              ----------------------------

                                        TAG MEX, INC.

                                        By:       /s/ Scott Briskie
                                           -------------------------------

                                        Title:            CFO
                                              ----------------------------

                                        FASHION RESOURCE (TCL), INC.

                                        By:       /s/ Scott Briskie
                                           -------------------------------

                                        Title:            CFO
                                              ----------------------------

                                       2

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