Exhibit 10.1

Royal Bank of Canada Commercial Financial Services 1055 West Georgia Street -
36th Floor Vancouver, British Columbia V6E 3S5 Tel.: (604) 665-3135 Fax: (604)
665-6368

July 29, 2008

Private and Confidential

BRAINTECH, INC.
Suite 102
930 West 1st Street
North Vancouver, BC
V7P 3N4

ROYAL BANK OF CANADA (the “Bank”) hereby confirms the credit facilities
described below (the “Credit Facilities”) subject to the terms and conditions
set forth below and in the attached Terms & Conditions and
Schedules (collectively the “Agreement”). This Agreement supersedes and cancels
the existing agreement dated November 2, 2006 and any amendments thereto. Any
amount owing by the Borrower to the Bank under such previous agreement is deemed
to be a Borrowing under this Agreement. Any and all security that has been
delivered to the Bank and is set forth as Security below, shall remain in full
force and effect, is expressly reserved by the Bank and shall apply in respect
of all obligations of the Borrower under the Credit Facilities. Unless otherwise
provided, all dollar amounts are in Canadian currency.

BORROWER: Braintech, Inc. (the “Borrower”)

CREDIT FACILITIES

The aggregate of Facility #1 and Facility #2 shall not exceed $2,405,000 at any
time.

Facility #1:        $250,000 revolving demand facility by way of:

a)  RBP based loans (“RBP Loans”)

  Revolve in increments of: $5,000 Minimum retained balance: $0 Revolved by:
Bank Interest rate (per annum): RBP + .50%

b)  RBUSBR based loans in US currency (“RBUSBR Loans”)

  Revolve in increments of: $5,000 Minimum retained balance: $0 Revolved by:
Bank Interest rate (per annum): RBUSBR + .50%

c)  Letters of Credit in Canadian currency or US currency (“LCs”)

  Fees to be advised on a transaction-by-transaction basis. Fees and drawings to
be charged to Borrower’s accounts.

d)  Letters of Guarantee in Canadian currency or US currency (“LGs”)

  Fees to be advised on a transaction-by-transaction basis. Fees and drawings to
be charged to Borrower’s accounts. Minimum fee of $100 in the currency of issue.

AVAILABILITY

The Borrower may borrow, convert, repay and reborrow up to the amount of this
facility provided this facility is made available at the sole discretion of the
Bank and the Bank may cancel or restrict the availability of any unutilized
portion at any time and from time to time.

SRF # 955 287 610

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Braintech, Inc. 2 July 29, 2008

Borrowings outstanding under this facility plus the Borrowings outstanding under
Facility #2 and plus $45,000 must not exceed at any time the aggregate of the
following, less Potential Prior-Ranking Claims (the “Borrowing Limit”):

a) 100% of irrevocable and unconditional auto renewable standby letters of
credit and/or letters of guarantee issued by an issuer acceptable to the Bank,
confirmed by the Bank and in form and substance satisfactory to the Bank.

The aggregate Borrowings outstanding under this facility plus the aggregate
Borrowings outstanding under Facility #2 must not exceed the lesser of (i) the
Borrowing Limit and, (ii) $2,405,000 at any time.

REPAYMENT

Notwithstanding compliance with the covenants and all other terms and conditions
of this Agreement, and regardless of the maturities of any outstanding
instruments or contracts, Borrowings under this facility are repayable on
demand.

GENERAL ACCOUNT

The Borrower shall establish current accounts with the Bank in each of Canadian
currency and US currency (each a "General Account")  for the conduct of the
Borrower’s day-to-day banking business.  The Borrower authorizes the Bank daily
or otherwise as and when determined by the Bank, to ascertain the balance of
each General Account and:

a) if such position is a debit balance the Bank may, subject to the revolving
increment amount and minimum retained balance specified in this Agreement, make
available a Borrowing by way of RBP Loans, or RBUSBR Loans as applicable, under
this facility; or b) if such position is a credit balance, where the facility is
indicated to be Bank revolved, the Bank may, subject to the revolving increment
amount and minimum retained balance specified in this Agreement, apply the
amount of such credit balance or any part as a repayment of any Borrowings
outstanding by way of RBP Loans, or RBUSBR Loans as applicable, under this
facility.

Facility #2         $2,405,000 non-revolving term facility by way of:

a)

RBP Loans

Interest rate (per annum): RBP + .50%

b)

RBUSBR Loans

Interest rate (per annum): RBUSBR + .50%

c)

Libor based loans in US currency (“Libor Loans”)

Interest rate (per annum): Libor + 1.50%

AVAILABILITY

The Borrower may borrow and convert up to the amount of this term facility
provided an Event of Default shall not have occured and be continuing at the
time of any Borrowing. At any time after August 31, 2008, or such later date as
may be agreed upon between the Bank and the Borower, any unutilized portion of
this facility shall be cancelled by the Bank.

Borrowings outstanding under this facility plus the Borrowings outstanding under
Facility #1 and plus $45,000 must not exceed at any time the Borrowing Limit.

The aggregate Borrowings outstanding under this facility plus the aggregate
Borrowings outstanding under Facility #1 must not exceed the lesser of (i) the
Borrowing Limit and, (ii) $2,405,000 at any time.

REPAYMENT

Payment Amount:

$100,208.00

Payment Frequency: Monthly Payment Type: Principal Plus Interest First payment
date:

October 11, 2008

Repayable in full on:

September 22, 2010

Original Amortization (months) 24

OTHER FACILITIES

The Credit Facilities are in addition to the following facilities (the “Other
Facilities”). The Other Facilities will be governed by this Agreement and
separate agreements between the Borrower and the Bank. In the event of a
conflict between this Agreement and any such separate agreement, the terms of
the separate agreement will govern.

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Braintech, Inc. 3 July 29, 2008

a)  VISA Business to a maximum amount of $45,000.

FEES

One Time Fee:

Payable upon acceptance of this Agreement.

Monthly Fees:

Payable in arrears on the same day of each month.

Application Fee: $1,000 Revolving Funds Arrangement Fee: $25

Administration Fee: $25

SECURITY

Security for the Borrowings and all other obligations of the Borrower to the
Bank (collectively, the “Security”), shall include:

a) General security agreement on the Bank’s form 924 signed by the Borrower
constituting a first ranking security interest in all personal property of the
Borrower;   b) Guarantee and postponement of claim on the Bank’s form 812 in the
amount of $2,895,000 signed by Braintech Canada, Inc., supported by a general
security agreement on the Bank’s form 924 constituting a first ranking security
interest in all personal property of Braintech Canada, Inc.;   c) Postponement
and assignment of claim on the Bank’s form 918 signed by Braintech Canada, Inc.;
  d) Irrevocable and unconditional standby letter of credit or letter of
guarantee in favour of the Bank, in the amount of US$400,000, provided by Owen
Jones, from an issuer acceptable to the Bank, confirmed by the Bank and in form
and substance satisfactory to the Bank;   e) Irrevocable and unconditional
standby letter of credit or letter of guarantee in favour of the Bank, in the
amount of US$250,000, provided by Dave Baird, from an issuer acceptable to the
Bank, confirmed by the Bank and in form and substance satisfactory to the Bank;
  f) Irrevocable and unconditional standby letter of credit or letter of
guarantee in favour of the Bank, in the amount of US$750,000, provided by Rick
Weidinger, from an issuer acceptable to the Bank, confirmed by the Bank and in
form and substance satisfactory to the Bank;   g) Irrevocable and unconditional
standby letter of credit or letter of guarantee in favour of the Bank, in the
amount of US$250,000, provided by Kenneth Brooks from an issuer acceptable to
the Bank, confirmed by the Bank and in form and substance satisfactory to the
Bank;   h) Irrevocable and unconditional standby letter of credit or letter of
guarantee in favour of the Bank, in the amount of US$125,000, provided by Peter
Speros, from an issuer acceptable to the Bank, confirmed by the Bank and in form
and substance satisfactory to the Bank;   i) Irrevocable and unconditional
standby letter of credit or letter of guarantee in favour of the Bank, in the
amount of US$125,000, provided by Jim Speros, from an issuer acceptable to the
Bank, confirmed by the Bank and in form and substance satisfactory to the Bank;
  j) Irrevocable and unconditional standby letter of credit or letter of
guarantee in favour of the Bank, in the amount of US$250,000, provided by Jeff
Lubore, from an issuer acceptable to the Bank, confirmed by the Bank and in form
and substance satisfactory to the Bank;   k) Irrevocable and unconditional
standby letter of credit or letter of guarantee in favour of the Bank, in the
amount of US$100,000, provided by Angie Speros, from an issuer acceptable to the
Bank, confirmed by the Bank and in form and substance satisfactory to the Bank;
  l) Irrevocable and unconditional standby letter of credit or letter of
guarantee in favour of the Bank, in the amount of US$100,000, provided by Fred
Bolander, from an issuer acceptable to the Bank, confirmed by the Bank and in
form and substance satisfactory to the Bank;

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Braintech, Inc. 4 July 29, 2008

m) Irrevocable and unconditional standby letter of credit or letter of guarantee
in favour of the Bank, in the amount of US$100,000, provided by Colin Eagan,
from an issuer acceptable to the Bank, confirmed by the Bank and in form and
substance satisfactory to the Bank;   n) Cash collateral agreement on the Bank’s
form 610 signed by the Borrower assigning term deposits and/or guaranteed
investment certificates in the amount of $20,000; and   o) Letter of
acknowledgement signed by each of the providers of the irrevocable and
unconditional standby letter of credit or letter of guarantee in favour of the
Bank as listed in paragraphs d) to m) above confirming the re-draw of the Credit
Facilities as outlined in this Agreement and that the security described in
paragraphs d) to m) remains in full force and effect until Facility #2 is repaid
in full.

REPORTING REQUIREMENTS

The Borrower will provide the following to the Bank:

a) quarterly company prepared consolidated financial statements for the
Borrower, within 30 days of each fiscal quarter end;   b) annual audited
consolidated financial statements for the Borrower, within 120 days of each
fiscal year end;   c) annual forecasted consolidated balance sheet and income
and cash flow statements for the Borrower, prepared on a quarterly basis for the
next following fiscal year, within 120 days of each fiscal year end; and   d)
such other financial and operating statements and reports as and when the Bank
may reasonably require.

CONDITIONS PRECEDENT

In no event will the Credit Facilities or any part thereof be available unless
the Bank has received:

a) a duly executed copy of this Agreement; b) the Security provided for herein,
registered, as required, to the satisfaction of the Bank; c) such financial and
other information or documents relating to the Borrower or any Guarantor if
applicable as the Bank may reasonably require; and d) such other authorizations,
approvals, opinions and documentation as the Bank may reasonably require.

Additionally;

e) all documentation to be received by the Bank shall be in form and substance
satisfactory to the Bank;

GOVERNING LAW JURISDICTION

Province of British Columbia.

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Braintech, Inc. 5 July 29, 2008

ACCEPTANCE

This Agreement is open for acceptance until August 27, 2008, after which date it
will be null and void, unless extended in writing by the Bank.

ROYAL BANK OF CANADA

Per:

/s/ David Gilbertson

Name:

David Gilbertson

Title: Senior Account Manager

We acknowledge and accept the terms and conditions of this Agreement

on this _______ day of ________________, 2008.

BRAINTECH, INC.  

Per:

/s/ Rick Weidinger

Name:

Rick Weidinger

Title:

CEO

 

Per:

/s/ Edward White

Name:

Edward White

Title:

V.P. Admin

  I/We have the authority to bind the Borrower

\attachments:
Terms and Conditions
Schedules:

 * Definitions
 * Calculation and Payment of Interest and Fees
 * Additional Borrowing Conditions
 * Notice Requirements

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Braintech, Inc. 6 July 29, 2008

TERMS AND CONDITIONS

The Bank is requested by the Borrower to make the Credit Facilities available to
the Borrower in the manner and at the rates and times specified in this
Agreement. Terms defined elsewhere in this Agreement and not otherwise defined
in the Terms and Conditions below or the Schedules attached hereto have the
meaning given to such terms as so defined. In consideration of the Bank making
the Credit Facilities available, the Borrower agrees, with the Bank as follows:

REPAYMENT

Amounts outstanding under the Credit Facilities, together with interest, shall
become due in the manner and at the rates and times specified in this Agreement
and shall be paid in the currency of the Borrowing. Unless the Bank otherwise
agrees, any payment hereunder must be made in money which is legal tender at the
time of payment. In the case of a demand facility of any kind, the Borrower
shall repay all principal sums outstanding under such facility upon demand
including, without limitation, an amount equal to the face amount of all LCs and
LGs which are unmatured or unexpired, which amount shall be held by the Bank as
security for the Borrower’s obligations to the Bank in respect of such
Borrowings. Where any Borrowings are repayable by scheduled blended payments,
such payments shall be applied, firstly, to interest due, and the balance, if
any, shall be applied to principal outstanding. If any such payment is
insufficient to pay all interest then due, the unpaid balance of such interest
will be added to such Borrowing, will bear interest at the same rate, and will
be payable on demand or on the date specified herein, as the case may
be. Borrowings repayable by way of scheduled payments of principal and interest
shall be so repaid with any balance of such Borrowings being due and payable as
and when specified in this Agreement. The Borrower shall ensure that the
maturities of instruments or contracts selected by the Borrower when making
Borrowings will be such so as to enable the Borrower to meet its repayment
obligations.

PREPAYMENT

Where Borrowings are by way of RBP Loans or RBUSBR Loans, the Borrower may
prepay such Borrowings in whole or in part without fee or premium. 

The prepayment of any Borrowings under a term facility and/or any term loan will
be made in the reverse order of maturity.

EVIDENCE OF INDEBTEDNESS

The Bank shall maintain accounts and records (the “Accounts”) evidencing the
Borrowings made available to the Borrower by the Bank under this Agreement. The
Bank shall record the principal amount of such Borrowings, the payment of
principal and interest on account of the Borrowings, and all other amounts
becoming due to the Bank under this Agreement. The Accounts constitute, in the
absence of manifest error, conclusive evidence of the indebtedness of the
Borrower to the Bank pursuant to this Agreement. The Borrower authorizes and
directs the Bank to automatically debit, by mechanical, electronic or manual
means, any bank account of the Borrower for all amounts payable under this
Agreement, including, but not limited to, the repayment of principal and the
payment of interest, fees and all charges for the keeping of such bank accounts.

GENERAL COVENANTS

Without affecting or limiting the right of the Bank to terminate or demand
payment of, or cancel or restrict availability of any unutilized portion of, any
demand or other discretionary facility, the Borrower covenants and agrees with
the Bank that the Borrower:

a) will pay all sums of money when due under the terms of this Agreement; b)
will immediately advise the Bank of any event which constitutes or which, with
notice, lapse of time or both, would constitute an Event of Default; c) will
file all material tax returns which are or will be required to be filed by it,
pay or make provision for payment of all material taxes (including interest and
penalties) and Potential Prior-Ranking Claims, which are or will become due and
payable and provide adequate reserves for the payment of any tax, the payment of
which is being contested; d) will give the Bank 30 days prior notice in writing
of any intended change in its ownership structure and it will not make or
facilitate any such changes without the prior written consent of the Bank; e)
will comply with all Applicable Laws, including, without limitation, all
Environmental Laws;

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Braintech, Inc. 7 July 29, 2008

f) will immediately advise the Bank of any action requests or violation notices
received concerning the Borrower and hold the Bank harmless from and against any
losses, costs or expenses which the Bank may suffer or incur for any environment
related liabilities existent now or in the future with respect to the Borrower;
g) will deliver to the Bank such financial and other information as the Bank may
reasonably request from time to time, including, but not limited to, the reports
and other information set out under Reporting Requirements; h) will immediately
advise the Bank of any unfavourable change in its financial position which may
adversely affect its ability to pay or perform its obligations in accordance
with the terms of this Agreement; i) will keep its assets fully insured against
such perils and in such manner as would be customarily insured by Persons
carrying on a similar business or owning similar assets. If the Borrower owns
any commercial buildings located in Metropolitan Vancouver, the Lower Fraser
Valley, Metropolitan Victoria or Saanich Peninsula, British Columbia, then, in
addition to the preceding, the Borrower shall insure and keep fully insured such
commercial buildings against risk of earthquake; j) except for Permitted
Encumbrances, will not, without the prior written consent of the Bank, grant,
create, assume or suffer to exist any mortgage, charge, lien, pledge, security
interest or other encumbrance affecting any of its properties, assets or other
rights; k) will not, without the prior written consent of the Bank, sell,
transfer, convey, lease or otherwise dispose of any of its properties or assets
other than in the ordinary course of business and on commercially reasonable
terms; l) will not, without the prior written consent of the Bank, guarantee or
otherwise provide for, on a direct, indirect or contingent basis, the payment of
any monies or performance of any obligations by any other Person, except as may
be provided for herein; m) will not, without the prior written consent of the
Bank, merge, amalgamate, or otherwise enter into any other form of business
combination with any other Person; n) will permit the Bank or its
representatives, from time to time, to visit and inspect the Borrower’s
premises, properties and assets and examine and obtain copies of the Borrower’s
records or other information and discuss the Borrower’s affairs with the
auditors, counsel and other professional advisers of the Borrower; o) will not
use the proceeds of any Credit Facility for the benefit or on behalf of any
Person other than the Borrower.

EXPENSES, ETC.

The Borrower agrees to pay the Bank all fees, as stipulated in this
Agreement. The Borrower also agrees to pay all fees (including legal fees),
costs and expenses incurred by the Bank in connection with preparation,
negotiation and documentation of this Agreement and any Security and the
operation, enforcement or termination of this Agreement and the Security. The
Borrower shall indemnify and hold the Bank harmless against any loss, cost or
expense incurred by the Bank if any facility under the Credit Facilities is
repaid or prepaid other than on its Maturity Date. The determination by the Bank
of such loss, cost or expense shall be conclusive and binding for all purposes
and shall include, without limitation, any loss incurred by the Bank in
liquidating or redeploying deposits acquired to make or maintain any facility.

GENERAL INDEMNITY

The Borrower hereby agrees to indemnify and hold the Bank and its directors,
officers, employees and agents harmless from and against any and all claims,
suits, actions, demands, debts, damages, costs, losses, obligations, judgements,
charges, expenses and liabilities of any nature which are suffered, incurred or
sustained by, imposed on or asserted against any such Person as a result of, in
connection with or arising out of i) any Event of Default, ii) the Bank acting
upon instructions given or agreements made by electronic transmission of any
type, iii) the presence of Contaminants at, on or under or the discharge or
likely discharge of Contaminants from, any properties now or previously used by
the Borrower or any Guarantor and iv) the breach of or non compliance with any
Applicable Law by the Borrower or any Guarantor.

AMENDMENTS AND WAIVERS

No amendment or waiver of any provision of this Agreement will be effective
unless it is in writing, signed by the Borrower and the Bank. No failure or
delay, on the part of the Bank, in exercising any right or power hereunder or
under any Security shall operate as a waiver thereof.  Any amendments requested
by the Borrower will require review and agreement by the Bank and its counsel.
Costs related to this review will be for the Borrower’s account.

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Braintech, Inc. 8 July 29, 2008

SUCCESSORS AND ASSIGNS

This Agreement shall extend to and be binding upon the parties hereto and their
respective heirs, executors, administrators, successors and permitted assigns.
The Borrower shall not be entitled to assign or transfer any rights or
obligations hereunder, without the consent in writing of the Bank. The Bank may
assign or transfer all or any part of its rights and obligations under this
Agreement to any Person. The Bank may disclose to potential or actual assignees
or transferees confidential information regarding the Borrower and any Guarantor
if applicable, (including, any such information provided by the Borrower, and
any Guarantor if applicable, to the Bank) and shall not be liable for any such
disclosure.

GAAP

Unless otherwise provided, all accounting terms used in this Agreement shall be
interpreted in accordance with Canadian Generally Accepted Accounting Principles
in effect from time to time, applied on a consistent basis from period to
period. Any change in accounting principles or the application of accounting
principles, including, without limitation, the use of differential reporting (or
any changes to the selection of differential reporting options) is only
permitted with the prior written consent of the Bank.

SEVERABILITY

The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement
and such invalid provision shall be deemed to be severable.

GOVERNING LAW

This Agreement shall be construed in accordance with and governed by the laws of
the Province identified in the Governing Law Jurisdiction section of this
Agreement and the laws of Canada applicable therein.  The Borrower irrevocably
submits to the non-exclusive jurisdiction of the courts of such Province and
acknowledges the competence of such courts and irrevocably agrees to be bound by
a judgment of any such court.

DEFAULT BY LAPSE OF TIME

The mere lapse of time fixed for performing an obligation shall have the effect
of putting the Borrower, or a Guarantor if applicable, in default thereof.

SET-OFF

The Bank is authorized (but not obligated), at any time and without notice, to
apply any credit balance (whether or not then due) in any account in the name of
the Borrower, or to which the Borrower is beneficially entitled (in any
currency) at any branch or agency of the Bank in or towards satisfaction of the
indebtedness of the Borrower due to the Bank under the Credit Facilities and the
other obligations of the Borrower under this Agreement. For that purpose, the
Bank is irrevocably authorized to use all or any part of any such credit balance
to buy such other currencies as may be necessary to effect such application.

NOTICES

Any notice or demand to be given by the Bank shall be given in writing by way of
a letter addressed to the Borrower. If the letter is sent by telecopier, it
shall be deemed received on the date of transmission, provided such transmission
is sent prior to 5:00 p.m. on a day on which the Borrower’s business is open for
normal business, and otherwise on the next such day. If the letter is sent by
ordinary mail to the address of the Borrower, it shall be deemed received on the
date falling five (5) days following the date of the letter, unless the letter
is hand-delivered to the Borrower, in which case the letter shall be deemed to
be received on the date of delivery. The Borrower must advise the Bank at once
about any changes in the Borrower’s address.

CONSENT OF DISCLOSURE

The Borrower hereby grants permission to any Person having information in such
Person’s possession relating to any Potential Prior-Ranking Claim, to release
such information to the Bank (upon its written request), solely for the purpose
of assisting the Bank to evaluate the financial condition of the Borrower.

NON-MERGER

The provisions of this Agreement shall not merge with any Security provided to
the Bank, but shall continue in full force for the benefit of the parties
hereto.

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Braintech, Inc. 9 July 29, 2008

JOINT AND SEVERAL

Where more than one Person is liable as Borrower or Guarantor if applicable for
any obligation under this Agreement, then the liability of each such Person for
such obligation is joint and several (in Quebec, solidarily) with each other
such Person.

LIFE AND DISABILITY INSURANCE

The Borrower acknowledges that the Bank has offered it insurance on the
Borrowings under Business Loan Insurance Plan Policy 51000 ("Policy") issued by
Sun Life Assurance Company of Canada to the Bank and the Borrower hereby waives
this offer or acknowledges it is ineligible for this offer and acknowledges that
Borrowings are not insured under the Policy as at the date of acceptance of this
Agreement.

If there are any discrepancies between the insurance information above, and the
Business Loan Insurance Plan documents regarding the Borrowings, the Business
Loan Insurance Plan documents govern.

Business Loan Insurance Plan premiums, if applicable, are taken with your
scheduled loan payments. In the case of blended payments of principal and
interest, as premiums fluctuate based on various factors such as, by way of
example, the age of the insured and changes to the insured loan balance, a part
of the premium payment may be deducted and taken from the scheduled blended loan
payment with the result that the amortization period may increase in the case of
any such loan to which this coverage applies. Refer to the Business Loan
Insurance Plan application (form 3460 Eng or 53460 Fr) for further explanation
and disclosure.

COUNTERPART EXECUTION

This Agreement may be executed in any number of counterparts and by different
parties in separate counterparts, each of which when so executed shall be deemed
to be an original and all of which taken together constitute one and the same
instrument.

EMAIL AND FAX TRANSMISSION

The Bank is entitled to rely on any report or certificate provided to the Bank
by the Borrower or any Guarantor as applicable, by way of email or fax
transmission as though it were an originally signed document. The Bank is
further entitled to assume that any communication from the Borrower received by
email or fax transmission is a reliable communication from the Borrower.

REPRESENTATIONS AND WARRANTIES

The Borrower, represents and warrants to the Bank that:

a) it is duly incorporated, validly existing and duly registered or qualified to
carry on business in each jurisdiction in which its business or assets are
located; b) the execution, delivery and performance by it of this Agreement have
been duly authorized by all necessary actions and do not violate its constating
documents or any Applicable Laws or agreements to which it is subject or by
which it is bound; c) no event has occurred which constitutes, or which, with
notice, lapse of time, or both, would constitute, an Event of Default; d) there
is no claim, action, prosecution or other proceeding of any kind pending or
threatened against it or any of its assets or properties before any court or
administrative agency which relates to any non-compliance with any Environmental
Laws which, if adversely determined, might have a material adverse effect upon
its financial condition or operations or its ability to perform its obligations
under this Agreement or any Security, and there are no circumstances of which it
is aware which might give rise to any such proceeding which it has not fully
disclosed to the Bank; and e) it has good and marketable title to all of its
properties and assets, free and clear of any encumbrances, other than as may be
provided for herein.

Representations and warranties are deemed to be repeated as at the time of each
Borrowing hereunder.

LANGUAGE

The parties hereto have expressly requested that this Agreement and all related
documents, including notices, be drawn up in the English language. Les parties
ont expressément demandé que la présente convention et tous les documents y
afférents, y compris les avis, soient rédigés en langue anglaise.

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Braintech, Inc. 10 July 29, 2008

WHOLE AGREEMENT

This Agreement and any documents or instruments referred to in, or delivered
pursuant to, or in connection with, this Agreement constitute the whole and
entire agreement between the Borrower and the Bank with respect to the Credit
Facilities.

EVENTS OF DEFAULT

Without affecting or limiting the right of the Bank to terminate or demand
payment of, or to cancel or restrict availability of any unutilized portion of,
any demand or other discretionary facility, each of the following shall
constitute an “Event of Default” which shall entitle the Bank, in its sole
discretion, to cancel any Credit Facilities, demand immediate repayment in full
of any amounts outstanding under any term facility, together with outstanding
accrued interest and any other indebtedness under or with respect to any term
facility, and to realize on all or any portion of any Security:

a) failure of the Borrower to pay any principal, interest or other amount when
due pursuant to this Agreement; b) failure of the Borrower, or any Guarantor if
applicable, to observe any covenant, condition or provision contained in this
Agreement or in any documentation relating hereto or to the Security; c) the
Borrower, or any Guarantor if applicable, is unable to pay its debts as such
debts become due, or is, or is adjudged or declared to be, or admits to being,
bankrupt or insolvent; d) if any proceeding is taken to effect a compromise or
arrangement with the creditors of the Borrower, or any Guarantor if applicable,
or to have the Borrower, or any Guarantor if applicable, declared bankrupt or
wound up, or to have a receiver appointed for any part of the assets or
operations of the Borrower, or any Guarantor if applicable, or if any
encumbrancer takes possession of any part thereof; e) if in the opinion of the
Bank there is a material adverse change in the financial condition, ownership or
operation of the Borrower, or any Guarantor if applicable; f) if any
representation or warranty made by the Borrower, or any Guarantor if applicable,
under this Agreement or in any other document relating hereto or under any
Security shall be false in any material respect; or g) if the Borrower, or any
Guarantor if applicable, defaults in the payment of any other indebtedness,
whether owing to the Bank or to any other Person, or defaults in the performance
or observance of any agreement in respect of such indebtedness where, as a
result of such default, the maturity of such indebtedness is or may be
accelerated.

Should the Bank demand immediate repayment in full of any amounts outstanding
under any term facility due to an Event of Default, the Borrower shall
immediately repay all principal sums outstanding under such facility and all
other obligations in connection with any such term facility.

EXCHANGE RATE FLUCTUATIONS

If, for any reason, the amount of Borrowings outstanding under any facility,
when converted to the Equivalent Amount in Canadian currency, exceeds the amount
available under such facility, the Borrower shall immediately repay such excess
or shall secure such excess to the satisfaction of the Bank.

INCREASED COSTS

The Borrower shall reimburse the Bank for any additional cost or reduction in
income arising as a result of (i) the imposition of, or increase in, taxes on
payments due to the Bank hereunder (other than taxes on the overall net income
of the Bank), (ii) the imposition of, or increase in, any reserve or other
similar requirement, (iii) the imposition of, or change in, any other condition
affecting the Credit Facilities imposed by any Applicable Law or the
interpretation thereof.

JUDGEMENT CURRENCY

If for the purpose of obtaining judgement in any court in any jurisdiction with
respect to this Agreement, it is necessary to convert into the currency of such
jurisdiction (the "Judgement Currency") any amount due hereunder in any currency
other than the Judgement Currency, then conversion shall be made at the rate of
exchange prevailing on the Business Day before the day on which judgement is
given. For this purpose "rate of exchange" means the rate at which the Bank
would, on the relevant date, be prepared to sell a similar amount of such
currency in the Toronto foreign exchange market, against the Judgement Currency,
in accordance with normal banking procedures.

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Braintech, Inc. 11 July 29, 2008

In the event that there is a change in the rate of exchange prevailing between
the Business Day before the day on which judgement is given and the date of
payment of the amount due, the Borrower will, on the date of payment, pay such
additional amounts as may be necessary to ensure that the amount paid on such
date is the amount in the Judgement Currency which, when converted at the rate
of exchange prevailing on the date of payment, is the amount then due under this
Agreement in such other currency together with interest at RBP and expenses
(including legal fees on a solicitor and client basis). Any additional amount
due from the Borrower under this section will be due as a separate debt and
shall not be affected by judgement being obtained for any other sums due under
or in respect of this Agreement.

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Schedule A

Schedule “A” to the Agreement dated July 29, 2008, between Braintech, Inc., as
Borrower, and Royal Bank of Canada, as the Bank.

DEFINITIONS

For the purpose of this Agreement, the following terms and phrases shall have
the following meanings:

“Applicable Laws” means, with respect to any Person, property, transaction or
event, all present or future applicable laws, statutes, regulations, rules,
orders, codes, treaties, conventions, judgements, awards, determinations and
decrees of any governmental, regulatory, fiscal or monetary body or court of
competent jurisdiction in any applicable jurisdiction;

“Banking Day” means a Business Day on which dealings in US currency deposits may
be carried on by and between leading Banks in the London Interbank Market;

“Borrowing” means each use of a Credit Facility and all such usages outstanding
at any time are “Borrowings”;

“Business Day” means a day, excluding Saturday, Sunday and any other day which
shall be a legal holiday or a day on which banking institutions are closed
throughout Canada, and when used in connection with a Libor Loan, a “Business
Day” also excludes any day which shall be a legal holiday or a day on which
banking institutions are closed in Toronto, Ontario or in the province where the
Borrower’s accounts are maintained;

“Contaminant” includes, without limitation, any pollutant, dangerous substance,
liquid waste, industrial waste, hazardous material, hazardous substance or
contaminant including any of the foregoing as defined in any Environmental Law;

“Environmental Activity” means any activity, event or circumstance in respect of
a Contaminant, including, without limitation, its storage, use, holding,
collection, purchase, accumulation, assessment, generation, manufacture,
construction, processing, treatment, stabilization, disposition, handling or
transportation, or its Release into the natural environment, including movement
through or in the air, soil, surface water or groundwater;

“Environmental Laws” means all Applicable Laws relating to the environment or
occupational health and safety, or any Environmental Activity;

“Equivalent Amount” means, with respect to an amount of any currency, the amount
of any other currency required to purchase that amount of the first mentioned
currency through the Bank in Toronto, in accordance with normal banking
procedures;

“Guarantor” means any Person who has guaranteed the obligations of the Borrower
under this Agreement;

“Interest Determination Date” means, with respect to a Libor Loan, the date
which is 2 Banking Days before the first day of the Libor Interest Period
applicable to such Libor Loan;

“Letter of Credit” or “LC” means a documentary credit issued by the Bank on
behalf of the Borrower for the purpose of paying suppliers of goods;

“Letter of Guarantee” or “LG” means a documentary credit issued by the Bank on
behalf of the Borrower for the purpose of providing security to a third party
that the Borrower or a person designated by the Borrower will perform a
contractual obligation owed to such third party;

“Libor” means, with respect to each Libor Interest Period applicable to a Libor
Loan, the annual rate of interest (rounded upwards, if necessary, to the nearest
whole multiple of one sixteenth of one percent (1/16th%)), at which the Bank, in
accordance with its normal practice, would be prepared to offer deposits to
leading banks in the London Interbank Market for delivery on the first day of
each of such Libor Interest Period, for a period equal to each such Libor
Interest Period, such deposits being in US currency of comparable amounts to be
outstanding during such Libor Interest Period, at or about 10:00 a.m. (Toronto
time) on the Interest Determination Date;

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  2 Schedule A

“Libor Interest Date” means with respect to any Libor Loan, the last day of each
Libor Interest Period and, if the Borrower selects a Libor Interest Period for a
period longer than 3 months, the Libor Interest Date shall be the date falling
every 3 months after the beginning of such Libor Interest Period as well as the
last day of such Libor Interest Period;

“Libor Interest Period” means, with respect to any Libor Loan, the initial
period (subject to availability) of approximately 1 month (or longer whole
multiples of 1 month to and including 6 months as selected by the Borrower and
notified to the Bank by written notice) or such shorter or longer period as the
Bank in its sole discretion shall make available commencing on the date on which
such Libor Loan is made or another method of Borrowing is converted to a Libor
Loan, as the case may be, and thereafter, while such Libor Loan is outstanding,
each successive period (subject to availability) of 1 month (or longer whole
multiples of 1 month to and including 6 months, as selected by the Borrower and
notified to the Bank by written notice) commencing on the last day of the
immediately preceding Libor Interest Period;

“Maturity Date” means the date on which a facility is due and payable in full;

“Permitted Encumbrances” means, in respect of the Borrower:

a) liens arising by operation of law for amounts not yet due or delinquent,
minor encumbrances on real property such as easements and rights of way which do
not materially detract from the value of such property, and security given to
municipalities and similar public authorities when required by such authorities
in connection with the operations of the Borrower in the ordinary course of
business; and b) Security granted in favour of the Bank;

“Person” includes an individual, a partnership, a joint venture, a trust, an
unincorporated organization, a company, a corporation, an association, a
government or any department or agency thereof including Canada Revenue Agency,
and any other incorporated or unincorporated entity;

“Potential Prior-Ranking Claims” means all amounts owing or required to be paid,
where the failure to pay any such amount could give rise to a claim pursuant to
any law, statute, regulation or otherwise, which ranks or is capable of ranking
in priority to the Security or otherwise in priority to any claim by the Bank
for repayment of any amounts owing under this Agreement;

“RBP” and “Royal Bank Prime” each means the annual rate of interest announced by
the Bank from time to time as being a reference rate then in effect for
determining interest rates on commercial loans made in Canadian currency in
Canada;

“RBUSBR” and “Royal Bank US Base Rate” each means the annual rate of interest
announced by the Bank from time to time as a reference rate then in effect for
determining interest rates on commercial loans made in US currency in Canada;

“Release” includes discharge, spray, inject, inoculate, abandon, deposit, spill,
leak, seep, pour, emit, empty, throw, dump, place and exhaust, and when used as
a noun has a similar meaning; and

“US” means United States of America.

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Schedule B

Schedule “B” to the Agreement dated July 29, 2008, between Braintech, Inc., as
Borrower, and Royal Bank of Canada, as the Bank.

CALCULATION AND PAYMENT OF INTEREST AND FEES

LIMIT ON INTEREST

The Borrower shall not be obligated to pay any interest, fees or costs under or
in connection with this Agreement in excess of what is permitted by Applicable
Law.

OVERDUE PAYMENTS

Any amount that is not paid when due hereunder shall, unless interest is
otherwise payable in respect thereof in accordance with the terms of this
Agreement or the instrument or contract governing same, bear interest until paid
at the rate of RBP plus 5% per annum or, in the case of an amount in US currency
if applicable, RBUSBR plus 5% per annum. Such interest on overdue amounts shall
be computed daily, compounded monthly and shall be payable both before and after
any or all of default, maturity date, demand and judgement.

EQUIVALENT YEARLY RATES

The annual rates of interest or fees to which the rates calculated in accordance
with this Agreement are equivalent, are the rates so calculated multiplied by
the actual number of days in the calendar year in which such calculation is made
and divided by 365 or, in the case of Libor Loans if applicable, divided by 360.

TIME AND PLACE OF PAYMENT

Amounts payable by the Borrower hereunder shall be paid at such place as the
Bank may advise from time to time in the applicable currency. Amounts due on a
day other than a Business Day shall be deemed to be due on the Business Day next
following such day. Interest and fees payable under this Agreement are payable
both before and after any or all of default, maturity date, demand and
judgement.

RBP LOANS AND RBUSBR LOANS

The Borrower shall pay interest on each RBP Loan and RBUSBR Loan, monthly in
arrears, on the 21st day of each month or such other day as may be agreed to
between the Borrower and the Bank. Such interest will be calculated monthly and
will accrue daily on the basis of the actual number of days elapsed and a year
of 365 days and shall be paid in the currency of the applicable Borrowing.

LETTER OF CREDIT FEES

The Borrower shall pay a LC fee on the date of issuance of any LC calculated on
the face amount of the LC issued, based upon the number of days in the term and
a year of 365 days. If applicable, fees for LCs issued in US currency shall be
paid in US currency and fees for LCs issued in any other approved currency shall
be paid in Canadian currency.

LETTER OF GUARANTEE FEES

The Borrower shall pay a LG fee on the date of issuance of any LG calculated on
the face amount of the LG issued and based on the number of days in the term
thereof and a year of 365 days. If applicable, fees for LGs issued in US
currency shall be paid in US currency and fees for LGs issued in any other
approved currency shall be paid in Canadian currency.

LIBOR LOANS

The Borrower shall pay interest on each Libor Loan, on each Libor Interest Date,
calculated in arrears.  Such interest will accrue daily and shall be calculated
on the basis of the actual number of days elapsed during the applicable Libor
Interest Period divided by 360.

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Schedule C

Schedule “C” to the Agreement dated July 29, 2008, between Braintech, Inc., as
Borrower, and Royal Bank of Canada, as the Bank.

ADDITIONAL BORROWING CONDITIONS

LCs or LGs:

Borrowings made by way of LCs or LGs will be subject to the following terms and
conditions:

a) each LC and LG shall expire on a Business Day and shall have a term of not
more than 365 days;   b) at least 2 Business Days prior to the issue of an LC or
LG, the Borrower shall execute a duly authorized application with respect to
such LC or LG and each LC and LG shall be governed by the terms and conditions
of the relevant application for such contract;   c) an LC or LG may not be
revoked prior to its expiry date unless the consent of the beneficiary of the LC
or LG has been obtained;   d) any LC or LG issued under a term facility must
have an expiry date on or before the Maturity Date of the term facility, unless
otherwise agreed by the Bank; and   e) if there is any inconsistency at any time
between the terms of this Agreement and the terms of the application for LC or
LG, the terms of the application for LC or LG shall govern.

Libor Loans:

Borrowings made by way of Libor Loans will be subject to the following terms and
conditions:

a) Libor Loans shall be issued and mature on a Banking Day and shall be made in
minimum amounts of $500,000 in US currency for terms of not less than 30 days
and not more than 360 days;   b) if the Borrower fails to select and to notify
the Bank of the Libor Interest Period applicable to any Libor Loan, the Borrower
shall be deemed to have selected a 3 month Libor Interest Period;   c) if the
Bank so requests, the Borrower shall enter into a Hedge Contract to hedge the
principal and interest of each Libor Loan against the risk of currency and
exchange rate fluctuations. “Hedge Contract” means any rate swap, rate cap, rate
floor, rate collar, currency exchange transaction, forward rate agreement or
other exchange, hedging or rate protection transaction, or any combination of
such transactions or agreements or any option with respect to any such
transaction now existing or hereafter entered into between the Borrower and the
Bank;   d) the Borrower shall indemnify and hold the Bank harmless against any
loss, cost or expense (including without limitation, any loss incurred by the
Bank in liquidating or redeploying deposits acquired to fund or maintain any
Libor Loan) incurred by the Bank as a result of:

  i) repayments, prepayments, conversions, rollovers or cancellations of a Libor
Loan other than on the last day of the Libor Interest Period applicable to such
Libor Loan, or   ii) failure to draw down a Libor Loan on the first day of the
Libor Interest Period selected by the Borrower; and

e) if the Bank determines, which determination is final, conclusive and binding
upon the Borrower, that:

  i) adequate and fair means do not exist for ascertaining the rate of interest
on a Libor Loan,

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  ii) the making or the continuance of a Libor Loan has become impracticable by
reason of circumstances which materially and adversely affect the London
Interbank Market,   iii) deposits in US currency are not available to the Bank
in the London Interbank Market in sufficient amounts in the ordinary course of
business for the applicable Libor Interest Period to make or maintain a Libor
Loan during such Libor Interest Period, or   iv) the cost to the Bank of making
or maintaining a Libor Loan does not accurately reflect the effective cost to
the Bank thereof or the costs to the Bank are increased or the income receivable
by the Bank is reduced in respect of a Libor Loan,

then the Bank shall promptly notify the Borrower of such determination and the
Borrower shall, prior to the next Interest Determination Date, notify the Bank
as to the basis of Borrowing it has selected in substitution for such Libor
Loan. If the Borrower does not so notify the Bank, such Libor Loan will
automatically be converted into an RBUSBR Loan on the expiry of the then current
Libor Interest Period.

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Schedule D

Schedule “D” to the Agreement dated July 29, 2008, between Braintech, Inc., as
Borrower, and Royal Bank of Canada, as the Bank.

NOTICE REQUIREMENTS

Notice Requirements for Libor Loans:

Amount Prior Notice Under $10,000,000 in US currency and up to 1 year rollovers
By 10:00 a.m. Eastern Standard Time on the Interest Determination Date