Document:

Exhibit 4.4

                                                        Form of Administration
                                                                     Agreement
                                                                 (Owner Trust)

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                    CHASE MANHATTAN AUTO OWNER TRUST 200_-_

                       Class A-1 ___% Asset Backed Notes

                       Class A-2 ___% Asset Backed Notes

                       Class A-3 ___% Asset Backed Notes

                       Class A-4 ___% Asset Backed Notes

                           _______________________

                           ADMINISTRATION AGREEMENT

                        Dated as of __________ __, 200_

                           _______________________

                             JPMorgan Chase Bank,

                               As Administrator

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                               TABLE OF CONTENTS

                                                                          Page
                                                                          ----
Section 1.  Duties of Administrator.........................................2

Section 2.  Records.........................................................7

Section 3.  Compensation....................................................7

Section 4.  Additional Information To Be Furnished to Issuer................7

Section 5.  Independence of Administrator...................................7

Section 6.  No Joint Venture................................................8

Section 7.  Other Activities of Administrator...............................8

Section 8.  Term of Agreement; Resignation and Removal of Administrator.....8

Section 9.  Action upon Termination, Resignation or Removal.................9

Section 10. Notices........................................................10

Section 11. Amendments.....................................................11

Section 12. Successors and Assigns.........................................11

Section 13. GOVERNING LAW..................................................12

Section 14. Headings.......................................................12

Section 15. Counterparts...................................................12

Section 16. Severability...................................................12

Section 17. Not Applicable to JPMorgan Chase in Other Capacities...........12

Section 18. Limitation of Liability of Owner Trustee,
              Indenture Trustee and Administrator..........................12

Section 19. Third-Party Beneficiary........................................13

Section 20. Nonpetition Covenants..........................................13

Section 21. Liability of Administrator.....................................13

EXHIBIT A - Form of Power of Attorney

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          ADMINISTRATION AGREEMENT dated as of __________ __, 200_, among
CHASE MANHATTAN AUTO OWNER TRUST 200_-_, a Delaware business trust (the
"Issuer"), JPMORGAN CHASE BANK, a New York banking corporation, as
administrator (the "Administrator"), and __________________, a ____________
banking association, not in its individual capacity but solely as Indenture
Trustee (the "Indenture Trustee").

                             W I T N E S S E T H:
                             - - - - - - - - - -

          WHEREAS the Issuer is issuing the Class A-1 ___% Asset Backed Notes
(the "Class A-1 Notes"), the Class A-2 ___% Asset Backed Notes (the "Class A-2
Notes"), the Class A-3 ___% Asset Backed Notes (the "Class A-3 Notes") and the
Class A-4 ___% Asset Backed Notes (the "Class A-4 Notes") and, together with
the Class A-1 Notes, the Class A-2 Notes and the Class A-3 Notes, the "Notes")
pursuant to the Indenture dated as of __________ __, 200_ (as amended,
modified or supplemented from time to time in accordance with the provisions
thereof, the "Indenture"), between the Issuer and the Indenture Trustee and
the ___% Asset Backed Certificates (the "Certificates") pursuant to the
Amended and Restated Trust Agreement dated as of __________ __, 200_ (as
amended, modified or supplemented from time to time in accordance with the
provisions thereof, the "Trust Agreement") between Chase USA (defined below),
as Depositor, and __________________, as owner trustee (the "Owner Trustee").

          WHEREAS the Issuer has entered into certain agreements in connection
with the issuance of the Notes and the Certificates, including (i) a Sale and
Servicing Agreement dated as of __________ __, 200_ (the "Sale and Servicing
Agreement") (capitalized terms used herein and not defined herein shall have
the meanings assigned such terms in the Sale and Servicing Agreement) between
the Issuer and Chase Manhattan Bank USA, National Association ("Chase USA"),
as Servicer and Seller, (ii) a Depository Agreement dated __________ __, 200_
(the "Note Depository Agreement") among the Issuer, the Indenture Trustee,
JPMorgan Chase Bank, as Agent (the "Agent") and The Depository Trust Company,
(iii) a Depository Agreement dated __________ __, 200_ among the Issuer, the
Owner Trustee, the Agent and The Depository Trust Company (the "Certificate
Depository Agreement," and together with the Note Depository Agreement, the
"Depository Agreements"), (iv) a Collection Account Control Agreement dated as
of __________ __, 200_ (the "Collection Account Control Agreement") among the
Issuer, the Indenture Trustee and JPMorgan Chase Bank, as securities
intermediary, (v) a Reserve Account Control Agreement dated as of __________
__, 200_ among the Issuer, the Indenture Trustee and ___________________, as
securities intermediary (the "Reserve Account Control Account Agreement," and
together with the Collection Account Control Agreement, the "Securities
Control Agreements"), (vi) the Trust Agreement, and (vii) the Indenture (the
Sale and Servicing Agreement, the Trust Agreement, the Depository Agreements,
the Securities Control Agreements and the Indenture being hereinafter referred
to collectively as the "Related Agreements");

          WHEREAS pursuant to the Related Agreements, the Issuer and the Owner
Trustee are required to perform certain duties in connection with (a) the
Notes and the collateral pledged therefor pursuant to the Indenture (the
"Collateral") and (b) the Certificates;

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          WHEREAS the Issuer desires to have the Administrator perform certain
of the duties of the Issuer and the Owner Trustee referred to in the preceding
clause, and to provide such additional services consistent with the terms of
this Agreement and the Related Agreements as the Issuer may from time to time
request;

          WHEREAS the Administrator has the capacity to provide the services
required hereby and is willing to perform such services for the Issuer and the
Owner Trustee on the terms set forth herein;

          NOW, THEREFORE, in consideration of the mutual covenants contained
herein, and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties agree as follows:

          SECTION 1. Duties of Administrator. (a) Duties with Respect to the
Related Agreements. (i) The Administrator agrees to perform all its duties as
Administrator and the duties of the Issuer and the Owner Trustee under the
Depository Agreements. The Administrator agrees to perform the duty of the
Issuer under Section 5.1(a) of the Sale and Servicing Agreement to move the
Collection Account to a Qualified Institution or Qualified Trust Institution,
as the case may be, and the duty of the Issuer under Section 5.6(b) of the
Sale and Servicing Agreement to move the Reserve Account to a Qualified
Institution or Qualified Trust Institution, as the case may be. In addition,
the Administrator shall consult with the Owner Trustee regarding the duties of
the Issuer and the Owner Trustee under the Related Agreements.

          The Administrator shall monitor the performance of the Issuer and
shall advise the Owner Trustee when action is necessary to comply with the
Issuer's or the Owner Trustee's duties under the Indenture and the Depository
Agreements. The Administrator shall prepare for execution by the Issuer or the
Owner Trustee or shall cause the preparation by other appropriate persons of
all such documents, reports, filings, instruments, certificates and opinions
as it shall be the duty of the Issuer or the Owner Trustee to prepare, file or
deliver pursuant to the Indenture and the Depository Agreements. In
furtherance of the foregoing, the Administrator shall take all appropriate
action that it is the duty of the Issuer or the Owner Trustee to take pursuant
to the Indenture including, without limitation, such of the foregoing as are
required with respect to the following matters under the Indenture (references
are to sections of the Indenture):

          (A) the preparation of or obtaining of the documents and instruments
     required for authentication of the Notes, if any, and delivery of the
     same to the Indenture Trustee (Section 2.2);

          (B) the duty to cause the Note Register to be kept and to give the
     Indenture Trustee notice of any appointment of a new Note Registrar and
     the location, or change in location, of the Note Register and the office
     or offices where Notes may be surrendered for registration of transfer or
     exchange (Section 2.4);

          (C) the notification of Noteholders of the final principal payment
     on their Notes (Section 2.7(b));

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          (D) the preparation, obtaining or filing of the instruments,
     opinions and certificates and other documents required for the release of
     collateral (Section 2.9);

          (E) the preparation of Definitive Notes and arranging the delivery
     thereof (Section 2.12);

          (F) the maintenance of an office or agency in the City of New York
     for registration of transfer or exchange of Notes (Section 3.2);

          (G) the duty to cause newly appointed Paying Agents, if any, to
     deliver to the Indenture Trustee the instrument specified in the
     Indenture regarding funds held in trust (Section 3.3);

          (H) the direction to Paying Agents to pay to the Indenture Trustee
     all sums held in trust by such Paying Agents (Section 3.3);

          (I) the obtaining and preservation of the Issuer's qualification to
     do business in each jurisdiction in which such qualification is or shall
     be necessary to protect the validity and enforceability of the Indenture,
     the Notes, the Collateral and each other instrument and agreement
     included in the Trust Estate (Section 3.4);

          (J) the preparation of all supplements, amendments, financing
     statements, continuation statements, if any, instruments of further
     assurance and other instruments, in accordance with Section 3.5 of the
     Indenture, necessary to protect the Trust Estate (Section 3.5);

          (K) the obtaining of the Opinion of Counsel on the Closing Date and
     the annual delivery of Opinions of Counsel, in accordance with Section
     3.6 of the Indenture, as to the Trust Estate, and the annual delivery of
     the Officers' Certificate and certain other statements, in accordance
     with Section 3.9 of the Indenture, as to compliance with the Indenture
     (Sections 3.6 and 3.9);

          (L) the identification to the Indenture Trustee in an Officers'
     Certificate of a Person with whom the Issuer has contracted to perform
     its duties under the Indenture (Section 3.7(b));

          (M) the notification of the Indenture Trustee and the Rating
     Agencies of an Event of Servicing Termination pursuant to the Sale and
     Servicing Agreement and, if such Event of Servicing Termination arises
     from the failure of the Servicer to perform any of its duties under the
     Sale and Servicing Agreement, the taking of all reasonable steps
     available to remedy such failure (Section 3.7(d));

          (N) the preparation and obtaining of documents and instruments
     required for the release of the Issuer from its obligation under the
     Indenture (Section 3.11(b));

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          (O) the delivery of notice to the Indenture Trustee of each Event of
     Default, Event of Servicing Termination and each default by the Seller
     under the Sale and Servicing Agreement (Section 3.18);

          (P) the taking of such further acts as may be reasonably necessary
     or proper to carry out more effectively the purpose of the Indenture or
     to compel or secure the performance and observance by the Seller and the
     Servicer of their obligations under the Sale and Servicing Agreement
     (Sections 3.19 and 5.16);

          (Q) the monitoring of the Issuer's obligations as to the
     satisfaction and discharge of the Indenture and the preparation of an
     Officers' Certificate and the obtaining of the Opinion of Counsel and the
     Independent Certificate relating thereto (Section 4.1);

          (R) the compliance with any written directive of the Indenture
     Trustee with respect to the sale of the Trust Estate in any manner
     permitted by law if an Event of Default shall have occurred and be
     continuing (Section 5.4);

          (S) provide the Indenture Trustee with the information necessary to
     deliver to each Noteholder such information as may be reasonably required
     to enable such Holder to prepare its United States federal and state and
     local income or franchise tax returns (Section 6.6);

          (T) the preparation and delivery of notice to Noteholders of the
     removal of the Indenture Trustee and the appointment of a successor
     Indenture Trustee (Section 6.8);

          (U) the preparation of any written instruments required to confirm
     more fully the authority of any co-trustee or separate trustee and any
     written instruments necessary in connection with the resignation or
     removal of the Indenture Trustee or any co-trustee or separate trustee
     (Sections 6.8 and 6.10);

          (V) the furnishing of the Indenture Trustee with the names and
     addresses of Noteholders during any period when the Indenture Trustee is
     not the Note Registrar (Section 7.1);

          (W) the preparation and, after execution by the Issuer, the filing
     with the Commission and any applicable state agencies and the Indenture
     Trustee of documents required to be filed on a periodic basis with, and
     summaries thereof as may be required by rules and regulations prescribed
     by, the Commission and any applicable state agencies and the transmission
     of such summaries, as necessary, to the Noteholders (Section 7.3);

          (X) the obtaining of an Officers' Certificate, Opinion of Counsel
     and Independent Certificates, if necessary, for the release of the Trust
     Estate as defined in the Indenture (Sections 8.4 and 8.5);

          (Y) the preparation of Issuer Orders and Issuer Requests and the
     obtaining of Opinions of Counsel with respect to the execution of
     supplemental indentures and the

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     mailing to the Noteholders of notices with respect to such supplemental
     indentures (Sections 9.1 and 9.2);

          (Z) the execution of new Notes conforming to any supplemental
     indenture (Section 9.5);

          (AA) provide the Indenture Trustee with the form of notice necessary
     to deliver the notification of Noteholders of the prepayment of the Notes
     (Section 10.2);

          (BB) the preparation of all Officers' Certificates, Opinions of
     Counsel and Independent Certificates with respect to any requests by the
     Issuer to the Indenture Trustee to take any action under the Indenture
     (Section 11.1(a));

          (CC) the preparation and delivery of Officers' Certificates and the
     obtaining of Independent Certificates, if necessary, for the release of
     property from the lien of the Indenture (Section 11.1(b));

          (DD) the preparation and delivery to the Noteholders and the
     Indenture Trustee of any agreements with respect to alternate payment and
     notice provisions (Section 11.6); and

          (EE) the recording of the Indenture, if applicable (Section 11.15).

          (b) Additional Duties. (i) In addition to the duties of the
Administrator set forth above, the Administrator shall perform such
calculations and shall prepare for execution by the Issuer or the Owner
Trustee or shall cause the preparation by other appropriate persons of all
such documents, reports, filings, instruments, certificates and opinions as it
shall be the duty of the Issuer or the Owner Trustee to prepare, file or
deliver pursuant to the Related Agreements, and at the request of the Owner
Trustee shall take all appropriate action that it is the duty of the Issuer or
the Owner Trustee to take pursuant to the Related Agreements. Subject to
Section 5 of this Agreement, and in accordance with the directions of the
Owner Trustee, the Administrator shall administer, perform or supervise the
performance of such other activities in connection with the Trust Estate
(including the Related Agreements) as are not covered by any of the foregoing
provisions and as are expressly requested by the Owner Trustee and are
reasonably within the capability of the Administrator.

          (ii) Notwithstanding anything in this Agreement or the Related
Agreements to the contrary, the Administrator shall be responsible for
promptly notifying the Owner Trustee in the event that any withholding tax is
imposed on the Issuer's payments (or allocations of income) to a
"Certificateholder" as contemplated in Section 5.2(c) of the Trust Agreement.
Any such notice shall specify the amount of any withholding tax required to be
withheld by the Owner Trustee pursuant to such provision.

          (iii) Notwithstanding anything in this Agreement or the Related
Agreements to the contrary, the Administrator shall be responsible for
performance of the duties of the Owner Trustee and the Issuer set forth in
Sections 2.11, 2.12, 2.13 and 5.5(a), (b) and (c) and 5.7 of the

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Trust Agreement with respect to, among other things, accounting and reports to
Certificateholders and the maintenance of Capital Accounts; provided, however,
that the Owner Trustee shall retain responsibility for the distribution of the
Schedule K-1s necessary to enable each Certificateholder to prepare its
federal and state income tax returns.

          (iv) The Administrator may satisfy its obligations with respect to
clauses (ii) and (iii) above by retaining, at the expense of the
Administrator, a firm of independent public accountants (the "Accountants")
acceptable to the Owner Trustee which shall perform the obligations of the
Administrator thereunder. In connection with paragraph (ii) above, the
Accountants will provide prior to __________ __, 200_ a letter in form and
substance satisfactory to the Owner Trustee as to whether any tax withholding
is then required and, if required, the procedures to be followed with respect
thereto to comply with the requirements of the Code. The Accountants shall be
required to update the letter in each instance that any additional tax
withholding is subsequently required or any previously required tax
withholding shall no longer be required.

          (v) The Administrator shall perform the duties of the Administrator
specified in Sections 10.2 and 10.3 of the Trust Agreement required to be
performed in connection with the resignation or removal of the Owner Trustee,
the duties of the Administrator specified in Section 10.5 of the Trust
Agreement required to be performed in connection with the appointment and
payment of co-Trustees, and any other duties expressly required to be
performed by the Administrator under the Trust Agreement.

          (vi) In carrying out the foregoing duties or any of its other
obligations under this Agreement, the Administrator may enter into
transactions with or otherwise deal with any of its Affiliates; provided,
however, that the terms of any such transactions or dealings shall be in
accordance with any directions received from the Issuer and shall be, in the
Administrator's opinion, no less favorable to the Issuer than would be
available from unaffiliated parties.

          (vii) It is the intention of the parties hereto that the
Administrator shall, and the Administrator hereby agrees to, execute on behalf
of the Issuer or the Owner Trustee all such documents, reports, filings,
instruments, certificates and opinions as it shall be the duty of the Issuer
or the Owner Trustee to prepare, file or deliver pursuant to the Basic
Documents. In furtherance thereof, the Owner Trustee shall, on behalf of
itself and of the Issuer, execute and deliver to the Administrator, and to
each successor Administrator appointed pursuant to the terms hereof, one or
more powers of attorney substantially in the form of Exhibit A hereto,
appointing the Administrator the attorney-in-fact of the Owner Trustee and the
Issuer for the purpose of executing on behalf of the Owner Trustee and the
Issuer all such documents, reports, filings, instruments, certificates and
opinions.

          (c) Non-Ministerial Matters. (i) With respect to matters that in the
reasonable judgment of the Administrator are non-ministerial, the
Administrator shall not take any action unless within a reasonable time before
the taking of such action, the Administrator shall have notified the Owner
Trustee of the proposed action and the Owner Trustee shall not have withheld
consent or provided an alternative direction. For the purpose of the preceding
sentence, "non-ministerial matters" shall include, without limitation:

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          (A) the initiation of any claim or lawsuit by the Issuer and the
     compromise of any action, claim or lawsuit brought by or against the
     Issuer (other than in connection with the collection of the Receivables);

          (B) the amendment, change or modification of the Related Agreements;

          (C) the appointment of successor Note Registrars, successor Paying
     Agents and successor Indenture Trustees pursuant to the Indenture or the
     appointment of successor Administrators or successor Servicers, or the
     consent to the assignment by the Note Registrar, the Paying Agent or the
     Indenture Trustee of its obligations under the Indenture; and

          (D) the removal of the Indenture Trustee.

          (ii) Notwithstanding anything to the contrary in this Agreement, the
Administrator shall not be obligated to, and shall not, (x) make any payments
to the Noteholders, the Certificateholders or the Class R Certificateholder
under the Related Agreements, (y) sell the Trust Estate pursuant to Section
5.4 of the Indenture or (z) take any action that the Issuer directs the
Administrator not to take on its behalf.

          SECTION 2.  Records. The Administrator shall maintain appropriate
books of account and records relating to services performed hereunder, which
books of account and records shall be accessible for inspection by the Issuer,
the Owner Trustee, the Indenture Trustee and the Seller at any time during
normal business hours.

          SECTION 3.  Compensation. As compensation for the performance of the
Administrator's obligations under this Agreement, the Administrator shall be
entitled to $_____ per month which shall be payable in accordance with Section
5.5 of the Sale and Servicing Agreement.

          SECTION 4.  Additional Information To Be Furnished to Issuer. The
Administrator shall furnish to the Issuer from time to time such additional
information regarding the Collateral as the Issuer shall reasonably request,
including notification of Noteholders pursuant to Section 1(a)(i) hereof.

          SECTION 5.  Independence of Administrator. For all purposes of this
Agreement, the Administrator shall be an independent contractor and shall not
be subject to the supervision of the Issuer or the Owner Trustee with respect
to the manner in which it accomplishes the performance of its obligations
hereunder. Unless expressly authorized by the Issuer or the Owner Trustee, as
the case may be, the Administrator shall have no authority to act for or
represent the Issuer or the Owner Trustee in any way and shall not otherwise
be deemed an agent of the Issuer or the Owner Trustee.

          SECTION 6.  No Joint Venture. Nothing contained in this Agreement
shall (i) constitute the Administrator and either of the Issuer or the Owner
Trustee as members of any partnership, joint venture, association, syndicate,
unincorporated business or other separate

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<PAGE>

entity, (ii) be construed to impose any liability as such on any of them or
(iii) be deemed to confer on any of them any express, implied or apparent
authority to incur any obligation or liability on behalf of the others.

          SECTION 7.  Other Activities of Administrator. (a) Nothing herein
shall prevent the Administrator or its affiliates from engaging in other
businesses or, in its sole discretion, from acting in a similar capacity as an
administrator for any other person or entity even though such person or entity
may engage in business activities similar to those of the Issuer, the Owner
Trustee or the Indenture Trustee.

          (b) The Administrator and its affiliates may generally engage in any
kind of business with any person party to a Related Agreement, any of its
affiliates and any person who may do business with or own securities of any
such person or any of its affiliates, without any duty to account therefor to
the Issuer, the Owner Trustee or the Indenture Trustee.

          SECTION 8.  Term of Agreement; Resignation and Removal of
Administrator. (a) This Agreement shall continue in force until the
dissolution of the Issuer, upon which event this Agreement shall automatically
terminate.

          (b) Subject to Sections 8(e) and (f), the Administrator may resign
its duties hereunder by providing the Issuer and the Owner Trustee with at
least 60 days' prior written notice.

          (c) Subject to Sections 8(e) and (f), the Issuer may remove the
Administrator without cause by providing the Administrator with at least 60
days' prior written notice.

          (d) Subject to Sections 8(e) and (f), at the sole option of the
Issuer, the Administrator may be removed immediately upon written notice of
termination from the Issuer to the Administrator if any of the following
events shall occur:

          (i) the Administrator shall default in the performance of any of its
     duties under this Agreement and, after notice of such default, shall not
     cure such default within ten days (or, if such default cannot be cured in
     such time, shall not give within ten days such assurance of cure as shall
     be reasonably satisfactory to the Issuer);

          (ii) a court having jurisdiction in the premises shall enter a
     decree or order for relief, and such decree or order shall not have been
     vacated within 60 days, in respect of the Administrator in any
     involuntary case under any applicable bankruptcy, insolvency or other
     similar law now or hereafter in effect or appoint a receiver, liquidator,
     assignee, custodian, trustee, sequestrator or similar official for the
     Administrator or any substantial part of its property or order the
     winding-up or liquidation of its affairs; or

          (iii) the Administrator shall commence a voluntary case under any
     applicable bankruptcy, insolvency or other similar law now or hereafter
     in effect, shall consent to the entry of an order for relief in an
     involuntary case under any such law, or shall consent to the appointment
     of a receiver, liquidator, assignee, trustee, custodian,

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<PAGE>

     sequestrator or similar official for the Administrator or any substantial
     part of its property, shall consent to the taking of possession by any
     such official of any substantial part of its property, shall make any
     general assignment for the benefit of creditors or shall fail generally
     to pay its debts as they become due.

          The Administrator agrees that if any of the events specified in
clause (ii) or (iii) of this Section shall occur, it shall give written notice
thereof to the Issuer, the Owner Trustee and the Indenture Trustee within
seven days after the happening of such event.

          (e) No resignation or removal of the Administrator pursuant to this
Section shall be effective until (i) a successor Administrator shall have been
appointed by the Issuer and (ii) such successor Administrator shall have
agreed in writing to be bound by the terms of this Agreement in the same
manner as the Administrator is bound hereunder.

          (f) The appointment of any successor Administrator shall be
effective only after receipt of written confirmation from each Rating Agency
that the proposed appointment will not result in the qualification,
downgrading or withdrawal of any rating assigned to the Notes and Certificates
by such Rating Agency.

          (g) A successor Administrator shall execute, acknowledge and deliver
a written acceptance of its appointment hereunder to the resigning
Administrator and to the Issuer. Thereupon the resignation or removal of the
resigning Administrator shall become effective, and the successor
Administrator shall have all the rights, powers and duties of the
Administrator under this Indenture. The successor Administrator shall mail a
notice of its succession to the Noteholders and the Certificateholders. The
resigning Administrator shall promptly transfer or cause to be transferred all
property and any related agreements, documents and statements held by it as
Administrator to the successor Administrator and the resigning Administrator
shall execute and deliver such instruments and do other things as may
reasonably be required for fully and certainly vesting in the successor
Administrator all rights, powers, duties and obligations hereunder.

          (h) In no event shall a resigning Administrator be liable for the
acts or omissions of any successor Administrator hereunder.

          (i) In the exercise or administration of its duties hereunder and
under the Related Agreements, the Administrator may act directly or through
its agents or attorneys pursuant to agreements entered into with any of them,
and the Administrator shall not be liable for the conduct or misconduct of
such agents or attorneys if such agents or attorneys shall have been selected
by the Administrator with due care.

          SECTION 9.  Action upon Termination, Resignation or Removal. Promptly
upon the effective date of termination of this Agreement pursuant to Section
8(a) or the resignation or removal of the Administrator pursuant to Section
8(b) or (c), respectively, the Administrator shall be entitled to be paid all
fees and reimbursable expenses accruing to it to the date of such termination,
resignation or removal. The Administrator shall forthwith upon termination
pursuant to Section 8(a) deliver to the Issuer all property and documents of or

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<PAGE>

relating to the Collateral then in the custody of the Administrator. In the
event of the resignation or removal of the Administrator pursuant to Section
8(b) or (c), respectively, the Administrator shall cooperate with the Issuer
and take all reasonable steps requested to assist the Issuer in making an
orderly transfer of the duties of the Administrator.

          SECTION 10.  Notices. Any notice, report or other communication given
hereunder shall be in writing and addressed as follows:

          (a) if to the Issuer or the Owner Trustee, to

                    ___________________________
                    ___________________________
                    ___________________________
                    ___________________________
                    ___________________________

          with a copy to:

                    Chase Automotive Finance Corporation
                    900 Stewart Avenue
                    Garden City, New York 11530
                    Attention: Financial Controller

          (b) if to the Administrator, to

                    JPMorgan Chase Bank
                    450 West 33rd Street
                    14th Floor
                    New York, New York  10001-2697
                    Attention: Structured Finance/Chase Auto

          (c) if to the Indenture Trustee, to

                    ___________________________
                    ___________________________
                    ___________________________
                    ___________________________

          (d) if to the Seller, to

                    Chase Manhattan Automotive Finance Corporation
                    900 Stewart Avenue
                    Garden City, New York 11530
                    Attention: Financial Controller

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<PAGE>

or to such other address as any party shall have provided to the other parties
in writing. Any notice required to be in writing hereunder shall be deemed
given if such notice is mailed by certified mail, postage prepaid, or
hand-delivered to the address of such party as provided above, except that
notices to the Indenture Trustee are effective only upon receipt.

          SECTION 11.  Amendments. This Agreement may be amended from time to
time by a written amendment duly executed and delivered by the Issuer, the
Administrator and the Indenture Trustee, with the written consent of the Owner
Trustee and without the consent of the Noteholders and the Certificateholders,
for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Agreement or of modifying in any
manner the rights of the Noteholders or Certificateholders; provided that such
amendment will not, as evidenced by an Opinion of Counsel, materially and
adversely affect the interest of any Noteholder, any Certificateholder or the
Class R Certificateholder. This Agreement may also be amended by the Issuer,
the Administrator and the Indenture Trustee with the written consent of the
Owner Trustee and the holders of Notes evidencing a majority in the
Outstanding Amount of the Notes, the holders of Certificates evidencing a
majority of the Certificate Balance and the Class R Certificateholder for the
purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Agreement or of modifying in any manner the
rights of Noteholders, the Certificateholders or the Class R
Certificateholder; provided, however, that no such amendment may (i) increase
or reduce in any manner the amount of, or accelerate or delay the timing of,
collections of payments on Receivables or distributions that are required to
be made for the benefit of the Noteholders or Certificateholders or (ii)
reduce the aforesaid percentage of the holders of Notes and Certificates which
are required to consent to any such amendment, without the consent of the
holders of all the outstanding Notes and Certificates. Notwithstanding the
foregoing, the Administrator may not amend this Agreement without the
permission of the Seller, which permission shall not be unreasonably withheld.

          SECTION 12.  Successors and Assigns. This Agreement may not be
assigned by the Administrator unless such assignment is previously consented
to in writing by the Issuer and the Owner Trustee and subject to receipt by
the Owner Trustee of written confirmation from each Rating Agency that such
assignment will not result in the qualification, downgrading or withdrawal of
any rating assigned to the Notes and Certificates by such Rating Agency in
respect thereof. An assignment with such consent and satisfaction, if accepted
by the assignee, shall bind the assignee hereunder in the same manner as the
Administrator is bound hereunder. Notwithstanding the foregoing, this
Agreement may be assigned by the Administrator without the consent of the
Issuer or the Owner Trustee to a corporation or other organization that is a
successor (by merger, consolidation or purchase of assets) to the
Administrator, provided that such successor organization executes and delivers
to the Issuer, the Owner Trustee and the Indenture Trustee an agreement in
which such corporation or other organization agrees to be bound hereunder by
the terms of said assignment in the same manner as the Administrator is bound
hereunder. Subject to the foregoing, this Agreement shall bind any successors
or assigns of the parties hereto.

                                     -11-
<PAGE>

          SECTION 13.  GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.

          SECTION 14.  Headings. The section headings hereof have been inserted
for convenience of reference only and shall not be construed to affect the
meaning, construction or effect of this Agreement.

          SECTION 15.  Counterparts. This Agreement may be executed in
counterparts, each of which when so executed shall together constitute but one
and the same agreement.

          SECTION 16.  Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction.

          SECTION 17.  Not Applicable to JPMorgan Chase in Other Capacities.
Nothing in this Agreement shall affect any obligation of JPMorgan Chase may
have in any other capacity.

          SECTION 18.  Limitation of Liability of Owner Trustee, Indenture
Trustee and Administrator. (a) Notwithstanding anything contained herein to
the contrary, this instrument has been signed by _____________________ not in
its individual capacity but solely in its capacity as Owner Trustee of the
Issuer and in no event shall _____________________ in its individual capacity
or any beneficial owner of the Issuer have any liability for the
representations, warranties, covenants, agreements or other obligations of the
Issuer hereunder, as to all of which recourse shall be had solely to the
assets of the Issuer. For all purposes of this Agreement, in the performance
of any duties or obligations of the Issuer hereunder, the Owner Trustee shall
be subject to, and entitled to the benefits of, the terms and provisions of
Articles VI, VII and VIII of the Trust Agreement.

          (b) Notwithstanding anything contained herein to the contrary, this
Agreement has been signed by ________________, not in its individual capacity
but solely as Indenture Trustee, and in no event shall _____________ have any
liability for the representations, warranties, covenants, agreements or other
obligations of the Issuer hereunder or in any of the certificates, notices or
agreements delivered pursuant hereto, as to all of which recourse shall be had
solely to the assets of the Issuer.

          (c) No recourse under any obligation, covenant or agreement of the
Issuer contained in this Agreement shall be had against any agent of the
Issuer (including the Administrator) as such by the enforcement of any
assessment or by any legal or equitable proceeding, by virtue of any statute
or otherwise; it being expressly agreed and understood that this Agreement is
solely an obligation of the Issuer as a Delaware business trust, and that no
personal liability whatsoever shall attach to or be incurred by any agent of
the Issuer (including the Administrator), as such, under or by reason of any
of the obligations, covenants or agreements of the Issuer contained in this
Agreement, or implied therefrom, and that any and all

                                     -12-
<PAGE>

personal liability for breaches by the Issuer of any such obligations,
covenants or agreements, either at common law or at equity, or by statute or
constitution, of every such agent is hereby expressly waived as a condition of
and in consideration for the execution of this Agreement.

          SECTION 19.  Third-Party Beneficiary. Each of the Seller (to the
extent provided in Section 11) and the Owner Trustee is a third-party
beneficiary to this Agreement and is entitled to the rights and benefits
hereunder and may enforce the provisions hereof as if it were a party hereto.

          SECTION 20.  Nonpetition Covenants. Notwithstanding any prior
termination of this Agreement, the Administrator, the Issuer and the Indenture
Trustee shall not, prior to the date which is one year and one day after the
termination of this Agreement with respect to the Issuer, acquiesce, petition
or otherwise invoke or cause the Issuer to invoke the process of any court of
government authority for the purpose of commencing or sustaining a case
against the Issuer under any Federal or state bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, trustee,
custodian, sequestrator or other similar official of the Issuer or any
substantial part of its property, or ordering the winding up or liquidation of
the affairs of the Issuer.

          SECTION 21.  Liability of Administrator. Notwithstanding any
provision of this Agreement, the Administrator shall not have any obligations
under this Agreement other than those specifically set forth herein, and no
implied obligations of the Administrator shall be read into this Agreement.
Neither the Administrator nor any of its directors, officers, agents or
employees shall be liable for any action taken or omitted to be taken in good
faith by it or them under or in connection with this Agreement, except for its
or their own gross negligence or willful misconduct and in no event shall the
Administrator be liable under or in connection with this Agreement for
indirect, special, or consequential losses or damages of any kind, including
lost profits, even if advised of the possibility thereof and regardless of the
form of action by which such losses or damages may be claimed. Without
limiting the foregoing, the Administrator may (a) consult with legal counsel
(including counsel for the Issuer), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts and (b) shall incur no liability under or in respect of
this Agreement by acting upon any notice (including notice by telephone),
consent, certificate or other instrument or writing (which may be by
facsimile) believed by it to be genuine and signed or sent by the proper party
or parties.

                                     -13-
<PAGE>

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

                           CHASE MANHATTAN AUTO OWNER TRUST
                               200_-_

                           By: _____________________________________________,
                                 not in its individual capacity but solely
                                 as Owner Trustee,

                           By: ______________________________________________
                                 Name:
                                 Title:

                           _________________________________________________,
                           not in its individual capacity but solely
                           as Indenture Trustee,

                           By: ______________________________________________
                                  Name:
                                  Title:

                           JPMORGAN CHASE BANK,
                           as Administrator

                           By: ______________________________________________
                                  Name:
                                  Title:

<PAGE>
                                                                     EXHIBIT A

                          [Form of Power of Attorney]

                               POWER OF ATTORNEY

STATE OF NEW YORK   )
                    )
COUNTY OF NEW YORK  )

          KNOW ALL MEN BY THESE PRESENTS, that Chase Manhattan Auto Owner
Trust 200_-_ ("Trust"), does hereby make, constitute and appoint JPMORGAN
CHASE BANK as Administrator under the Administration Agreement (as defined
below), and its agents and attorneys, as Attorneys-in-Fact to execute on
behalf of the Trust all such documents, reports, filings, instruments,
certificates and opinions as it shall be the duty of the Trust to prepare,
file or deliver pursuant to the Related Agreements (as defined in the
Administration Agreement), including, without limitation, to appear for and
represent the Trust in connection with the preparation, filing and audit of
federal, state and local tax returns pertaining to the Trust, and with full
power to perform any and all acts associated with such returns and audits that
the Trust could perform, including without limitation, the right to distribute
and receive confidential information, defend and assert positions in response
to audits, initiate and defend litigation, and to execute waivers of
restriction on assessments of deficiencies, consents to the extension of any
statutory or regulatory time limit, and settlements. For the purpose of this
Power of Attorney, the term "Administration Agreement" means the
Administration Agreement dated as of ______________ __, 200_ among the Trust,
JPMorgan Chase Bank, as Administrator, and _____________________, as Indenture
Trustee, as such may be amended from time to time.

          All powers of attorney for this purpose heretofore filed or executed
by the Trust are hereby revoked.

          EXECUTED this ____ day of _______, 200_.

                                     CHASE MANHATTAN AUTO OWNER TRUST 200_-_

                                     By:

                                     ________________________________,
                                     not in its individual capacity but solely
                                     as Owner Trustee

                                     By: ____________________________
                                          Name:
                                          Title:EXHIBIT 10.31

                                FUNDING AGREEMENT

         THIS FUNDING AGREEMENT ("Funding Agreement") is dated as of November
26, 2001, by and between SAC TECHNOLOGIES, INC., a Minnesota corporation, with
headquarters located at 1285 Corporate Center Drive, Suite 175, Eagan, Minnesota
55121(the "Company"), and THE SHAAR FUND LTD., (the "Investor").

                               W I T N E S S E T H

         WHEREAS, the Investor has previously extended credit to the Company in
         the amount of $3,028,761; and

         WHEREAS, the Company wishes to induce the Investor to loan to the
Company, and the Investor is willing to loan to the Company, subject to the
terms and conditions set forth herein, up to an additional Two Million One
Hundred Forty-Five Thousand and 00/100 ($2,145,000.00) Dollars.

         NOW, THEREFORE, for and in consideration of the premises and the mutual
agreement contained herein and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

         1. LOAN. (a) Subject to the terms and conditions set forth herein, the
Investor shall loan to the Company One Million Sixty-Five Thousand and 00/100
($1,065,00.00) Dollars (the "Initial Advance") to the Company in same day U.S.
funds by wire transfer to an account designated by the Company. The Initial
Advance shall be evidenced by a Secured Note in substantially the form attached
hereto as Exhibit C, in the principal amount of $4,092,920 (the "Initial Note")
aggregating the Initial Advance and the amounts due under under prior notes (the
"Prior Notes") delivered by the Company to the Investor as set forth in Schedule
1(a) annexed hereto, in the aggregate principal amount of Two Million Seven
Hundred Seventy Thousand and 00/100 ($2,770,000) Dollars, and accrued interest
of Two Hundred Fifty-Seven Thousand Nine Hundred Twenty and 00/100 ($257,920.00)
Dollars through the date hereof.

               (b) The Investor agrees to loan up to an additional One Million
Eighty Thousand and 00/100 ($1,080,000.00) Dollars to the Company by advancing
(the "Advances") to the Company monthly, commencing March 2002 and ending August
2002, on a non-cumulative basis, an additional amount of $180,000 per month if

<PAGE>

the Market Price for the prior calendar month exceeds $1.00. Notwithstanding the
foregoing, the Investor may, in its sole discretion, agree to fund other
Advances submitted by the Company, in such amounts as it may determine from time
to time. To the extent that Advances or other funding is made available by the
Investor or its affiliates from the date hereof until August 31, 2002, the
Investor's obligation to fund Advances shall be reduced accordingly. As used
herein, "Market Price" per Common Share means the average of the closing bid
prices of the Common Shares as reported by Bloomberg LP for the Principal Market
on which the Company's Common Stock is traded. Each Advance shall be evidenced
by a Secured Note (the "Advance Notes") in substantially the form attached
hereto as Exhibit C-1.

               (c) The Investor shall not be obligated to fund an Advance unless
they shall have received at least ten (10) business days written notice from the
Company, setting forth the amount requested and the use of said proceeds, which
shall be in accordance with Schedule 6 hereto. No such notice shall be delivered
prior to the first business day of the month of such Advance. Upon each funding
hereunder, the Company shall deliver a Certificate of an executive officer of
the Company, substantially in the form annexed hereto as Exhibit A.

               (d) Simultaneous herewith the Company shall issue and deliver
five year Warrants to the Investor or its designee, granting to the Investor or
its designee to purchase four million (4,000,000) shares of Common Stock with an
exercise price of $1.00 per share. The Warrants shall contain cashless exercise
provisions, and shall be substantially in the form annexed hereto as Exhibit B.

                    (e) The Investor shall not be obligated to make any Advances
under Paragraph 1(b) hereof, unless on or prior to February 28, 2002, the
Company (a) shall have secured all necessary shareholder approval to increase
the number of authorized shares to 60,000,000 shares of Common Stock, and shall
have made all necessary filings in respect thereof with the Secretary of State
of Minnesota, (b) all representations and warranties made by the Company shall
be true and correct in all material respects, as if same were made on the date
of such advance, (c) the Company is in compliance with its filing obligations
under the Registration Rights Agreement, and (d) the Company shall be in
material compliance with all other obligations under the Related

<PAGE>

Agreements between the Company and the Holder.

         2. NOTES. The terms of the Initial Advance shall be set forth in and
evidenced by the Initial Note. The terms of the Advances shall be set forth in
and evidenced by one or more Secured Promissory Notes in the aggregate amount up
to One Million Eighty Thousand and 00/100 ($1,080,000.00) Dollars, payable to
the order of the Investor or its assignees (the Initial Note and the Advance
Notes are hereinafter collectively referred to as the "Notes"). The Notes shall
be secured pursuant to the terms of the Security Interest Provisions annexed
hereto as Exhibit D.

         3. MUTUAL DELIVERIES.

               (a) Upon the delivery by the Investor of (i) the Initial Advance,
as provided in Section 1 above, and (ii) the Prior Notes (or an indemnity
reasonably acceptable to the Company) the Company shall deliver to the Investor
the Initial Note.

               (b) The Company shall also deliver, or cause to be delivered, the
original or execution copies of the following instruments and agreements duly
executed by all parties thereto other than the Investor (together with the
Initial Notes - the "Related Agreements"):

                    (i) this Agreement with the Security Interest Provisions
(Exhibit D);

                    (ii) Series B Convertible Preferred Stock and 5% Convertible
Debenture Exchange Agreement ("Exchange Agreement") and Annexes thereto in the
form annexed hereto as Exhibit E;

                    (iii) Registration Rights Agreement in the form annexed
hereto as Exhibit F;

                    (iv) the opinion of counsel in the form annexed hereto as
Exhibit G; and

                    (v) executed letter agreements from Gary Wendt, Barry M.
Wendt, Jeffrey Brown, H. Donald Rosacker, and Jeffrey J. May.

         4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Investor that:

               (a) The Company has the corporate power and authority to enter
into this Funding

<PAGE>

Agreement and the Related Agreements and to perform its obligations hereunder
and thereunder. The execution and delivery by the Company of this Funding
Agreement and the Related Agreements and the consummation by the Company of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action on the part of the Company. This Funding Agreement
and the Related Agreements have been duly executed and delivered by the Company
and constitute valid and binding obligations of the Company enforceable against
it in accordance with their respective terms, subject to the effects of any
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting creditors' rights generally and to the application of equitable
principles in any proceeding (legal or equitable).

               (b) The execution, delivery and performance by the Company of
this Funding Agreement and the Related Agreements and the consummation of the
transactions contemplated hereby and thereby do not and will not breach or
constitute a default under any applicable law or regulation or of any agreement,
judgment, order, decree or other instrument binding on the Company which breach
or default could reasonably by expected to have a material adverse effect on the
Company.

               (c) Except as set forth in Schedule 4(c) hereto, the Company is
in material compliance with all applicable laws, regulations, judgments, decrees
and orders material to the conduct of its business.

               (d) Except as set forth in Schedule 4(d) hereto, there is no
pending, or to the knowledge of the Company, threatened, judicial,
administrative or arbitral action, claim, suit, proceeding or investigation
against or involving the Company, which might affect the validity or
enforceability of this Funding Agreement or the Related Agreements or which
involves the Company and which if adversely determined, could reasonably be
expected to have a material adverse effect on the Company.

               (e) No consent or approval of, or exemption by, or filing with,
any party or governmental or public body or authority is required in connection
with the execution, delivery and performance under this Funding Agreement or the
Related Agreements or the taking of any action contemplated hereunder or
thereunder, except for Federal and State Blue Sky securities law filings, and
required filings pursuant to the Security Interest Provisions.

               (f) The Company has been duly organized and is validly existing
as a corporation in good

<PAGE>

standing under the laws of the State of Minnesota. The Company is duly qualified
and licensed and in good standing as a foreign corporation in each jurisdiction
in which its current ownership or leasing of any properties or its ownership or
leasing of any properties or the character of its operations as currently
conducted requires such qualification or licensing, except where the failure to
be so qualified would not have a material adverse effect on the Company. The
Company has all corporate power and authority, and has obtained all necessary
authorizations, approvals, orders, licenses, certificates, franchises and
permits of and from all governmental or regulatory officials and bodies
necessary to own or lease its properties and conduct its business other than
those authorizations, approvals and such other documents the lack of which could
not reasonably be expected to have a material adverse effect on the Company.

               (g) Except as set forth is Schedule 4 (g), the execution,
delivery and performance of this Agreement by the Company and the Related
Agreements to be delivered hereunder and the consummation of the transactions
contemplated hereby and thereby will not: (i) violate any provision of the
Company's Articles of Incorporation or Bylaws, (ii) violate, conflict with or
result in the breach of any of the terms of, result in a material modification
of the effect of, otherwise, give any other contracting party the right to
terminate, or constitute (or with notice or lapse of time or both constitute) a
default under, any contract or other agreement to which the Company is a party
or by or to which the Company or any of the Company's assets or properties may
be bound or subject, (iii) violate any order, judgment, injunction, award or
decree of any court, arbitrator or governmental or regulatory body by which the
Company, or the assets or properties of the Company are bound, (iv) to the
Company's knowledge, violate any statute, law or regulation.

               (h) Except as set forth in the Company's filings with the
Securities and Exchange Commission (the "SEC Filings") or in Schedule 4(h)
hereto, there has been no material change in the capitalization, assets, or
liabilities of the Company since the issuance of the financial statements, for
the period ending December 31, 2000, delivered to Investor, nor is the Company
in default under, or an Event of Default has occurred in respect of any Prior
Agreement between the Company and the Investor.

               (i) CONTROL PERSONS. Except as set forth in the SEC Filings, none
of the following has

<PAGE>

occurred during the past five (5) years with respect to the Company (or any
subsidiary or predecessor entity) or control person of the Company (a "Person"):

                    (1) A petition under the federal bankruptcy laws or any
state insolvency law was filed by or against, or a receiver, fiscal agent or
similar officer was appointed by a court for the business or property of such
Person, or any partnership in which he was a general partner at or within two
years before the time of such filing, or any corporation or business association
of which he was an executive officer at or within two years before the time of
such filing;

                    (2) Such Person was convicted in a criminal proceeding or is
a named subject of a pending criminal proceeding (excluding traffic violations
and other minor offenses);

                    (3) Such Person was the subject of any order, judgment or
decree, not subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, permanently or temporarily enjoining him from, or
otherwise limiting, the following activities:

                         (i) Acting, as an investment advisor, underwriter,
broker or dealer in securities, or as an affiliated person, director or employee
of any investment company, bank, savings and loan association or insurance
company, as a futures commission merchant, introducing broker, commodity trading
advisor, commodity pool operator, floor broker, any other person regulated by
the Commodity Futures Trading Commission ("CFTC") or engaging in or continuing
any conduct or practice in connection with such activity;

                         (ii) Engaging in any type of business practice; or

               (iii) Engaging in any activity in connection with the purchase or
sale of any security or commodity or in connection with any violation of federal
or state securities laws or federal commodities laws;

         (4) Such person was the subject of any order, judgment or decree, not
subsequently reversed, suspended or vacated, of any federal or state authority
barring, suspending or otherwise limiting for more than 60 days the right of
such person to engage in any activity described in paragraph (3) of this item,
or to be associated with persons engaged in any such activity;

         (5) Such person was found by a court of competent jurisdiction in a
civil action or by the

<PAGE>

CFTC or SEC to have violated any federal or state securities law, and the
judgment in such civil action or finding by the CFTC or SEC has not been
subsequently reversed, suspended, or vacated.

               (j) Each party represents and warrants that it has had no
dealings in connection with this transaction with any finder or broker who will
demand payment of any fee or commission from the Investor. Each party agrees to
indemnify the other against and hold the other harmless from any and all
liabilities to any persons claiming brokerage commissions or finder's fees on
account of services purported to have been rendered in connection with this
Agreement or the transactions contemplated hereby.

         5. REPRESENTATIONS AND WARRANTIES OF THE INVESTOR. The Investor hereby
represents and warrants to the Company that:

               (a) The Investor has the corporate power and authority to enter
into this Funding Agreement and the Related Agreements and to perform its
obligations hereunder and thereunder. The execution and delivery by the Investor
of this Financial Agreement and the Related Agreements and the consummation by
the Investor of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action on the part of the Investor. This
Funding Agreement and the Related Agreements have been duly executed and
delivered by the Investor and constitute valid and binding obligations of the
Investor, enforceable against it in accordance with their respective terms,
subject to the effects of any applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally and to the
application of equitable principles in any proceeding (legal or equitable).

               (b) The execution, delivery and performance by the Investor of
this Funding Agreement and the Related Agreements and the consummation of the
transactions contemplated hereby and thereby do not and will not breach or
constitute a default under any applicable law or regulation or of any agreement,
judgment, order, decree or other instrument binding on the Investor.

               (c) There is no pending, or to the knowledge of the Investor,
threatened, judicial, administrative or arbitral action, claim, suit, proceeding
or investigation which might affect the validity or enforceability of this
Funding Agreement or the Related Agreements.

<PAGE>

               (d) No consent or approval of, or exemption by, or filing with,
any party of governmental or public body or authority is required in connection
with the execution, delivery and performance under this Funding Agreement or the
Related Agreements or the taking of any action contemplated hereunder or
thereunder.

               (e) The Investor has prior substantial investment experience,
including investment in non-listed and non-registered securities and has had the
opportunity to engage the services of an investment advisor, attorney or
accountant to read all of the documents furnished or made available by the
Company to the Investor in connection with this investment and to evaluate the
merits and risks of this investment.

               (f) Such Investor is acquiring the Notes, the Warrants and shares
of Common Stock issuable upon conversion (the "Securities") to be acquired
hereunder for its own account for investment purposes only and not with a view
to or for distributing or reselling such Securities or any part thereof or
interest therein, without prejudice, however, to such Investor's right, subject
to the provisions of this Agreement and the Registration Rights Agreement, at
all times to sell or otherwise dispose of all or any part of such Securities
pursuant to an effective registration statement under the Securities Act and in
compliance with applicable state securities laws or under an exemption from such
registration.

               (g) Each party represents and warrants that it has had no
dealings in connection with this transaction with any finder or broker who will
demand payment of any fee or commission from the Investor. Each party agrees to
indemnify the other against and hold the other harmless from any and all
liabilities to any persons claiming brokerage commissions or finder's fees on
account of services purported to have been rendered in connection with this
Agreement or the transactions contemplated hereby.

         6. USE OF PROCEEDS. The Company will use the proceeds received
hereunder (excluding amounts paid by the Company for legal fees, and escrow fees
in connection with the sale of the Notes) for the purposes and the amounts
specified in Schedule 6 hereto, and the Company shall not vary such purpose or
amount without the prior written consent of the Investor in each instance.
Unless specifically consented to in advance in each instance by the Investor,
the Company shall not, directly or indirectly, use such proceeds for the
repayment of any outstanding loan by the Company, or the redemption of any
equity securities.

<PAGE>

         7. COVENANTS OF THE COMPANY. The Company covenants and agrees that, so
long as any of the Notes shall be outstanding, except as otherwise required
under the Related Agreements, the Company shall:

               (a) Promptly pay and discharge all lawful taxes, assessments and
governmental charges or levies imposed upon it or upon its income and profits,
or upon any of its property, before the same shall become in default as well as
all lawful material claims for labor, materials and supplies which, if unpaid,
might become a lien or charge upon such properties or any part thereof;
provided, however, that it shall not be required to pay and discharge any such
tax, assessment, charge, levy or claim so long as the validity thereof shall be
contested in good faith by appropriate proceedings, and the Company shall set
aside on its books adequate reserves with respect to any such tax, assessment,
charge, levy or claim so contested.

               (b) Pay, or cause to be paid, all material debts and perform, or
cause to be performed, all material obligations promptly and in accordance with
the respective terms thereof.

               (c) Implement and maintain a standard system of accounting in
accordance with generally accepted accounting principles ("GAAP").

               (d) Provide to the Investor copies of all SEC Filings within five
(5) days after filing.

               (e) Do, or cause to be done, all things that may be necessary to
(i) maintain its due organization, valid existence and good standing under the
laws of its state of incorporation; (ii) preserve and keep in full force and
effect all qualifications, registrations and licenses in those jurisdictions in
which the failure to do so could or would have a material adverse effect; (iii)
maintain its power or authority to carry on its business as now conducted; and
(iv) use its best efforts to keep available the services of its key present
employees and agents and maintain its current relations with suppliers,
customers, distributors and joint venture partners (subject to the business
judgment of executive management).

               (f) At all times maintain, preserve, protect and keep material
property used and useful in the conduct of its business in good repair, working
order and condition (subject to normal wear and tear), and from time to time
make all needful and proper repairs, renewals, replacements, betterment and
improvements thereto, so that the business carried on in connection therewith
may be properly conducted at all times.

<PAGE>

               (g) Keep adequately insured all property of a character usually
insured by similar corporations and carry such other insurance as is usually
carried by similar corporations.

               (h) The Company is not in possession of, nor has the Company or
its agents disclosed to Investor, any material non-public information that (i)
if disclosed, would reasonably be expected to have a materially adverse effect
on the price of the Common Stock or(ii) according to applicable law, rule or
regulation, should have been disclosed publicly by the Company prior to the date
hereof but which has not been so disclosed. Each of the Company, its officers,
directors, employees and agents shall in no event disclose non-public
information to Investor, advisors to or representatives of Investor, unless
prior to disclosure of such information, the Company identifies such information
as being non-public information and provides Investor, such advisors and
representatives with the opportunity in writing to accept or refuse to accept
such non-public information for review and the Investor in writing agrees to
accept such non-public information. The Company may, as a condition to
disclosing any non-public information hereunder, require Investor's advisors and
representatives to enter into a confidentiality agreement in form and substance
reasonably satisfactory to the Company and Investor.

               (i) Not assume, guaranty or otherwise, directly or indirectly,
become liable or responsible for the obligations of any other person or entity,
except for 75% or greater owned subsidiaries, for the purpose of paying or
discharging the obligations of such person or entity unless such guarantees
relate to the business of the Company, are incurred in the ordinary course of
its business and do not exceed in the aggregate $100,000.

               (j) Not declare or pay any cash dividends, or redeem any equity
securities of the Company or authorize or make any other distribution on any
class of equity securities of the Company except for the payment of dividends on
the Series B Preferred Stock.

               (k) The Board of Directors shall promptly after the execution
hereof, (x) adopt proper resolutions authorizing an increase in number of
authorized shares of Common Stock to 60,000,000 shares, (y) recommend to,
promptly and duly obtain shareholder approval to carry out such resolutions (and
hold a special meeting of the shareholders no later than February 28, 2002) and
(z) within 5 Business Days of obtaining such shareholder authorization, file an
appropriate amendment to the Company's articles of incorporation to evidence

<PAGE>

such increase.

               (l) Not enter into any agreement or understanding which may,
directly or indirectly, cause or effect a change in "control" of the Company as
defined in Rule 405 under the Securities Act of 1933, without the prior written
consent of the Investor, which shall not be unreasonably withheld.

               (m) The Company understands that a delay in the issuance of the
Shares of Common Stock beyond five (5) days from delivery of the Conversion
Notice delivered in accordance with the terms of this Agreement and the Notes,
(the "Delivery Date") could result in economic loss to the Investor. As
compensation to the Investor for such loss, the Company agrees to pay late
payments to the Investor for late issuance of Shares upon Conversion in
accordance with the following schedule (where "No. Business Days Late" is
defined as the number of business days beyond seven (7) business days from
Delivery Date:

                                         Late Payment For Each $10,000
                                         of Principal Amount of Notes
          No. Business Days Late         Being Converted
          ----------------------------------------------

                   1                              $100
                   2                              $200
                   3                              $300
                   4                              $400
                   5                              $500
                   6                              $600
                   7                              $700
                   8                              $800
                   9                              $900
                   10                             $1,000
                   >10                            $1,000 +$200 for each Business
                                                  Day Late beyond 10 days

The Company shall pay any payments incurred under this Section in immediately
available funds upon demand. Furthermore, in addition to any other remedies
which may be available to the Investor, in the event that the Company fails for
any reason to effect delivery of such shares of Common Stock within five (5)
business days after the Delivery Date, the Investor will be entitled to revoke
the relevant Notice of Conversion by delivering a notice to such effect to the
Company whereupon the Company and the Investor shall each be restored to their
respective positions immediately prior to delivery of such Notice of Conversion.

         8. COVENANTS OF THE INVESTOR. For so long as Investor owns any Notes,
Investor and its affiliates

<PAGE>

shall not engage in short sales of the Company's Common Stock; provided,
however, that the Investor or its affiliates may enter into any sale, hedging or
similar arrangement it deems appropriate with respect to that number of shares
of Common Stock equal to the number of shares of Common Stock covered by a
particular Conversion Notice delivered under the Notes commencing on the day the
Investor delivers such Conversion Notice (as contemplated by Section 7(m)
hereof).

         9. RELEASE. Effective upon the mutual execution hereof , the Company
and the Investor, for itself and on behalf of all affiliated persons and
entities, representatives, and all predecessors in interest, successors and
assigns (collectively, the "Releasing Parties"), hereby releases and forever
discharges each of the other party, and its direct and indirect partners,
officers, directors, employees, affiliates, representatives, agents, trustees,
beneficiaries, predecessors in interest, successors in interest and nominees of
and from any and all claims, demands, actions and causes of action, whether
known or unknown, fixed or contingent, arising prior to the date of execution of
this Agreement, that the Company may have had, may now have or may hereafter
acquire with respect to any matters whatsoever under, relating to or arising
from any prior Purchase Agreement, Registration Statement, and the agreements
entered into in connection therewith (sometimes collectively referred to as the
"Prior Agreements"), but excluding any claims under the Company Indemnity
delivered pursuant to Paragraph 3(b) hereof or Section 6 of the Exchange
Agreement. Each releasing party also fully waives any offsets it may have with
respect to the amounts owed under the Prior Agreements. Additionally, each party
represents, warrants and covenants that it has not, and at the time this release
becomes effective will not have, sold, assigned, transferred, or otherwise
conveyed to any other person or entity all or any portion of its rights, claims,
demands, actions, or causes of action herein released.

         (10) INDEMNIFICATION. If (i) the Investor becomes involved in any
capacity in any action, proceeding or investigation brought by any stockholder
of the Company, in connection with or as a result of the consummation of the
transactions contemplated by the Transaction Documents or the Prior Agreements,
or if such the Investor impleaded in any such action, proceeding or
investigation by any person, or (ii) the Investor becomes involved in any
capacity in any action, proceeding or investigation brought by the Securities
and Exchange Commission, any self-regulatory organization or other body having
jurisdiction, against or involving the Company or in connection

<PAGE>

with or as a result of the consummation of the transactions contemplated by the
Transaction Documents or the Prior Agreements, or if the Investor is impleaded
in any such action, proceeding or investigation by any person, then in any such
case, the Company hereby agrees to indemnify, defend and hold harmless the
Investor from and against and in respect of all losses, claims, liabilities,
damages or expenses resulting from, imposed upon or incurred by the Investor,
directly or indirectly, and reimburse such Investor for its reasonable legal and
other expenses (including the cost of any investigation and preparation)
incurred in connection therewith, as such expenses are incurred. In addition,
the Company will reimburse the Investor for reasonable internal and overhead
costs for the time of any officers or employees of the Investor devoted to
appearing and preparing to appear as witnesses, assisting in preparation for
hearings, trials or pretrial matters, or otherwise with respect to inquiries,
hearing, trials, and other proceedings relating to the subject matter of the
Transaction Documents, the Prior Agreements or the Note. The indemnification and
reimbursement obligations of the Company under this paragraph shall be in
addition to any liability which the Company may otherwise have (other than
matters specifically addressed in the Registration Rights Agreement, which shall
be governed solely by that agreement), shall extend upon the same terms and
conditions to any affiliates of the Investor who are actually named in such
action, proceeding or investigation, and partners, directors, agents, employees
and controlling persons (if any), as the case may be, of the Investor and any
such affiliate, and shall be binding upon and inure to the benefit of any
successors, assigns, heirs and personal representatives of the Company, the
Investor, any such affiliate and any such person. The Company also agrees that
neither the Investor nor any such affiliate, partner, director, agent, employee
or controlling person shall have any liability to the Company or any person
asserting claims on behalf of or in right of the Company in connection with or
as a result of the consummation of the Transaction Documents or the Prior
Agreements, except as provided in or contemplated by the Transaction Documents.
Notwithstanding the foregoing, the indemnification agreement contained within
this Section 9 shall not apply (i) to any action, proceeding, or investigation
which is based on or relating to (A) Investor's trading activities; (B)
Investor's violation of the Securities Act, the Exchange Act, any state
securities laws or any rule or regulation thereunder, including, but not limited
to, Investors use of material non-public information; (C) actions for which
indemnification would not be available to Investor under the Registration

<PAGE>

Rights Agreement; or (D) actions which are not in compliance with any obligation
of Investor under any of the Transaction Documents, or (ii) to any indemnity or
undertaking by Investor in favor of the Company in connection with any lost,
stolen, or missing Prior Notes or Certificates evidencing other securities.

         11. ASSIGNMENT. Subject to compliance with applicable securities law,
this Funding Agreement and the Related Agreements may be assigned by the
Investor to transferees or assignees of the Note, provided that the Company is,
prior to or simultaneously with such transfer, furnished with written notice of
the name and address of such transferee or assignee, and such assignee agrees in
writing to be bound by the terms hereof and provided further that, if the Note
is only assigned or transferred in part, then such assignment shall only be made
in part on an appropriate proportionate basis. If there is a conflict between
this provision and any provision of the Related Agreements, this provision shall
govern.

         12. RIGHT OF FIRST REFUSAL.

                  (i) The Company covenants and agrees that if during the period
from the date hereof through the date on which the Notes are paid in full, the
Company offers to enter into any transaction (a "New Transaction") for the sale
of Common Stock (other than in connection with an acquisition, merger or other
business combination), the Company shall notify the Investor in writing of all
of the terms of such offer (a "New Transaction Offer"). The Investor shall have
the right (the "Right of First Refusal"), exercisable by written notice given to
the Company by the close of business on the tenth business day after the
Investor's receipt of the New Transaction Offer (the "Right of First Refusal
Expiration Date"), to participate in all or any part of the New Transaction
Offer on the terms so specified.

               (ii) If, and only if, the Investor does not exercise the Right of
First Refusal in full, the Company may consummate the remaining portion of the
New Transaction with any New Investor on substantially the terms specified in
the New Transaction Offer within ninety (90) days of the Right of First Refusal
Expiration Date.

                  (iii) If the terms of the New Transaction to be consummated
with such other party differ from the terms specified in the New Transaction
Offer so that the terms are more beneficial in any material respect to the New
Investor, the Company shall give the Investor a New Transaction Offer relating
to the terms of the New

<PAGE>

Transaction, as so changed, and the Investor's Right of First Refusal and the
preceding terms of this paragraph 11 shall apply with respect to such changed
terms.

         13. REGISTRATION RIGHTS. Reference is made to the Registration Rights
Agreement. The Company's acknowledges that the Investor has certain rights under
the Registration Rights Agreement with respect to the Common Stock issuable upon
conversion of the Notes..

         14. SECURITY INTEREST RELEASE PROVISIONS. The Investor agrees to
execute necessary documents to release its Security Interest in the Collateral
pursuant to the Security Interest Provisions upon the Company securing cash
investments of not less than $5,000,000 in new shareholder equity. The Company
further covenants and agrees that , notwithstanding such release, it will not
grant any other security interest or other lien or rights in the Collateral
(however denominated) as long as any of the Notes remain outstanding.

         15. NOTICES. Any notice required or permitted hereunder shall be given
in writing (unless otherwise specified herein) and shall be deemed effectively
given upon personal delivery or seven business days after deposit in the United
States Postal Service, by (a) advance copy by fax, and (b) mailing by express
courier or registered or certified mail with postage and fees prepaid, addressed
to each of the other parties thereunto entitled at the following addresses, or
at such other addresses as a party may designate by ten days advance written
notice to each of the other parties hereto.

COMPANY:                   SAC Technologies, Inc.
                           1285 Corporate Center Drive
                           Suite 175
                           Eagan, Minnesota 55121
                           Telephone No.: (651) 687-0414
                           Telecopier No.:

                           with a copy to:

                           Vincent Vietti, Esq.
                           Eleven Penn Center
                           14th Floor
                           1835 Market Street
                           Philadelphia, PA 19103-2895
                           215-665-8760 (Philadelphia) Fax

<PAGE>

PURCHASER:                 The Shaar Fund Ltd.
                           Kaya Flamboyan 9
                           Curacao
                           Netherlands Antilles
                           (Tel: 599-9-732-2222)
                           (Fax: 599-9-732-2225)

with copies  (which shall not constitute notice) to:

                           Levinson Capital Management, LLC
                           35 East Grassy Sprain Road
                           Suite 300 Yonkers, NY 10710

                           Phone number: 914-395-0096
                           Fax number: 914-395-0059

ESCROW AGENT:              Krieger & Prager, Esqs.
                           39 Broadway, Suite 1440
                           New York, New York 10006
                           Telephone No.: (212) 363-2900

                           Facsimile No.: (212) 363-2999

         16. SEVERABILITY. If a court of competent jurisdiction determines that
any provision of this Funding Agreement is invalid, unenforceable or illegal for
any reason, such determination shall not affect or impair the validity, legality
and enforceability of the other provisions of this Funding Agreement. If any
such invalidity, unenforceability or illegality of a provision of this Funding
Agreement becomes known or apparent to any of the parties hereto, the parties
shall negotiate promptly and in good faith in an attempt to make appropriate
changes and adjustments to such provision specifically and this Funding
Agreement generally to achieve as closely as possible, consistent with
applicable law, the intent and spirit of such provision specifically and this
Funding Agreement generally.

         17. EXECUTION IN COUNTERPARTS. This Funding Agreement may be executed
in counterparts, each of which shall be deemed an original, but all of which
together shall constitute the same Funding Agreement.

         18. The Company shall pay all fees and disbursements of the Investor
with respect to the preparation and enforcement of this Agreement and the
Related Agreements.

         19. GOVERNING LAW. This Agreement and the Related Agreements shall be
governed by and construed in accordance with the laws of the State of New York,
except to the extent that the Minnesota Business

<PAGE>

Corporation Act would apply to the internal corporate governance of the Company.
Each of the parties consents to the jurisdiction of the federal courts whose
districts encompass any part of the City of New York or the state courts of the
State of New York sitting in the City of New York in connection with any dispute
arising under this Agreement and hereby waives, to the maximum extent permitted
by law, any objection, including any objection based on FORUM NON COVENIENS, to
the bringing of any such proceeding in such jurisdictions.

         20. JURY TRIAL WAIVER. The Company and Purchaser hereby waive a trial
by jury in any action, proceeding or counterclaim brought by either of the
parties hereto against the other in respect of any matter arising out of or in
connection with the Transaction Documents.

         21. RESTATED AGREEMENT. As hereby restated, this Agreement supercedes
any prior agreement between the parties with respect to the subject matter
hereof, and the Notes heretofore delivered pursuant to this Agreement shall be
deemed amended in accordance with the provisions hereof.

                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>

         IN WITNESS WHEREOF, the parties have executed this Funding Agreement as
of the date first written above.

                                                     SAC TECHNOLOGIES, INC.

                                                     By: _______________________
                                                         Name:
                                                         Title:

                                                     THE SHAAR FUND LTD.

                                                     By: _______________________
                                                         Name:
                                                         Title:

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