Document:

a5757825ex10_7.htm

    Exhibit
10.7

    

    ANTS
SOFTWARE INC.

    

    2008
STOCK PLAN

    

    1. Purposes of the
Plan.  Awards granted under the ANTs software inc. 2008 Stock
Plan may be Incentive Stock Options, Nonstatutory Stock Options, Restricted
Stock and Restricted Stock Units as determined by the Administrator at the time
of the grant of Awards.  The purposes of this 2008 Stock Plan
are:

    

    (a) to attract
and retain the best available personnel for positions of substantial
responsibility,

     

    (b) to provide
incentives to Employees and Consultants, and

     

    (c) to promote
the success of the Company’s business.

    

    2. Definitions.  As
used herein, the following definitions shall apply:

    

    (a) “Administrator” means
the Board or any of its Committees as shall be administering the Plan, in
accordance with Section 4 of the Plan.

     

    (b) “Affiliate” means any
Parent or Subsidiary (as defined in Section 424(e) and (f) of the Code) of the
Company.

     

    (c) “Applicable Laws”
means the requirements relating to the administration of equity compensation
plans under U.S. state corporate laws, U.S. federal and state securities laws,
the Code, any stock exchange or quotation system on which the Shares are listed
or quoted and the applicable laws of any other country or jurisdiction where
Awards are granted under the Plan.

     

    (d) “Award” means,
individually or collectively, a grant under the Plan of Incentive Stock Options,
Nonqualified Stock Options, Restricted Stock or Restricted Stock
Units.

     

    (e) “Award Agreement”
means the written agreement setting forth the terms and conditions applicable to
each Award granted under the Plan.

     

    (f) “Board” means the
Board of Directors of the Company.

     

    (g) “Change of Control”
means the occurrence of any of the following events, in one or a series of
related transactions:

     

    (i) any
“person,” as such term is used in Sections 13(d) and 14(d) of the Exchange Act,
other than the Company, a subsidiary of the Company or a Company employee
benefit plan, including any trustee of such plan acting as trustee, is or
becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities of the Company representing fifty
percent (50%) or more of the combined voting power of the Company’s then
outstanding securities entitled to vote generally in the election of directors;
or

     

    
      
         

      

      
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    (ii) a merger
or consolidation of the Company or any direct or indirect subsidiary of the
Company with any other corporation, other than a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) at least fifty
percent (50%) of the total voting power represented by the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation; or

     

    (iii) the sale
or disposition by the Company of all or substantially all the Company’s assets;
or

     

    (iv) a change
in the composition of the Board, as a result of which fewer than a majority of
the Directors are Incumbent Directors.  “Incumbent Directors” shall
mean Directors who either (A) are Directors as of the date this Plan is
approved by the Board, or (B) are elected, or nominated for election, to
the Board with the affirmative votes of at least a majority of the Directors and
whose election or nomination was not in connection with any transaction
described in (i) or (ii) above or in connection with an actual or
threatened proxy contest relating to the election of directors of the
Company.

    

    (h) “Code” means the
Internal Revenue Code of 1986, as amended.  Reference to a specific
section of the Code or regulation thereunder shall include such section or
regulation, any valid regulation promulgated under such section, and any
comparable provision of any future legislation or regulation amending,
supplementing or superseding such section or regulation.

     

    (i) “Committee” means a
Committee appointed by the Board in accordance with Section 4 of the
Plan.

     

    (j) “Common Stock” means
the Common Stock of the Company.

     

    (k) “Company” means ANTs
software inc., a Delaware corporation, or any successor thereto.

     

    (l) “Consultant” means any
person other than an Employee who is engaged by the Company or any Affiliate to
render consulting or advisory services and is compensated for such services,
including a non-Employee director.

     

    (m) “Continuous Status as an
Employee or Consultant” means that the employment or consulting
relationship with the Company or any Affiliate is not interrupted or
terminated.  For purposes of Awards of Incentive Stock Options, the
term “Continuous Status as an Employee or Consultant” means that the employment
relationship with the Company or any Affiliate is not interrupted or
terminated.  Continuous Status as an Employee or Consultant shall not
be considered interrupted in the case of (i) any leave of absence approved by
the Company or an Affiliate or (ii) transfers between locations of the Company
and its Affiliates or between the Company and any Affiliate, or between
Affiliates or (iii) transfer between Employee and Consultant
Status.  If reemployment upon expiration of a leave of absence
approved by the Company or an Affiliate is not guaranteed by statute or
contract, on the 181st day
after such leave commences any Award which is an Incentive Stock Option held by
the Participant shall cease to be treated as an Incentive Stock Option and shall
be treated for tax purposes as a Nonstatutory Stock Option.  In the
event of a Participant’s change in status from Consultant to Employee or
Employee to Consultant, an Participant’s Continuous Status as an Employee or
Consultant shall not automatically terminate solely as a result of such change
in status.  However, in such event, an Award that is an Incentive
Stock Option held by the Participant shall cease to be treated as an Incentive
Stock Option and shall be treated for tax purposes as a Nonstatutory Stock
Option three months and one day following such change of status.

     

    
      
         

      

      
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    (n) “Date of Grant” means,
with respect to an Award, the date that the Award is granted and its
exercise price is set (if applicable), consistent with Applicable Laws and
applicable financial accounting rules.

     

    (o) “Director” means a
member of the Board.

     

    (p) “Disability” means
total and permanent disability as defined in Section 22(e)(3) of the
Code.

     

    (q) “Earnings Per Share”
means, as to any Performance Period, the Company’s or a business unit’s fully
diluted earnings per share as defined by generally accepted accounting
principles.

     

    (r) “Employee” means any
person employed by the Company or any Affiliate of the Company.

     

    (s) “Exchange Act” means
the Securities Exchange Act of 1934, as amended.  Reference to a
specific section of the Exchange Act or regulation thereunder shall include such
section or regulation, any valid regulation promulgated under such section, and
any comparable provision of any future legislation or regulation amending,
supplementing or superseding such section or regulation.

     

    (t) “Fair Market Value”
means, as of any date, the value of Common Stock determined as
follows:

     

    (i) If the
Common Stock is listed on any established stock exchange or a national market
system, including without limitation the Nasdaq National Market of the National
Association of Securities Dealers, Inc. Automated Quotation
(“Nasdaq”) System, or on any bulletin board or similar computer trading
system, the Fair Market Value of a Share of Common Stock shall be the closing
sales price for such stock (or the closing bid, if no sales were
reported) as quoted on such system or exchange (or the exchange with the
greatest volume of trading in Common Stock) on the day of determination, as
reported in The Wall Street Journal or such other source as the Administrator
deems reliable; or

     

    (ii) In the
absence of an established market for the Common Stock, the Fair Market Value
shall be determined in good faith by the Administrator.

    

    (u) “Fiscal Year” means a
fiscal year of the Company.

     

    (v) “Incentive Stock
Option” means an Option intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code and the regulations
promulgated thereunder.

     

    (w) “Net Income” means, as
to any Performance Period, the net income of the Company for the Performance
Period determined in accordance with generally accepted accounting
principles.

     

    
      
         

      

      
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    (x) “Nonstatutory Stock
Option” means an Option not intended to qualify as an Incentive Stock
Option.

     

    (y) “Notice of Grant”
means a written or electronic notice evidencing certain terms and conditions of
an individual Award.  The Notice of Grant is part of the Award
Agreement.

     

    (z) “Operating Margins”
means the ratio of Operating Income to Revenue.

     

    (aa) “Operating Income”
means the Company’s or a business unit’s income from operations determined in
accordance with generally accepted accounting principles.

     

    (bb) “Option” means a stock
option granted pursuant to the Plan.

     

    (cc) “Option Agreement”
means a written or electronic agreement between the Company and a Participant
evidencing the terms and conditions of an individual Option
grant.  The Option Agreement is subject to the terms and conditions of
the Plan.

     

    (dd) “Parent” means a
“parent corporation”, whether now or hereafter existing, as defined in
Section 424(e) of the Code.

     

    (ee) “Participant” means
the holder of an outstanding Award granted under the Plan.

     

    (ff) “Performance Goals”
means the goal(s) (or combined goal(s)) determined by the Administrator (in its
discretion) to be applicable to a Participant with respect to an
Award.  As determined by the Administrator, the Performance Goals
applicable to an Award may provide for a targeted level or levels of achievement
using one or more of the following measures:  (a) Revenue,
(b) Earnings Per Share, (c) Net Income, (d) Operating Margins,
and (e) Total Stockholder Return.  The Performance Goals may
differ from Participant to Participant and from Award to Award.  Any
criteria used may be measured, as applicable, (i) on Pro Forma numbers,
(ii) in absolute terms, (iii) in relative terms (including, but not
limited, the passage of time and/or against other companies or financial
metrics), (iv) on a per share and/or share per capita basis,
(v) against the performance of the Company as a whole or against particular
segments or products of the Company and/or (vi) on a pre-tax or after-tax
basis.  Prior to the Determination Date, the Administrator shall
determine whether any element(s) (for example, but not by way of limitation, the
effect of mergers or acquisitions) shall be included in or excluded from the
calculation of any Performance Goal with respect to any Participants (whether or
not such determinations result in any Performance Goal being measured on a basis
other than generally accepted accounting principles).

     

    (gg) “Performance Period”
means any Fiscal Year or such longer period as determined by the Administrator
in its sole discretion.

     

    (hh) “Period of
Restriction” means the period during which the transfer of Shares of
Restricted Stock are subject to restrictions and therefore, the Shares are
subject to a substantial risk of forfeiture.  As provided in
Section 9, such restrictions may be based on the passage of time, the
achievement of target levels of performance, or the occurrence of other events
as determined by the Administrator, in its discretion.

     

    (ii) “Plan” means this 2008
Stock Plan, as set forth in this instrument and as hereafter amended from time
to time.

     

    
      
         

      

      
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    (jj) “Pro Forma” means
calculation of a Performance Goal in a manner that excludes certain unusual or
non-cash expenses or credits, such as restructuring expenses, extraordinary tax
events, expenses or credits related to stock options, other equity compensation
or the like, acquisition related expenses, extraordinary items, income or loss
from discontinued operations, and/or gains or losses from early extinguishment
of debt instead of conforming to generally accepted accounting
principles.

     

    (kk) “Restricted Stock”
means an Award granted to a Participant pursuant to Section 9.

     

    (ll) “Restricted Stock
Unit” means an Award granted to a Participant pursuant to
Section 10.

     

    (mm) “Revenue” means the
Company’s or a business unit’s net sales for the Performance Period, determined
in accordance with generally accepted accounting principles.

     

    (nn) “Rule 16b-3” means
Rule 16b-3 of the Exchange Act or any successor to Rule 16b-3, as in effect when
discretion is being exercised with respect to the Plan.

     

    (oo) “Section 16(b)”
means Section 16(b) of the Securities Exchange Act of 1934, as
amended.

     

    (pp) “Share” means a share
of the Common Stock, as adjusted in accordance with Section 13 of the
Plan.

     

    (qq) “Subsidiary” means a
“subsidiary corporation”, whether now or hereafter existing, as defined in
Section 424(f) of the Code.

     

    (rr) “Total Stockholder
Return” means the total return (change in share price plus reinvestment
of any dividends) of a share of the Company’s common stock.

    

    3. Stock Subject to the
Plan.

     

    (a) Subject to
the provisions of Section 13 of the Plan, the maximum aggregate number of
Shares which may be issued under the Plan is 5,000,000.

     

    (b) The Shares
may be authorized, but unissued, or reacquired Common Stock.  If an
Award expires or becomes unexercisable without having been exercised in full, or
with respect to Restricted Stock or Restricted Stock Units, is forfeited to or
repurchased by the Company, the unpurchased Shares (or for Awards other than
Options, the forfeited or repurchased Shares) which were subject thereto will
become available for future grant or sale under the Plan (unless the Plan has
terminated).  Shares that have actually been issued under the Plan
under any Award will not be returned to the Plan and will not become available
for future distribution under the Plan; provided, however, that if unvested
Shares of Restricted Stock or Restricted Stock Units are repurchased by the
Company or are forfeited to the Company, such Shares will become available for
future grant under the Plan.  Shares used to pay the tax and exercise
price of an Award will not become available for future grant or sale under the
Plan.  To the extent an Award under the Plan is paid out in cash
rather than Shares, such cash payment will not result in reducing the number of
Shares available for issuance under the Plan.  Notwithstanding the
foregoing and, subject to adjustment provided in Section 13, the maximum
number of Shares that may be issued upon the exercise of Incentive Stock Options
shall equal the aggregate Share number stated in this Section 3(a), plus,
to the extent allowable under Section 422 of the Code, any Shares that
become available for issuance under the Plan under this
Section 3(b).

    

    
      
         

      

      
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    4. Administration of the
Plan.

     

    (a) Procedure.

     

    (i) Multiple
Administrative Bodies. The Plan may be administered by different Administrators
with respect to different groups of Employees or Consultants.

     

    (ii) Section 162(m).  To
the extent that the Administrator determines it to be desirable to qualify
Awards granted hereunder as “performance-based compensation” within the meaning
of Section 162(m) of the Code, the Plan shall be administered by a
Committee of two or more “outside directors” within the meaning of
Section 162(m) of the Code.

     

    (iii) Rule
16b-3.  To the extent desirable to qualify transactions hereunder as
exempt under Rule 16b-3, the transactions contemplated hereunder shall be
structured to satisfy the requirements for exemption under Rule
16b-3.

     

    (iv) Other
Administration.  Other than as provided above, the Plan shall be
administered by (A) the Board or (B) a Committee, which committee
shall be constituted to satisfy Applicable Laws.

     

    (b) Powers of
the Administrator.  Subject to the provisions of the Plan, and in the
case of a Committee, subject to the specific duties delegated by the Board to
such Committee, the Administrator shall have the authority, in its
discretion:

     

    (i) to
determine the Fair Market Value of the Common Stock, in accordance with
Section 2(r) of the Plan;

     

    (ii) to select
the Employees and Consultants to whom Awards may be granted
hereunder;

     

    (iii) to
determine whether and to what extent Awards are granted hereunder;

     

    (iv) to
determine the number of Shares to be covered by each Award granted
hereunder;

     

    (v) to approve
forms of agreement for use under the Plan;

     

    (vi) to
determine the terms and conditions, not inconsistent with the terms of the Plan,
of any Award granted hereunder.  With respect to Options, such terms
and conditions include, but are not limited to, the exercise price, the time or
times when Options may be exercised, based in each case on such factors as the
Administrator, in its sole discretion, shall determine;

     

    (vii) to
construe and interpret the terms of the Plan and Awards granted
hereunder;

     

    
      
         

      

      
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    (viii) to
prescribe, amend and rescind rules and regulations relating to the Plan,
including rules and regulations relating to sub-plans established for the
purpose of qualifying for preferred tax treatment under foreign tax
laws;

     

    (ix) to modify
or amend each Award (not inconsistent with the terms of the Plan), including the
discretionary authority to extend the post-termination exercisability period of
Options longer than is otherwise provided for in the Plan;

     

    (x) to
authorize any person to execute on behalf of the Company any instrument required
to effect the grant of an Award previously granted by the
Administrator;

     

    (xi) to allow
Participants to satisfy withholding tax obligations by electing to have the
Company withhold from the Shares to be issued upon exercise or vesting of an
Award that number of Shares having a Fair Market Value equal to the minimum
amount required to be withheld (but no more).  The Fair Market Value
of any Shares to be withheld shall be determined on the date that the amount of
tax to be withheld is to be determined.  All elections by a
Participant to have Shares withheld for this purpose shall be made in such form
and under such conditions as the Administrator may deem necessary or
advisable;

     

    (xii) to
determine the terms and restrictions applicable to Awards; and

     

    (xiii) to make
all other determinations deemed necessary or advisable for administering the
Plan.

     

    (c) Effect of
Administrator’s Decision.  The Administrator’s decisions,
determinations and interpretations shall be final and binding on all
Participants and any other holders of Awards and shall be given the maximum
deference permitted by law.

     

    5. Eligibility.  Awards
may be granted only to Employees and Consultants.

     

    6. No Employment
Rights.  Neither the Plan nor any Award shall confer upon a
Participant any right with respect to continuing the Participant’s employment
with the Company, or continued Contractor status with the Company, or its
Affiliates, nor shall they interfere in any way with the Participant’s right or
the Company’s or Subsidiary’s right, as the case may be, to terminate such
employment or Contractor status at any time, with or without cause or
notice.

     

    7. Term of
Plan.  The Plan shall become effective on March 26, 2008
and continue in effect, expiring at the close of business, pacific daylight
time, on March 25, 2018.

     

    8. Stock
Options.

     

    (a) Grant of
Options.  Subject to the terms and provisions of the Plan, Options may
be granted to Employees and Consultants at any time and from time to time as
determined by the Administrator in its sole discretion.  The
Administrator, in its sole discretion, shall determine the number of Shares
subject to each Option.  The Administrator may grant Incentive Stock
Options, Nonstatutory Stock Options, or a combination thereof.

     

    (b) Term.  The
term of each Option shall be stated in the Notice of Grant; provided, however,
that the term shall be no longer than ten (10) years from the Date of
Grant.  Moreover, in the case of an Incentive Stock Option granted to
a Participant who, at the time the Incentive Stock Option is granted, owns stock
representing more than ten percent (10%) of the voting power of all classes
of stock of the Company or any Affiliate, the term of the Incentive Stock Option
shall be no longer than five (5) years from the Date of
Grant.  Subject to the five (5) and ten (10) year limits set
forth in the preceding sentence, the Administrator may, after an Option is
granted, extend the maximum term of the Option.  Unless otherwise
determined by the Administrator, any extension of the term of an Option pursuant
to this Section 8(b) shall comply with Code Section 409A.

     

    
      
         

      

      
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    (c) Option
Exercise Price.   The per share exercise price for the Shares to
be issued pursuant to exercise of an Option shall be determined by the
Administrator and shall be no less than 100% of the Fair Market Value per share
on the Date of Grant; provided, however, that in the case of an Incentive Stock
Option granted to an Employee who, at the time the Incentive Stock Option is
granted, owns stock representing more than ten percent (10%) of the voting
power of all classes of stock of the Company or any Affiliate, the per Share
exercise price shall be no less than 110% of the Fair Market Value per Share on
the Date of Grant.  Notwithstanding the foregoing, in the event that
the Company or a Subsidiary consummates a transaction described in
Section 424(a) of the Code (e.g., the acquisition of property or stock from
an unrelated corporation), persons who become Employees on account of such
transaction may be granted Options in substitution for options granted by their
former employer.  If such substitute Options are granted, the
Administrator, in its sole discretion and consistent with Section 424(a) of
the Code, may determine that such substitute Options shall have an exercise
price less than one hundred percent (100%) of the Fair Market Value of the
Shares on the Date of Grant.

     

    (d) Waiting
Period and Exercise Dates.  At the time an Option is granted, the
Administrator shall fix the period within which the Option may be exercised and
shall determine any conditions which must be satisfied before the Option may be
exercised.  In so doing, the Administrator may specify that an Option
may not be exercised until the completion of a service period or until
performance milestones are satisfied.

     

    (e) Form of
Consideration.  The Administrator shall determine the acceptable form
of consideration for exercising an Option, including the method of
payment.  In the case of an Incentive Stock Option, the Administrator
shall determine the acceptable form of consideration at the time of
grant.  Subject to Applicable Laws, such consideration may consist
entirely of:

     

    (i) cash;

     

    (ii) check;

     

    (iii) other
Shares which (A) in the case of Shares acquired upon exercise of an option,
have been owned by the Participant for more than six months on the date of
surrender, and (B) have a Fair Market Value on the date of surrender equal
to the aggregate exercise price of the Shares as to which said Option shall be
exercised;

     

    (iv) delivery
to the Company of (A) a properly executed exercise notice together with
such other documentation as the Administrator and the broker, if applicable,
shall require to effect an exercise of the Option and (B) the sale proceeds
required to pay the exercise price;

     

    (v) any
combination of the foregoing methods of payment; or

     

    
      
         

      

      
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    (vi) such other
consideration and method of payment for the issuance of Shares to the extent
permitted by Applicable Laws.

     

    (f) Exercise
of Option; Rights as a Stockholder.  Any Option granted hereunder
shall be exercisable according to the terms of the Plan and at such times and
under such conditions as determined by the Administrator and set forth in the
Option Agreement.  An Option may not be exercised for a fraction of a
Share.  An Option shall be deemed exercised when the Company
receives:  (i) written or electronic notice of exercise (in
accordance with the Option Agreement) from the person entitled to exercise
the Option, and (ii) full payment for the Shares with respect to which the
Option is exercised.  Full payment may consist of any consideration
and method of payment authorized by the Administrator and permitted by the
Option Agreement and the Plan.  Shares issued upon exercise of an
Option shall be issued in the name of the Participant.  Until the
stock certificate evidencing such Shares is issued (as evidenced by the
appropriate entry on the books of the Company or of a duly authorized transfer
agent of the Company), no right to vote or receive dividends or any other rights
as a stockholder shall exist with respect to the optioned stock, notwithstanding
the exercise of the Option.  The Company shall issue (or cause to be
issued) such stock certificate promptly after the Option is
exercised.  No adjustment will be made for a dividend or other right
for which the record date is prior to the date the stock certificate is issued,
except as provided in Section 13 of the Plan.  Exercising an
Option in any manner shall decrease the number of Shares thereafter available
for sale under the Option, by the number of Shares as to which the Option is
exercised.

     

    (g) Termination
of Continuous Status as an Employee or Consultant.  If a Participant’s
Continuous Status as an Employee or Consultant terminates, other than upon the
Participant’s death or Disability, the Participant may exercise his or her
Option within such period of time as is specified in the Option Agreement to the
extent that the Option is vested on the date of termination (but in no event
later than the expiration of the term of such Option as set forth in the Option
Agreement).  In the absence of a specified time in the Option
Agreement, the Option shall remain exercisable for three (3) months
following termination of the Participant’s Continuous Status as an Employee or
Consultant.  If, on the date of termination, the Participant is not
vested as to his or her entire Option, the Shares covered by the unvested
portion of the Option shall revert to the Plan.  If, after
termination, the Participant does not exercise his or her Option within the time
specified by the Administrator, the Option shall terminate, and the Shares
covered by such Option shall revert to the Plan.

     

    (h) Disability.  If
a Participant’s Continuous Status as an Employee or Consultant terminates as a
result of the Participant’s Disability, the Participant may exercise his or her
Option for twelve (12) months following the Participant’s termination (but
in no event may the Option be exercised later than the expiration of the term of
such Option as set forth in the Option Agreement).  If, on the date of
termination, the Participant is not vested as to his or her entire Option, the
Shares covered by the unvested portion of the Option shall revert to the
Plan.  If, after termination, the Participant does not exercise his or
her Option within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.

     

    (i) Death of
Participant.  If a Participant dies while in Continuous Status as an
Employee or Consultant, the Option may be exercised for twelve (12) months
following Participant’s death (but in no event may the option be exercised later
than the expiration of the term of such Option as set forth in the Option
Agreement), by the Participant’s designated beneficiary, provided such
beneficiary has been designated prior to Participant’s death in a form
acceptable to the Administrator.  If no such beneficiary has been
designated by the Participant, then such Option may be exercised by the personal
representative of the Participant’s estate or by the person(s) to whom the
Option is transferred pursuant to the Participant’s will or in accordance with
the laws of descent and distribution.  If the Option is not so
exercised within the time specified herein, the Option shall terminate, and the
Shares covered by such Option shall revert to the Plan.

     

    
      
         

      

      
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    (j) ISO
$100,000 Rule.  Each Option shall be designated in the Notice of Grant
as either an Incentive Stock Option or a Nonstatutory Stock
Option.  However, notwithstanding such designations, to the extent
that the aggregate Fair Market Value of Shares subject to a Participant’s
Incentive Stock Options granted by the Company, any Affiliate, which become
exercisable for the first time during any calendar year (under all plans of the
Company or any Affiliate) exceeds $100,000, such excess Options shall be
treated as Nonstatutory Stock Options.  For purposes of this
Section 8(j), Incentive Stock Options shall be taken into account in the
order in which they were granted, and the Fair Market Value of the Shares shall
be determined as of the time of grant.

     

    (k) Misconduct.  In
the event of termination of a Participant’s Continuous Status as an Employee or
Consultant as a result of misconduct (including, but not limited to, any act of
dishonesty, willful misconduct, fraud or embezzlement) or should the Participant
make or attempt to make any unauthorized use or disclosure of material
confidential information or trade secrets of the Company or any Affiliate, then
in any such event  his or her option shall terminate and cease to be
exercisable immediately upon the termination of Participant’s Continuous Status
as an Employee or Consultant Status or such unauthorized disclosure or use of
confidential or secret information or attempt thereat.

     

    9. Restricted
Stock.

     

    (a) Grant of
Restricted Stock.  Subject to the terms and provisions of the Plan,
the Administrator, at any time and from time to time, may grant Shares of
Restricted Stock to Employees or Consultants as the Administrator, in its sole
discretion, shall determine.  The Administrator, in its sole
discretion, shall determine the number of Shares to be granted to each
Participant.

     

    (b) Restricted
Stock Agreement.  Each Award of Restricted Stock shall be evidenced by
an Award Agreement that shall specify the Period of Restriction, the number of
Shares granted, and such other terms and conditions as the Administrator, in its
sole discretion, shall determine.  Unless the Administrator determines
otherwise, Shares of Restricted Stock shall be held by the Company as escrow
agent until the restrictions on such Shares have lapsed.

     

    (c) Transferability.  Except
as provided in this Section 9, Shares of Restricted Stock may not be sold,
transferred, pledged, assigned, or otherwise alienated or hypothecated until the
end of the applicable Period of Restriction.

     

    (d) Other
Restrictions.  The Administrator, in its sole discretion, may impose
such other restrictions on Shares of Restricted Stock as it may deem advisable
or appropriate, in accordance with this Section 9(d).

     

    (i) General
Restrictions.  The Administrator may set restrictions based upon
continued employment or service with the Company and its affiliates, the
achievement of specific performance objectives (Company-wide, departmental, or
individual), applicable federal or state securities laws, or any other basis
determined by the Administrator in its discretion.

     

    
      
         

      

      
        - 10
-

        
          

        

      

      
         

      

    

     

    (ii) Section 162(m)
Performance Restrictions.  For purposes of qualifying grants of
Restricted Stock as “performance-based compensation” under Section 162(m)
of the Code, the Administrator, in its discretion, may set restrictions based
upon the achievement of Performance Goals.  The Performance Goals
shall be set by the Administrator on or before the latest date permissible to
enable the Restricted Stock to qualify as “performance-based compensation” under
Section 162(m) of the Code.  In granting Restricted Stock which
is intended to qualify under Section 162(m) of the Code, the Administrator
shall follow any procedures determined by it from time to time to be necessary
or appropriate to ensure qualification of the Restricted Stock under
Section 162(m) of the Code (e.g., in determining the Performance
Goals).

     

    (iii) Legend on
Certificates.  The Administrator, in its discretion, may legend the
certificates representing Restricted Stock to give appropriate notice of such
restrictions.

     

    (e) Removal of
Restrictions.  Except as otherwise provided in this Section 9,
Shares of Restricted Stock covered by each Restricted Stock grant made under the
Plan shall be released from escrow as soon as practicable after the last day of
the Period of Restriction.  The Administrator, in its discretion, may
accelerate the time at which any restrictions shall lapse or be
removed.  After the restrictions have lapsed, the Participant shall be
entitled to have any legend or legends under Section 9(d)(iii) removed from
his or her Share certificate, and the Shares shall be freely transferable by the
Participant.  The Administrator (in its discretion) may establish
procedures regarding the release of Shares from escrow and the removal of
legends, as necessary or appropriate to minimize administrative burdens on the
Company.

     

    (f) Voting
Rights.  During the Period of Restriction, Participants holding Shares
of Restricted Stock granted hereunder may exercise full voting rights with
respect to those Shares, unless the Administrator determines
otherwise.

     

    (g) Dividends
and Other Distributions.  During the Period of Restriction,
Participants holding Shares of Restricted Stock shall be entitled to receive all
dividends and other distributions paid with respect to such Shares unless
otherwise provided in the Award Agreement.  Any such dividends or
distribution shall be subject to the same restrictions on transferability and
forfeitability as the Shares of Restricted Stock with respect to which they were
paid, unless otherwise provided in the Award Agreement.

     

    (h) Return of
Restricted Stock to the Company.  On the date set forth in the Award
Agreement, the Restricted Stock for which restrictions have not lapsed shall
revert to the Company and again shall become available for grant under the
Plan.

     

    10. Restricted Stock
Units.

     

    (a) Grant of
Restricted Stock Units.  Restricted Stock Units may be granted to
Employees or Consultants at any time and from time to time, as shall be
determined by the Administrator, in its sole discretion.  The
Administrator shall have complete discretion in determining the number of
Restricted Stock Units granted to each Participant.

     

    (b) Value of
Restricted Stock Units.  Each Restricted Stock Unit shall have an
initial value equal to the Fair Market Value of a Share on the Grant
Date.

     

    (c) Restricted
Stock Unit Agreement.  Each Award of Restricted Stock Units shall be
evidenced by an Award Agreement that shall specify any vesting conditions, the
number of Restricted Stock Units granted, and such other terms and conditions as
the Administrator, in its sole discretion, shall determine.

     

    
      
         

      

      
        - 11
-

        
          

        

      

      
         

      

    

     

    (d) Performance
Objectives and Other Terms.  The Administrator, in its sole
discretion, shall set performance objectives or other vesting criteria which,
depending on the extent to which they are met, will determine the number or
value of Restricted Stock Units that will be paid out to the
Participants.  Each Award of Restricted Stock Units shall be evidenced
by an Award Agreement that shall specify the Performance Period, and such other
terms and conditions as the Administrator, in its sole discretion, shall
determine.

     

    (i) General
Performance Objectives or Vesting Criteria.  The Administrator may set
performance objectives or vesting criteria based upon the achievement of
Company-wide, departmental, or individual goals, applicable federal or state
securities laws, or any other basis determined by the Administrator in its
discretion (for example, but not by way of limitation, Continuous Status as an
Employee or Consultant).

     

    (ii) Section 162(m)
Performance Objectives.  For purposes of qualifying grants of
Restricted Stock Units as “performance-based compensation” under
Section 162(m) of the Code, the Administrator, in its discretion, may
determine that the performance objectives applicable to Restricted Stock Units
shall be based on the achievement of Performance Goals.  The
Performance Goals shall be set by the Administrator on or before the latest date
permissible to enable the Restricted Stock Units to qualify as
“performance-based compensation” under Section 162(m) of the
Code.  In granting Restricted Stock Units that are intended to qualify
under Section 162(m) of the Code, the Administrator shall follow any
procedures determined by it from time to time to be necessary or appropriate to
ensure qualification of the Restricted Stock Units under Section 162(m) of
the Code (e.g., in determining the Performance Goals).

     

    (e) Earning of
Restricted Stock Units.  After the applicable Performance Period has
ended, the holder of Restricted Stock Units shall be entitled to receive a
payout of the number of Restricted Stock Units earned by the Participant over
the Performance Period, to be determined as a function of the extent to which
the corresponding performance objectives have been achieved.  After
the grant of a Restricted Stock Unit, the Administrator, in its sole discretion,
may reduce or waive any performance objectives for such Restricted Stock
Unit.

     

    (f) Form and
Timing of Payment of Restricted Stock Units.  Payment of vested
Restricted Stock Units shall be made as soon as practicable after vesting
(subject to any deferral permitted under Section 18).  The
Administrator, in its sole discretion, may pay Restricted Stock Units in the
form of cash, in Shares or in a combination thereof.

     

    (g) Cancellation
of Restricted Stock Units.  On the date set forth in the Award
Agreement, all unvested Restricted Stock Units shall be forfeited to the Company
and, except as otherwise determined by the Administrator, again shall be
available for grant under the Plan.

     

    11. Leaves of
Absence.  Unless the Administrator provides otherwise or except
as otherwise required by Applicable Laws, vesting of Awards granted hereunder
shall continue during any leave of absence approved by the
Administrator.

     

    12. Non-Transferability of
Awards.  Unless determined otherwise by the Administrator, an
Award may not be sold, pledged, assigned, hypothecated, transferred, or disposed
of in any manner other than by will or by the laws of descent or distribution
and may be exercised, during the lifetime of the recipient, only by the
recipient.  If the Administrator makes an Award transferable, such
Award shall contain such additional terms and conditions as the Administrator
deems appropriate; provided, however, that such Award shall in no event be
transferable for value.  Notwithstanding the foregoing, a Participant
may, if the Administrator (in its discretion) so permits, transfer an Award to
an individual or entity other than the Company.  Any such transfer
shall be made in accordance with such procedures as the Administrator may
specify from time to time.

     

    
      
         

      

      
        - 12
-

        
          

        

      

      
         

      

    

     

    13. Adjustments Upon Changes in
Capitalization.

     

    (a) Subject to
any required action by the stockholders of the Company, the number of Shares
covered by each outstanding Award, the number of Shares which have been
authorized for issuance under the Plan but as to which no Awards have yet been
granted or which have been returned to the Plan upon cancellation or expiration
of an Award, as well as the price per Share of Common Stock covered by each such
outstanding Award and the 162(m) Fiscal Year share issuance limits under
Sections 8(a), 9(a) and 10(a) hereof, shall be proportionately adjusted for any
increase or decrease in the number of issued Shares resulting from a stock
split, reverse stock split, stock dividend, combination or reclassification of
the Common Stock, or any other increase or decrease in the number of issued
Shares effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall not
be deemed to have been “effected without receipt of
consideration.”  Such adjustment shall be made by the Administrator,
whose determination in that respect shall be final, binding and
conclusive.  Except as expressly provided herein, no issuance by the
Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall
be made with respect to, the number or price of Shares subject to an
Award.

     

    (b) Dissolution
or Liquidation.  In the event of the proposed dissolution or
liquidation of the Company, the Administrator shall notify each Participant as
soon as practicable prior to the effective date of such proposed
transaction.  The Administrator in its sole discretion may provide for
a Participant to have the right to exercise his or her Award until ten
(10) days prior to such transaction as to all of the Shares covered
thereby, including Shares as to which the Award would not otherwise be
exercisable.  In addition, the Administrator may provide that any
Company repurchase option or forfeiture rights applicable to any Award shall
lapse 100%, and that any Award vesting shall accelerate 100%, provided the
proposed dissolution or liquidation takes place at the time and in the manner
contemplated.  To the extent it has not been previously exercised, an
Award will terminate immediately prior to the consummation of such proposed
action.

     

    (c) Change of
Control.  In the event of a Change of Control, each outstanding Award
shall be assumed or an equivalent Award substituted by the successor corporation
or a Parent or Subsidiary of the successor corporation.  In the event
that the successor corporation refuses to assume or substitute for the Award,
the Participant shall fully vest in and have the right to exercise all of his or
her outstanding Options, including Shares as to which such Awards would not
otherwise be vested or exercisable, all restrictions on Restricted Stock will
lapse, and, with respect to Awards with performance-based vesting, including but
not limited to Restricted Stock and Restricted Stock Units, all performance
goals or other vesting criteria will be deemed achieved at one hundred percent
(100%) of target levels and all other terms and conditions
met.  In addition, if an Option is not assumed or substituted in the
event of a Change of Control, the Administrator shall notify the Participant in
writing or electronically that the Option shall be fully vested and exercisable
for a period of fifteen (15) days from the date of such notice, and the
Option shall terminate upon the expiration of such period.  For the
purposes of this paragraph, an Award shall be considered assumed if, following
the Change of Control, the 

     

    
      
         

      

      
        - 13
-

        
          

        

      

      
         

      

       

      Award
confers the right to purchase or receive, for each Share subject to the Award
immediately prior to the Change of Control, the consideration (whether stock,
cash, or other securities or property) received in the Change of Control by
holders of Common Stock for each Share held on the effective date of the
transaction (and if holders were offered a choice of consideration, the type of
consideration chosen by the holders of a majority of the outstanding Shares);
provided, however, that if such consideration received in the Change of Control
is not solely common stock of the successor corporation or its Parent, the
Administrator may, with the consent of the successor corporation, provide for
the consideration to be received upon the exercise of an Option or upon the
payout of the Restricted Stock Unit Award, for each Share subject to the Award,
to be solely common stock of the successor corporation or its Parent equal in
fair market value to the per share consideration received by holders of Common
Stock in the Change of Control.  Notwithstanding anything in this
Section 13(c) to the contrary, an Award that vests, is earned or paid-out
upon the satisfaction of one or more performance goals will not be considered
assumed if the Company or its successor modifies any of such performance goals
without the Participant’s consent; provided, however, a modification to such
performance goals only to reflect the successor corporation’s post-Change of
Control corporate structure will not be deemed to invalidate an otherwise valid
Award assumption.

       

    

    14. Amendment and Termination of
the Plan.

     

    (a) Amendment
and Termination.  The Board may at any time amend, alter, suspend or
terminate the Plan; provided, however, that the Board may not materially amend
the Plan without obtaining stockholder approval.  For this purpose,
the following shall be considered material amendments requiring stockholder
approval:  (i) increasing the number of Shares that may be issued
under the Plan (other than in accordance with Section 13(a) hereof),
(ii) modifying the persons eligible for participation under the Plan or
(iii) as otherwise may be required by Applicable Laws.

     

    (b) Stockholder
Approval.  The Company shall obtain stockholder approval of any Plan
amendment to the extent necessary and desirable to comply with Applicable
Laws.  Such stockholder approval, if required, shall be obtained in
such a manner and to such a degree as is required by the applicable law, rule or
regulation.

     

    
      
         

      

      
        - 14
-

        
          

        

      

      
         

      

    

     

    (c) Effect of
Amendment or Termination.  No amendment, alteration, suspension or
termination of the Plan shall impair the rights of any Participant, unless
mutually agreed otherwise between the Participant and the Administrator, which
agreement must be in writing (or electronic format) and signed by the
Participant and the Company.

     

    15. Conditions Upon Issuance of
Shares.

     

    (a) Legal
Compliance.  Shares shall not be issued pursuant to the exercise of an
Award unless the exercise of such Award and the issuance and delivery of such
Shares shall comply with Applicable Laws and shall be further subject to the
approval of counsel for the Company with respect to such
compliance.

     

    (b) Investment
Representations.  As a condition to the exercise or receipt of Shares
pursuant to an Award, the Company may require the person exercising or receiving
Shares pursuant to an Award to represent and warrant at the time of any such
exercise or receipt that the Shares are being purchased only for investment and
without any present intention to sell or distribute such Shares if, in the
opinion of counsel for the Company, such a representation is
required.

     

    16. Liability of
Company.

     

    (a) Inability
to Obtain Authority.  The inability of the Company to obtain authority
from any regulatory body having jurisdiction, which authority is deemed by the
Company’s counsel to be necessary to the lawful issuance and sale of any Shares
hereunder, shall relieve the Company of any liability in respect of the failure
to issue or sell such Shares as to which such requisite authority shall not have
been obtained.

     

    (b) Grants
Exceeding Allotted Shares.  If the Shares covered by an Award exceed,
as of the Date of Grant, the number of Shares which may be issued under the Plan
without additional stockholder approval, such Award shall be void with respect
to such excess Shares, unless stockholder approval of an amendment sufficiently
increasing the number of Shares subject to the Plan is timely obtained in
accordance with Section 14(b) of the Plan.

     

    17. Reservation of
Shares.  The Company, during the term of this Plan, will at all
times reserve and keep available such number of Shares as shall be sufficient to
satisfy the requirements of the Plan.

     

    18. Deferrals.  The
Administrator, in its sole discretion, may permit a Participant to defer receipt
of the payment of cash or the delivery of Shares that would otherwise be due to
such Participant under an Award.  Any such deferral elections shall be
subject to such rules and procedures as shall be determined by the Administrator
in its sole discretion.

     

    19. Participation.  No
Employee or Consultant shall have the right to be selected to receive an Award
under this Plan, or, having been so selected, to be selected to receive a future
Award.

     

    20. No Rights as
Stockholder.  Except to the limited extent provided in
Section 9(f), no Participant (nor any beneficiary) shall have any of the
rights or privileges of a stockholder of the Company with respect to any Shares
issuable pursuant to an Award (or exercise thereof), unless and until
certificates representing such Shares shall have been issued, recorded on the
records of the Company or its transfer agents or registrars, and delivered to
the Participant (or beneficiary).

     

    21. Withholding
Requirements.  Prior to the delivery of any Shares or cash
pursuant to an Award (or exercise thereof), the Company shall have the power and
the right to deduct or withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy federal, state, local and foreign taxes
(including the Participant’s FICA obligation) required to be withheld with
respect to such Award (or exercise thereof).  Notwithstanding any
contrary provision of the Plan, if a Participant fails to remit to the Company
such withholding amount within the time period specified by the Administrator
(in its discretion), the Participant’s Award may, in the Administrator’s
discretion, be forfeited and in such case the Participant shall not receive any
of the Shares subject to such Award.

     

    22. Withholding
Arrangements.  The Administrator, in its sole discretion and
pursuant to such procedures as it may specify from time to time, may permit or
require a Participant to satisfy all or part of the tax withholding obligations
in connection with an Award by (a) having the Company withhold otherwise
deliverable Shares, or (b) delivering to the Company already-owned Shares
having a Fair Market Value equal to the amount required to be
withheld.  The amount so withheld shall not exceed the amount
determined by using the minimum federal, state, local or foreign jurisdiction
statutory withholding rates applicable to the Participant with respect to the
Award on the date that the amount of tax to be withheld is to be
determined.  The Fair Market Value of the Shares to be withheld or
delivered shall be determined as of the date that the taxes are required to be
withheld.

     

    
      
         

      

      
        - 15
-

        
          

        

      

      
         

      

    

     

    23. Indemnification.  Each
person who is or shall have been a member of the Committee, or of the Board,
shall be indemnified and held harmless by the Company against and from
(a) any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by him or her in connection with or resulting from any
claim, action, suit, or proceeding to which he or she may be a party or in which
he or she may be involved by reason of any action taken or failure to act under
the Plan or any Award Agreement, and (b) from any and all amounts paid by
him or her in settlement thereof, with the Company’s approval, or paid by him or
her in satisfaction of any judgment in any such claim, action, suit, or
proceeding against him or her, provided he or she shall give the Company an
opportunity, at its own expense, to handle and defend the same before he or she
undertakes to handle and defend it on his or her own behalf.  The
foregoing right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Company’s
Certificate of Incorporation or Bylaws, by contract, as a matter of law, or
otherwise, or under any power that the Company may have to indemnify them or
hold them harmless.

     

    24. Successors.  All
obligations of the Company under the Plan, with respect to Awards granted
hereunder, shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
or assets of the Company.

     

    25. Gender and
Number.  Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.

     

    26. Severability.  In
the event any provision of the Plan shall be held illegal or invalid for any
reason, the illegality or invalidity shall not affect the remaining parts of the
Plan, and the Plan shall be construed and enforced as if the illegal or invalid
provision had not been included.

     

    27. Governing
Law.  The Plan and all Award Agreements shall be construed in
accordance with and governed by the laws of the State of California (with the
exception of its conflict of laws provisions).

     

    28. Captions.  Captions
are provided herein for convenience of reference only and shall not serve as a
basis for interpretation or construction of the Plan.

     

    29. No Rules of
Construction.  No rules of construction are intended to apply
to the interpretation of this Plan and for all purposes this Plan shall be
deemed to be jointly authored by the Administrator and the
Participants.

     

    
- 16
-EXHIBIT 10.1
    

    
      

      

      

      

      

      

      

      SHARE PURCHASE AGREEMENT
    

    
      Dated as of August 12, 2008
by and among
    

    
      ADIL SHAFI,
SHAFI, INC.,
SHAFI INNOVATION, INC.
and
BRAINTECH,
      INC.
    

    
      

      

      

      

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    
      TABLE OF CONTENTS
    

    
    	
           
        	

        	
          
             
          

        	
          
            Page
          

        
	

        	

        	

        	
           
        
	

        	

        	

        	
           
        
	

        	

        	

        	
           
        
	
          
            ARTICLE 1 CERTAIN MATTERS OF CONSTRUCTION AND DEFINITIONS
          

        	
          1
        
	

        	

        	

        	
           
        
	
          ARTICLE 2 THE PURCHASE AND SALE OF THE SHARES
        	
          1
        
	

        	

        	

        	
           
        
	

        	
          
            2.1
          

        	
          
            Purchase and Sale of the Shares
          

        	
          1
        
	

        	

        	

        	
           
        
	

        	
          
            2.2
          

        	
          
            Purchase Price
          

        	
          1
        
	

        	

        	

        	
           
        
	

        	
          
            2.3
          

        	
          
            The Closing
          

        	
          2
        
	

        	

        	

        	
           
        
	
          ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF EACH COMPANY AND SELLER
        	
          2
        
	

        	

        	

        	
           
        
	

        	
          
            3.1
          

        	
          
            Corporate Status
          

        	
          2
        
	

        	

        	

        	
           
        
	

        	
          
            3.2
          

        	
          
            Capital Stock
          

        	
          2
        
	

        	

        	

        	
           
        
	

        	
          
            3.3
          

        	
          
            Subsidiaries and Equity Ownership
          

        	
          3
        
	

        	

        	

        	
           
        
	

        	
          
            3.4
          

        	
          
            Authority for Agreement; Noncontravention
          

        	
          3
        
	

        	

        	

        	
           
        
	

        	
          
            3.5
          

        	
          
            Financial Statement Matters
          

        	
          4
        
	

        	

        	

        	
           
        
	

        	
          
            3.6
          

        	
          
            Absence of Material Adverse Changes
          

        	
          5
        
	

        	

        	

        	
           
        
	

        	
          
            3.7
          

        	
          
            Absence of Certain Liabilities
          

        	
          5
        
	

        	

        	

        	
           
        
	

        	
          
            3.8
          

        	
          
            Books and Records
          

        	
          5
        
	

        	

        	

        	
           
        
	

        	
          
            3.9
          

        	
          
            Accounts Receivable
          

        	
          5
        
	

        	

        	

        	
           
        
	

        	
          
            3.10
          

        	
          
            Compliance with Applicable Laws, Organizational Documents
          

        	
          6
        
	

        	

        	

        	
           
        
	

        	
          
            3.11
          

        	
          
            Litigation and Audits
          

        	
          6
        
	

        	

        	

        	
           
        
	

        	
          
            3.12
          

        	
          
            Tax Matters
          

        	
          6
        
	

        	

        	

        	
           
        
	

        	
          
            3.13
          

        	
          
            Employee Benefit Plans
          

        	
          9
        
	

        	

        	

        	
           
        
	

        	
          
            3.14
          

        	
          
            Employment-Related Matters
          

        	
          11
        
	

        	

        	

        	
           
        
	

        	
          
            3.15
          

        	
          
            Certain Other Labor Matters
          

        	
          12
        
	

        	

        	

        	
           
        
	

        	
          
            3.16
          

        	
          
            Environmental
          

        	
          12
        
	

        	

        	

        	
           
        
	

        	
          
            3.17
          

        	
          
            No Broker's or Finder's Fees
          

        	
          13
        
	

        	

        	

        	
           
        
	

        	
          
            3.18
          

        	
          
            Assets Other Than Real Property
          

        	
          13
        
	

        	

        	

        	
           
        
	

        	
          
            3.19
          

        	
          
            Real Property
          

        	
          14
        
	

        	

        	

        	
           
        
	

        	
          
            3.20
          

        	
          
            Contracts, Agreements and Commitments
          

        	
          15
        
	

        	

        	

        	
           
        
	

        	
          
            3.21
          

        	
          
            Intellectual Property
          

        	
          18
        

    

    
      
        

        

      

      
        
          - i -
        

        
          

        

      

      
        

        

      

    

    

    

    
    	
           
        	
          3.22
        	
          Insurance Contracts
        	
          20
        
	

        	

        	
           
        
	

        	
          3.23
        	
          Banking Relationships
        	
          20
        
	

        	

        	
           
        
	

        	
          3.25
        	
          Absence of Certain Relationships
        	
          20
        
	

        	

        	
           
        
	

        	
          3.26
        	
          Certain Documents and Information
        	
          21
        
	

        	

        	
           
        
	

        	
          3.27
        	
          Disclosure
        	
          21
        
	

        	

        	
           
        
	

        	
          3.28
        	
          Seller Representation
        	
          21
        
	

        	

        	
           
        
	
          ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF BUYER
        	
          22
        
	

        	

        	
           
        
	

        	
          4.1
        	
          Corporate Status of Buyer
        	
          22
        
	

        	

        	
           
        
	

        	
          4.2
        	
          Authority for Agreement
        	
          22
        
	

        	

        	
           
        
	

        	
          4.3
        	
          Acquisition of Shares for Investment
        	
          22
        
	

        	

        	
           
        
	

        	
          4.4
        	
          No Broker's or Finder's Fees
        	
          23
        
	

        	

        	
           
        
	

        	
          4.5
        	
          Buyer SEC Reports
        	
          23
        
	

        	

        	
           
        
	

        	
          4.6
        	
          Capacity to Perform
        	
          23
        
	

        	

        	
           
        
	
          ARTICLE 5 INDEMNIFICATION
        	
          23
        
	

        	

        	
           
        
	

        	
          5.2
        	
          Indemnification of Seller Indemnified Parties
        	
          24
        
	

        	

        	
           
        
	

        	
          5.3
        	
          Claims for Indemnification
        	
          24
        
	

        	

        	
           
        
	

        	
          5.4
        	
          Defense by Indemnifying Party
        	
          24
        
	

        	

        	
           
        
	

        	
          5.5
        	
          Claims Period
        	
          25
        
	

        	

        	
           
        
	

        	
          5.6
        	
          Subrogation
        	
          25
        
	

        	

        	
           
        
	

        	
          5.7
        	
          Exclusive Remedies
        	
          26
        
	

        	

        	
           
        
	

        	
          5.8
        	
          Calculation of Losses
        	
          26
        
	

        	

        	
           
        
	

        	
          5.9
        	
          Treatment of Indemnity Payments Between the Parties
        	
          26
        
	

        	

        	
           
        
	

        	
          5.10
        	
          Indemnity Threshold
        	
          26
        
	

        	

        	
           
        
	

        	
          5.11
        	
          Indemnity Ceiling
        	
          26
        
	

        	

        	
           
        
	

        	
          5.12
        	
          Right to Offset
        	
          26
        
	

        	

        	
           
        
	
          ARTICLE 6 COVENANTS
        	
          27
        
	

        	

        	
           
        
	

        	
          6.1
        	
          Release
        	
          27
        
	

        	

        	
           
        
	

        	
          6.2
        	
          Tax Matters
        	
          27
        
	

        	

        	
           
        
	

        	
          6.3
        	
          Company Indebtedness
        	
          29
        

    

    
      
        

        

      

      
        
          - ii -
        

        
          

        

      

      
        

        

      

    

    

    

    
    	
           
        	
          6.4
        	
          Automotive Market
        	
          29
        
	

        	

        	

        	
           
        
	

        	
          6.5
        	
          Certain Business Planning
        	
          29
        
	

        	

        	

        	
           
        
	

        	
          6.6
        	
          Right of First Refusal to Purchase the SI IP
        	
          29
        
	

        	

        	

        	
           
        
	

        	
          6.7
        	
          Certain Hires
        	
          30
        
	

        	

        	

        	
           
        
	

        	
          6.8
        	
          Assignment of Siemens Contract
        	
          30
        
	

        	

        	

        	
           
        
	

        	
          6.9
        	
          No Uncashed Checks
        	
          30
        
	

        	

        	

        	
           
        
	

        	
          6.10
        	
          Capital Contributions to SI
        	
          30
        
	

        	

        	

        	
           
        
	

        	
          6.11
        	
          Appointment to Buyer's Board of Directors
        	
          30
        
	

        	

        	

        	
           
        
	

        	
          6.12
        	
          Required Registration
        	
          30
        
	

        	

        	

        	
           
        
	

        	
          6.13
        	
          Escrow Agreement
        	
          31
        
	

        	

        	

        	
           
        
	

        	
          6.14
        	
          Excess Debt
        	
          31
        
	

        	

        	

        	
           
        
	
          ARTICLE 7 CONDITIONS PRECEDENT
        	
          32
        
	

        	

        	

        	
           
        
	

        	
          7.1
        	
          Conditions Precedent to the Obligations of Each Party
        	
          32
        
	

        	

        	

        	
           
        
	

        	
          7.2
        	
          Conditions Precedent to Buyer's Obligation to Consummate the Closing
        	
          32
        
	

        	

        	

        	
           
        
	

        	
          7.3
        	
          Conditions to Obligations of each Company and Seller to Consummate
          the Closing 34
        	

        
	

        	

        	

        	
           
        
	

        	

        	

        	
           
        
	
          ARTICLE 8 SURVIVAL OF REPRESENTATIONS AND COVENANTS
        	
          35
        
	

        	

        	

        	
           
        
	

        	
          8.1
        	
          Each Company's and Seller' Representations and Covenants
        	
          35
        
	

        	

        	

        	
           
        
	

        	
          8.2
        	
          Buyer's Representations and Covenants
        	
          35
        
	

        	

        	

        	
           
        
	

        	
          8.3
        	
          Effect of Investigation
        	
          36
        
	

        	

        	

        	
           
        
	
          ARTICLE 9 OTHER PROVISIONS
        	
          36
        
	

        	

        	

        	
           
        
	

        	
          9.1
        	
          Notices
        	
          36
        
	

        	

        	

        	
           
        
	

        	
          9.2
        	
          Entire Agreement
        	
          37
        
	

        	

        	

        	
           
        
	

        	
          9.3
        	
          Assignability
        	
          37
        
	

        	

        	

        	
           
        
	

        	
          9.4
        	
          Validity
        	
          37
        
	

        	

        	

        	
           
        
	

        	
          9.5
        	
          Specific Performance
        	
          37
        
	

        	

        	

        	
           
        
	

        	
          9.6
        	
          Governing Law
        	
          37
        
	

        	

        	

        	
           
        
	

        	
          9.7
        	
          Counterparts
        	
          37
        
	

        	

        	

        	
           
        
	

        	
          9.8
        	
          Waiver
        	
          37
        

    

    
      
        

        

      

      
        
          - iii -
        

        
          

        

      

      
        

        

      

    

    

    

    
    	
          
            SCHEDULES
          

        	

        
	

        	
           
        
	
          
            Schedule 2.2(a)
          

        	
          
            Contingent Purchase Price Shares
          

        
	
          Schedule 3.1
        	
          Corporate Status
        
	
          Schedule 3.2.2
        	
          Options and Convertible Securities
        
	
          Schedule 3.4.2
        	
          No Conflict
        
	
          Schedule 3.5.1
        	
          Financial Statements
        
	
          Schedule 3.5.2
        	
          Revenues
        
	
          Schedule 3.6
        	
          Absence of Material Adverse Changes
        
	
          Schedule 3.9
        	
          Accounts Receivable
        
	
          Schedule 3.11
        	
          Litigation and Audits
        
	
          Schedule 3.12.2
        	
          Payment of Taxes
        
	
          Schedule 3.12.3
        	
          Withholding
        
	
          Schedule 3.12.4
        	
          Assessments
        
	
          Schedule 3.12.5
        	
          Access to Returns
        
	
          Schedule 3.12.9
        	
          Certain Income Items and Deductions
        
	
          Schedule 3.13.1
        	
          List of Plans
        
	
          Schedule 3.13.2
        	
          ERISA
        
	
          Schedule 3.13.4
        	
          Funding
        
	
          Schedule 3.13.6
        	
          Payments Relating to the Transactions
        
	
          Schedule 3.14.2
        	
          Employee List
        
	
          Schedule 3.15.2
        	
          Certain Other Labor Matters
        
	
          Schedule 3.17
        	
          No Broker’s or Finder’s Fees
        
	
          Schedule 3.18.1
        	
          Title
        
	
          Schedule 3.18.2(b)
        	
          Closing Date Assets
        
	
          Schedule 3.18.2(c)
        	
          Closing Date Assets
        
	
          Schedule 3.19.2
        	
          Company Leases
        
	
          Schedule 3.20.1
        	
          Material Company Contracts
        
	
          Schedule 3.20.2
        	
          Status of Material Company Contracts
        
	
          Schedule 3.20.3
        	
          Consents
        
	
          Schedule 3.21.1
        	
          Right to Intellectual Property
        
	
          Schedule 3.21.2(a)
        	
          No Conflict
        
	
          Schedule 3.21.2(c)
        	
          No Conflict
        
	
          Schedule 3.21.2(f)
        	
          No Conflict
        
	
          Schedule 3.21.2(g)
        	
          No Conflict
        
	
          Schedule 3.21.2(h)
        	
          No Conflict
        
	
          Schedule 3.21.2(k)
        	
          No Conflict
        
	
          Schedule 3.21.3
        	
          Employee Agreements
        
	
          Schedule 3.22
        	
          Insurance Contracts
        
	
          Schedule 3.23
        	
          Banking Relationships
        
	
          Schedule 3.25
        	
          Absence of Certain Relationships
        
	
          Schedule 3.26
        	
          Certain Documents and Information
        
	
          Schedule 6.6
        	
          SI Intellectual Property
        
	
          Schedule 6.10
        	
          Delivery of Certain Agreements
        
	
          Schedule 7.2.4
        	
          Consents
        

    

    
      
        

        

      

      
        
          - iv -
        

        
          

        

      

      
        

        

      

    

    

    

    
    	
          Schedule 7.2.9(a)
        	
          Pre-LOI and LOI Deposits
        
	
          Schedule 7.2.14
        	
          Board Composition
        

    

    
      ANNEX
    

    
      I         Certain Matters of Construction and Definitions (Article 1)
    

    
      EXHIBITS
    

    
      A         Form of Employment Agreement (Section 4.6)
B
              Form of Lock-up Agreement (Section 7.2.6)
C         Form
      of Promissory Note (Section 7.2.9(b))
D         Form of Seller Side
      Letter (Section 7.2.18)
E         Creditor and Payment Schedule
      (Annex I, Section 1.3(b))
F         Form of Escrow Agreement (Annex
      I, Section 1.3(x))
    

    
      
        

        

      

      
        
          - v -
        

        
          

        

      

      
        

        

      

    

    

    

    
      SHARE PURCHASE AGREEMENT
    

    
      Share Purchase Agreement, dated as of August 12, 2008 this (“Agreement”),
      by and among Adil Shafi (“Seller”), an individual residing
      at 7517 Radcliffe, Brighton, Michigan 48114, SHAFI, Inc., a Michigan
      corporation (“SI”), SHAFI Innovation, Inc., a Michigan
      corporation (“SII” and, together with SI, the “Companies”
      and each, individually, a “Company”) and Braintech, Inc., a
      Nevada corporation (“Buyer”).  Seller, SI, SII and Buyer
      are each individually referred to herein as a “Party” and
      are collectively referred to herein as the “Parties.”  
    

    
      RECITALS
    

    
      R.1       Seller owns all of the issued and outstanding capital
      stock of SI (the “SI Shares”) and all of the issued and
      outstanding capital stock of SII (the “SII Shares”).
    

    
      R.2       Buyer desires to
      purchase all of the SI Shares and eighty percent (80%) of the SII Shares
      (the “SII 80% Shares”, and together with the SI Shares, the
      “Shares”) from Seller and Seller desires to sell the Shares
      to Buyer.
    

    
      R.3       Seller and the respective boards of directors of Buyer
      and each Company have determined that it is advisable to consummate, in
      connection with the above-referenced purchase and sale of the Shares,
      certain other transactions (collectively with such sale and purchase of
      the Shares, the “Transactions”), all on the terms and
      conditions set forth herein.
    

    
      NOW, THEREFORE, in consideration of the mutual promises hereinafter set
      forth and other good and valuable consideration, the receipt and
      adequacy of which are hereby acknowledged, the Parties, intending to be
      legally bound, agree as follows:
    

    
      Article 1  

CERTAIN
      MATTERS OF CONSTRUCTION AND DEFINITIONS
    

    
      Certain matters of construction of this Agreement and the definition of
      capitalized terms used herein but not otherwise defined in this
      Agreement are set forth in Annex I.
    

    
      Article 2  

THE
      PURCHASE AND SALE OF THE SHARES
    

    
      2.1  Purchase and Sale of the Shares.  Upon the
      terms and subject to the conditions set forth herein, at the closing of
      the Transactions (the “Closing”), Buyer shall purchase and
      acquire from Seller, and Seller shall sell and transfer to Buyer all of
      the Shares for the consideration specified in Section 2.2, in
      each case, free and clear of any and all Encumbrances.
    

    
      2.2  Purchase Price.  Buyer shall pay an
      aggregate maximum purchase price consisting of the following
      (collectively, the “Purchase Price”):
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
                     (a)  as full consideration for the SI shares, 2,999,700
      shares of Buyer’s common stock, par value of $0.01 per share, to be
      issued to Seller on the Closing Date, and 1,000,000 shares of the
      Buyer’s common stock, par value of $0.01 per share, to be earned by
      Seller after the Closing as set forth on Schedule 2.2(a) (the “Contingent
      Purchase Price Shares”) and deposited into the Escrow Account
      pursuant to the Escrow Agreement as earned prior to the first Closing
      Date Anniversary.
    

    
                     (b)  as full consideration for the SII 80% Shares, 300
      shares of Buyer’s common stock, par value $0.01 per share, to be issued
      to Seller on the Closing Date.
    

    
      2.3  The Closing.  Subject to the satisfaction
      (or waiver) of all of the conditions precedent to the obligations of the
      Parties to consummate the Closing set forth in Article 7 (the “Closing
      Conditions”), the Closing shall take place by means of courier
      delivery, electronic mail or other means and at the time and in the
      manner acceptable by the parties on the date hereof  (the “Closing
      Date”).
    

    
      Article 3  

REPRESENTATIONS
      AND WARRANTIES OF EACH COMPANY AND SELLER
    

    
      Each of the Companies and Seller, jointly and severally, represent and
      warrant to Buyer that the statements contained in this Article 3
      are true and correct as of the date hereof, except as set forth in the
      Disclosure Schedule attached hereto (the “Disclosure Schedule”).  The
      Disclosure Schedule shall be arranged in sections and paragraphs
      corresponding to the numbered and lettered sections and paragraphs
      contained in this Article 3, and the disclosures in any paragraph
      of the Disclosure Schedule shall qualify only the corresponding section
      or paragraph in this Article 3.
    

    
      3.1  Corporate Status.  Each Company is a
      corporation duly organized, validly existing and in good standing under
      the laws of the State of Michigan, and has the requisite corporate power
      to own, operate and lease its properties and to carry on its business as
      currently being conducted.  Each Company is duly qualified or licensed
      to do business as a foreign corporation and is in good standing in all
      jurisdictions in which the character of the properties owned or held
      under by lease such Company or the nature of the business transacted by
      such Company makes qualification, respectively, necessary, except where
      failure to be so qualified would not have a Company Material Adverse
      Effect.  All jurisdictions in which each Company is qualified to do
      business are set forth on Schedule 3.1.
    

    
      3.2  Capital Stock.  
    

    
           3.2.1  Authorized Stock
      and Ownership.  The authorized capital stock of SI consists
      solely of 60,000 common shares (the “SI Common Shares”),
      and the authorized capital stock of SII consists solely of 50,000 common
      shares (the “SII Common Shares” and, together with the SI
      Common Shares, the “Common Shares”).  As of the date
      hereof, 59,950 shares of SI Common Shares are held by SI in its treasury
      and 50 shares of SI Common Shares are issued and outstanding and held
      beneficially and of record by Seller, free and clear of any and all
      Encumbrances. As of the date hereof, 49,900 shares of SII Common Shares
      are held by SII in its treasury and 100 shares of SII Common Shares are
      issued and outstanding and held beneficially and of record by Seller,
      free and clear of any and all Encumbrances.  All of the outstanding
      Common Shares has been duly authorized and validly issued, was not
      issued in violation of any Person’s preemptive rights, and is fully paid
      and nonassessable.  All of the issued and outstanding shares of Common
      Shares have been issued in compliance with all applicable United States
      (“U.S.”) federal, foreign, state, regional and provincial
      securities laws.  Upon consummation of the Closing, Buyer will own all
      of the outstanding SI Common Shares and eighty percent (80%) of the
      outstanding SII Common Shares free and clear of any and all Encumbrances.
    

    
      
        

        

      

      
        
          - 2 -
        

        
          

        

      

      
        

        

      

    

    
           3.2.2  Options and
      Convertible Securities.  Except as set forth on Schedule 3.2.2:
    

    
                     (a)  there are no outstanding subscriptions, options,
      warrants, conversion rights or other rights, securities, agreements or
      commitments obligating any Company to issue, sell or otherwise transfer
      any of its capital stock or other equity interests, or any securities or
      obligations convertible into, or exercisable or exchangeable for, any
      Common Shares or other capital stock or other equity interest of such
      Company; and
    

    
                     (b)  there are no voting trusts, stockholders agreement
      or other agreements or understandings to which any Company or Seller is
      a party with respect to the voting of Common Shares or any other equity
      security of such Company, and no Company is not a party to or bound by
      any outstanding restrictions, options or other obligations, agreements
      or commitments to sell, repurchase, redeem or acquire any outstanding
      Common Shares or other equity securities of such Company.
    

    
      3.3  Subsidiaries and Equity Ownership.  No
      Company has any Subsidiary nor otherwise owns or has a contractual right
      or obligation to acquire any capital stock or other securities or equity
      of any Person.  
    

    
      3.4  Authority for Agreement; Noncontravention.
    

    
          3.4.1  Authority.  Each
      Company has the corporate power and authority to enter into and deliver
      this Agreement, to perform its obligations hereunder and to consummate
      the Transactions to the extent of its obligations hereunder.  Seller has
      full power and authority to enter into and deliver this Agreement, to
      perform his obligations hereunder and to consummate the
      Transactions.  The execution and delivery of this Agreement by Seller
      and each Company and their consummation of the Transactions, to the
      extent of their obligations hereunder, has been duly and validly
      authorized by the board of directors of each Company and no other
      corporate proceedings on the part of any Company is necessary to
      authorize the execution and delivery of this Agreement and the
      consummation of the Transactions, to the extent of their obligations
      hereunder.  This Agreement and, when executed and delivered, the other
      agreements contemplated hereby to be signed by each Company and Seller
      have been, or with respect to such other agreements, will be duly
      executed and delivered by each Company and Seller and constitute valid
      and binding obligations of each Company and Seller enforceable against
      each such Company and Seller in accordance with their terms.  
    

    
      
        

        

      

      
        
          - 3 -
        

        
          

        

      

      
        

        

      

    

    

    

    
           3.4.2  No Conflict.  Except
      as set forth on Schedule 3.4.2, neither the execution and
      delivery of this Agreement or the other agreements contemplated hereby
      to be signed by each Company and Seller, nor the performance by each
      Company and Seller of their respective obligations hereunder or
      thereunder, nor the consummation by each Company and Seller of the
      Transactions, to the extent of their respective obligations hereunder or
      thereunder, will (a) in respect of any Company, conflict with or result
      in a violation of any provision of its articles of incorporation or
      by-laws (collectively and with respect to any Company, “Organizational
      Documents”), (b) except as set forth on Schedule 3.4.2,
      with or without the giving of notice or the lapse of time, or both,
      conflict with, or result in any violation or breach of, or constitute a
      default under, or result in any right to accelerate or result in the
      creation of any Encumbrance pursuant to, or right of termination under,
      any provision of any note, mortgage, indenture, lease, instrument or
      other agreement, permit, concession, grant, franchise, license,
      judgment, order, decree, statute, ordinance, rule or regulation to which
      any Company or Seller is a party or by which any Company or Seller or
      any of its or his assets or properties is bound or which is applicable
      to such Company or Seller or any of its or his assets or properties.  No
      Governmental Authorization is necessary for the execution and delivery
      of this Agreement or any or the other agreements contemplated hereby to
      be signed by each Company or Seller and, except as set forth on Schedule
      3.4.2, for the consummation of the Transactions by each Company and
      Seller.
    

    
      3.5  Financial Statement Matters.  
    

    
           3.5.1  Financial
      Statements.  Schedule 3.5.1 sets forth (a)
      correct and complete balance sheets of each Company as of December 31,
      2007, (b) statements of income, retained earnings and cash flow of each
      Company for the fiscal ended December 31, 2007, as reviewed by certified
      public accountants, (c) the unaudited balance sheets of each Company as
      of June 30, 2008 (collectively, the “Balance Sheet Date”)
      and (d) the unaudited statements of income, retained earnings and cash
      flow of each Company for the six (6) months ended June 30, 2008; such
      balance sheets and statements of income, retained earnings and cash flow
      are accurate and complete.  Collectively, the financial statements
      referred to in the immediately preceding sentence are sometimes referred
      to herein as the “Financial Statements,” and the balance
      sheets of the Companies in the immediately preceding sentence are
      referred to herein as the “Balance Sheets.”  Each of the
      Balance Sheets (including any related notes) fairly presents in all
      material respects the financial position of each Company as of its date,
      and the other statements included in the Financial Statements (including
      any related notes) fairly present, in all material respects, the
      statements of income, retained earnings and cash flow, as the case may
      be, of each Company for the periods therein set forth, in each case in
      accordance with GAAP, and in the case of the unaudited balance sheets as
      of June 30, 2008 of each Company, subject to normal recurring year-end
      audit adjustments (which, individually and in the aggregate, shall not
      be material in amount) and the absence of footnotes.
    

    
      
        

        

      

      
        
          - 4 -
        

        
          

        

      

      
        

        

      

    

    
      3.5.2  Revenues.  Except as set forth on Schedule
      3.5.2, neither of the Companies received any revenues or other cash
      payments during the period commencing on June 1, 2008 through the date
      hereof.  
    

    
      3.5.3  Indebtedness.   The Creditor and
      Payment Schedule sets forth all of the Company Indebtedness, except for
      Related Party Indebtedness (all of which is hereby waived and released
      by Seller), and such Company Indebtedness and information related
      thereto all as set forth on the Creditor and Payment Schedule is true,
      accurate and complete. With respect to Company Indebtedness to any
      creditor as set forth on the Creditor and Payment Schedule, if payments
      relating to such creditor are made in the amounts and on the dates
      indicated on the Creditor and Payment Schedule, all obligations to such
      creditor shall have been satisfied in full; provided, however,
      nothing herein shall limit Buyer’s right to negotiate reduced amounts or
      alternate payment dates with any creditor of a Company.  As of the
      Closing, (i) no Company will have Liability for borrowed money or Taxes
      due and owing except for Braintech Accepted Debt, which shall not exceed
      an aggregate of $900,000, upon the terms set forth on the Creditor and
      Payment Schedule, and (ii) Seller shall fully and finally satisfy in a
      timely manner, without any Liability to Buyer or any Company, any and
      all Excess Debt.
    

    
      3.6  Absence of Material Adverse Changes.  Since
      the Balance Sheet Date, no Company has suffered any Company Material
      Adverse Effect, nor has there occurred or arisen any event, condition or
      state of facts of any character that could reasonably be expected to
      result in a Company Material Adverse Effect. Except as set forth on Schedule
      3.6, since the Balance Sheet Date, there have been no dividends or
      other distributions declared or paid in respect of, or any repurchase or
      redemption by any Company of, any Common Stock or other capital stock of
      such Company, or any commitment relating to any of the foregoing.
    

    
      3.7  Absence of Certain Liabilities.  No
      Company has any liabilities or obligations, fixed, accrued, contingent
      or otherwise (each, a “Liability”, and collectively, “Liabilities”),
      that are material and not fully reflected or provided for on, or
      disclosed in the notes to, the Balance Sheets, except Liabilities
      expressly disclosed on the Creditor and Payment Schedule.  
    

    
      3.8  Books and Records.  The books of
      account, minute books, stock record books and other records of each
      Company, all of which have been made available to Buyer, are complete
      and correct in all material respects and have been maintained in
      accordance with sound business practices.  The actions reflected in such
      minute books are accurate and complete records of the meetings reported
      in such minute books and, except where the failure to do so will not
      have a Company Material Adverse Effect, no meeting of the stockholders
      of any Company, any Company’s board of directors or any committee of any
      Company’s board of directors has been held for which minutes have not
      been prepared and are not contained in such minute books.  At the
      Closing, all of those books and records will be in each respective
      Company’s possession.
    

    
      3.9  Accounts Receivable.  All accounts
      receivable, whether or not billed, of any Company that are reflected on
      the Balance Sheets or recorded on any Company’s books or accounting
      records as of the Closing Date (each, an “Account Receivable”,
      and collectively, the “Accounts Receivable”) represented or
      represent valid obligations arising from sales actually made or services
      actually performed in the ordinary course of business.  Unless paid
      prior to the Closing Date, the Accounts Receivable are, or will be as of
      the Closing Date, collectible in full subject to any reserves
      therefor.  There is no contest, claim or right of set-off under any
      Material Company Contract with any obligor of the Accounts Receivable
      relating to the amount or validity of such Accounts Receivable.  Schedule
      3.9 contains a complete and accurate list of all Accounts Receivable
      as of June 30, 2008, including a list of the Accounts Receivable that
      are billed (including the name of the client and invoice number, date
      and amount), a list of the Accounts Receivable that are unbilled and
      information regarding the aging of such Accounts Receivable.
    

    
      
        

        

      

      
        
          - 5 -
        

        
          

        

      

      
        

        

      

    

    
      3.10  Compliance with Applicable Laws,
      Organizational Documents.  Each Company has all requisite
      licenses, permits and certificates from all Governmental Entities
      (collectively, “Permits”) necessary to conduct its business
      as currently conducted, and to own, lease and operate its properties in
      the manner currently held and operated, except for any Permits the
      absence of which, in the aggregate, do not and could not reasonably be
      expected to have a Company Material Adverse Effect or prevent or
      materially delay the consummation of the Transactions.  All of the
      Permits are in full force and effect.  Each Company is in compliance in
      all material respects with all the terms and conditions related to such
      Permits.  There are no proceedings in progress, pending or, to any
      Company’s Knowledge or Seller’s Knowledge, threatened, which may result
      in revocation, cancellation, suspension, or any material adverse
      modification of any of such Permits.  Each Company’s business has not
      been since June 30, 2003, and is not currently being conducted in
      violation, in any material respect, of any Applicable Laws, Permits or
      other authorizations of any Governmental Entity.  Each Company is not in
      default or violation of any provision of its respective Organizational
      Documents.
    

    
      3.11  Litigation and Audits.  Except for
      any claim, action, suit or proceeding set forth on Schedule 3.11,
      (a) there is no investigation by any Governmental Entity with respect to
      any Company pending or, to any Company’s Knowledge or Seller’s
      Knowledge, threatened, nor has any Governmental Entity indicated to any
      Company an intention to conduct the same; (b) there is no claim, action,
      suit, arbitration or proceeding pending or, to any Company’s Knowledge
      or Seller’s Knowledge, threatened against or involving any Company, or
      any of their respective assets or properties, or against any Person
      whose liability for any claim, action, suit arbitration or proceeding
      any Company has or may have retained or assumed either contractually or
      by operation of law, at law or in equity, or before any arbitrator or
      Governmental Entity and (c) there are no judgments, decrees, injunctions
      or orders of any Governmental Entity or arbitrator outstanding against
      any Company.
    

    
      3.12  Tax Matters.
    

    
      3.12.1  Filing of Returns.  Each Company
      has prepared and filed on a timely basis with all appropriate
      Governmental Entities all returns in respect of Taxes that such Company
      is required to file on or prior to the Closing, and all such returns are
      correct and complete in all material respects.  No claim has been made
      by any Governmental Entity in a jurisdiction (domestic or foreign) where
      any Company does not file returns in respect of Taxes that such Company
      is or may be subject to taxation in such jurisdiction.  
    

    
      3.12.2  Payment of Taxes.  Except as set
      forth on Schedule 3.12.2, each Company has paid in full all Taxes
      due on or before the Closing (whether or not shown on any Tax return)
      and, except as set forth on Schedule 3.12.2, in the case of Taxes
      accruing for the period ending on or before the Closing that are not due
      on or before the Closing, each Company has made adequate provision in
      such Company’s books and records and on the face of its financial
      statements (rather than in any notes thereto) for such payment.  Except
      as set forth on Schedule 3.12.2, there are no Encumbrances on any
      of the assets of any Company that arose in connection with any failure
      (or alleged failure) to pay any Tax.  Since December 31, 2003, no
      Company has incurred any Liability for Taxes arising from extraordinary
      gain or loss as that term is used in GAAP, outside the ordinary course
      of its business.  Except as set forth on Schedule 3.12.2,
      there is no dispute or claim concerning any Liability for Taxes of any
      Company claimed or raised by any Governmental Entity.
    

    
      
        

        

      

      
        
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      3.12.3  Withholding.  Each Company has
      withheld from each payment made or owing, and with respect to any
      distributive share of such Company’s income allocable, to any of its
      respective current or former employees, officers, directors, independent
      contractors, creditors, Seller, or other third party all amounts
      required by Applicable Laws to be withheld and has, where required,
      remitted such amounts within the applicable periods to the appropriate
      Governmental Entities.  All Forms W-2 and 1099 and similar documents
      required to be filed with respect to amounts withheld by or on behalf of
      each Company have been properly completed and timely filed.  Each
      Company has timely paid all amounts required by Applicable Laws to be
      paid by such Company to any Governmental Entity in respect of taxation
      of any Seller on his distributive share of such Company’s
      income.  Except as set forth in Schedule 3.12.3, no
      portion of the Purchase Price is subject to the Tax withholding
      provision of Section 3406 or Subchapter A of chapter 3 of the Code or of
      any other Tax law.
    

    
      3.12.4  Assessments.  There are no
      assessments of any Company with respect to Taxes that have been issued
      and are outstanding.  Since December 31, 2003, no Governmental Entity
      has examined or audited any Company in respect of Taxes.  Except as set
      forth on Schedule 3.12.4, since December 31, 2003, no
      Company has received any indication from any Governmental Entity (a)
      indicating an interest to open an audit or review in respect of Taxes,
      (b) requesting information relating to Tax matters, or (c) noticing a
      deficiency or proposed adjustment for any amount of Taxes proposed,
      asserted or addressed.  No Company has executed or filed any agreement
      extending the period of assessment or collection of any Taxes. Schedule
      3.12.4 contains a list of all jurisdictions in which each Company is
      required to file any Tax Return, and no basis exists for a claim to be
      made by any Governmental Entity in any  jurisdiction where such Company
      does not file Tax Returns that such Company is or may be subject to
      taxation by, or be required to file Tax Returns in, that jurisdiction.
    

    
      3.12.5  Access to Returns.  Buyer has
      been provided with a copy of or access to all federal, state, local,
      provincial and foreign Tax returns filed by each Company since January
      1, 2000.  Buyer has been provided with a copy of or access to all
      assessments, extensions and waivers resulting from any audits of any
      Company by a Governmental Entity in respect of Taxes, and all such
      assessments and related penalties and interest have been paid in full.  Schedule
      3.12.5 sets forth, which respect to each Company, the amounts of the
      net operating loss carryovers, tax credit carryovers, and the tax basis
      of assets as of July 31, 2008.
    

    
      3.12.6  Compensation Deductions.  No
      Company is a party to any agreement, contract, arrangement or plan that
      has resulted or could result (determined regardless of whether or not
      such Company is or has been otherwise subject to the Code Sections 280G
      or 162(m)), separately or in the aggregate, in the payment of (a) any
      “excess parachute payment” within the meaning of Code Section 280G (or
      any corresponding provision of state, local, provincial or foreign law)
      or (b) any amount that will not be fully deductible as a result of Code
      Section 162 (m) (or any corresponding provisions of state, local,
      provincial or foreign Tax law).
    

    
      
        

        

      

      
        
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      3.12.7  Affiliated Group.  No Company is
      nor has been a member of an Affiliated Group filing a consolidated
      federal income Tax return.  No Company has Liability for the Taxes of
      any Person other than itself under Treasury Regulation Section 1.1502-6
      (or any similar provision of state, local, provincial or foreign law),
      as a transferee or successor, by contract, or otherwise.  No Company has
      filed or been included in a combined, consolidated or unitary return (or
      substantial equivalent thereof) of any Person.  
    

    
      3.12.8  No Tax Agreements.  No Company is
      nor has been a party to or otherwise bound by any tax sharing or similar
      agreement.  No rulings or agreements in respect of any Tax are pending
      or have been issued by or entered into with any Government Entity with
      respect to any Company.
    

    
      3.12.9  Certain Income Items and Deductions.  Except
      as set forth on Schedule 3.12.9, no Company will be required to
      include any item of income in, or exclude any item of deduction from,
      taxable income for any taxable period (or portion thereof) ending after
      the Closing Date as a result of any:
    

    
                     (a)  change in method of accounting for a taxable period
      ending on or prior to the Closing Date;
    

    
                     (b)  “closing agreement” as described in Code Section
      7121 (or any corresponding or similar provision of state, local,
      provincial or foreign income Tax law) executed on or prior to the
      Closing Date;
    

    
                     (c)  deferred intercompany transactions or any excess
      loss account described in Treasury Regulations under Code Section 1502
      (or any corresponding or similar provision of state, local, provincial
      or foreign income Tax law);
    

    
                     (d)  installment sale or open transaction disposition
      made on or prior to the Closing Date; or
    

    
                     (e)  prepaid amount received on or prior to the Closing
      Date.
    

    
      3.12.10   Certain Stock Distributions.  No
      Company has distributed stock of another Person, nor has it had its
      stock distributed by another Person, in a transaction that was purported
      or intended to be governed in whole or in part by Code Sections 355 or
      361.
    

    
      3.12.11   Code Section 382 Ownership Change.  No
      Company has undergone a Code Section 382 ownership change at any time.
    

    
      3.12.12   Miscellaneous.  No
      Company (a) has engaged in any reportable transaction within the meaning
      of Section 6111 and 6112 of the Code; (b) is or has been a U.S. real
      property holding corporation within the meaning of Section 897(c)(2) of
      the Code during the applicable period specified in Section
      897(c)(1)(A)(ii) of the Code; (c) is a party to any joint venture,
      partnership or other arrangement or contract which could be treated as a
      partnership for federal income tax purposes; or (d) has entered into any
      sale leaseback or any leveraged lease transaction.
    

    
      
        

        

      

      
        
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      3.12.13   “S Corporation.”  SII
      has been a validly electing “S Corporation” within the meaning of Code
      Sections 1361 and 1362 (“S Corporation”) at all times since
      its formation, and SII will be an S Corporation up to and including
      immediately preceding consummation of the Closing.
    

    
      3.12.14   Built-In Gain.  SII does not
      have a built-in gain (within the meaning of Section 1374(d)(2) of the
      Code).
    

    
      3.12.15   No Acquisitions.  No Company
      has:
    

    
                     (a)  acquired assets from another corporation in a
      transaction in which such corporation’s tax basis for the acquired
      assets was determined, in whole or in part, by reference to the tax
      basis of the acquired assets (or any other property) in the hands of the
      transferor; or
    

    
                     (b)  acquired any stock of any corporation that is a
      “qualified subchapter S subsidiary” within the meaning of Code Section
      1361(b)(3)(B).
    

    
      3.13  Employee Benefit Plans.
    

    
      3.13.1  List of Plans.  Schedule
      3.13.1 contains a correct and complete list of all pension, profit
      sharing, retirement, deferred compensation, welfare, legal services,
      medical, dental or other employee benefit or health insurance plans,
      life insurance or other death benefit plans, disability, stock option,
      stock purchase, stock compensation, bonus, vacation pay, severance pay
      and other similar plans, programs or agreements, and every material
      written personnel policy, relating to any Persons employed by each
      Company or in which any Person employed by each Company is eligible to
      participate and which is currently maintained or that was maintained at
      any time since January 1, 2002, or contributed to by each Company or any
      of their respective ERISA Affiliates, or with respect to which each
      Company or any of their respective ERISA Affiliates have any Liability
      (collectively, the “Company Plans”).  Each Company has
      provided to Buyer complete copies, as of the date hereof, of all of the
      Company Plans that have been reduced to writing, together with all
      documents establishing or constituting any related trust, annuity
      contract, insurance contract or other funding instrument, and summaries
      of those that have not been reduced to writing.  Each Company has
      provided to Buyer complete copies of current plan summaries, employee
      booklets, personnel manuals, service and trust agreements regarding
      health and welfare and retirement benefits and other material documents
      relating to the terms of each respective Company Plans that are in the
      possession of each such Company as of the date hereof.  No Company nor
      their respective ERISA Affiliates has and has never had any “defined
      benefit plans” as defined in ERISA Section 3(35).
    

    
      
        

        

      

      
        
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      3.13.2  ERISA.  No Company nor any of
      their respective ERISA Affiliates has incurred any “withdrawal
      liability” calculated under ERISA Section 4211 nor has there been an
      event or circumstance that would cause any of them to incur any such
      Liability.  With respect to all Company Plans, each Company and every
      one of their respective ERISA Affiliates is in material compliance with
      all requirements prescribed by all Applicable Laws and has in all
      material respects performed all obligations required to be performed by
      it, and has been operated and administered in a manner that is in
      material compliance with all Applicable Laws and its terms and that
      would not subject the Company, any ERISA Affiliate, any participant, or
      any other Person to an excise tax, an additional tax, or any other
      penalty under the Code, ERISA or any other Applicable Law.  No Company
      Plan promises or provides retiree medical or other retiree or
      post-employment welfare benefits to any Person except as required by
      Applicable Laws, and no Company nor their respective ERISA Affiliates
      have represented, promised or contracted (whether in oral or written
      form) to provide such retiree benefits to any employee, former employee,
      director, consultant or other Person, except to the extent required by
      Applicable Laws.  No Company Plan or employment agreement provides
      health benefits that are not insured through an insurance
      contract.  Except as set forth on Schedule 3.13.2, each
      Company Plan is amendable and terminable unilaterally by each respective
      Company at any time without Liability to such Company as a result
      thereof and no Company Plan, plan documentation or agreement, summary
      plan description or other written communication distributed generally to
      employees by its terms prohibits each respective Company from amending
      or terminating any such Company Plan.  
    

    
      3.13.3  Plan Determinations.  Each
      Company Plan intended to qualify under Code Section 401(a) has either
      received a determination letter from the Internal Revenue Service (“IRS”)
      or is documented using a prototype or volume submitter plan document
      with respect to which the IRS has issued an opinion letter upon which
      such Company may reasonably rely to the effect that the Company Plan (or
      form of Plan document) so qualifies.  Copies of all such determination
      letters and opinion letters that have been received by such Company have
      been delivered to Buyer, and no Company nor any Seller has taken any
      action, or received any notification of any action taken by any other
      Person since the date of such determination letters or opinion letters
      that might reasonably be expected to cause the loss of such
      qualification or exemption.  With respect to each Company Plan that is a
      qualified profit sharing plan, all employer contributions accrued for
      plan years ending prior to the Closing under the Company Plan terms and
      Applicable Laws have been made.
    

    
      3.13.4  Funding.  Except as set forth on Schedule
      3.13.4:
    

    
                     (a)  all contributions, premiums or other payments due or
      required to be made to the Company Plans as of the date hereof have been
      made as of the date hereof or are properly reflected on the Balance
      Sheets;
    

    
                     (b)  there are no actions, liens, suits or claims (other
      than routine claims for benefits) pending or, to any Company’s Knowledge
      or Seller’s Knowledge, threatened with respect to any Company Plan; and
    

    
      
        

        

      

      
        
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                     (c)  no event has occurred, and there exists no condition
      or set of circumstances, that presents a material risk of a partial
      termination (within the meaning of Code Section 411(d)(3)) of any
      Company Plan.
    

    
      3.13.5  Certain Other Matters.  Except as
      reserved for on the Balance Sheets, no Company has Liability or
      potential Liability nor will any Company have any Liability or would
      reasonably be expected to have Liability, with regard to any Company
      Plan, including, without limitation, any Liability as a result of any
      failure to perform non-discrimination testing on a Company Plan or any
      failure to amend a Company Plan pursuant to Applicable Law, including
      the legislation commonly known as “GUST” or the legislation commonly
      known as “EGTRRA.”  All employee contributions, including elective
      deferrals, to any Company’s 401(k) Plan have been segregated from such
      Company’s general assets and deposited into the trust(s) established
      pursuant to such Company’s 401(k) Plan in a timely manner in accordance
      with Applicable Law, including, without limitation, the “plan asset”
      regulations of the U.S. Department of Labor.
    

    
      3.13.6  Payments Relating to the Transactions.  Except
      as required to comply with Applicable Law or except as set forth on Schedule
      3.13.6, no Company Plan provides for, as a result of the
      Transactions contemplated by this Agreement (whether alone or in
      connection with other events), any payment of any material amount of
      money or other property to or the acceleration of or provision of any
      other rights or benefits to any current or former officer, employee,
      independent contractor or director of such respective Company, whether
      or not such payment, right or benefit, or acceleration thereof, would
      constitute a parachute payment within the meaning of Section 280G of the
      Code.
    

    
      3.13.7  Section 409A.  To the extent that
      any Company Plan constitutes a “non-qualified deferred compensation
      plan” with the meaning of Section 409A of the Code, such Company Plan
      has been operated in good faith compliance with Section 409A of the Code
      and applicable IRS and Treasury guidance.
    

    
      3.14  Employment-Related Matters.
    

    
      3.14.1  Labor Relations.  (a) No Company
      is a party to any collective bargaining agreement or other contract or
      agreement with any labor organization or other representative of any of
      the employees of such Company; (b) there is no labor strike, dispute,
      slowdown, work stoppage or lockout that is pending or, to any Company’s
      Knowledge or Seller’s Knowledge, threatened against or otherwise
      affecting any Company, and no Company has experienced the same;
      (c) except as has occurred in the ordinary course of any Company’s
      business without any resulting material Liability of such Company, no
      Company has closed any plant or facility, effectuated any layoffs of
      employees or implemented any early retirement or group separation
      program at any time, nor has any Company planned or announced any such
      action or program for the future with respect to which such Company has
      any material Liability; and (d) all salaries, wages, vacation pay,
      bonuses, commissions and other compensation due from any Company to the
      employees of such Company before the date hereof have been paid or
      accrued as of the date hereof except as set forth in Schedule 3.15.2.
    

    
      3.14.2  Employee List.  Set forth on Schedule
      3.14.2 is a list containing, as of the date hereof, the names of
      each of the respective employees of each Company, whether full-time or
      part-time, and each employee’s position and starting employment date
      (the “Employee List”).  The Employee List is correct and
      complete as of the date of the Employee List.  No third party has
      asserted in writing any claim, or, to any Company’s Knowledge or
      Seller’s Knowledge, has any reasonable basis to assert any valid claim,
      against any Company that either the continued employment by, or
      association with, such Company of any of the current officers or
      employees of, or consultants to, such Company contravenes any agreements
      or Applicable Laws regarding unfair competition, trade secrets or
      proprietary information.  Each Company has provided to Buyer a list
      setting forth the salary and other compensation, as of the date hereof,
      of each employee listed on the Employee List.
    

    
      
        

        

      

      
        
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      3.15  Certain Other Labor Matters.
    

    
      3.15.1  Each Company is and has been in compliance in all
      respects with all laws, regulations or rules regarding termination of
      employees, including, without limitation, the WARN Act (and any similar
      foreign, provincial, state or local statute or regulation), the Fair
      Labor Standards Act, as well as any termination notice and/or severance
      mandated by statute or civil or common law and no Company is subject to
      any pending claim for wrongful dismissal, constructive dismissal or any
      other claim, actual or, to any Company’s Knowledge or Seller’s
      Knowledge, threatened, or any litigation, actual or, to any Company’s
      Knowledge or Seller’s Knowledge, threatened, relating to employment or
      termination of employment of any employee or consultant.
    

    
          3.15.2  Except as set forth on Schedule
      3.15.2: (a) each Company is in compliance in all respects with all
      Applicable Laws relating to employment and employment practices, the
      classification of employees, wages, hours, collective bargaining,
      unlawful discrimination, civil rights, safety and health, workers’
      compensation and terms and conditions of employment; (b) there are no
      material charges with respect to or relating to any Company pending or,
      to any Company’s Knowledge or Seller’s Knowledge, threatened, before the
      Equal Employment Opportunity Commission or any other federal, state,
      local or foreign agency or other Governmental Entity responsible for the
      prevention of unlawful employment practices, and to any Company’s
      Knowledge or Seller’s Knowledge, there is no basis for any such charges;
      and (c) no Company has received any notice from any federal, state,
      local or foreign agency or other Governmental Entity responsible for the
      enforcement of labor or employment laws of an intention to conduct an
      investigation of such Company and no such investigation is in progress.
    

    
      3.15.3  No claims for unpaid wages or occupational injury claims
      of any employee of any Company have been reported to any applicable
      Governmental Entity, or have been knowingly concealed or misrepresented
      by any Company, and there is no work environment or environmental
      condition in the workplace of any Company that has caused a workplace
      injury and that has not yet been remediated.
    

    
      3.16  Environmental.
    

    
      3.16.1  Environmental Laws.  Except for
      matters that, individually or in the aggregate, would not have a Company
      Material Adverse Effect, (a) each Company is in compliance with all
      applicable Environmental Laws in effect on the date hereof; (b) no
      Company has received any written communication that alleges that such
      Company is not in compliance in all material respects with all
      applicable Environmental Laws in effect on the date hereof; (c) there
      are no circumstances that may prevent or interfere with future
      compliance by any Company with all Environmental Laws; (d) all Permits
      and other Governmental Authorizations currently held by any Company
      pursuant to the Environmental Laws are in full force and effect, each
      Company is in compliance with all of the terms of such Permits and
      Governmental Authorizations, and no other Permits or Governmental
      Authorizations pursuant to the Environmental Laws are required by any
      Company for the conduct of their respective businesses on the date
      hereof; and (e) the management, handling, storage, transportation,
      treatment, and disposal by each Company of all Materials of
      Environmental Concern has been in compliance with all applicable
      Environmental Laws.
    

    
      
        

        

      

      
        
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      3.16.2  Environmental Claims.  There is
      no Environmental Claim pending or, to any Company’s Knowledge or
      Seller’s Knowledge, threatened against or involving any Company or
      against any Person whose Liability for any Environmental Claim any
      Company has or may have retained or assumed either contractually or by
      operation of law.
    

    
      3.16.3  No Basis for Claims.  Except for
      matters that, individually or in the aggregate, would not have a Company
      Material Adverse Effect, there are no past or current actions or
      activities by any Company, or any circumstances, conditions, events or
      incidents, including the storage, treatment, release, emission,
      discharge, disposal or arrangement for disposal of any Material of
      Environmental Concern, by any Company or any other Person, that could
      reasonably form the basis of any Environmental Claim against any Company
      or against any such other Person whose Liability for any Environmental
      Claim such Company may have retained or assumed either contractually or
      by operation of law, including the storage, treatment, release,
      emission, discharge, disposal or arrangement for disposal of any
      Material of Environmental Concern or any other contamination or other
      hazardous condition, whether caused by such Company or not, related to
      the premises at any time occupied by such Company.  
    

    
      3.17  No Broker’s or Finder’s Fees.  Except
      as set forth on Schedule 3.17, no Company nor Seller has paid or
      become obligated to pay any fee or commission to any broker, finder,
      financial advisor, intermediary or other similar Person in connection
      with the Transactions, and giving effect to the consummation of the
      Closing, will not cause such Company, as the case may be, or Seller to
      be so obligated.
    

    
      3.18  Assets Other Than Real Property.
    

    
      3.18.1  Title.  Each Company has good,
      valid and marketable title to all of the tangible assets shown on the
      Balance Sheets, in each case, free and clear of any Encumbrance, except
      for (a) assets disposed of since the Balance Sheet Date in the ordinary
      course of business and in a manner consistent with past practices, (b)
      Liabilities and Encumbrances reflected in the Balance Sheets or
      otherwise in the Financial Statements, (c) Permitted Encumbrances, and
      (d) Liabilities and Encumbrances set forth on Schedule 3.18.1.
    

    
      
        

        

      

      
        
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      3.18.2  Closing Date Assets.
    

    
                     (a)  As of the Closing Date, each Company will have good,
      valid and marketable title to all of their respective assets, in each
      case free and clear of any Encumbrances other than Permitted
      Encumbrances.
    

    
                     (b)  Each Company’s inventory has been paid for by such
      Company, consists of a quality and quantities that are usable and
      saleable upon customary terms and conditions in the ordinary course of
      business and meet all customer and warranty standards and requirements.  Schedule
      3.18.2(b) lists and describes all inventory purchased by such
      Company without the manufacturer’s standard warranty.
    

    
                     (c)  Schedule
      3.18.2(c) lists all tangible personal property (other than
      inventory) which is owned by each Company and the location thereof, as
      of the Closing Date.  
    

    
                     (d)  Each Company’s properties, assets and rights are all
      the properties, assets and rights that are used in or that are being
      held for use or are otherwise necessary in the operation, as currently
      conducted by such Company, of its business.
    

    
      3.18.3  Condition.  All material
      facilities, equipment and personal property owned by each Company and
      regularly used in its respective business is in good operating condition
      and repair, ordinary wear and tear excepted, which wear and tear, taken
      in the aggregate, is not material to such Company and does not affect
      such Company’s obligations to consummate the Transactions and otherwise
      perform under this Agreement.
    

    
      3.19  Real Property.
    

    
      3.19.1  Company Real Property.  No Company owns
      nor has ever owned any real property.
    

    
      3.19.2  Company Leases.  Schedule
      3.19.2 lists, as to each Company, the Company Leases.  Complete
      copies of the Company Leases, and all material amendments thereto (which
      are identified on Schedule 3.19.2) have been made available by
      the Company to Buyer.  The Company Leases grant leasehold estates free
      and clear of all Encumbrances (except Permitted Encumbrances or those
      Encumbrances that would not materially impair such leasehold estates)
      granted by or caused by the actions of each respective Company. The
      Company Leases are in full force and effect and are binding and
      enforceable against each of the parties thereto in accordance with their
      respective terms and conditions.  No Company nor, to any Company’s
      Knowledge or Seller’s Knowledge, any other Person to a Company Lease,
      has committed a material breach or default under any Company Lease, nor
      has there occurred any event that with the passage of time or the giving
      of notice or both would constitute such a breach or default.  Schedule
      3.19.2 identifies each Company Lease the provisions of which would
      be materially and adversely affected by the Transactions and each
      Company Lease that requires the consent of any third Person in
      connection with the Transactions.  No material construction, alteration
      or other leasehold improvement work with respect to the real property
      covered by any of the Company Leases remains to be paid for or to be
      performed by any Company.  Except as set forth on Schedule
      3.19.2, no Company Leases have an unexpired term which, including
      any renewal or extensions of such term provided for in the Company
      Lease, could exceed 365 days.
    

    
      
        

        

      

      
        
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      3.19.3  Condition.  All leasehold
      improvements and fixtures, or parts thereof, used by any Company in the
      conduct of its respective business are in good operating condition and
      repair, ordinary wear and tear excepted, and are insured with coverages
      that are required pursuant to the Company Leases, to be insured by third
      Persons.
    

    
      3.20  Contracts, Agreements and Commitments.
    

    
      3.20.1  Company Contracts.   Schedule
      3.20.1 sets forth a list of all Material Company Contracts.  “Material
      Company Contracts” means any and all of the following Contracts,
      whether or not indentified on Schedule 3.20.1, (i) under which a
      Company has or may acquire rights, (ii) under which a Company has or may
      become subject to any Liability, or (iii) by which a Company or any of
      the assets owned or used by a Company is or may become bound:  
    

    
                     (a)  any bonus, commission, deferred compensation,
      pension, severance, profit-sharing, stock option, employee stock
      purchase or retirement plan, Contract or arrangement or other employee
      benefit plan or arrangement;
    

    
                     (b)  any employment Contract with any current employee,
      officer, director or consultant (or any former employees, officers,
      directors and consultants to the extent there remain at the date hereof
      obligations to be performed by any such Company);
    

    
                     (c)  any Contract for personal services or employment
      with a term of service or employment specified in the Contract or any
      Contract for personal services or employment in which any such Company
      has agreed upon the termination of such Contract to make any payments
      greater than those that would otherwise be imposed by Applicable Laws;
    

    
                     (d)  any Contract of guarantee of the debts, liabilities
      or obligations of any Person, or Contract pursuant to which any such
      Company remains obligated for indemnification;
    

    
                     (e)  any Contract containing a covenant limiting or
      purporting to limit the freedom of any such Company to compete with any
      Person in any geographic area or to engage in any line of business;
    

    
                     (f)  any lease (excluding the Company Leases) under which
      any Company is lessee that involves, in the aggregate, payments of
      $5,000 or more per annum, or of $10,000 or more for the remaining term
      of the lease, any lease that is material to the conduct of the Company’s
      business, or any Company Lease;
    

    
                     (g)  any joint venture or profit-sharing Contract or
      similar Contract;
    

    
      
        

        

      

      
        
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                     (h)  except for trade indebtedness incurred in the
      ordinary course of business and equipment leases entered into in the
      ordinary course of business, any loan or credit Contract providing for
      the extension of credit to any such Company or any instrument evidencing
      or related in any way to indebtedness incurred in the acquisition of
      companies or other entities or indebtedness for borrowed money by way of
      direct loan, sale of debt securities, purchase money obligation,
      conditional sale, guarantee, or otherwise that individually is in the
      amount of $5,000 or more;
    

    
                     (i)  any license Contract, either as licensor or
      licensee, involving payments (including past payments) of $5,000 in the
      aggregate or more, or any material distributor, dealer, reseller,
      franchise, manufacturer’s representative, or sales agency or any other
      similar material Contract;
    

    
                     (j)  any Contract granting exclusive rights to, or
      providing for the sale of, all or any portion of the Company Proprietary
      Rights (as defined in Section 3.21.1);
    

    
                     (k)  any Contract or arrangement providing for the
      payment of any commission or similar payment based on sales or contract
      awards other than to employees of any such Company;
    

    
                     (l)  any Contract for the sale by any such Company of
      materials, products, services or supplies that involves future payments
      to the Company of more than $5,000;
    

    
                     (m)  any Contract for the purchase by the Company of any
      materials, equipment, services, or supplies that either (i) involves a
      binding commitment by any such Company to make future payments in excess
      of $5,000 and cannot be terminated by it without penalty upon fewer than
      30 days’ notice or (ii) was not entered into in the ordinary course of
      business;
    

    
                     (n)  any Contract or arrangement with any third Person
      for such third party to develop any intellectual property or other asset
      expected to be used or currently used or useful in any such Company’s
      business;
    

    
                     (o)  any Contract or commitment for the acquisition,
      construction or sale of fixed assets owned or to be owned by any such
      Company that involves future payments by it of more than $5,000;
    

    
                     (p)  any Contract or commitment to which current or
      former directors, officers or Affiliates of any such Company (or
      directors or officers of an Affiliate of the Company) are also parties;
    

    
                     (q)  hedging or similar Contracts;
    

    
                     (r)  Contracts by and between any Company and Persons
      with whom any Company is not dealing at arm’s length;
    

    
      
        

        

      

      
        
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                     (s)  any Contract not described above that was not made
      in the ordinary course of business;
    

    
                     (t)  any Contract relating to any Company Indebtedness or
      the repayment thereof;
    

    
                     (u)  any Contract relating to the automotive related
      business (collectively, the “Automotive Business Contracts”);
      or
    

    
                     (v)  any Contract not described above that provides for
      any continuing or future obligation of any Company, involving Liability
      of any such Company of more than $5,000, actual or contingent, including
      any continuing representation or warranty and any indemnification
      obligation.
    

    
      3.20.2  Status of Contracts.   Except as
      otherwise disclosed on Schedule 3.20.2:
    

    
                     (a)  all
      Material Company Contracts are in full force and effect, and are valid
      and binding on each Company, as applicable, and, to any Company’s
      Knowledge or Seller’s Knowledge, on the other parties thereto, and no
      Company, nor, to any Company’s Knowledge or Seller’s Knowledge, any
      other party thereto, has breached any provision of, or defaulted under
      the terms of any such Material Company Contract except for breaches or
      defaults that are not material or have been cured or waived;
    

    
                     (b)  a true and complete copy of each written Material
      Company Contract (and all amendments thereto) and a true and accurate
      summary of all provisions of each oral Material Company Contract has
      been delivered to Buyer;
    

    
                     (c)  there are no oral modifications or amendments to any
      of the Material Company Contracts;
    

    
                     (d)  to any Company’s Knowledge or the Seller’s
      Knowledge, no Company has received any notice of any stop work orders,
      terminations, cure notices, show cause notices or notices of default or
      breach under any of the Material Company Contracts, nor, to any
      Company’s Knowledge or Seller’s Knowledge, has any such action been
      threatened or asserted;
    

    
                     (e)  there are no Material Company Contracts for the
      provision of goods or services by any Company that include a liquidated
      damages clause or unlimited liability by any such Company, or liability
      for consequential damages;
    

    
                     (f)  there are no Material Company Contracts for the
      provision of goods or services by any Company that require such Company
      to post a surety, performance or other bond or to be an account party to
      a letter of credit or bank guarantee; and
    

    
                     (g)  to any Company’s Knowledge or Seller’s Knowledge, no
      party to a Material Company Contract has notified such Company, as
      applicable, that such Company has breached or violated any Law or any
      certification, representation, clause, provision or requirement of any
      Material Company Contract.
    

    
      
        

        

      

      
        
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      3.20.3  Consents.  Schedule
      3.20.3 identifies each Contract and other document that requires the
      Consent of, or notice to, a third Person to consummate or in connection
      with the Transactions.
    

    
      3.21  Intellectual Property.
    

    
      3.21.1  Right to Intellectual Property.  Except
      as set forth on Schedule 3.21.1, each Company owns, controls or
      has rights to use, without making any future payment to others or
      granting any future rights to others in exchange therefore, all patents,
      trademarks, trade names, service marks, copyrights, and the subject
      matter of any pending applications therefor, maskworks, net lists,
      schematics, technology, know-how, computer software programs or
      applications (in source code or object code form), and tangible or
      intangible proprietary information or material (excluding Commercial
      Software) that are used in the business of each such Company as
      currently conducted or proposed to be conducted (the “Company
      Proprietary Rights”).  Any software and other intellectual property
      not owned by but used in any Company’s business, as the case may be, has
      been acquired and used by such Company on the basis of and in accordance
      with a valid license from the manufacturer or a dealer authorized to
      distribute such software or other intellectual property, free and clear
      of any claims or rights of any third parties.  No Company is in breach
      of any of the terms and conditions of any such license nor has any
      Company been infringing upon any rights of any third parties in
      connection with its acquisition or use of any software or other
      intellectual property.
    

    
      3.21.2  No Conflict.  
    

    
                     (a)  Set forth on Schedule
      3.21.2(a) is a complete list of all patents, trademarks, copyrights,
      trade names and service marks, in each case owned by each Company and
      registered or filed with any governmental body, and any applications
      therefor, included in the Company Proprietary Rights, specifying, where
      applicable, the jurisdictions in which each such Company Proprietary
      Right has been issued or registered or in which an application for such
      issuance and registration has been filed, including the respective
      registration or application numbers and the names of all registered
      owners.
    

    
                     (b)  No Company’s currently marketed software products
      has been registered for copyright protection with the U.S. Copyright
      Office or any foreign offices nor has any Company been requested to make
      any such registration.
    

    
                     (c)  Set forth on Schedule
      3.21.2(c) is a complete list of all material licenses, sublicenses
      and other Contracts as to which each Company is a party and pursuant to
      which each Company, as applicable, or any other Person is authorized to
      use any Company Proprietary Right (excluding “end-user licenses”) or
      other trade secret material to the business of such Company, and
      includes the identity of all parties thereto, a description of the
      nature and subject matter thereof, the applicable royalty and the term
      thereof. 
    

    
      
        

        

      

      
        
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                     (d)  No Company is in violation of any license,
      sublicense or other Contract described on Schedule 3.21.2(c)
      except such violations as do not materially impair any such Company’s
      rights under such license, sublicense or agreement.  
    

    
                     (e)  The execution and delivery of this Agreement by each
      Company, and the consummation of the Transactions, will neither cause
      any Company to be in violation or default under any such license,
      sublicense or other Contract described on Schedule 3.20.2(c), nor
      entitle any other party to any such license, sublicense or agreement to
      terminate or modify such license, sublicense or other Contract.  
    

    
                     (f)  Except as set forth on Schedule
      3.21.2(f), each Company is the sole and exclusive owner or licensee
      of, with all right, title and interest in and to (free and clear of any
      and all Encumbrances), the Company Proprietary Rights, and has sole and
      exclusive rights (and is not contractually obligated to pay any
      compensation to any third party in respect thereof) to the use thereof
      or the material covered thereby in connection with the services or
      products in respect of which such Company Proprietary Rights are being
      used.  
    

    
                     (g)  Except as set forth on Schedule
      3.21.2(g), no claims with respect to the Company Proprietary Rights
      have been asserted or, to any Company’s Knowledge or Seller’s Knowledge,
      are threatened by any Person nor, to any Company’s Knowledge or Seller’s
      Knowledge, are there any valid grounds for any bona fide claims (a) to
      the effect that the manufacture, sale, licensing or use of any of the
      products of any Company as currently manufactured, sold, licensed or
      used or proposed for manufacture, use, sale or licensing by such Company
      infringes on any copyright, patent, trademark, service mark or trade
      secret, (b) against the use by any Company of any trademarks, service
      marks, trade names, trade secrets, copyrights, patents, technology,
      know-how or computer software programs and applications used in such
      Company’s business as currently conducted or as proposed to be conducted
      by such Company, or (c) challenging the ownership by any Company, or the
      validity or effectiveness of any of the Company Proprietary Rights.  
    

    
                     (h)  Except as set forth on Schedule
      3.21.2(h), all registered trademarks, service marks and copyrights
      owned by each Company are valid and subsisting in the jurisdictions in
      which they have been filed.  
    

    
                     (i)  There is no unauthorized use, infringement or
      misappropriation of any of any Company’s Company Proprietary Rights by
      any third party, including any employee or former employee of any
      Company.  
    

    
                     (j)  No Company Proprietary Right or product of any
      Company is subject to any outstanding decree, order, judgment, or
      stipulation restricting in any manner the licensing thereof by such
      Company.
    

    
      
        

        

      

      
        
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                     (k)  Except as set forth on Schedule
      3.21.2(k), no Company has entered into any agreement under which
      such Company is restricted from selling, licensing or otherwise
      distributing any of its products to any class of customers, in any
      geographic area, during any period of time or in any segment of the
      market.  
    

    
                     (l)  Each Company’s products, packaging and documentation
      contain copyright notices sufficient to maintain copyright protection on
      the copyrighted portions of the Company Proprietary Rights.
    

    
      3.21.3  Employee Agreements.  Except
      as set forth on Schedule 3.21.3, as to each Company, each
      employee, officer and consultant has executed a confidentiality and
      invention assignment agreement in the form set forth on Schedule
      3.21.3.  To any Company’s Knowledge and the Seller’s Knowledge, no
      employee, officer or consultant of any Company is in violation of any
      employment or consulting contract, proprietary information and
      inventions agreement, non-competition agreement, or any other contract
      or agreement relating to the relationship of any such employee, officer
      or consultant with the Company or any previous employer.
    

    
      3.22  Insurance Contracts.  Schedule
      3.22 lists all contracts of insurance and indemnity in force at the
      date hereof with respect to each Company.  All of such contracts of
      insurance and indemnity (collectively, the “Company Insurance
      Contracts”) are in full force and effect, and to any Company’s
      Knowledge or Seller’s Knowledge, there are no defaults thereunder by any
      Company that could permit the insurer to deny payment of claims
      thereunder.  No Company has received notice from any of its insurance
      carriers that any insurance premiums will be materially increased in the
      future or that any insurance coverage provided under the Company
      Insurance Contracts will not be available in the future on substantially
      the same terms as now in effect.  No Company has received or given a
      notice of cancellation with respect to any of the Company Insurance
      Contracts.
    

    
      3.23  Banking Relationships.  Schedule
      3.23 shows the names and locations of all banks, trust companies and
      other financial institutions in which any Company has accounts, lines of
      credit or safety deposit boxes and, with respect to each account, line
      of credit or safety deposit box, the names of all Persons authorized to
      draw thereon or to have access thereto.
    

    
      3.24  No Contingent Liabilities.  No
      Company has contingent or conditional Liabilities of any kind arising
      from or in connection with any acquisition of a Person or a line of
      business by such Company.
    

    
      3.25  Absence of Certain Relationships.  Except
      as set forth on Schedule 3.25, to any Company’s Knowledge or
      Seller’s Knowledge none of (a) the Company, (b) any officer of the
      Company, (c) Seller or (d) any member of the immediate family of the
      individuals listed in clauses (b) or (c) of this Section 3.25,
      has any ownership, financial or employment interest in any
      subcontractor, supplier, or customer of any Company (other than holdings
      in publicly held companies of less than two percent of the outstanding
      capital stock of any such publicly held company), or any other entity
      having business relationships with any Company.  All personal guarantees
      of, or pledges of collateral by, Seller with respect to any Company
      Indebtedness is set forth on Schedule 3.25.
    

    
      
        

        

      

      
        
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      3.26  Certain Documents and Information.  Attached
      hereto as Schedules 3.26(a), (b), (c), and (d),
      respectively, are true and complete copies of the Market Access
      Schedule, Revenue and Contract Pipeline, Current Balance Sheet and List
      of Agreements and Settlements, each of which is current as of the
      Closing Date except the Current Balance Sheet which shall be as of June
      30, 2008.
    

    
      3.27  Disclosure. To the Company’s
      Knowledge and the Seller’s Knowledge, no representations or warranties
      by any Company or Seller in this Agreement (including the Disclosure
      Schedule) or in the certificate to be delivered pursuant to Section
      7.2.1 at Closing (i) contains or will contain any untrue statement
      of a material fact, or (ii) omits or will omit to state any fact
      necessary to make the statements contained herein or therein, in light
      of the circumstances under which such statements were made, not
      misleading.
    

    
      3.28  Seller Representation.  Seller
      hereby represents and warrants to Buyer that the following statements in
      this Section are true and correct as of the date hereof:
    

    
      (a)       Seller is acquiring the shares of Buyer common stock
      comprising the Purchase Price (the “Purchase Price Shares”)
      for his own account and for investment and not with a view to the resale
      or redistribution of any part thereof.
    

    
      (b)       Seller is an “accredited investor” as defined in Rule 501(a)
      under the Securities Act and has acquired sufficient information about
      Buyer to reach an informed decision to acquire the Purchase Price
      Shares. Seller has, to the extent deemed necessary by Seller, consulted
      with his own advisors regarding the investment in the Purchase Price
      Shares.  Seller has such knowledge and experience in financial and
      business matters that the Seller is capable of evaluating the merits and
      risk of an investment in the Purchase Price Shares.
    

    
      (c)       Seller has reviewed the following reports filed by Buyer with
      the SEC: (i)  Form 10-KSB for the year ended December 31, 2007 filed
      with the SEC on March 28, 2008; (ii) Form 10-QSB/A (amendment no. 1) for
      the quarter ended March 31, 2007 filed with the SEC on March 19, 2008;
      (iii) Form 10-QSB/A (amendment no. 1) for the quarter ended June 30,
      2009 filed with the SEC on March 19, 2008; (iv) Form 10-QSB/A (amendment
      no. 1) for the quarter ended September 30, 2007 filed with the SEC on
      March 19, 2008; (v) Form 8-K filed with the SEC March 18, 2008; and (vi)
      Form 10-Q for the quarter ended March 31 2008 filed with the SEC on May
      14, 2008.  Seller has had access to, and the opportunity to review, all
      of the exhibits filed with respect to the foregoing SEC reports via the
      SEC’s website at www.sec.gov.  Seller has been afforded the opportunity
      to ask questions of and receive answers from the duly authorized
      officers of Buyer concerning the terms and conditions of the
      transactions contemplated hereby, and to obtain any additional
      information which Buyer possesses or can acquire without unreasonable
      effort or expense that is necessary to verify the accuracy of the
      information in the foregoing SEC report.
    

    
      (d)       Seller is not acquiring the Purchase Price Shares as a result
      of or subsequent to any advertisement, article, notice or other
      communication published in any newspaper, magazine or similar medium or
      broadcast over television or radio, any seminar, meeting, or any other
      form of general solicitation or general advertising.
    

    
      
        

        

      

      
        
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      (e)       Seller understands that the Purchase Price Shares: (i) are
      being offered and issued in a transaction not involving any public
      offering, (ii) have not been registered under the Securities Act or any
      applicable state securities laws, (iii) may not be resold, pledged or
      otherwise transferred unless registered under the Securities Act and
      applicable state securities laws (and that the Company has no obligation
      to so register the Purchase Price Shares) and (iv) will bear a
      restrictive legend substantially as follows:
    

    
                “THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED
      UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (“SECURITIES ACT”),
      AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED UNLESS
      AND UNTIL SUCH SECURITIES ARE REGISTERED UNDER THE SECURITIES ACT AND
      APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY
      SATISFACTORY TO THE CORPORATION IS OBTAINED TO THE EFFECT THAT SUCH
      REGISTRATION IS NOT REQUIRED.”
    

    
      Article 4  

REPRESENTATIONS
      AND WARRANTIES OF BUYER
    

    
      Buyer represents and warrants to Seller as follows:
    

    
      4.1  Corporate Status of Buyer.  Buyer is a
      corporation duly organized, validly existing and in good standing under
      the laws of the State of Nevada, with the requisite corporate power to
      own, operate and lease its properties and to carry on its business as
      currently being conducted.  The authorized capital stock of Buyer
      consists of 200,000,000 shares of common stock, par value $0.001 per
      share, of which as of July 1, 2008, 45,878,000 shares were issued and
      outstanding.
    

    
      4.2  Authority for Agreement.  Buyer has the
      corporate power and authority to enter into this Agreement, to
      consummate its obligations hereunder and to consummate the
      Transactions.  The execution, delivery and performance of this Agreement
      and the consummation of the Transactions have been duly and validly
      authorized by Buyer’s respective board of directors and no other
      corporate proceedings on the part of Buyer are necessary to authorize
      the execution, delivery and performance of this Agreement and the
      consummation of the Transactions.  This Agreement and, when executed and
      delivered, the other agreements contemplated hereby to be signed by
      Buyer have been or, when executed and delivered, will be duly executed
      and delivered by Buyer as the case may be, and constitute valid and
      binding obligations of Buyer as the case may be, enforceable against
      Buyer in accordance with their terms.
    

    
      4.3  Acquisition of Shares for Investment. Buyer
      is acquiring the Shares for investment and not with a view toward, or
      for sale in connection with, any distribution thereof, nor with any
      present intention of distributing or selling the Shares, and Buyer
      acknowledges that the Shares may not be sold, transferred, offered for
      sale, pledged, hypothecated or otherwise disposed of without
      registration under the Securities Act except pursuant to an exemption
      from registration available under the Securities Act of 1933, as amended
      (the “Securities Act”).
    

    
      
        

        

      

      
        
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      4.4  No Broker’s or Finder’s Fees.  No
      finder, broker, agent, financial adviser or other intermediary has acted
      on behalf of Buyer in connection with the negotiation or consummation of
      this Agreement or the Transactions and no Company nor Seller will have
      any Liability to any such Persons entitled to any fee, payment,
      commission or other consideration in connection therewith as a result of
      any arrangement made by Buyer.
    

    
      4.5  Buyer SEC Reports.  Each of Buyer’s Form
      10-KSB for the fiscal year ended December 31, 2007 and Form 10-Q for the
      quarter ended March 31, 2008 as filed with U.S. Securities & Exchange
      Commission (“SEC”) did not contain any untrue statement of a material
      fact or omit to state any fact necessary to make the statements
      contained therein, in light of the circumstances under which they were
      made, not misleading.
    

    
      4.6  Capacity to Perform.  Buyer has provided
      evidence to Seller’s reasonable satisfaction of its resources and
      ability to meet its obligations hereunder to cause the satisfaction of
      the Company Indebtedness set forth on the Creditor and Payment Schedule
      and to pay the salary and benefits to Seller as and when due under the
      Employment Agreement, the form of which is attached hereto as Exhibit
      A (the “Employment Agreement”), to be entered into
      between Seller and Buyer at the Closing.
    

    
      Article 5  

INDEMNIFICATION
    

    
      5.1  Indemnification of Buyer Indemnified Parties.
      In addition to Buyer’s rights under the Seller Side Letter, from and
      after the Closing Date Seller shall indemnify, defend and hold harmless
      Buyer and its respective directors, officers, employees,
      representatives, successor and assigns (collectively, “Buyer
      Indemnified Parties”) in respect of, and Buyer Indemnified Parties
      shall be entitled to payment and reimbursement from Seller of the amount
      of, all Losses suffered, incurred or paid by any Buyer Indemnified
      Party, by reason of, in whole or in part, or arising from, in whole or
      in part, (a) any breach by Seller of any covenant, agreement or
      obligation in this Agreement (whether to be performed before, on or
      after the Closing Date) or by any Company of any covenant, agreement or
      obligation in this Agreement to be performed by the Closing Date, or
      (b) any misrepresentation or inaccuracy in, or breach of, any
      representation or warranty made by any Company or Seller in this
      Agreement or the certificates delivered pursuant Section 7.2.1.  Notwithstanding
      anything herein to the contrary, in determining if there is a
      misrepresentation or inaccuracy in, or a breach of, a representation or
      warranty in Article 3 or a certificate given pursuant to Section
      7.2.1, each representation, warranty or certificate referenced in
      clause (b) of the immediately preceding sentence shall read as if all
      Materiality Qualifications and qualifications as to any Company’s
      Knowledge or Seller’s Knowledge contained in any such representation or
      warranty in Article 3 or in any certificate delivered pursuant to Section
      7.2.1 are ignored.  
    

    
      
        

        

      

      
        
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      5.2  Indemnification of Seller Indemnified Parties.
      Subject to this Article 5 from and after the Closing Date, Buyer
      shall indemnify, defend and hold harmless Seller and his heirs and
      estate (collectively, “Seller Indemnified Parties”) in
      respect of, and Seller Indemnified Parties shall be entitled to payment
      and reimbursement from Buyer of the amount of, all Losses suffered,
      incurred or paid by any Seller Indemnified Party by reason of, in whole
      or in part, or arising from, in whole or in part, (a) any breach by
      Buyer of any covenant, agreement or obligation of Buyer in this
      Agreement to be performed before, on or after the Closing, (b) any
      misrepresentation or inaccuracy in, or breach of any, representation or
      warranty contained in Article 4 or in the certificate delivered
      pursuant to Section 7.3.1, and (c) the Braintech Accepted Debt
      and for any personal guarantees by Seller specifically relating thereto
      disclosed in Article 3 or a schedule thereto.
    

    
      5.3  Claims for Indemnification.  Upon a
      Person entitled to indemnification under Article 5 (an “Indemnified
      Party”) obtaining reasonably sufficient knowledge of any facts,
      claim or demand which has given rise to, or would reasonably give rise
      to, a claim for indemnification hereunder (referred to herein as an “Indemnification
      Claim”), such Indemnified Party shall promptly thereafter give
      notice of such facts, claim or demand (“Notice of Claim”)
      to the Party from whom indemnification is sought under this Article 5
      (the “Indemnifying Party”).  So long as the Notice of Claim
      is given by the Indemnified Party in the claims period specified in Section
      5.5, no failure or delay by the Indemnified Party in the giving of a
      Notice of Claim shall reduce or otherwise affect the Indemnified Party’s
      right to indemnification except to the extent, if any, that the
      Indemnifying Party has been materially prejudiced thereby.
    

    
      5.4  Defense by Indemnifying Party.  
    

    
           5.4.1  If a claim or demand is
      asserted by a third Person against an Indemnified Party (a “Third
      Party Claim”), the Indemnifying Party shall, except as otherwise
      provided in Section 5.4.2, have the right, but not the
      obligation, exercisable by notice to the Indemnified Party within
      10 days of the date of the Notice of Claim concerning the commencement
      or assertion of any Third Party Claim, to assume the defense of such
      Third Party Claim.
    

    
           5.4.2  The Seller shall not have
      such right or opportunity to assume and control the defense of any such
      Third Party Claim, but shall have the right to participate in the
      defense of such Third Party Claim and shall pay the reasonable fees and
      expenses of counsel retained by the Buyer Indemnified Party in respect
      of the Third Party Claim, if (i) such Third Party Claim relates to, or
      arises in connection with, any criminal proceeding, civil action,
      indictment, or investigation by any Governmental Entity other than
      inquiries or audits in the ordinary course of business, (ii) the Buyer
      Indemnified Party reasonably believes that an adverse determination with
      respect to such Third Party Claim would be detrimental to the Buyer
      Indemnified Party’s reputation or continuing business interests, (iii)
      such Third Party Claim seeks an injunction or other equitable relief
      against the Buyer Indemnified Party, (iv) the Seller fails to conduct
      the defense of such Third Party Claim actively and diligently, or (v)
      the Buyer Indemnified Party determines that the Seller will not be able
      to adequately defend against such Third Party Claim.  
    

    
           5.4.3  If the Buyer Indemnified
      Party assumes and controls the defense of a Third Party Claim pursuant
      to Section 5.4.2, the Buyer Indemnified Party shall permit the
      Seller to participate in the defense of such claim, to have reasonable
      access to all documents and personnel involved in such claim and to
      discuss its views and positions with the Buyer Indemnified Party.  The
      Buyer Indemnified Party agrees, in connection with any such Third Party
      Claim, to work cooperatively and in good faith with the Seller
      consistent with the best interest of the Buyer Indemnified Party. 
    

    
      
        

        

      

      
        
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           5.4.4  If the Indemnifying Party is
      entitled under Section 5.4 to assume the defense of the
      respective Third Party Claim and gives such notice of intent to defend,
      the Indemnifying Party shall assume the defense thereof as follows:  (i)
      the Indemnifying Party will defend the Indemnified Party against the
      matter with counsel compensated by and chosen by Indemnifying Party,
      which choice of counsel is subject to the reasonable satisfaction of
      Indemnified Party; (ii) the Indemnified Party may retain separate
      co-counsel at the sole cost and expense of Indemnified Party; (iii) the
      Indemnified Party will not consent to the entry of any judgment or enter
      into any settlement with respect to the matter without the consent of
      the Indemnifying Party; and (iv) the Indemnifying Party will not consent
      to the entry of any judgment with respect to the matter, or enter into
      any settlement that does not include a provision whereby the plaintiff
      or claimant in the matter releases the Indemnified Party from all
      Liability with respect thereto, without the consent of the Indemnified
      Party, which consent shall not be unreasonably withheld or delayed if
      such settlement only requires the payment by one or more Indemnifying
      Parties of a monetary amount, does not include a statement as to
      admission of fault, culpability or failure to act by or on behalf of
      such Indemnified Party, and the Indemnified Party could not reasonably
      believe that the settlement would be detrimental to the Indemnified
      Party’s reputation or continuing business.  
    

    
           5.4.5  If a Third Party Claim is
      made and no Indemnifying Party notifies the Indemnified Party within 10
      days after the Indemnified Party has given notice of the matter that the
      Indemnifying Party is assuming the defense thereof, the Indemnified
      Party shall defend against, or enter into any settlement with respect to
      the matter.  The Indemnified Party shall not settle such Third Party
      Claim without the prior consent of the Indemnifying Party, which consent
      shall not be unreasonably withheld or delayed.  
    

    
         5.5  Claims Period.
      Except for (i) Share Ownership Claims, (ii) Indemnification Claims in
      respect of Section 3.12 , (iii) Company Indebtedness Claims, and
      (iv) Indemnification Claims based on intentional acts, willful
      misconduct or fraud, any Indemnification Claim in respect of a
      misrepresentation or inaccuracy in, or breach of, any representation or
      warranty in Article 3 or Article 4, or in any certificate
      delivered pursuant to Section 7.2.1 or 7.3.1 must be
      asserted by notice on or before the first Closing Date Anniversary. Any
      (i) Share Ownership Claim, (ii) Indemnification Claims in respect of Section
      3.12, (iii) Company Indebtedness Claims, (iv) Indemnification Claims
      based on breach of a covenant, agreement or obligation hereunder, and
      (v) Indemnification Claims based on intentional acts, willful misconduct
      or fraud, must be made before the expiration of the applicable statute
      of limitation for the respective claims.
    

    
      5.6  Subrogation. Upon making an
      indemnity payment pursuant to this Article 5, the Indemnifying
      Party will, to the extent of such payment, be subrogated to all rights
      of the Indemnified Party against any third party in respect of the
      damages to which the payment is related.  Without limiting the
      generality of any other provision hereof, each such Indemnified Party
      and Indemnifying Party will duly execute upon request all instruments
      reasonably necessary to evidence and perfect the above described
      subrogation rights.
    

    
      
        

        

      

      
        
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      5.7  Exclusive Remedies. If the Closing
      occurs, the remedies provided for in this Article 5 shall be,
      except as otherwise provided in Article 6 or in the Seller Side
      Letter, the sole and exclusive remedies of the Parties and their
      respective officers, directors, employees, agents, representatives,
      heirs, estates, successors and assigns for any breach of or inaccuracy
      in any representation or warranty contained in this Agreement or any
      certificate delivered at Closing; provided, however, that
      nothing herein is intended to waive any claims for intentional acts,
      willful misconduct or fraud or waive any equitable remedies to which a
      Party may be entitled.
    

    
      5.8  Calculation of Losses. Without
      creating any obligation of the Indemnified Parties to pursue the receipt
      of proceeds referenced in clauses (a) or (b) below or otherwise
      increasing the obligations of the Indemnified Parties hereunder, the
      Losses associated with any Indemnified Claim shall be reduced by (a) the
      amount of the cash value of any insurance proceeds received by the
      Indemnified Party, net of associated costs and expenses relating to the
      collection of the same; and (b) any other compensatory payments actually
      received by the Indemnified Party from any other Persons by way of
      subrogation, indemnification, guarantee or similar mechanism with
      respect to the Losses for which indemnification is claimed, net of
      associated costs and expenses relating to the collection of such
      payments.
    

    
      5.9  Treatment of Indemnity Payments Between the
      Parties.  Unless otherwise required by Applicable Laws, all
      indemnification payments shall constitute adjustments to the Purchase
      Price for all Tax purposes, and no Party shall take any position
      inconsistent with such characterization.
    

    
      5.10  Indemnity Threshold.   Except for
      Indemnification Claims in respect of Sections 3.2 or 3.5.3
      or based on willful misconduct or fraud, the Buyer Indemnified Parties
      shall not be entitled to indemnification pursuant to this Article 5
      in respect of a misrepresentation or inaccuracy in, or breach of, a
      representation or warranty in Article 3 until the aggregate
      amount of all Losses suffered, incurred or paid by one or more Buyer
      Indemnified Parties exceeds $10,000 (the “Indemnity Threshold”)
      whereupon the Buyer Indemnified Parties shall be entitled to
      indemnification for all Losses including such Indemnity Threshold.
    

    
      5.11  Indemnity Ceiling.   Except for
      Indemnification Claims in respect of Sections 3.2 or 3.5.3
      or based on willful misconduct or fraud, the aggregate Liability of
      Seller under this Article 5 in respect of a misrepresentation or
      inaccuracy in, or breach of, a representation or warranty in Article 3
      shall not exceed $250,000.
    

    
      5.12  Right to Offset.   Buyer may offset
      any amount to which Buyer is entitled under this Article 5
      against any Contingent Purchase Price Shares otherwise payable hereunder
      by Buyer to Seller.  Buyer may also proceed against the Contingent
      Purchase Price Shares in the Escrow Account in accordance with the terms
      of the Escrow Agreement with respect to any amount to which Buyer is
      entitled under this Article 5.  For purposes of this Article
      5 each such Contingent Purchase Price Share shall have a deemed
      value equal to the Stated Value.
    

    
      
        

        

      

      
        
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      Article 6  

COVENANTS
    

    
      6.1  Release.  Subject to and effective
      as of consummation of the Closing, Seller hereby remises, releases and
      forever discharges each Company and their respective successors and
      assigns of and from any and all manner of action and actions, cause and
      causes of actions, suits, debts, dues, sums of money, accounts,
      reckonings, bonds, bills, specialties, covenants, contracts,
      controversies, executions, claims and demands of any kind and nature
      whatsoever in law or in equity known or unknown against such Company
      which Seller ever had or may have up until immediately preceding the
      Closing, including any claims to any commissions or any portion of the
      revenue or profits of any Company or with respect to any Related Party
      Indebtedness, except (a) any and all indemnification and other rights,
      benefits and claims of any Seller under any such Company’s
      Organizational Documents not in respect of any breach by such Company or
      Seller of any representations, warranties, covenants, obligations or
      agreements contained herein, and (b) any rights, benefits and claims of
      Seller under this Agreement or any documents, instruments or
      certificates delivered in connection with the consummation of the
      Transactions.
    

    
      6.2  Tax Matters.  
    

    
      6.2.1  Tax Returns.  Seller shall prepare
      or cause to be prepared, and timely file or cause to be timely filed,
      all Tax returns for each Company for all periods ending on or prior to
      the Closing Date.  Seller shall permit Buyer to review and comment on
      each such Tax Return described in the preceding sentence prior to
      filing.  Seller shall, jointly and severally, pay and otherwise have
      Liability for all Taxes of each Company in respect of all taxable
      periods ending on or prior to the Closing Date and the portion through
      the end of the Closing Date for any taxable period that includes, but
      does not end on, the closing Date (“Pre-Closing Tax Period”)
      in excess of the amounts shown as an accrual or reserve for such Taxes
      on the face of the Final Closing Balance Sheet.
    

    
      6.2.2  Straddle Period.  If any taxable
      period includes (but does not end on) the Closing Date (a “Straddle
      Period”), the amount of any Taxes based on or measured by income or
      receipts of any Company for the Pre-Closing Tax Period shall be
      determined based on an interim closing of the books as of the close of
      business on the Closing Date and the amount of other Taxes of any
      Company for a Straddle Period that relates to the Pre-Closing Tax Period
      shall be deemed to be the amount of such Tax for the entire taxable
      period multiplied by a fraction in the numerator of which is the number
      of days in the taxable period ending on the Closing Date and the
      denominator of which is the number of days in such Straddle Period.
    

    
      6.2.3  Cooperation on Tax Matters.         
    

    
      (a)  The Parties shall cooperate fully, as and to the extent reasonably
      requested by the other Party, in connection with the filing of
      Tax returns and any audit, litigation or other proceeding with respect
      to Taxes, or in connection with the preparation or review of any Tax
      accrual or similar workpapers related to the activities of the Company
      on or before the Closing Date, including those relevant to compliance
      with FASB Interpretation No. 48.  Such cooperation shall include the
      retention and (upon the other Party's request) the provision of records
      and information reasonably relevant to any such audit, litigation, or
      other proceeding or to the preparation or review of such workpapers and
      making employees available on a mutually convenient basis to provide
      additional information and explanation of any material provided
      hereunder.  Each Company, Buyer and Seller agrees (i) to retain all
      books and records with respect to Tax matters (including relevant to the
      preparation or review of Tax accrual workpapers) pertinent to each
      Company relating to any taxable period beginning before the Closing Date
      until expiration of the statute of limitations (and any extensions
      thereof) of the respective taxable periods, and to abide by all record
      retention agreements entered into with any taxing authority, and (ii) to
      give Seller reasonable notice prior to transferring, destroying or
      discarding any such books and records and, if Sellers Representative so
      requests, allow Seller to take possession of such books and records.
    

    
      
        

        

      

      
        
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      (b)  Subject to Applicable Laws, the Parties further agree, upon
      request, to use their reasonable commercial efforts to obtain any
      certificate or other document from any Governmental Entity or any other
      Person as may be necessary to mitigate, reduce or eliminate any Tax that
      could be imposed (including with respect to the Transactions).    
    

    
      6.2.4  Certain Taxes.  All transfer,
      documentary, sales, use, stamp, registration Taxes and fees payable in
      respect of the purchase and sale of the Shares hereunder shall be paid
      by the Buyer to the extent, if any, required of Buyer by Applicable
      Laws, and by Seller to the extent, if any, required of Seller by
      Applicable Laws.
    

    
      6.2.5  Certain Withholding Taxes.  Notwithstanding
      anything herein to the contrary, if any Company is required by
      Applicable Laws to withhold Taxes with respect to any portion of such
      Company’s income allocable to Seller, in connection with the Taxable
      period of such Company ending on the day before the Closing Date or
      otherwise, which amount has not previously been withheld from amounts
      previously or concurrently distributed to Seller, Seller shall reimburse
      such Company for such amount, including for any penalties or interest
      with respect thereto, no later than the date(s) on which any such
      amount(s) are paid by such Company to the applicable Governmental Entity.
    

    
      6.2.6  Tax Structure. The parties
      covenant and agree that Buyer’s acquisition of the Shares is intended to
      qualify as a reorganization within the meaning of Code Section
      368(a)(1)(B); provided, however, the parties further
      covenant and agree that Buyer shall retain the right to determine, in
      its sole discretion, whether and the extent to which any tax elections
      shall be made with respect to the transactions contemplated hereby, and
      that Seller and the Companies shall cooperate with any such elections
      and make any necessary elections to give effect to such determination by
      Buyer; provided further, however, that in the event such
      other election shall have a material adverse effect upon Seller, then
      Buyer and Seller shall amend the Employment Agreement to extend the
      period of time for which Seller is entitled to receive automotive
      revenues (as defined in the Employment Agreement) thereunder through
      September 2009.
    

    
      
        

        

      

      
        
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      6.3  Company Indebtedness.  Buyer
      covenants and agrees with Seller that from and after Closing, Buyer will
      cause SI to satisfy the Braintech Accepted Debt; provided, however,
      nothing herein shall prevent Buyer from negotiating or attempting to
      negotiate the terms of any such Braintech Accepted Debt; provided,
      further, that Buyer may modify or cause the modification of the
      repayment terms (including, without limitation, the amount paid, to be
      paid or not paid in any specific month and the timing of any payments)
      of any Braintech Accepted Debt for which no written settlement thereof
      has been entered into between SI and the applicable creditor as of the
      date hereof;  provided further that Seller’s
      obligations to satisfy Excess Debt shall not be reduced in any way as a
      result of the negotiated reduction of any Braintech Accepted Debt or
      settlement of Braintech Accepted Debt for less than the amount shown on
      the Creditor and Payment Schedule.
    

    
      6.4  Automotive Market.  Consistent with
      the Seller’s obligations upon becoming an employee of Buyer as of the
      Closing, the parties agree that from the Closing Date through March,
      2009, the Companies and Seller may conduct business in the automotive
      market involving the sales of products other than those presently owned
      and marketed by Buyer; provided, however, in no event
      shall the Companies or Seller engage in any activity or business that
      would violate or cause the violation of the restrictions applicable to
      Buyer with respect to sales, licenses and other business conducted in
      the automotive market pursuant to and as more fully set forth in that
      certain Exclusive Global Channel Partner Agreement between Buyer and ABB
      Inc.
    

    
      6.5  Certain Business Planning.  The
      parties agree to cooperate to cause SII to have a market presence in
      Houghton, Michigan by July 2009 with Historically Underutilized Business
      Zone, or HubZone, planning and the registration of Buyer for preferred
      government status to commence as soon as commercially practicable after
      Closing.  The parties agree that the board of directors of SII will
      consist of no more than five (5) directors at least for so long as
      Seller remains a member of Buyer’s board of directors, one of whom shall
      be the Chief Executive Officer of Buyer and that Seller will be
      President of SII as of Closing. The parties agree that at least for so
      long as Seller remains a member of Buyer’s board of directors, Seller
      shall designate four (4) of the directors on the SII board of
      directors.  The parties agree to consider whether, for a lease rate of
      approximately $2,500 per month, the Brighton, Michigan office of SI/SII
      would support the sale of robot demonstrations.
    

    
      6.6  Right of First Refusal to Purchase the SI IP.  Seller  shall
      have a right of first refusal until the third Closing Date Anniversary
      to purchase for cash all of the SI intellectual property described on Schedule
      6.6 (the “SI IP”) at fair market value (“FMV”)
      upon the Insolvency of Buyer.  FMV of the SI IP shall equal the amount
      of a bona fide offer, acceptable to Buyer, to purchase the SI IP by a
      third party unrelated to Buyer, or if no such proposed purchase exists,
      the fair market value of the SI IP determined as of the date of such
      Buyer Insolvency as determined by an appraiser acceptable to Buyer and
      Seller, whose appraisal fees and expenses shall be borne equally by
      Buyer and Seller. Buyer shall notify Seller within fifteen (15) days of
      Insolvency.  Seller shall, at his discretion, notify Buyer of his
      intention to exercise his purchase right under this Section 6.6
      in writing.  The consummation of any such purchase by Seller shall be as
      mutually agreed by Buyer and Seller.
    

    
      
        

        

      

      
        
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      6.7  Certain Hires. Following the
      Closing, Buyer will consider the hiring of a business development
      employee, administrative assistant to Seller and director of government
      and international programs of SII recommended by Seller, subject to
      final approval by Buyer’s Chief Executive Officer.
    

    
      6.8  Assignment of Siemens Contract.  SII
      shall assign that certain Purchase Order, dated 02/26/2008, by and
      between SII and Siemens Energy & Automation and all related purchase
      orders (collectively, the “Siemens Contract”), and all of
      SII’s right, title and interest therein to SI on or prior to Closing.
    

    
      6.9  No Uncashed Checks.  The Companies
      and Seller shall ensure that no checks issued by either Company are
      uncashed as of Closing.
    

    
      6.10  Capital Contributions to SI.  All
      indebtedness and other obligations for borrowed money of SI to Seller
      prior to Closing shall be converted into capital contributions by Seller
      to SI.
    

    
      6.11  Appointment to Buyer’s Board of Directors.  Buyer
      shall cause Seller to become a director on the Buyer’s board of
      directors effective as of the Closing and shall, to the extent not
      precluded by its current charter, bylaws or corporate governance
      policies, cause Seller to remain on the Buyer’s board of directors for
      so long as Seller is employed by Buyer pursuant to the terms of the
      Employment Agreement.
    

    
      6.12  Required Registration.  
    

    
      6.12.1  Registration.  Buyer shall
      prepare and file with the SEC a registration statement covering the
      resale of any and all of the shares of Buyer common stock received by
      Seller as Purchase Price that cannot be sold pursuant to Rule 144 under
      the Securities Act, which offering shall be made on a continuous basis
      pursuant to Rule 415 under the Securities Act. The registration
      statement shall be on Form SB-2 (or other applicable form at the
      discretion of Buyer).  Buyer shall use its best efforts to cause the
      registration statement to be declared effective under the Securities Act
      prior to the date that is six (6) months after the Closing Date and
      shall use its commercially reasonable efforts to keep the registration
      statement continuously effective under the Securities Act until the date
      when all the shares of Buyer common stock owned by Seller and covered by
      the registration statement (a) have been sold pursuant to the
      registration statement or an exemption from the registration
      requirements of the Securities Act or (b) may be sold without any volume
      or other restrictions pursuant to Rule 144(b)(1).  In connection with
      such registration statement, Seller shall provide such information and
      shall execute and deliver to Buyer such documents, including, but not
      limited to, a selling shareholder questionnaire in customary form and
      substance reasonably satisfactory to Buyer, as Buyer may reasonably
      request in order to effect, or maintain the continuous effectiveness of,
      such registration pursuant to this paragraph and in accordance with
      applicable securities laws.
    

    
      
        

        

      

      
        
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      6.12.2  Material Development Condition.  With
      respect to any registration statement filed or to be filed pursuant to
      this Section 6.12, if Buyer determines that, in its good faith
      judgment, it would (because of the existence of, or in reasonable
      anticipation of, any acquisition or corporate reorganization or other
      transaction, financing activity, stock repurchase or other material
      development involving Buyer or any subsidiary, or the unavailability for
      reasons beyond Buyer’s control of any required financial statements or
      other material information, or any other event or condition material to
      Buyer or any subsidiary) be materially disadvantageous to Buyer to
      proceed with such registration statement or that Buyer is required by
      applicable law, rules or regulations not to proceed with the
      registration statement (a “Material Development Condition”),
      then Buyer shall, notwithstanding any other provisions of this Section
      6.12, be entitled, upon the giving of a written notice that a
      Material Development Condition has occurred from an officer of Buyer to
      Seller (i) to cause sales of Buyer common stock by Seller pursuant to
      such registration statement to cease, (ii) to cause such registration
      statement to be withdrawn and the effectiveness of such registration
      statement suspended, or (iii) in the event no such registration
      statement has yet been filed or declared effective, to delay filing or
      effectiveness of any such registration statement until, in the good
      faith judgment of Buyer, such Material Development Condition shall be
      disclosed or no longer exists (notice of which Buyer shall promptly
      deliver to Seller).  Notwithstanding the foregoing provisions of this Section
      6.12, in the event a registration statement is filed and
      subsequently withdrawn by reason of any existing or anticipated Material
      Development Condition as provided above, Buyer shall use commercially
      reasonable efforts to cause a new registration statement covering the
      Buyer common stock owned by Seller and for which the above registration
      rights apply to be filed with the SEC as soon as reasonably practicable
      after such Material Development Condition ceases to
      exist.  Notwithstanding the foregoing, Buyer’s pursuit of a registered,
      underwritten public offering of its securities shall be deemed to be a
      Material Development Condition for which the above delay may last up to
      180 days; provided, Seller is permitted to include his shares of Buyer
      common stock that would otherwise be registered as set forth above in
      the registration statement relating to such underwritten public offering
      to the extent the underwriter does not object thereto based on its
      ability to market and sell the same.
    

    
      6.12.3  Trading Restrictions.  Nothing in
      this Section 6.12 shall limit or otherwise affect Seller’s
      obligations to abide by Buyer’s insider trading policy from time to time
      in effect, if any, the Lock-Up Agreement, and applicable federal
      securities laws in respect of trading while in possession of material,
      nonpublic information concerning Buyer.
    

    
      6.13  Escrow Agreement.  The
      parties covenant and agree that as soon as practicable after Closing,
      and in no event later than ninety (90) days thereafter, Buyer and Seller
      shall identify and engage a mutually acceptable bank or other financial
      institution that has no prior or existing relationship with any of the
      parties to serve as the escrow agent under the Escrow Agreement (the
      “Escrow Agent”).  Buyer and Seller further agree to enter into the
      Escrow Agreement in the form attached hereto with such changes as are
      reasonably requested by the Escrow Agent.  
    

    
      6.14  Excess Debt.  Seller covenants and
      agrees that from and after Closing, he shall fully and finally satisfy
      in a timely manner, without any Liability to Buyer or the Companies, any
      and all Excess Debt.  Seller shall be permitted to negotiate the terms
      of repayment of any particular Excess Debt with the creditor to whom
      such debt is payable, provided he receives the prior written consent of
      Buyer’s Chief Executive Officer to do so.  Any such negotiation by
      Seller with such a creditor shall not limit Seller’s obligations
      pursuant to the first sentence of this Section 6.14.  Seller
      covenants and agrees that he shall not negotiate, attempt to negotiate,
      settle or attempt to settle any Braintech Accepted Debt, or discuss or
      attempt to discuss the same with any creditor thereof, in each case
      without the prior written consent of Buyer’s Chief Executive Officer.
    

    
      
        

        

      

      
        
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      Article 7  

CONDITIONS
      PRECEDENT
    

    
      7.1  Conditions Precedent to the Obligations of
      Each Party.  The obligations of the Parties to consummate the
      Closing shall be subject to the satisfaction at or prior to the Closing
      of the following conditions, any of which conditions may be waived in
      writing prior to Closing by the Party for whose benefit such condition
      is imposed:
    

    
      7.1.1  No Illegality.  There shall not
      have been any action taken, and no Applicable Laws shall have been
      enacted, by any Governmental Entity since the date hereof that would
      prohibit or materially restrict the consummation of the Transactions.
    

    
      7.1.2  Third Party Consents.  All filings
      with and notifications to, and all approvals and authorizations of,
      third parties, including Governmental Entities, required for the
      consummation of the Transactions shall have been made or obtained and
      all such approvals and authorizations obtained shall be effective and
      shall not have been suspended, revoked or stayed by action of any
      Governmental Entity.
    

    
      7.1.3  No Injunction.  No injunction or
      restraining or other order issued by a court of competent jurisdiction
      that prohibits or materially restricts the consummation of the
      Transactions shall be in effect (each Party agreeing to use all
      reasonable efforts to have any injunction or other order immediately
      lifted), and no action or proceeding shall have been commenced or
      threatened in writing seeking any injunction or restraining or other
      order that seeks to prohibit, restrain, materially restrict, invalidate
      or set aside consummation of the Transactions.
    

    
      7.2  Conditions Precedent to Buyer’s Obligation
      to Consummate the Closing.  Buyer’s obligations to consummate
      the Closing shall be subject to the satisfaction at or prior to the
      Closing of the following additional conditions, any of which conditions
      may be waived in writing by Buyer prior to Closing:
    

    
      7.2.1  Representations and Warranties.  The
      representations and warranties of each Company and Seller contained in
      this Agreement shall be true and correct, disregarding any Materiality
      Qualifications, in all material respects on and as of the Closing Date,
      except for those representations and warranties that address matters
      only as of a particular date (which shall remain true and correct as of
      such date), with the same force and effect as if made on and as of the
      Closing Date, and each Company and Seller shall have delivered to Buyer
      a certificate to that effect, dated the Closing Date and signed on
      behalf of each Company by such Company’s President and signed by Seller.
    

    
      
        

        

      

      
        
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      7.2.2  Agreements and Covenants.  Each
      Company and Seller shall have performed in all material respects all of
      its agreements, obligations and covenants set forth herein that are
      required to be performed at or prior to the Closing Date; and each
      Company and Seller shall have delivered to Buyer a certificate to that
      effect, dated as of the Closing Date and signed on behalf of each
      Company by such Company’s President and signed by Seller.
    

    
      7.2.3  Closing Documents.  Each Company
      and Seller shall have delivered to Buyer the Company Closing certificate
      described hereafter in this Section 7.2.3 and such Closing
      documents as the Buyer shall reasonably request other than additional
      legal opinions. The Company Closing certificate, dated as of the Closing
      Date, duly executed by each Company’s secretary, shall certify as to (a)
      the signing authority, incumbency and specimen signature of the
      signatories of this Agreement and other documents signed on each
      Company’s behalf in connection herewith; (b) the resolutions adopted by
      each Company’s board of directors authorizing and approving the
      execution, delivery and performance of this Agreement and the other
      documents executed in connection herewith and the consummation of the
      Transactions and state that such resolutions have not been modified,
      amended, revoked or rescinded and remain in full force and effect; and
      (c) each Company’s Organizational Documents.
    

    
      7.2.4  Consents.  All Consents listed on Schedule
      7.2.4 shall have been obtained by each Company and shall be
      effective and shall not have been suspended, revoked, or stayed by
      action of any Person granting one or more of such Consents.
    

    
      7.2.5  Acceptance of Employment.  Seller
      shall have entered into the three (3) year Employment Agreement dated as
      of the date hereof with Buyer.  
    

    
      7.2.6  Acceptance of Lock-Up Agreement.
      Seller shall have accepted as of the Closing Date the “lock-up” of any
      common stock received by Seller as part of the Purchase Price pursuant
      to a lock-up agreement dated as of the date hereof with Buyer in
      substantially in the form of Exhibit B (“Lock-Up
      Agreement”).
    

    
      7.2.7  Company Material Adverse Effect.  Since
      the date hereof, no Company shall have suffered a Company Material
      Adverse Effect.
    

    
      7.2.8  Delivery of Shares.  Seller shall have
      delivered to Buyer the one or more stock certificates representing all
      of the Shares, endorsed in blank or accompanied by duly executed
      assignment documents, all sufficient to convey, transfer and assign to
      Buyer sole and exclusive record and beneficial right, title and interest
      in and to such Shares, free and clear of all Encumbrances.
    

    
      7.2.9  Pre-LOI and LOI Deposit; Loan.
    

    
                     (a)  Seller and SI shall provide Buyer reasonably
      acceptable evidence of the uses of the Pre-LOI Deposit and the LOI
      Deposit which shall be in accordance with such uses and proposed uses
      set forth in Schedule 7.2.9(a).
    

    
                     (b)  The Companies shall execute a promissory note
      payable to Buyer in the form attached hereto as Exhibit C with
      respect to the Pre-LOI Deposit and LOI Deposit.
    

    
      
        

        

      

      
        
          - 33 -
        

        
          

        

      

      
        

        

      

    

    

    

    
      7.2.10  Indebtedness. Neither Company
      shall have indebtedness except as expressly set forth on the Creditor
      and Payment Schedule.
    

    
      7.2.11  Delivery of Certain Agreements.  Each
      of the documents attached as Schedules 3.26(a), (b), (c) and (d),
      respectively, is not materially adversely different from Exhibits C, D,
      E and F copies provided in connection with the Letter of Intent.
    

    
      7.2.12    Removal of Restrictions Relating to
      8(a) BDC.  SI and Seller shall have rescinded the restrictions
      on transfers of SI Common Shares set forth in that certain
      Acknowledgment of Action by Sole Director and Shareholder on Behalf of
      SHAFI, Inc., dated September 20, 2006, and provided Buyer evidence
      thereof satisfactory to Buyer.
    

    
      7.2.13  Board Composition.  Buyer
      shall be satisfied with evidence of corporate actions taken to cause the
      composition of the boards of directors of the Companies to be as set
      forth on Schedule 7.2.14 effective upon Closing.
    

    
      7.2.14  Assignment of Siemens Contract.  The
      Companies and Seller shall have delivered to Buyer evidence acceptable
      to Buyer of the assignment of the Siemen’s Contract to SI in accordance
      with Section 6.8.
    

    
      7.2.15  No Outstanding Checks.  There
      shall be no checks issued by SI or SII on or prior to the Closing Date
      that have not been cashed.  
    

    
      7.2.16  Capital Contributions to SI.  The
      Companies and Seller shall have delivered to Buyer evidence satisfactory
      to Buyer that all indebtedness and other obligations for borrowed money
      of SI to Seller has been converted into capital contributions by Seller
      to SI.
    

    
      7.2.17  Seller Side Letter.  Seller shall
      have executed and delivered the Seller Side Letter in the form attached
      hereto as Exhibit D (the “Seller Side Letter”).
    

    
      7.3  Conditions to Obligations of each Company
      and Seller to Consummate the Closing.  The obligations of each
      Company and the Seller to consummate the Closing shall be subject to the
      satisfaction at or prior to the Closing of the following additional
      conditions, any of which may be waived in writing by Seller prior to
      Closing:
    

    
      7.3.1  Representations and Warranties.  The
      representations and warranties of Buyer contained in this Agreement
      shall be true and correct in all material respects on and as of the
      Closing Date, except for those representations and warranties which
      address matters only as of a particular date (which shall remain true
      and correct as of such date), with the same force and effect as if made
      on and as of the Closing Date and Buyer shall have delivered to the
      Company a certificate to that effect, dated the date of the Closing and
      signed on behalf of Buyer by its Chief Executive Officer.
    

    
      7.3.2  Agreements and Covenants.  Buyer
      shall have performed in all material respects all of its agreements and
      covenants set forth herein that are required to be performed at or prior
      to the Closing Date; and Buyer shall have delivered to the Company a
      certificate to that effect, dated as of the Closing Date and signed on
      behalf of Buyer by Buyer’s Chief Executive Officer.
    

    
      
        

        

      

      
        
          - 34 -
        

        
          

        

      

      
        

        

      

    

    
      7.3.3  Closing Documents.  Buyer shall
      have delivered to the Company closing certificates of Buyer and such
      other closing documents as the Seller shall reasonably request (other
      than opinions of counsel). The Closing certificates of Buyer, dated as
      of the Closing Date, duly executed by the secretary of Buyer shall
      certify as to (a) the signing authority, incumbency and specimen
      signature of the signatories of this Agreement and other documents
      signed on behalf of Buyer in connection herewith; (b) the resolutions
      adopted by Buyer’s board of directors authorizing and approving the
      execution, delivery and performance of this Agreement and the other
      documents executed in connection herewith and the consummation of the
      Transactions and state that such resolutions have not been modified,
      amended, revoked or rescinded and remain in full force and effect; (c)
      Buyer’s articles of incorporation and by-laws; and (d) compliance by
      Buyer with the Securities Act and the rules and regulations promulgated
      thereunder with respect to the issuance of Buyer’s common stock as
      Purchase Price consideration.
    

    
      7.3.4  Board of Directors.  Seller shall
      have been appointed to the Buyer’s board of directors effective upon the
      Closing in accordance with Section 6.11.
    

    
      7.3.5  Employment Agreements.  Execution
      and delivery by Buyer of a counterpart of the Employment Agreement with
      Seller.
    

    
      Article 8  

SURVIVAL
      OF REPRESENTATIONS AND COVENANTS
    

    
      8.1  Each Company’s and Seller’ Representations
      and Covenants.  All representations and warranties made by each
      Company and Seller in this Agreement, or any certificate or other
      writing delivered by each Company, Seller or any of their Affiliates
      pursuant hereto or in connection herewith, shall survive the Closing and
      any investigation at any time made by or on behalf of Buyer and shall
      terminate on the first Closing Date Anniversary, except that (a) Buyer
      Indemnified Party claims pending on such date shall continue until
      resolved and (b) the representations and warranties in Sections 3.2,
      3.5.3 and 3.12, which shall survive until the expiration
      of the applicable statute of limitation for the respective
      Indemnification Claims, except that Buyer Indemnified Party claims
      pending on such date in respect of any of such Sections shall continue
      until resolved.  The covenants and other agreements made by each Company
      or Seller in this Agreement or any certificate or other writing
      delivered by any Company or any of its Affiliates pursuant hereto or in
      connection herewith shall survive the Closing and any investigation at
      any time made by or on behalf of Buyer until the expiration of the
      applicable statute of limitations.
    

    
      8.2  Buyer’s Representations and Covenants.  All
      representations and warranties made by Buyer in this Agreement or any
      certificate or other writing delivered by Buyer or any of its respective
      Affiliates pursuant hereto or in connection herewith shall survive the
      Closing until the first Closing Date Anniversary, except that any
      Company or Seller claims pending on such date shall continue until
      resolved.  The covenants and other agreements made by Buyer in this
      Agreement or any certificate or other writing delivered by the Buyer
      pursuant hereto or in connection herewith shall survive the Closing and
      any investigation at any time made by or on behalf of each Company or
      Seller until the expiration of the applicable statute of limitations.
    

    
      
        

        

      

      
        
          - 35 -
        

        
          

        

      

      
        

        

      

    

    
      8.3  Effect of Investigation.  The right
      to indemnification or other remedies based on any representation,
      warranty, covenant or obligation of Seller, SI or SII contained in or
      made pursuant to this Agreement shall not be affected by any
      investigation conducted with respect to, or any knowledge acquired (or
      capable of being acquired) at any time, whether before or after the
      execution and delivery of this Agreement or the Closing Date occurs,
      with respect to the accuracy or inaccuracy of or compliance with, any
      such representation, warranty, covenant or obligation.  The waiver of
      any condition to the obligation of Buyer to consummate the Transactions,
      where such condition is based on the accuracy of any representation or
      warranty, or on the performance of or compliance with any covenant or
      obligation, shall not affect the right to indemnification or other
      remedies based on such representation, warranty, covenant or obligation.
    

    
      Article 9  

OTHER
      PROVISIONS
    

    
      9.1  Notices.  All notices and other
      communications hereunder shall be in writing and shall be deemed given
      if sent by facsimile, delivered by hand, sent by a reputable nationwide
      courier service, or mailed by registered or certified mail (return
      receipt requested) to the Parties at the following addresses (or at such
      other address for a Party as shall be specified by like notice) and
      shall be deemed given on the date on which the facsimile is machine
      verified as received, so hand-delivered or on the third business day
      following the date on which so mailed or sent:
    

    
    	
           
        	
          
            To Buyer:
          

        
	

        	
           
        
	

        	
           
        	
          Braintech, Inc.
        
	

        	

        	
          #102 - 930 West 1st Street
        
	

        	

        	
          North Vancouver, B.C. Canada
        
	

        	

        	
          V7P 3N4
        
	

        	

        	
          Attention: Rick Weidinger, President
        
	

        	

        	
          Phone: 604-988-6440
        
	

        	

        	
          Fax: 604-988-7309
        
	

        	

        	
           
        
	

        	
          with copy to (which shall not constitute notice):
        
	

        	
           
        
	

        	

        	
          Greenberg Traurig, LLP
        
	

        	

        	
          1750 Tysons Boulevard, Suite 1200
        
	

        	

        	
          McLean, VA 22102
        
	

        	

        	
          
            Attention: Jeffrey R. Houle
          

        
	

        	

        	
          Phone: 703-749-1336
        
	

        	

        	
          Fax: 703-714-8336
        

    

    
      
        

        

      

      
        
          - 36 -
        

        
          

        

      

      
        

        

      

    

    

    

    
    	
           
        	
          
            To Seller:
          

        
	

        	
           
        
	

        	
           
        	
          Adil Shafi
        
	

        	

        	
          7517 Radcliffe
        
	

        	

        	
          Brighton, Michigan 48114
        
	

        	

        	
          Phone: 734-516-6761
        

    

    
      9.2  Entire Agreement.  Unless otherwise
      herein specifically provided, this Agreement, including the preamble,
      recitals, Schedules and Exhibits, and the documents and instruments and
      other agreements among the Parties as contemplated by or referred to
      herein constitute the entire agreement among the Parties with respect to
      the subject matter hereof, and supersede all other prior agreements and
      understandings, both written and oral, between the Parties with respect
      to the subject matter hereof, including the Letter of Intent. Each Party
      acknowledges that, in entering this Agreement and consummating the
      Closing, such Party is not relying on any representation, warranty,
      covenant, obligation or agreement not expressly stated in this Agreement
      or in the certificates of or agreements among the Parties contemplated
      by or referred to herein.
    

    
      9.3  Assignability.  This Agreement is
      not intended to confer upon any Person other than the Parties any rights
      or remedies hereunder, except as otherwise expressly provided
      herein.  Neither this Agreement nor any of the rights and obligations of
      the Parties hereunder shall be assigned or delegated without the consent
      of all Parties, except that Buyer may assign its rights to
      indemnification hereunder to one or more of its lenders.
    

    
      9.4  Validity.  The invalidity or
      unenforceability of any provisions of this Agreement shall not affect
      the validity or enforceability of any other provisions of this
      Agreement, each of which shall remain in full force and effect.
    

    
      9.5  Specific Performance.  The Parties
      acknowledge that damages alone may not adequately compensate a Party for
      violation by another Party of this Agreement.  Accordingly, in addition
      to all other remedies that may be available hereunder or under
      Applicable Laws, any Party shall have the right to any equitable relief
      that may be appropriate to remedy a breach or threatened breach by any
      other Party hereunder, including the right to enforce specifically the
      terms and conditions of this Agreement by obtaining injunctive relief in
      respect of any violation or non-performance hereof.
    

    
      9.6  Governing Law.  This Agreement shall
      take effect and shall be construed as a contract under the laws
      (excluding conflict of law rules and principles) of the State of
      Michigan.
    

    
      9.7  Counterparts.  This Agreement may be
      executed in one or more counterparts, all of which together shall
      constitute one and the same agreement.
    

    

    

    
      
        

        

      

      
        
          - 37 -
        

        
          

        

      

      
        

        

      

    

    
      9.8  Waiver.  The rights and remedies of
      the Parties are cumulative and not alternative.  Neither the failure nor
      any delay by any Party in exercising any right, power or privilege under
      this Agreement will operate as a waiver of such right, power or
      privilege, and no single or partial exercise of any such right, power or
      privilege will preclude any other or further exercise of such right,
      power or privilege or the exercise of any other right, power or
      privilege.  To the maximum extent permitted by Applicable Laws, (a) no
      claim or right arising out of this Agreement can be discharged by one
      Party, in whole or in part, by a waiver or renunciation of the claim or
      right unless in writing signed by the other Party, (b) no waiver that
      may be given by a Party will be applicable except in the specific
      instance for which it is given; and (c) no notice to or demand on one
      Party will be deemed to be a waiver of any obligation of such Party or
      of the right of the Party giving such notice or demand to take further
      action without notice of demand as provided in this Agreement or the
      documents referred to in this Agreement.
    

    

    

    
      [THE SIGNATURE PAGE FOLLOWS THIS PAGE.]
    

    
      
        

        

      

      
        
          38
        

        
          

        

      

      
        

        

      

    

    
      IN WITNESS WHEREOF, the Parties have duly executed this Share Purchase
      Agreement under seal as of the date first above written.
    

    
    	
           
        	
          
            Braintech, Inc.
          

        
	

        	
           
        	

        	

        
	

        	
          
            By
          

        	
          
             
          

        
	

        	

        	
          
            Name:
          

        	
          
            Frederick W. Weidinger
          

        
	

        	

        	
          
            Title:
          

        	
          
            Chairman and Chief Executive Officer
          

        
	

        	

        	

        	
           
        
	

        	

        	

        	
           
        
	

        	
          
            SHAFI, Inc.
          

        
	

        	

        	

        	
           
        
	

        	
          
            By
          

        	
          
             
          

        
	

        	

        	
          
            Name:
          

        	
          
            Adil Shafi
          

        
	

        	

        	
          
            Title:
          

        	
          
            President
          

        
	

        	

        	

        	
           
        
	

        	

        	

        	
           
        
	

        	
          
            SHAFI Innovation, Inc.
          

        
	

        	

        	

        	
           
        
	

        	
          
            By
          

        	
          
             
          

        
	

        	

        	
          
            Name:
          

        	
          
            Adil Shafi
          

        
	

        	

        	
          
            Title:
          

        	
          
            President
          

        
	

        	

        	

        	
           
        
	

        	

        	

        	
           
        
	

        	
          Adil Shafi
        
	

        	
           
        
	

        	
           
        

    

    
      

      

      

      [Signature Page to Share Purchase Agreement]
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
      ANNEX I
    

    
      CERTAIN MATTERS OF CONSTRUCTION AND DEFINITIONS
    

    
      1.1       Construction of this
      Agreement and Certain Terms and Phrases
    

    
                                 (a)  Unless the context of this Agreement
      otherwise requires, (i) words of any gender include each other gender;
      (ii) words using the singular or plural number also include the plural
      or singular number, respectively; (iii) the terms “hereof,” “herein,”
      “hereby” and derivative or similar words refer to this entire Agreement
      and not to any particular provision of this Agreement; and (iv) the
      terms “Article,” “Annex,” “Section,” “Schedule” and “Exhibit” without
      any reference to a specified document refer to the specified Article,
      Annex, Section, Schedule and Exhibit, respectively, of this Agreement.
    

    
                                 (b)  The words “including,” “include” and
      “includes” are not exclusive and shall be deemed to be followed by the
      words “without limitation”; if exclusion is intended, the word
      “comprising” is used instead.
    

    
                                 (c)  The word “or” shall be construed to mean
      “and/or” unless the context clearly prohibits that construction.
    

    
                                 (d)  Whatever this agreement refers to a
      number of days, such number shall refer to calendar days unless Business
      Days are specified.
    

    
                                 (e)  All accounting terms used herein and not
      expressly defined herein shall have the meanings given to them under
      GAAP.
    

    
                                 (f)  Any reference to any federal, state,
      local, provincial or foreign statute or law, including any one or more
      sections thereof, shall be deemed also to refer to, unless the context
      requires otherwise, all rules and regulations promulgated thereunder,
      including Treasury Regulations.
    

    
                                 (g)  Any representation or warranty contained
      herein as to the enforceability of a contract, including this Agreement,
      shall be subject to the effect of any bankruptcy, insolvency,
      reorganization, moratorium or other similar law affecting the
      enforcement of creditors’ rights generally and to general equitable
      principles (regardless of whether such enforceability is considered in a
      proceeding in equity or at law).
    

    
                                 (h)  The Parties have participated jointly in
      the negotiation and drafting of this Agreement.  If an ambiguity or
      question of intent or interpretation arises, this Agreement shall be
      construed as if drafted jointly by the Parties and no presumption or
      burden of proof shall arise favoring or disfavoring any Party by virtue
      of the authorship of any of the provisions hereof.
    

    
                                 (i)  The disclosures in the Schedules
      referenced in Article 3 shall relate only to the representations
      and warranties in the particular Section of Article 3 to which
      they expressly relate and not to any other representation or warranty
      contained in Article 3.
    

    
      1.2.      Cross References.  The
      following terms defined elsewhere in this Agreement in the Sections set
      forth below shall have the respective meanings therein defined:
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
    	
          Term
        	
          Definition
        
	
          Accounts Receivable
        	
          Section 3.9
        
	
          Agreement
        	
          Preamble
        
	
          Automotive Business Contracts
        	
          Section 3.20.1
        
	
          Balance Sheets
        	
          Section 3.5.1
        
	
          Balance Sheet Date
        	
          Section 3.5.1
        
	
          Buyer
        	
          Preamble
        
	
          Buyer Indemnified Parties
        	
          Section 5.1
        
	
          Closing
        	
          Section 2.1
        
	
          Closing Conditions
        	
          Section 2.3
        
	
          Closing Date
        	
          Section 2.3
        
	
          Common Shares
        	
          Section 3.2.1
        
	
          Company(ies)
        	
          Preamble
        
	
          Company Insurance Contracts
        	
          Section 3.22
        
	
          Company Proprietary Rights
        	
          Section 3.21.1
        
	
          Company Plans

          
            Contingent Purchase Price Shares
          

        	
          Section 3.13.1

          
            Section 2.2(a)
          

        
	
          Defined Benefit Plans
        	
          Section 3.13.1
        
	
          Disclosure Schedule
        	
          Article 3 Preamble
        
	
          Employee List
        	
          Section 3.14.2
        
	
          Employment Agreement
        	
          Section 4.6
        
	
          Escrow Agent
        	
          Section 6.13
        
	
          Financial Statements

          
            FMV
          

        	
          Section 3.5.1

          
            Section 6.6
          

        
	
          IRS
        	
          Section 3.13.3
        
	
          Indemnification Claim
        	
          Section 5.3
        
	
          Indemnified Party
        	
          Section 5.3
        
	
          Indemnifying Party

          
            Indemnity Threshold
          

        	
          Section 5.3

          
            Section 5.10
          

        
	
          Liability(ies)

          
            Lock-Up Agreement
          

        	
          Section 3.7

          
            Section 7.2.6
          

        
	
          Material Company Contract

          
            Material Development Condition
          

        	
          Section 3.20.1

          
            Section 6.12.2
          

        
	
          Notice of Claim
        	
          Section 5.3
        
	
          Organizational Documents
        	
          Section 3.4.2
        
	
          Party(ies)
        	
          Preamble
        
	
          Permits
        	
          Section 3.10
        
	
          Pre-Closing Tax Period
        	
          Section 6.2.1
        
	
          Purchase Price

          
            Purchase Price Shares
          

          
            S Corporation
          

        	
          Section 2.2

          
            Section 3.28
          

          
            Section 3.12.13
          

        
	
          Securities Act
        	
          Section 4.3
        
	
          Seller
        	
          Preamble
        

    

    
      I-2
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
    	
          Seller Indemnified Parties

          
            Seller Side Letter
          

        	
          Section 5.2

          
            Section 7.2.18
          

        
	
          Shares
        	
          Recital R.2
        
	
          SI
        	
          Preamble
        
	
          SII
        	
          Preamble
        
	
          SI Common Shares
        	
          Schedule 3.2.1
        
	
          SII Common Shares
        	
          Schedule 3.2.1
        
	
          SI IP
        	
          Section 6.6
        
	
          SI Shares
        	
          Recital R.1
        
	
          SII Shares
        	
          Recital R.1
        
	
          SII 80% Shares
        	
          Recital R.2
        
	
          Siemens Contract
        	
          Section 6.8
        
	
          Straddle Period
        	
          Section 6.2.2
        
	
          Third Party Claim
        	
          Section 5.4.1
        
	
          Transactions

          
            U.S.
          

        	
          Recital R.3

          
            Section 3.2.1
          

        

    

    
      1.3.        Certain Defined
      Terms.  As used in this Agreement, the following terms shall have
      the following meanings ascribed to them:
    

    
      (a)  Affiliate:  with respect to any Person, any Person
      which, directly or indirectly, controls, is controlled by, or is under
      common control with, such Person.
    

    
      (b)  Affiliated Group:  as defined in Code Section
      1504(a).
    

    
      (c)  Applicable Laws:  with respect to any Person, any
      law, statute, treaty, rule, regulation, ordinance, permit, license,
      judgment, order, writ, injunction, decree, directive, determination or
      other requirement of any Governmental Entity or arbitrator, in each
      case, applicable to or binding upon such Person or any of its property
      or to which such Person or any of its property is subject.
    

    
      (d)  Braintech Accepted Debt: any Company Indebtedness
      expressly set forth on the Creditor and Payment Schedule in the column
      thereon titled “Braintech Accepted Debt (Remaining Balance)” in the
      amount set forth in such column. Braintech Accepted Debt shall not
      exceed $900,000 in the aggregate.
    

    
      (e)  Business Day:  a day (other than a Saturday or
      Sunday) on which commercial banking institutions in Herndon, Virginia
      are open for the transaction of substantially all of their banking
      business.
    

    
      (f)  Closing Date Anniversary:  the referenced
      anniversary of the Closing Date.
    

    
      (g)  COBRA:  the provisions of Section 4980B of the
      Code and Part 6 of Title I of ERISA.
    

    
      (h)  Code:  the U.S. Internal Revenue Code of 1986, as
      amended.
    

    
      I-3
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
      (i)  Commercial Software:  packaged commercial
      software programs generally available to the public through retail
      dealers in computer software or directly from the manufacturer that have
      been licensed to a Company and that are used in a Company’s business but
      are in no way a component of or incorporated in or specifically required
      to develop any of a Company’s products and related trademarks and
      technology.
    

    
      (j)  Company Indebtedness: any and all indebtedness,
      Tax liabilities due and owing, and other obligations (whether fixed,
      accrued, contingent or otherwise) of any Company as of the date hereof.
    

    
      (k)  Company Indebtedness Claims:  any
      and all claims of one or more Buyer Indemnified Parties under Article
      5 in respect of representations and warranties in Section 3.5.3  or
      in any certificate given hereunder in respect of Section 3.5.3.
    

    
      (l)  Company Leases: each lease, sublease, license or
      other agreement under which a Company uses, occupies or has the right to
      occupy any real property or interest therein that (i) provides for
      future minimum payments of $5,000 or more (ignoring any right of
      cancellation or termination) or (ii) the cancellation or termination of
      which would have a Company Material Adverse Effect.
    

    
      (m)  Company Material Adverse Effect: any materially
      adverse change in or effect on the financial condition, business,
      operations, assets, properties, or results of operations of a Company,
      individually or taken as a whole.
    

    
      (n)  Company’s Knowledge: the means the
      knowledge, after due inquiry, of Seller, any one or more of the members
      of the boards of directors of a Company, or any one or more of the
      following officers of a Company: President.
    

    
      (o)  Consent:  any consent, approval, ratification,
      waiver or other authorization, including Governmental Authorization.
    

    
      (p)  Contract:  any contract, agreement, obligation,
      promise, commitment, arrangement or undertaking (whether written or oral
      and whether express or implied) that is legally binding.
    

    
      (q)  Creditor and Payment Schedule:  the Creditor and
      Payment Schedule attached hereto as Exhibit E which sets forth
      the Company Indebtedness and any repayment terms agreed to by the
      creditors identified thereon.
    

    
      (r)  Current Balance Sheet:  balance sheet of SI as of
      June 30, 2008 prepared in accordance with GAAP on an accrual basis.
    

    
      (s)  Encumbrance: any mortgage, pledge, proxy,
      lien, charge, security interest, assignment as security, conditional
      sale or other title retention agreement, third party rights or other
      encumbrance, but excluding any registration requirements under
      applicable federal or state securities laws.
    

    
      I-4
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
      (t)  Environmental Claim: any actual notice alleging
      potential liability (including potential liability for investigatory
      costs, cleanup costs, response or remediation costs, natural resources
      damages, property damages, personal injuries, fines or penalties)
      arising out of, based on or resulting from (i) the presence, or release
      of any Material of Environmental Concern at any location, whether or not
      owned by the party to whom that notice is directed or (ii) circumstances
      forming the basis of any violation, or alleged violation, of any
      Environmental Law.
    

    
      (u)  Environmental Laws: any and all federal, state or
      local statutes, regulations and ordinances relating to the protection of
      public health, safety or the environment in existence and effective on
      the Closing Date, including the Federal Comprehensive Environmental
      Response, Compensation and Liability Act of 1980, as amended.
    

    
      (v)  ERISA: the Employee Retirement Income
      Security Act of 1974, as amended.
    

    
      (w)  ERISA Affiliate:  with respect to a party, any
      member (other than that party) of a controlled group of corporations,
      group of trades or businesses under common control or affiliated service
      group that includes that party (as defined for purposes of Code Section
      414(b), (c) and (m)).
    

    
      (x)  Escrow Account: the escrow account
      established pursuant to the Escrow Agreement into which the Contingent
      Purchase Price Shares shall be deposited.
    

    
      (y)  Escrow Agreement: the Escrow Agreement by and
      among Buyer, Seller and Escrow Agent in the form of Exhibit F
      hereto to be modified and executed in accordance with Section 6.13.
    

    
      (z)  Excess Debt: any and all of the following: (i)
      Company Indebtedness existing as of immediately prior to the Closing
      that is not expressly set forth on the Creditor and Payment Schedule or
      is in excess of the Company Indebtedness identified thereon, and (ii)
      Seller Obligation Debt.  
    

    
      (aa)  GAAP: generally accepted accounting
      principles used in the U.S. of America.
    

    
      (bb)  Governmental Authorization:  any consent,
      approval, license, permit, waiver or other authorization issued,
      granted, given or otherwise made available by or under the authority of
      any Governmental Entity or pursuant to any Applicable Laws.
    

    
      (cc)  Governmental Entity:  any nation
      or government, or supranational body, any state or political subdivision
      thereof (including the U.S. or any other country or other federal, or
      any state, local or municipal or other), any court and any
      administrative agency or other regulatory body, instrumentality,
      authority or other entity or official thereof exercising executive,
      legislative, judicial, regulatory or administrative functions thereof.
    

    
      (dd)  Insolvency: as to Buyer, (i) Buyer shall have
      voluntarily instituted any proceeding (A) seeking a declaration that
      Buyer is insolvent under any law relating to bankruptcy, insolvency,
      relief of debtors or protection of creditors, or any other similar law,
      or (B) seeking appointment of a receiver, trustee, liquidator, assignee,
      sequestrator or other custodian for Buyer or for all or any substantial
      part of such Buyer’s property; or (ii) a proceeding shall have been
      instituted by a third party in respect of Buyer: (A) seeking a
      declaration that Buyer is insolvent under any law relating to
      bankruptcy, insolvency, relief of debtors or protection of creditors, or
      any other similar law now or hereafter in effect, and such proceeding
      shall remain undismissed and unstayed for a period of 90 consecutive
      days, or (B) seeking appointment of a receiver, trustee, liquidator,
      assignee, sequestrator or other custodian for Buyer or for all or any
      substantial part of such Buyer’s property, and such proceeding shall
      remain undismissed and unstayed for a period of 90 consecutive days; or
      (iii) Buyer makes a general assignment for the benefit of creditors or
      admits in writing its inability to pay its debts generally as they
      become due. The debts and liabilities of SI and SII, and any of the
      foregoing events relating to such debts or liabilities or to SI or SII,
      shall not be taken into account for purposes of determining whether
      Insolvency of Buyer has occurred.
    

    
      I-5
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
      (ee)  Letter of Intent:  that certain Letter of Intent,
      dated June 19, 2008, between Buyer and Seller.
    

    
      (ff)  List of Agreements and Settlements:  a list of
      all agreements and settlements relating to the indebtedness and other
      obligations of each Company as set forth on the Creditor and Payment
      Schedule attached hereto as Exhibit E.
    

    
      (gg)  Losses:  the amount of any actual damages,
      liabilities, obligations, deficiencies, losses (including any actual
      diminution in value), expenditures, costs or expenses (including
      reasonable attorneys’ fees and disbursements).  For purposes of
      determining the amount of any Loss, the amount of any Loss shall include
      the related reasonable attorneys’ fees and disbursement incurred to
      investigate and enforce the respective Party’s indemnification rights
      hereunder.  The failure of any Buyer Indemnified Party to seek available
      insurance coverage or insurance proceeds for any Losses otherwise
      reimbursable under Section 5.1 shall not adversely affect such
      Buyer Indemnified Party’s right to indemnification in respect thereof
      under Section 5.1.  If, however, the Buyer Indemnified Party
      receives insurance proceeds in respect of any such Losses, the amount of
      such insurance proceeds less any associated costs, including attorney
      fees, incurred in obtaining such proceeds, shall be excluded in
      determining the amount of Losses subject to an Indemnification Claim.
    

    
      (hh)  Market Access Schedule:  a list of market
      contacts, relationships, integrator program development, web training
      and market knowledge of Seller, that may or may not be titled Market
      Access & Acceleration.
    

    
      (ii)  Material or Materials of Environmental Concern:  petroleum
      and its by-products and any and all other substances or constituents to
      the extent that they are regulated by, or form the basis of liability
      under, any Environmental Law.
    

    
      I-6
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
      (jj)  Materiality Qualifications:  Collectively, the
      exceptions and qualifications to the representations and warranties in Article
      3 that are based upon such exceptions and qualifications not being
      “material” or being “in all material respects,” or not having or would
      or could not reasonably be expected to result in a Company Material
      Adverse Effect.
    

    
      (kk)  Permitted Encumbrances:  means (i)  immaterial
      liens that were incurred in the ordinary course of business, such as
      carriers’, warehousemen’s, landlords’ and mechanics’ liens and other
      similar liens arising in the ordinary course of business, and (ii) such
      imperfections or minor defects of title, easements, rights-of-way and
      other similar restrictions (if any) as are insubstantial in character,
      amount or extent, do not materially detract from the value or interfere
      with the present or proposed use of the properties or assets of the
      party subject thereto or affected thereby, and do not otherwise
      adversely affect or impair the business or operations of such party.
    

    
      (ll)  Person:  an individual, a corporation, an
      association, a partnership, limited liability company, joint stock
      company, an estate, a trust or any other entity, including Governmental
      Entity, or organization.
    

    
      (mm)  Related Party Indebtedness:  any and all (whether
      contingent or otherwise) (i) indebtedness of either Company to Seller,
      (ii) obligations of either Company for amounts borrowed directly or
      indirectly by such Company from Seller, (iii) any obligations to repay
      or otherwise return any capital contribution by Seller to either
      Company, and (iv) any salary, bonus or other compensation, or expense
      reimbursement, due from either Company to Seller, in each of (i), (ii),
      (iii) and (iv) as of the date hereof.
    

    
      (nn)  Release:  shall have the meaning
      assigned to that term in the Federal Comprehensive Environmental
      Response, Compensation and Liability Act of 1980, as amended.
    

    
      (oo)  Revenue and Contract Pipeline:  revenue and
      contract pipeline of each Company through December 2010.
    

    
      (pp)  Share Ownership Claims:  any
      and all claims of one or more Buyer Indemnified Parties under Article
      5 in respect of representations and warranties in Section 3.2  or
      in any certificate given hereunder in respect of Section 3.2.
    

    
      (qq)  Seller Obligation Debt: any Company Indebtedness
      that is expressly set forth on the Creditor and Payment Schedule but is
      not Braintech Accepted Debt.
    

    
      (rr)  Seller’s Knowledge:  the knowledge, after
      due inquiry, of Seller.
    

    
      (ss)  Stated Value: the volume weighted average closing
      sales price of Buyer’s common stock on the OTC Bulletin Board for the
      10-consecutive trading day period immediately preceding the Closing Date.
    

    
      I-7
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
      (tt)  Subsidiary:  any
      corporation, partnership, limited liability company, association, joint
      stock company or other business entity 50% or more of the outstanding
      voting securities of which is owned or controlled, directly or
      indirectly, by the referenced Person, or by one or more Subsidiaries of
      the referenced Person, or by referenced Person and one or more
      Subsidiaries of the referenced Person.  For purposes of the definition,
      “voting securities” means securities ordinarily having voting power for
      the election of directors or of other individuals having similar
      functions, whether at all times or only so long as no senior class of
      securities has such voting power by reason of any contingency, or other
      ownership interests ordinarily constituting a majority voting interest.
    

    
      (uu)  Taxes:  all taxes, levies and
      other assessments, including all income, gross receipts, license,
      franchise, sales, use, goods and services, value added, capital, capital
      stock, capital gains, net worth, transfer, registration, profits,
      withholding, payroll, employment, employer health, social security (or
      similar), excise, severance, stamp, occupation, premium, windfall
      profits, environmental, (including under Code Section 52A), customs,
      duties, alternative or add-on, minimum, estimated, real property and
      personal property taxes, and any other taxes, assessments or similar
      charges in the nature of a tax, including unemployment insurance
      payments and workers compensation premiums, together with any
      installments with respect thereto, and any interest, fines and
      penalties, imposed by any Governmental Entity (including federal, state,
      municipal and foreign Governmental Entities), and whether disputed or
      not.
    

    
      (vv)  Treasury Regulations:  a regulation
      promulgated by the U.S. Department of Treasury under one or more
      provisions of the Code.
    

    

    

    
      I-8
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    
      Schedule 2.2(a)
    

    
      Contingent Purchase Price Shares 
    

    

    

    
      MILESTONES
    

    

    

    
      Each Milestone is comprised of Revenue and Non – Revenue Related
      Commitments. The achievement of each Revenue Related Commitment is
      contingent on the following five conditions (Revenue Related
      Conditions). A breach of any one of these Revenue Related Conditions and
      the failure to cure the same within 60 days thereafter shall void the
      requirement by Seller to achieve his Revenue Related Commitment. These
      Revenue Related Conditions will remain only as long as the Revenue
      Related Commitments for the below Milestones are in effect, unless
      modified through written mutual agreement between Buyer’s Chief
      Executive Officer (“CEO”) and Seller.  Notwithstanding anything in this
      Schedule 2.2(a) to the contrary, if Seller’s employment with Buyer is
      terminated by Buyer for “Good Cause” (as such term is defined in the
      Employment Agreement) or by Seller without “Good Reason” (as such term
      is defined in the Employment Agreement), Seller shall no longer have the
      right to earn any Contingent Purchase Price Shares for any Milestone
      period below ending thereafter.
    

    

    

    
      Revenue Related Condition 1: Direct Hiring : Hiring by Buyer of
      Elsie White and Donna Burr on or about September 1, 2008. Each employee
      shall agree to employment offer and conditions thereof.  Donna will work
      out of the to-be-selected Detroit area office unless there exists a
      hardship agreed to by CEO.  Elsie White will travel when necessary but
      will track and monitor and assist with Government Sales from her home in
      Houghton, Michigan.
    

    

    

    
      Revenue Related Condition 2: Regular Operational Execution
      Authority to Seller : Seller shall have direct operational authority for
      technical and sales functions (exception: the Chief Technology Officer
      and Chief Sales Officer of Buyer (“CTO” and “CSO”) shall report to CEO
      but have dotted line responsibility to Seller but Seller will have
      operational authority over each function).  Seller shall have full
      authority to execute daily operational authority of business for the
      technology and sales of the Buyer. Strategic directions of Buyer in both
      respects shall be with agreement of CEO. Seller will have authority to
      exercise disciplinary warnings and take necessary actions in order to
      direct technical and sales functions of the Buyer. Seller shall notify
      and obtain prior consent of CEO of such warnings and actions.
    

    

    

    
      Revenue Related Condition 3: Employee Incentive for Revenue
      Related Goals  : Seller to develop and prepare Bonus Securities
      Compensation Plan to motivate and incent Buyer employees to achieve
      revenue commitments. Such Bonus Plan shall be subject to approval of CEO
      and the Compensation Committee of the Board of Directors of Buyer.
      Compensation Plan will be part of Sales Plan due by September 30, 2008.
    

    

    

    
      Revenue Related Condition 4: Organizational Hierarchy and
      Decisions: Seller as Chief Operating Officer of Buyer and President of
      SHAFI, Inc., and SHAFI Innovation, Inc. shall report directly to CEO for
      the duration of his three year Employment Agreement. Seller to confer
      weekly or more frequently with CEO or upon CEO request.  Seller shall be
      given daily operational authority regarding revenue and sales. Strategic
      sales decisions as well as marketing and financial sales (ROI) decisions
      shall be subject to consultation with and the consent of the CEO.
    

    

    

    
      Revenue Related Condition 5: Market Oriented Communications : CEO
      (or his designee) responsible for all Public Relations and Investor
      Relations of Buyer.
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    

    

    

    
      Milestone 1:    250,000 Contingent Purchase Price Shares shall be
      earned as of the end of the Quarter ending September 30, 2008, provided
      the following goals and commitments are achieved during such quarter:
    

    

    

    
      Revenue Related Goals : None.
    

    

    

    
      Non – Revenue Related Commitment :
    

    

    

    	
        Successful receipt of Customer, Partner and Vision Provider Support
        for Partnership in terms of Press Release to be issued on or around
        August 29, 2008.
      
	
        Consignment receipt of and communications with three industrial robot
        manufacturers by August 29, 2008: Motoman, Staubli, Kuka
      
	
        Consignment receipt and communication with top three Vision Provider
        Packages by August 29, 2008: Siemens, Cognex, PPT.
      
	
        The Seller will develop and produce a sales plan acceptable to CEO
        including the interview and hire of acceptable sales and technical
        employees, including third party independent contractors, sales
        quotas, vertical market and geographical focus. Plan will also include
        an acceptable employee incentive plan based specifically on revenue
        related goals specified in sales plan. This sales plan to be presented
        for approval to the CEO on or before September 30, 2008. Seller shall
        hire employees as required in approved sales plan and allowed by
        Buyer’s cash flow to meet revenue commitment goals. Sales plan will
        require a minimum of 5 new hires.
      
	
        Selection and opening of approved sales office location in Detroit
        area according to Market Access Schedule.
      

    

    

    

    
      Milestone 2:    250,000 Contingent Purchase Price Shares shall be
      earned as of the end of the Quarter ending December 31, 2008, provided
      the following goals and commitments are achieved during such quarter:
    

    

    

    
      Revenue Related Commitment : $450,000 in non–automotive roll – up
      revenues from all products except ABB.
    

    

    

    
      Non – Revenue Related Commitment :
    

    

    

    	
        Plant Visits and development of at least 10 sales proposals to Non
        Automotive End Users by October 1, 2008, and 25 (units) by December
        31, 2008.
      
	
        Introduction to at least 10 System Integration partners by October 1,
        2008 and development of at least 25 (units) sales proposals through
        System Integration Partners by December 31, 2008.
      
	
        Certification of at least 6 System Integrators (such that they can
        independently order, install and service our products) by December 31,
        2008.
      
	
        Complete Market Access Schedule.
      

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    

    

    

    

    

    
      Milestone 3:    250,000 Contingent Purchase Price Shares shall be
      earned as of the end of the  Quarter ending March 31, 2009, provided the
      following goals and commitments are achieved during such quarter:
    

    

    

    
      Revenue Related Commitment : $900,000 in non–automotive roll – up
      revenues from all products.
    

    

    

    
      Non – Revenue Related Commitment :
    

    

    

    	
        Concept, develop and launch, in cooperation with Vice President of
        Sales of Buyer, a formal Systems Integrator Program (called
        “Brainpower 1”) replete with paths for certification, exclusivity and
        continued loyalty through mutually incentivized initiatives.
        Brainpower 1 to include classroom, hands on and web based training
        (both sales and technical), partner seminars, web based and linked
        promotion, Buyer brand promotion, periodic sales reviews for Buyer
        exclusive integrators and annual sales commitments.
      
	
        Signup 15 Systems Integrators to Brainpower 1 program by March 31,
        2009.
      
	
        Assist Vice President of Sales of Buyer to evaluate inquiries, provide
        quotations and help create organizational infrastructure (with Buyer
        team and resources) to manage the Brainpower 1 program for these 15
        Systems Integrators by March 31, 2009.
      

    

    

    

    
      Milestone 4:    250,000 Contingent Purchase Price Shares shall be
      earned as of the end of the  Quarter ending June 30, 2009, provided the
      following goals and commitments are achieved during such quarter:
    

    

    

    
      Revenue Related Commitment : $1,500,000 in roll – up revenues from all
      products.
    

    

    

    
       Non – Revenue Related Commitment :
    

    

    

    	
        Concept, develop and launch, in cooperation with Vice President of
        Sales of Buyer, a formal Training and Continued Certification Program
        (called “Brainpower 2”) for Third Party, non–competitive Support
        Companies, Consultants, Writers in the trade press, for Buyer’s
        product line.
      
	
        Signup 15 Third Party, non–competitive Support Companies, Consultants
        or Writers to Brainpower 2 program by June 30, 2009.
      
	
        Assist Buyer engineering and marketing teams to interact on projects
        with these 15 Companies, Consultants or Writers by June 30, 2009.

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