Document:

Exhibit 10.1
    

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

    

    
      July 29, 2008
    

    
      

      Private and Confidential
    

    
      

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

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

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

    
      CREDIT FACILITIES
    

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

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

    
      a)  RBP based loans (“RBP Loans”)
    

    
    	
           
        	
          Revolve in increments of:
        	
          $5,000
        	
          Minimum retained balance:
        	
          $0
        
	

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

    

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

    
    	
           
        	
          Revolve in increments of:
        	
          $5,000
        	
          Minimum retained balance:
        	
          $0
        
	

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

    

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

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

    

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

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

    

    
      AVAILABILITY
    

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

    
      SRF # 955 287 610
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
    	
          Braintech, Inc.
        	
          2
        	
          July 29, 2008
        

    

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

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

    

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

    
      REPAYMENT
    

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

    
      GENERAL ACCOUNT
    

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

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

    

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

    
    	
          
            a)
          

        	
          
            RBP Loans
          

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

        	
          
            RBUSBR Loans
          

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

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

        	
          Interest rate (per annum):
        	
          Libor + 1.50%
        

    

    
      AVAILABILITY
    

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

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

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

    
      REPAYMENT
    

    
    	
          Payment Amount:
        	
          
            $100,208.00
          

        	
          Payment Frequency:
        	
          Monthly
        
	
          Payment Type:
        	
          Principal Plus Interest
        	
          First payment date:
        	
          
            October 11, 2008
          

        
	
          Repayable in full on:
        	
          
            September 22, 2010
          

        	
          Original Amortization (months)
        	
          24
        

    

    
      OTHER FACILITIES
    

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

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
    	
          Braintech, Inc.
        	
          3
        	
          July 29, 2008
        

    

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

    
    	
          
            FEES
          

        
	
          One Time Fee:

          
            Payable upon acceptance of this Agreement.
          

        	
          Monthly Fees:

          
            Payable in arrears on the same day of each month.
          

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

          
            Administration Fee: $25
          

        

    

    
      SECURITY
    

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

    
    	
          a)
        	
          General security agreement on the Bank’s form 924 signed by the
          Borrower constituting a first ranking security interest in all
          personal property of the Borrower;
        
	

        	
           
        
	
          b)
        	
          Guarantee and postponement of claim on the Bank’s form 812 in the
          amount of $2,895,000 signed by Braintech Canada, Inc., supported by
          a general security agreement on the Bank’s form 924 constituting a
          first ranking security interest in all personal property of
          Braintech Canada, Inc.;
        
	

        	
           
        
	
          c)
        	
          Postponement and assignment of claim on the Bank’s form 918 signed
          by Braintech Canada, Inc.;
        
	

        	
           
        
	
          d)
        	
          Irrevocable and unconditional standby letter of credit or letter of
          guarantee in favour of the Bank, in the amount of US$400,000,
          provided by Owen Jones, from an issuer acceptable to the Bank,
          confirmed by the Bank and in form and substance satisfactory to the
          Bank;
        
	

        	
           
        
	
          e)
        	
          Irrevocable and unconditional standby letter of credit or letter of
          guarantee in favour of the Bank, in the amount of US$250,000,
          provided by Dave Baird, from an issuer acceptable to the Bank,
          confirmed by the Bank and in form and substance satisfactory to the
          Bank;
        
	

        	
           
        
	
          f)
        	
          Irrevocable and unconditional standby letter of credit or letter of
          guarantee in favour of the Bank, in the amount of US$750,000,
          provided by Rick Weidinger, from an issuer acceptable to the Bank,
          confirmed by the Bank and in form and substance satisfactory to the
          Bank;
        
	

        	
           
        
	
          g)
        	
          Irrevocable and unconditional standby letter of credit or letter of
          guarantee in favour of the Bank, in the amount of US$250,000,
          provided by Kenneth Brooks from an issuer acceptable to the Bank,
          confirmed by the Bank and in form and substance satisfactory to the
          Bank;
        
	

        	
           
        
	
          h)
        	
          Irrevocable and unconditional standby letter of credit or letter of
          guarantee in favour of the Bank, in the amount of US$125,000,
          provided by Peter Speros, from an issuer acceptable to the Bank,
          confirmed by the Bank and in form and substance satisfactory to the
          Bank;
        
	

        	
           
        
	
          i)
        	
          Irrevocable and unconditional standby letter of credit or letter of
          guarantee in favour of the Bank, in the amount of US$125,000,
          provided by Jim Speros, from an issuer acceptable to the Bank,
          confirmed by the Bank and in form and substance satisfactory to the
          Bank;
        
	

        	
           
        
	
          j)
        	
          Irrevocable and unconditional standby letter of credit or letter of
          guarantee in favour of the Bank, in the amount of US$250,000,
          provided by Jeff Lubore, from an issuer acceptable to the Bank,
          confirmed by the Bank and in form and substance satisfactory to the
          Bank;
        
	

        	
           
        
	
          k)
        	
          Irrevocable and unconditional standby letter of credit or letter of
          guarantee in favour of the Bank, in the amount of US$100,000,
          provided by Angie Speros, from an issuer acceptable to the Bank,
          confirmed by the Bank and in form and substance satisfactory to the
          Bank;
        
	

        	
           
        
	
          l)
        	
          Irrevocable and unconditional standby letter of credit or letter of
          guarantee in favour of the Bank, in the amount of US$100,000,
          provided by Fred Bolander, from an issuer acceptable to the Bank,
          confirmed by the Bank and in form and substance satisfactory to the
          Bank;
        

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
    	
          Braintech, Inc.
        	
          4
        	
          July 29, 2008
        

    

    
    	
          m)
        	
          Irrevocable and unconditional standby letter of credit or letter of
          guarantee in favour of the Bank, in the amount of US$100,000,
          provided by Colin Eagan, from an issuer acceptable to the Bank,
          confirmed by the Bank and in form and substance satisfactory to the
          Bank;
        
	

        	
           
        
	
          n)
        	
          Cash collateral agreement on the Bank’s form 610 signed by the
          Borrower assigning term deposits and/or guaranteed investment
          certificates in the amount of $20,000; and
        
	

        	
           
        
	
          o)
        	
          Letter of acknowledgement signed by each of the providers of the
          irrevocable and unconditional standby letter of credit or letter of
          guarantee in favour of the Bank as listed in paragraphs d) to m)
          above confirming the re-draw of the Credit Facilities as outlined in
          this Agreement and that the security described in paragraphs d) to
          m) remains in full force and effect until Facility #2 is repaid in
          full.
        

    

    
      REPORTING REQUIREMENTS
    

    
      The Borrower will provide the following to the Bank:
    

    
    	
          a)
        	
          quarterly company prepared consolidated financial statements for the
          Borrower, within 30 days of each fiscal quarter end;
        
	

        	
           
        
	
          b)
        	
          annual audited consolidated financial statements for the Borrower,
          within 120 days of each fiscal year end;
        
	

        	
           
        
	
          c)
        	
          annual forecasted consolidated balance sheet and income and cash
          flow statements for the Borrower, prepared on a quarterly basis for
          the next following fiscal year, within 120 days of each fiscal year
          end; and
        
	

        	
           
        
	
          d)
        	
          such other financial and operating statements and reports as and
          when the Bank may reasonably require.
        

    

    
      CONDITIONS PRECEDENT
    

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

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

    

    
      Additionally;
    

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

    

    
      GOVERNING LAW JURISDICTION
    

    
      Province of British Columbia.
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
    	
          Braintech, Inc.
        	
          5
        	
          July 29, 2008
        

    

    
      ACCEPTANCE
    

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

    
      ROYAL BANK OF CANADA
    

    
    	
          Per:
        	
          
            /s/ David Gilbertson
          

        	

        
	
          Name:
        	
          
            David Gilbertson
          

        	

        
	
          Title:
        	
          Senior Account Manager
        	

        

    

    
      We acknowledge and accept the terms and conditions of this Agreement
    

    
      on this _______ day of ________________, 2008.
    

    
    	
          BRAINTECH, INC.
        	

        
	

        	
           
        
	
          
            Per:
          

        	
          
            /s/ Rick Weidinger
          

        	

        
	
          
            Name:
          

        	
          
            Rick Weidinger
          

        	

        
	
          
            Title:
          

        	
          
            CEO
          

        	

        
	

        	

        	
           
        
	
          
            Per:
          

        	
          
            /s/ Edward White
          

        	

        
	
          
            Name:
          

        	
          
            Edward White
          

        	

        
	
          
            Title:
          

        	
          
            V.P. Admin
          

        	

        
	

        	

        	
           
        
	
          I/We have the authority to bind the Borrower
        	

        

    

    
      \attachments:
Terms and Conditions
Schedules:
    

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

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
    	
          Braintech, Inc.
        	
          6
        	
          July 29, 2008
        

    

    
      TERMS AND CONDITIONS
    

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

    
      REPAYMENT
    

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

    
      PREPAYMENT
    

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

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

    
      EVIDENCE OF INDEBTEDNESS
    

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

    
      GENERAL COVENANTS
    

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

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

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
    	
          Braintech, Inc.
        	
          7
        	
          July 29, 2008
        

    

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

    

    
      EXPENSES, ETC.
    

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

    
      GENERAL INDEMNITY
    

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

    
      AMENDMENTS AND WAIVERS
    

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

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
    	
          Braintech, Inc.
        	
          8
        	
          July 29, 2008
        

    

    
      SUCCESSORS AND ASSIGNS
    

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

    
      GAAP
    

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

    
      SEVERABILITY
    

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

    
      GOVERNING LAW
    

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

    
      DEFAULT BY LAPSE OF TIME
    

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

    
      SET-OFF
    

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

    
      NOTICES
    

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

    
      CONSENT OF DISCLOSURE
    

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

    
      NON-MERGER
    

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

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
    	
          Braintech, Inc.
        	
          9
        	
          July 29, 2008
        

    

    
      JOINT AND SEVERAL
    

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

    
      LIFE AND DISABILITY INSURANCE
    

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

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

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

    
      COUNTERPART EXECUTION
    

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

    
      EMAIL AND FAX TRANSMISSION
    

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

    
      REPRESENTATIONS AND WARRANTIES
    

    
      The Borrower, represents and warrants to the Bank that:
    

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

    

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

    
      LANGUAGE
    

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

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
    	
          Braintech, Inc.
        	
          10
        	
          July 29, 2008
        

    

    
      WHOLE AGREEMENT
    

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

    
      EVENTS OF DEFAULT
    

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

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

    

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

    
      EXCHANGE RATE FLUCTUATIONS
    

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

    
      INCREASED COSTS
    

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

    
      JUDGEMENT CURRENCY
    

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

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
    	
          Braintech, Inc.
        	
          11
        	
          July 29, 2008
        

    

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

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
    	
          Schedule A
        

    

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

    
      DEFINITIONS
    

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
    	
           
        	
          2
        	
          Schedule A
        

    

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

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

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

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

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

    

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

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

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

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

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

    
      “US” means United States of America.
    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
    	
          Schedule B
        

    

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

    
      CALCULATION AND PAYMENT OF INTEREST AND FEES
    

    
      LIMIT ON INTEREST
    

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

    
      OVERDUE PAYMENTS
    

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

    
      EQUIVALENT YEARLY RATES
    

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

    
      TIME AND PLACE OF PAYMENT
    

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

    
      RBP LOANS AND RBUSBR LOANS
    

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

    
      LETTER OF CREDIT FEES
    

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

    
      LETTER OF GUARANTEE FEES
    

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

    
      LIBOR LOANS
    

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

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
    	
          Schedule C
        

    

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

    
      ADDITIONAL BORROWING CONDITIONS
    

    
      LCs or LGs:
    

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

    
    	
          a)
        	
          each LC and LG shall expire on a Business Day and shall have a term
          of not more than 365 days;
        
	

        	
           
        
	
          b)
        	
          at least 2 Business Days prior to the issue of an LC or LG, the
          Borrower shall execute a duly authorized application with respect to
          such LC or LG and each LC and LG shall be governed by the terms and
          conditions of the relevant application for such contract;
        
	

        	
           
        
	
          c)
        	
          an LC or LG may not be revoked prior to its expiry date unless the
          consent of the beneficiary of the LC or LG has been obtained;
        
	

        	
           
        
	
          d)
        	
          any LC or LG issued under a term facility must have an expiry date
          on or before the Maturity Date of the term facility, unless
          otherwise agreed by the Bank; and
        
	

        	
           
        
	
          e)
        	
          if there is any inconsistency at any time between the terms of this
          Agreement and the terms of the application for LC or LG, the terms
          of the application for LC or LG shall govern.
        

    

    
      Libor Loans:
    

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

    
    	
          a)
        	
          Libor Loans shall be issued and mature on a Banking Day and shall be
          made in minimum amounts of $500,000 in US currency for terms of not
          less than 30 days and not more than 360 days;
        
	

        	
           
        
	
          b)
        	
          if the Borrower fails to select and to notify the Bank of the Libor
          Interest Period applicable to any Libor Loan, the Borrower shall be
          deemed to have selected a 3 month Libor Interest Period;
        
	

        	
           
        
	
          c)
        	
          if the Bank so requests, the Borrower shall enter into a Hedge
          Contract to hedge the principal and interest of each Libor Loan
          against the risk of currency and exchange rate fluctuations. “Hedge
          Contract” means any rate swap, rate cap, rate floor, rate collar,
          currency exchange transaction, forward rate agreement or other
          exchange, hedging or rate protection transaction, or any combination
          of such transactions or agreements or any option with respect to any
          such transaction now existing or hereafter entered into between the
          Borrower and the Bank;
        
	

        	
           
        
	
          d)
        	
          the Borrower shall indemnify and hold the Bank harmless against any
          loss, cost or expense (including without limitation, any loss
          incurred by the Bank in liquidating or redeploying deposits acquired
          to fund or maintain any Libor Loan) incurred by the Bank as a result
          of:
        

    

    
    	
           
        	
          i)
        	
          repayments, prepayments, conversions, rollovers or cancellations of
          a Libor Loan other than on the last day of the Libor Interest Period
          applicable to such Libor Loan, or
        
	

        	

        	
           
        
	

        	
          ii)
        	
          failure to draw down a Libor Loan on the first day of the Libor
          Interest Period selected by the Borrower; and
        

    

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

    

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

    

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
    	
           
        	
          ii)
        	
          the making or the continuance of a Libor Loan has become
          impracticable by reason of circumstances which materially and
          adversely affect the London Interbank Market,
        
	

        	

        	
           
        
	

        	
          iii)
        	
          deposits in US currency are not available to the Bank in the London
          Interbank Market in sufficient amounts in the ordinary course of
          business for the applicable Libor Interest Period to make or
          maintain a Libor Loan during such Libor Interest Period, or
        
	

        	

        	
           
        
	

        	
          iv)
        	
          the cost to the Bank of making or maintaining a Libor Loan does not
          accurately reflect the effective cost to the Bank thereof or the
          costs to the Bank are increased or the income receivable by the Bank
          is reduced in respect of a Libor Loan,
        

    

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

    
      
        

        

      

      
        

        

        
          

        

      

      
        

        

      

    

    
    	
          Schedule D
        

    

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

    
      NOTICE REQUIREMENTS
    

    
      Notice Requirements for Libor Loans:
    

    
    	
          Amount
        	
          Prior Notice
        
	
          Under $10,000,000 in US currency and up to 1 year rollovers
        	
          By 10:00 a.m. Eastern Standard Time on the Interest Determination
          Date8-K

EXHIBIT 4.1  

PLURISTEM THERAPEUTICS
INC. 

COMMON STOCK PURCHASE
WARRANT 

		
	Warrant No.: 20080922	Original Issue Date: September 22, 2008
	Initial Holder: Bangor Holdings Ltd.	No. of Shares Subject to Warrant: 675,000
	 	Exercise Price Per Share: $1.90
	 	Expiration Time: 10 a.m., New York time, on September 21, 2013 (subject to acceleration as provided herein)

        Pluristem
Therapeutics Inc., a Nevada corporation (the “Company”), hereby certifies that,
for value received, the Initial Holder shown above, or its permitted registered assigns
(the “Holder”), is entitled to purchase from the Company up to the number of
shares of its common stock shown above (the “Common Stock”) (each such share, a
“Warrant Share” and all such shares, the “Warrant Shares”) at the
exercise price shown above (as may be adjusted from time to time as provided herein, the
“Exercise Price”), at any time and from time to time on or after the Original
Issue Date shown above and through and including the expiration time shown above (the
“Expiration Time”), and subject to the following terms and conditions:  

        This
Warrant is being issued pursuant to a Securities Purchase Agreement, dated September 22,
2008 (the “Subscription Agreement”), by and between the Company and the Initial
Holder.  The original issuance of the Warrant by the Company pursuant to the
Subscription Agreement and the exercise thereof has been registered pursuant to a
Registration Statement on Form S-3 (File No. 333-151761) (the “Registration
Statement”). 

    1.        Definitions.
In addition to the terms defined elsewhere in this Warrant,           capitalized terms
that are not otherwise defined herein have the meanings given           to such terms in
the Subscription Agreement.  

    2.        List
of Warrant Holders.  The Company shall register this Warrant, upon records to be
maintained by the Company for that purpose (the “Warrant Register”), in the
name of the record Holder (which shall include the Initial Holder or, as the case may be,
any registered assignee to which this Warrant is permissibly assigned hereunder from time
to time).  The Company may deem and treat the registered Holder of this Warrant as
the absolute owner hereof for the purpose of any exercise hereof or any distribution to
the Holder, and for all other purposes, absent actual notice to the contrary.  

    3.       List
of           Transfers; Restrictions on Transfer. The Company shall register any
transfer           of all or any portion of this Warrant in the Warrant Register, upon
surrender of           this Warrant, with the Form of Assignment attached hereto duly
completed and           signed, to the Company at its address specified herein. Upon any
such           registration or transfer, a new Warrant to purchase Common Stock, in
          substantially the form of this Warrant (any such new Warrant, a “New
          Warrant”), evidencing the portion of this Warrant so transferred shall be
          issued to the transferee and a New Warrant evidencing the remaining portion of
          this Warrant not so transferred, if any, shall be issued to the transferring
          Holder. The acceptance of the New Warrant by the transferee thereof shall be
          deemed the acceptance by such transferee of all of the rights and obligations
in           respect of the New Warrant that the Holder has in respect of this Warrant.  

- 1 -

    4.       Exercise
          and Duration of Warrant.  

		    (a)         All
or any part of this Warrant           shall be exercisable by the registered Holder in
any manner permitted by           Section 10 of this Warrant at any time and from
time to time on or after           the Original Exercisability Date and through and
including the Expiration Time.           Subject to Section 11 hereof, at the Expiration
Time, the portion of this           Warrant not exercised prior thereto shall be and
become void and of no value and           this Warrant shall be terminated and shall no
longer be outstanding.  

		    (b)        The
Holder may exercise this Warrant by delivering to the Company (i) an exercise notice, in
the form attached hereto (the “Exercise Notice”), completed and duly signed,
and (ii) if such Holder is not utilizing the cashless exercise provisions set forth in
this Warrant, payment of the Exercise Price for the number of Warrant Shares as to which
this Warrant is being exercised.  The date such items are delivered to the Company
(as determined in accordance with the notice provisions hereof) is an “Exercise Date
..” The Holder shall not be required to deliver the original Warrant in order to
effect an exercise hereunder, but if it is not so delivered then such exercise shall
constitute an agreement by the Holder to deliver the original Warrant to the Company as
soon as practicable thereafter.  Execution and delivery of the Exercise Notice shall
have the same effect as cancellation of the original Warrant and issuance of a New
Warrant evidencing the right to purchase the remaining number of Warrant Shares.  

    5.       Delivery
          of Warrant Shares.  

		    (a)        Upon
exercise of this           Warrant, the Company shall promptly (but in no event later
than three (3)           Trading Days after the Exercise Date) issue or cause to be
issued and cause to           be delivered to or upon the written order of the Holder and
in such name or           names as the Holder may designate, a certificate for the
Warrant Shares issuable           upon such exercise, free of restrictive legends. “Trading
Day” shall           mean a date on which the Company’s Common Stock trades on
its principal           trading market. The Holder, or any Person permissibly so
designated by the           Holder to receive Warrant Shares, shall be deemed to have
become the holder of           record of such Warrant Shares as of the Exercise Date.  The
Company shall,           upon the written request of the Holder, use its best efforts to
deliver, or           cause to be delivered, Warrant Shares hereunder electronically
through the           Depository Trust and Clearing Corporation or another established
clearing           corporation performing similar functions, if available; provided,
that,          the Company may, but will not be required to, change its transfer
agent if its           current transfer agent cannot deliver Warrant Shares
electronically through the           Depository Trust and Clearing Corporation.  If
as of the time of exercise           the Warrant Shares constitute restricted or control
securities, the Holder, by           exercising, agrees not to resell them except in
compliance with all applicable           securities laws.  

		    (b)        To
the extent permitted           by law, the Company’s obligations to issue and
deliver Warrant Shares in           accordance with the terms hereof are absolute and
unconditional, irrespective of           any action or inaction by the Holder to enforce
the same, any waiver or consent           with respect to any provision hereof, the
recovery of any judgment against any           Person or any action to enforce the same,
or any setoff, counterclaim,           recoupment, limitation or termination, or any
breach or alleged breach by the           Holder or any other Person of any obligation to
the Company or any violation or           alleged violation of law by the Holder or any
other Person, and irrespective of           any other circumstance that might otherwise
limit such obligation of the Company           to the Holder in connection with the
issuance of Warrant Shares. Nothing herein           shall limit a Holder’s right to
pursue any other remedies available to it           hereunder, at law or in equity
including, without limitation, a decree of           specific performance and/or
injunctive relief with respect to the Company’s           failure to timely deliver
certificates representing shares of Common Stock upon           exercise of the Warrant
as required pursuant to the terms hereof.  

- 2 -

    6.       Charges,
          Taxes and Expenses. Issuance and delivery of certificates for shares of
          Common Stock upon exercise of this Warrant shall be made without charge to the
          Holder for any issue or transfer tax, withholding tax, transfer agent fee or
          other incidental tax or expense in respect of the issuance of such
certificates,           all of which taxes and expenses shall be paid by the Company; provided,
          however, that the Company shall not be required to pay any tax that may be
          payable in respect of any transfer involved in the registration of any
          certificates for Warrant Shares or the Warrants in a name other than that of
the           Holder. The Holder shall be responsible for all other tax liability that
may           arise as a result of holding or transferring this Warrant or receiving
Warrant           Shares upon exercise hereof.  

    7.        Replacement
of Warrant.  If this Warrant is mutilated, lost, stolen           or destroyed,
the Company shall issue or cause to be issued in exchange and           substitution for
and upon cancellation hereof, or in lieu of and substitution           for this Warrant,
a New Warrant, but only upon receipt of evidence reasonably           satisfactory to the
Company of such loss, theft or destruction and customary and           reasonable
indemnity, if requested. Applicants for a New Warrant under such           circumstances
shall also comply with such other reasonable regulations and           procedures and pay
such other reasonable third-party costs as the Company may           prescribe. If a New
Warrant is requested as a result of a mutilation of this           Warrant, then the
Holder shall deliver such mutilated Warrant to the Company as           a condition
precedent to the Company’s obligation to issue the New Warrant.  

    8.        Reservation
of Warrant Shares. The Company covenants that it will at all           times reserve
and keep available out of the aggregate of its authorized but           unissued and
otherwise unreserved Common Stock, solely for the purpose of           enabling it to
issue Warrant Shares upon exercise of this Warrant as herein           provided, the
number of Warrant Shares that are then issuable and deliverable           upon the
exercise of this entire Warrant, free from preemptive rights or any           other
contingent purchase rights of persons other than the Holder (taking into
          account the adjustments and restrictions of Section 9). The Company covenants
          that all Warrant Shares so issuable and deliverable shall, upon issuance and
the           payment of the applicable Exercise Price in accordance with the terms
hereof, be           duly and validly authorized, issued and fully paid and
nonassessable.  

    9.        Certain
          Adjustments; Termination Under Certain Circumstances. The Exercise Price
and           number of Warrant Shares issuable upon exercise of this Warrant are subject
to           adjustment from time to time as set forth in this Section 9.  

		    (a)        Stock
Dividends and Splits. If the Company, at any time while this Warrant is outstanding,
(i) pays a stock dividend on its Common Stock or otherwise makes a distribution on any
class of capital stock that is payable in shares of Common Stock, (ii) subdivides
outstanding shares of Common Stock into a larger number of shares, or (iii) combines
outstanding shares of Common Stock into a smaller number of shares, then in each such
case the Exercise Price shall be multiplied by a fraction of which the numerator shall be
the number of shares of Common Stock outstanding immediately before such event and of
which the denominator shall be the number of shares of Common Stock outstanding
immediately after such event. Any adjustment made pursuant to clause (i) of this
paragraph shall become effective immediately after the record date for the determination
of stockholders entitled to receive such dividend or distribution, and any adjustment
pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately
after the effective date of such subdivision or combination.  

		    (b)       Pro
Rata           Distributions.  If the Company, at any time while this Warrant is
          outstanding, distributes to all holders of Common Stock for no consideration
(i)           evidences of its indebtedness, (ii) any security (other than a distribution
of           Common Stock covered by the preceding paragraph), (iii) rights or warrants
to           subscribe for or purchase any security, or (iv) any other asset besides cash
(in           each case, “Distributed Property”), then either upon any exercise
of           this Warrant that occurs after the record date fixed for determination of
          stockholders entitled to receive such distribution or, at the option of the
          Company, concurrently with such distribution, the Holder shall be entitled to
          receive, in addition to the Warrant Shares otherwise issuable upon such
exercise           (if applicable), the Distributed Property that such Holder would have
been           entitled to receive in respect of such number of Warrant Shares had the
Holder           been the record holder of such Warrant Shares immediately prior to such
record           date.  

- 3 -

		    (c)        Fundamental
Transactions. As used herein, “Fundamental Transaction” means at any time
while this Warrant is outstanding  (i) the Company effects any merger of the Company
with another Person, in which the shareholders of the Company immediately prior to the
transaction own immediately after the transaction less than a majority of the outstanding
stock of the successor entity, or its parent if applicable, (ii) the Company effects any
sale of all or substantially all of its assets in one or a series of related
transactions, (iii) any tender offer or exchange offer approved or authorized by the
Company’s Board of Directors is completed pursuant to which holders of at least a
majority of the outstanding Common Stock tender or exchange their shares for other
securities, cash or property, or (iv) the Company effects any reclassification of the
Common Stock or any compulsory share exchange pursuant to which the Common Stock is
effectively converted into or exchanged for other securities, cash or property. In the
event of a Fundamental Transaction pursuant to which the securities, cash or property
issuable with respect to the outstanding Common Stock consist solely of cash and/or
securities traded on a national securities exchange or an established over-the-counter
market (the “Alternate Consideration”), this Warrant shall expire immediately
prior to the closing of the Fundamental Transaction. The Company shall not effect any
such Fundamental Transaction unless prior to or simultaneously with the consummation
thereof, any successor to the Company, surviving entity or the corporation purchasing or
otherwise acquiring such assets or other appropriate corporation or entity shall assume
the obligation to deliver to the Holder, such Alternate Consideration as, in accordance
with the foregoing provisions, the Holder shall be entitled to receive upon proper
exercise of this Warrant prior to such closing. In the event of a Fundamental Transaction
in which the consideration does not entirely consist of the Alternate Consideration, the
Company (or the successor entity) shall purchase this Warrant from the Holder by paying
to the Holder, within ten (10) Business Days after the closing of such Fundamental
Transaction cash in an amount equal to the Black Scholes Value (as reasonably determined
by the Board of Directors of the Company or the Company’s financial advisor in the
Fundamental Transaction) of the remaining unexercised portion of this Warrant on the date
of such Fundamental Transaction determined as of the day immediately following the public
announcement of the applicable Fundamental Transaction.  

		    (d)       Number
of Warrant           Shares. Simultaneously with any adjustment to the Exercise Price
pursuant to           paragraph (a) of this Section 9, the number of Warrant Shares that
may be           purchased upon exercise of this Warrant shall be increased or decreased
          proportionately, so that after such adjustment the aggregate Exercise Price
          payable hereunder for the adjusted number of Warrant Shares shall be the same
as           the aggregate Exercise Price in effect immediately prior to such adjustment.  

		    (e)        Calculations.
All           calculations under this Section 9 shall be made to the nearest cent or the
          nearest 1/100th  of a share, as applicable. The number of shares of Common
          Stock outstanding at any given time shall not include shares owned or held by
or           for the account of the Company, and the disposition of any such shares shall
be           considered an issue or sale of Common Stock.  

		    (f)        Notice
of           Adjustments. Upon the occurrence of each adjustment pursuant to this
Section           9, the Company at its expense will, at the written request of the
Holder,           promptly compute such adjustment in accordance with the terms of this
Warrant           and prepare a certificate setting forth such adjustment, in good faith,
          including a statement of the adjusted Exercise Price and adjusted number or
type           of Warrant Shares or other securities issuable upon exercise of this
Warrant (as           applicable), describing the transactions giving rise to such
adjustments and           showing in detail the facts upon which such adjustment is
based. Upon written           request, the Company will promptly deliver a copy of each
such certificate to           the Holder and to the Company’s transfer agent for the
Common Stock.  

- 4 -

		    (g)        Notice
of Corporate           Events. If, while this Warrant is outstanding, the Company (i)
declares a           dividend or any other distribution of cash, securities or other
property in           respect of its Common Stock, including without limitation any
granting of rights           or warrants to subscribe for or purchase any capital stock
of the Company or any           Subsidiary, (ii) authorizes or approves, enters into any
agreement contemplating           or solicits stockholder approval for any Fundamental
Transaction or (iii)           authorizes the voluntary dissolution, liquidation or
winding up of the affairs           of the Company, then, except if such notice and the
contents thereof shall be           deemed to constitute material non-public information,
the Company shall deliver           to the Holder a notice describing the material terms
and conditions of such           transaction at least ten (10) Trading Days prior to the
applicable record or           effective date on which a Person would need to hold Common
Stock in order to           participate in or vote with respect to such transaction, and
the Company will           take all reasonable steps to give Holder the practical
opportunity to exercise           this Warrant prior to such time; provided, however, that
the failure to           deliver such notice or any defect therein shall not affect the
validity of the           corporate action required to be described in such notice.  

    10.        Payment
of Exercise           Price. The Holder may pay the Exercise Price in one of the
following           manners:  

		    (a)        Cash
Exercise. If           an Exercise Notice is delivered at a time when the
Registration Statement (or           another registration statement covering the exercise
of the Warrant) is           effective, then the Holder shall deliver immediately
available funds; or  

		    (b)       Cashless
Exercise.           If an Exercise Notice is delivered at a time when the
Registration Statement is           not then effective, then the Holder shall notify the
Company in an Exercise           Notice of its election to utilize cashless exercise, in
which event the Company           shall issue to the Holder the number of Warrant Shares
determined as follows:  

			
	 	 	X = Y [(A-B)/A]
	 	where:	 
	 	 	X = the number of Warrant Shares to be issued to the Holder.
	 	 	Y = the number of Warrant Shares with respect to which this Warrant is being exercised.
	 	 	A = the closing price on the Trading Day immediately prior to the Exercise Date.
	 	 	B = the Exercise Price then in effect.

    11        Limitations
on Exercise. (a)     Notwithstanding anything to the
contrary contained herein, the number of Warrant Shares that may be acquired by the
Holder upon any exercise of this Warrant (or otherwise in respect hereof) shall be
limited to the extent necessary to ensure that, following such exercise (or other
issuance), the total number of shares of Common Stock then beneficially owned by the
Holder and its Affiliates and any other Persons whose beneficial ownership of Common
Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the
Securities Exchange Act of 1934 (the “Exchange Act”), does not exceed 4.999% of
the total number of issued and outstanding shares of Common Stock (including for such
purpose the shares of Common Stock issuable upon such exercise). For such purposes,
beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange
Act and the rules and regulations promulgated thereunder. Each delivery of an Exercise
Notice by the Holder will constitute a representation by the Holder that it has evaluated
the limitation set forth in this Section and determined that issuance of the full number
of Warrant Shares requested in such Exercise Notice is permitted under this Section.  The
Company’s obligation to issue shares of Common Stock in excess of the limitation
referred to in this Section shall be suspended (and, except as provided below, shall not
terminate or expire notwithstanding any contrary provisions hereof) until such time, if
any, as such shares of Common Stock may be issued in compliance with such limitation; provided,
that, if, as of the Expiration Time, the Company has not received written notice that
the shares of Common Stock may be issued in compliance with such limitation, the Company’s
obligation to issue such shares shall terminate.  This provision shall not restrict
the number of shares of Common Stock which a Holder may receive or beneficially own in
order to determine the amount of securities or other consideration that such Holder may
receive in the event of a Fundamental Transaction as contemplated in Section 9 of this
Warrant.  By written notice to the Company, the Holder may waive the provisions of
this Section but any such waiver will not be effective until the sixty-first (61st) day
after such notice is delivered to the Company, nor will any such waiver affect any other
Holder.  

- 5 -

		    (b)        Notwithstanding
 anything to the contrary contained herein, the number of Warrant Shares that may be
acquired by the Holder upon any exercise of this Warrant (or otherwise in respect hereof)
shall be limited to the extent necessary to ensure that, following such exercise (or
other issuance), the total number of shares of Common Stock then beneficially owned by
such Holder and its Affiliates and any other Persons whose beneficial ownership of Common
Stock would be aggregated with the Holder’s for purposes of Section 13(d) of the
Exchange Act, does not exceed 9.999% of the total number of issued and outstanding shares
of Common Stock (including for such purpose the shares of Common Stock issuable upon such
exercise). For such purposes, beneficial ownership shall be determined in accordance with
Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder.
Each delivery of an Exercise Notice hereunder will constitute a representation by the
Holder that it has evaluated the limitation set forth in this Section and determined that
issuance of the full number of Warrant Shares requested in such Exercise Notice is
permitted under this Section.  The Company’s obligation to issue shares of
Common Stock in excess of the limitation referred to in this Section shall be suspended
(and, except as provided below, shall not terminate or expire notwithstanding any
contrary provisions hereof) until such time, if any, as such shares of Common Stock may
be issued in compliance with such limitation; provided , that, if, as of the Expiration
Time, the Company has not received written notice that the shares of Common Stock may be
issued in compliance with such limitation, the Company’s obligation to issue such
shares shall terminate.  This provision shall not restrict the number of shares of
Common Stock which a Holder may receive or beneficially own in order to determine the
amount of securities or other consideration that such Holder may receive in the event of
a Fundamental Transaction as contemplated in Section 9 of this Warrant.  This
restriction may not be waived.  

    12.        No
Fractional           Shares. No fractional Warrant Shares will be issued in
connection with any           exercise of this Warrant. In lieu of any fractional shares
that would otherwise           be issuable, the Company shall pay cash equal to the
product of such fraction           multiplied by the closing price of one Warrant Share
as reported by the           applicable Trading Market on the Exercise Date.  

    13.        Notices.
Any and           all notices or other communications or deliveries hereunder (including,
without           limitation, any Exercise Notice) shall be in writing and shall be
deemed given           and effective on the earliest of (i) the date of transmission, if
such notice or           communication is delivered via facsimile at the facsimile number
specified in           this Section at or prior to 10:00 a.m. (New York City time) on a
Trading Day,           (ii) the next Trading Day after the date of transmission, if such
notice or           communication is delivered via fax at the fax number specified in
this Section           on a day that is not a Trading Day or later than 10:00 a.m. (New
York City time)           on any Trading Day, (iii) the Trading Day following the date of
mailing, if sent           by nationally recognized overnight courier service, or (iv)
upon actual receipt           by the party to whom such notice is required to be given.
The addresses for such           notices or communications shall be:  if to the
Company, to Pluristem           Therapeutics Inc., MATAM Advanced Technology Park,
Building No. 20, Haifa,           Israel, Attention: Chief Executive Officer, (Fax No.:
+972-74-7107173) (or such           other address as the Company shall indicate in
writing in accordance with this           Section) or (ii) if to the Holder, to the
address or facsimile number appearing           on the Warrant Register (or such other
address as the Holder shall indicate in           writing in accordance with this
Section).  

- 6 -

    14.        Warrant
Agent. The           Company shall serve as warrant agent under this Warrant. Upon
thirty (30)           days’ notice to the Holder, the Company may appoint a new
warrant agent.           Any corporation into which the Company or any new warrant agent
may be merged or           any corporation resulting from any consolidation to which the
Company or any new           warrant agent shall be a party or any corporation to which
the Company or any           new warrant agent transfers substantially all of its
corporate trust or           shareholders services business shall be a successor warrant
agent under this           Warrant without any further act. Any such successor warrant
agent shall promptly           cause notice of its succession as warrant agent to be
mailed (by first class           mail, postage prepaid) to the Holder at the Holder’s
last address as shown           on the Warrant Register.  

    15.        Miscellaneous.  

		    (a)        This
Warrant shall be           binding on and inure to the benefit of the parties hereto and
their respective           successors and assigns. Subject to the preceding sentence,
nothing in this           Warrant shall be construed to give to any Person other than the
Company and the           Holder any legal or equitable right, remedy or cause of action
under this           Warrant. This Warrant may be amended only in writing signed by the
Company and           the Holder, or their successors and assigns.  

		    (b)        All
questions concerning           the construction, validity, enforcement and interpretation
of this Warrant shall           be governed by and construed and enforced in accordance
with the internal laws           of the State of New York, without regard to the
principles of conflicts of law           thereof. Each party agrees that all legal
proceedings concerning the           interpretations, enforcement and defense of this
Warrant and the transactions           herein contemplated (“Proceedings”)
(whether brought against a party           hereto or its respective Affiliates, employees
or agents) shall be commenced           exclusively in the New York Courts. Each party
hereto hereby irrevocably submits           to the exclusive jurisdiction of the New York
Courts for the adjudication of any           dispute hereunder or in connection herewith
or with any transaction contemplated           hereby or discussed herein, and hereby
irrevocably waives, and agrees not to           assert in any Proceeding, any claim that
it is not personally subject to the           jurisdiction of any New York Court, or that
such Proceeding has been commenced           in an improper or inconvenient forum. Each
party hereto hereby irrevocably           waives personal service of process and consents
to process being served in any           such Proceeding by mailing a copy thereof via
registered or certified mail or           overnight delivery (with evidence of delivery)
to such party at the address in           effect for notices to it under this Warrant and
agrees that such service shall           constitute good and sufficient service of
process and notice thereof. Nothing           contained herein shall be deemed to limit
in any way any right to serve process           in any manner permitted by law. Each
party hereto hereby irrevocably waives, to           the fullest extent permitted by
applicable law, any and all right to trial by           jury in any legal proceeding
arising out of or relating to this Warrant or the           transactions contemplated
hereby. If either party shall commence a Proceeding to           enforce any provisions
of this Warrant, then the prevailing party in such           Proceeding shall be
reimbursed by the other party for its attorney’s fees           and other costs and
expenses incurred with the investigation, preparation and           prosecution of such
Proceeding.  

		    (c)        The
headings herein are           for convenience only, do not constitute a part of this
Warrant and shall not be           deemed to limit or affect any of the provisions
hereof.  

		    (d)        In
case any one or more           of the provisions of this Warrant shall be invalid or
unenforceable in any           respect, the validity and enforceability of the remaining
terms and provisions           of this Warrant shall not in any way be affected or
impaired thereby and the           parties will attempt in good faith to agree upon a
valid and enforceable           provision which shall be a commercially reasonable
substitute therefore, and           upon so agreeing, shall incorporate such substitute
provision in this Warrant.  

- 7 -

		    (e)        Prior
to exercise of this           Warrant, the Holder hereof shall not, by reason of by being
a Holder, be           entitled to any rights of a stockholder with respect to the
Warrant Shares.  

        IN
WITNESS WHEREOF, the Company has caused this Warrant to be duly executed by its authorized
officer as of the date first indicated above. 

			PLURISTEM THERAPEUTICS INC.

By: /s/ Yaky Yanay
——————————————

Yaky Yanay
Chief Financial Officer

- 8 -

PLURISTEM THERAPEUTICS
INC. 

EXERCISE NOTICE 

WARRANT ORIGINALLY
ISSUED SEPTEMBER __, 2008 

WARRANT NO. _________ 

Ladies and Gentlemen: 

(1)     The
 undersigned   hereby  elects  to  exercise  the   above-referenced   Warrant  with
 respect  to                 shares of Common Stock.   Capitalized  terms used herein and
not otherwise  defined herein have the respective meanings set forth in the Warrant.  

(2)     The
Holder intends that payment of the Exercise Price shall be made as (check one):  

	 	    o
                            	Cash  Exercise
under Section 10(a)

	 	   o
                             	Cashless Exercise
under Section 10(b)

(3)     If the
Holder has elected a Cash Exercise, the holder shall pay the sum of $ ______________  to
the Company in accordance with the terms of the Warrant.  

(4)     Pursuant
to this Exercise Notice, the Company shall deliver to the Holder the number of Warrant
Shares determined in accordance with the terms of the Warrant.  

(5)     By its
delivery of this Exercise Notice, the undersigned represents and warrants to the Company
that in giving effect to the exercise evidenced hereby the Holder will not beneficially
own in excess of the number of shares of Common Stock (as determined in accordance with
Section 13(d) of the Securities Exchange Act of 1934) permitted to be owned under Section
11 of this Warrant to which this notice relates.  

		
	Dated: ___________________________________________	HOLDER:
	 
	 
	 	 ______________________________________________
	 	Print name †
	 
	 	By: ____________________________________________
	 
	 	Title: ___________________________________________

- 9 -

PLURISTEM THERAPEUTICS
INC. 

WARRANT ORIGINALLY
ISSUED SEPTEMBER __, 2008 

WARRANT NO. _________ 

FORM OF ASSIGNMENT 
To be completed and
signed only upon transfer of Warrant 

FOR VALUE RECEIVED, the undersigned
hereby sells, assigns and transfers unto _________________ the right represented by the
within Warrant to purchase _________________ shares of Common Stock to which the within
Warrant relates and appoints __________________ attorney to transfer said right on the
books of the Company with full power of substitution in the premises. 

		
	Dated:__________________________	TRANSFEROR:
	 
	 	______________________________
	 	Print name †
	 
	 	By:___________________________
	 
	 	Title:__________________________
	 
	 
	 	TRANSFEREE:
	 
	 	______________________________
	 	Print name †
	 
	 	By: ___________________________
	 
	 	Title:__________________________
	 
	WITNESS:
	 	Address of Transferee:
	__________________________
	Print name †	__________________________
	 	__________________________

- 10 -

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00147-of-00352.parquet"}]]